IOI Properties 2002-cover fa

Transcription

Our Vision
CONSISTENCY
… is to be a pre-eminent corporation in our core businesses
by providing products and services of superior values and by
sustaining consistent long-term growth in volume and
profitability.
Consistency
We shall strive to achieve responsible and balanced
commercial success by satisfying our customers’ needs, giving
superior performance to our shareholders, providing rewarding
careers to our people, having mutually beneficial relationship
with our business associates, participating and contributing
effectively towards nation building and the welfare and
CONSISTENCY
9027-W
IOI Properties Berhad
25787-H Incorporated in Malaysia
Annual Report
2002
www.ioigroup.com
IOI Properties Berhad 25787-H Incorporated in Malaysia Annual Report 2002
advancement of the society in which we operate.
Contents
IOI Corporation Berhad
2
Notice of Annual
General Meeting
5
Statement
Accompanying
Notice of Annual General
Meeting of the Company
8
Chairman’s Statement
20
Group Performance
Highlights
24
Management’s
Discussion
and Analysis
- Highlights
- Economic Profit and
Return
- Review of Core Business
Operations
36
Corporate Information
37
Board of Directors
38
Profile of Directors
44
Audit Committee
Report
48
Corporate
Governance
53
Statement on
Internal Control
55
Statement on
Directors’
Interests
56
Other Information
59
Financial Statements
103 Group Properties
21
Group Quarterly
Results
21
Financial Calendar
22
Five Year Financial
Highlights
106 Shareholders
Information
Proxy Form
■
create value for all stakeholders
■
market focused and oriented
■
continuous improvement in quality,
24%
productivity and cost efficiencies
2002
2001
2000
1999
1998
245,195
203,847
200,684
145,282
102,904
163,605
134,088
126,904
129,909
64,260
Shareholders’ equity (RM’000)
1,416,033
1,335,587
956,750
749,205
632,725
Return on average equity (%)
11.89
11.70
14.88
18.80
10.59
Basic earnings per share (sen)
49.18
43.42
49.21
50.42
24.94
35.0
30.0
20.0
15.0
12.0
470,025
411,446
346,908
273,426
160,289
1,926
3,112
2,051
2,025
1,073
Net profit attributable
to shareholders (RM’000)
Gross dividend per share (%)
Property
Sales value (RM’000)
Sales (unit)
IOI Properties Berhad Annual Report 2002
2001
RM426.4 million
30 June 2001 : RM1.68 billion
2002
RM245.2 million
2001
RM203.8 million
■
22%
2002
163.6 million
2001
134.1 million
23%
2002
RM6.20
2001
RM5.05
30 June 2002 : RM2.06 billion
Market Capitalisation has increased
Financial
Profit before taxation (RM’000)
2002
RM528.8 million
20%
Share Price
focus on core businesses
Net Earnings
■
Profit Before Tax
towards Vision IOI
23%
Our Results
plan and act with cohesive purpose
Revenue
Our Key Strategies
Key Indicators
■
Improving consumer confidence and low interest
rates both contributed to an impressive recovery in
the Klang Valley housing market in the second half of
the financial year. As a result, IOI Properties Berhad
was able to further improve on last year’s good
results. Pre-tax profit rose by some 20%, while net
attributable profit shot up by 22%.
Notice of Annual General Meeting
NOTICE IS HEREBY GIVEN THAT the Twenty-Seventh Annual
General Meeting of the Company will be held at Putra
Room, Renaissance Palm Garden Hotel, IOI Resort, 62502
Putrajaya, Malaysia on Friday, 18 October 2002 at 9.30 a.m.
for the following purposes:
Agenda
1
To receive and adopt the Audited Financial Statements
authorised with full powers to allot and issue shares in
for the financial year ended 30 June 2002 and the Reports
the Company from time to time and upon such terms
of the Directors and Auditors thereon.
and conditions and for such purposes as they may
deem fit subject always to the approval of the
2
To re-elect the following Directors retiring by rotation
relevant authorities being obtained for such issue and
pursuant to Article 101 of the Company’s Articles of
provided that the aggregate number of shares to be
Association:
issued pursuant to this resolution does not exceed ten
percent (10%) of the issued share capital for the time
a
Puan Sri Datin Hoong May Kuan
being of the Company and that such authority shall
b
Dato’ Yeo How
continue in force until the conclusion of the next
Annual General Meeting of the Company and that
3
To consider and if thought fit, to pass the following as an
the Directors be and are also empowered to obtain
Ordinary Resolution:
the approval from the Kuala Lumpur Stock Exchange
for the listing of and quotation for the additional
“THAT the increase in the payment of Directors’ fees to
shares so issued.”
RM210,000, to be divided among the Directors in such
manner as the Directors may determine, be and is hereby
4
5.2 Proposed Renewal Of Existing Share Buy-Back
approved.”
Authority
To re-appoint BDO Binder, the retiring auditors and to
“THAT, subject to compliance with all applicable laws,
authorise the Directors to fix their remuneration.
regulations and the approval of all relevant
authorities, approval be and is hereby given to the
5
As special business, to consider and if thought fit, to pass
Company to utilise up to ten percent (10%) of the
the following resolutions as Ordinary Resolutions:
Group’s latest audited shareholders’ equity, which
comprises the issued and fully paid-up share capital
5.1 Authority To Directors To Allot And Issue Shares Pursuant
To Section 132D Of The Companies Act, 1965
and reserves of the Group to purchase up to ten
percent (10%) of the issued and paid-up ordinary
share capital of the Company (“Proposed Purchase”)
“THAT pursuant to Section 132D of the Companies
as may be determined by the Directors of the
Act, 1965, the Directors be and are hereby
Company from time to time through the Kuala Lumpur
Stock Exchange (“KLSE”) upon such terms and
2
conditions as the Directors may deem fit and expedient in
the interest of the Company and shall be backed by the
5.3 Proposed Renewal Of Shareholders’ Mandate For
Recurrent Related Party Transactions
latest audited retained earnings and share premium
reserves of the Company;
“THAT approval be and is hereby given for the
renewal of Shareholders’ Mandate for the Company
AND THAT at the discretion of the Directors of the
and its subsidiaries to enter into Recurrent Related
Company, the shares of the Company to be purchased
Party Transactions of a revenue or trading nature
are to be cancelled and/or retained as treasury shares
which are necessary for day-to-day operations
and distributed as dividends or resold on the KLSE;
involving the interest of Directors, Major Shareholders
or persons connected with the Directors and/or Major
AND THAT the Directors of the Company be and are
Shareholders of the Company and its subsidiaries
hereby empowered generally to do all acts and things to
(“Related Parties”), as detailed in the Circular to
give effect to the Proposed Purchase with full powers to
Shareholders of the Company dated 26 September
assent to any condition, modification, revaluation,
2002 subject to the following:
variation and/or amendment (if any) as may be imposed
by the relevant authorities and/or do all such acts and
i
the transactions are carried out in the ordinary
things as the Directors may deem fit and expedient in the
course of business on normal commercial terms
best interest of the Company;
which are not more favourable to the Related
Parties than those generally available to the
AND THAT such authority shall commence immediately
public and are not to the detriment of the
upon passing of this resolution until:
minority shareholders of the Company; and
i
the conclusion of the next Annual General Meeting
ii
disclosure is made in the annual report of the
of the Company at which time the authority shall
aggregate value of transactions conducted
lapse unless by ordinary resolution passed at a
pursuant to the Shareholders’ Mandate during
general meeting, the authority is renewed either
the financial year,
unconditionally or subject to conditions;
and any other arrangements and/or transactions as
ii
the expiration of the period within which the next
are incidental thereto;
Annual General Meeting after that date is required
by law to be held; or
AND THAT authority conferred by this resolution will
commence immediately upon the passing of this
iii
revoked or varied by ordinary resolution of the
Ordinary Resolution until:
shareholders of the Company at a general meeting,
i
the conclusion of the next Annual General
whichever is earlier but not so as to prejudice the
Meeting of the Company, at which time it will
completion of purchase(s) by the Company before the
lapse, unless by a resolution passed at the
aforesaid expiry date and, in any event, in accordance
meeting, the authority is renewed;
with the provisions of the KLSE Listing Requirements or any
other relevant authorities.”
3
5.3 Proposed Renewal Of Shareholders’ Mandate For
Recurrent Related Party Transactions (cont’d)
ii
Notes
1
A member may appoint any person to be his proxy and the
provisions of Section 149(1)(b) of the Act shall not apply to the
Company.
2
An instrument appointing a proxy must be in writing under the hand
of the appointor or of his attorney duly authorised in writing or, if the
appointor is a corporation, either under seal or under the hand of
an officer or attorney duly authorised.
3
If a member appoints two proxies to attend at the same meeting,
the instrument of proxy must specify the proportion of his
shareholdings to be represented by each proxy.
4
An instrument appointing a proxy may specify the manner in which
the proxy is to vote in respect of a particular resolution and, where
an instrument of proxy so provides, the proxy is not entitled to vote
on the resolution except as specified in the instrument.
5
An instrument appointing a proxy must be deposited at the
Company's registered office at No.7-10, Jalan Kenari 5, Bandar
Puchong Jaya, Off Jalan Puchong, 47100 Puchong, Selangor Darul
Ehsan, not less than 48 hours before the time for holding the
Meeting or any adjournment thereof.
6
Explanatory Statement on Special Business
the expiration of the period within which the
next Annual General Meeting after the date it is
required to be held pursuant to Section 143(1) of
the Companies Act, 1965 (“the Act”) (but shall
not extend to such extension as may be allowed
pursuant to Section 143(2) of the Act); or
iii
revoked or varied by resolution passed by the
shareholders in general meeting,
whichever is the earlier.
AND THAT the Directors of the Company be and are
hereby authorised to complete and do all such acts
and things as they may consider expedient or
necessary to give effect to the Proposed Renewal of
Shareholders’ Mandate.”
6
i
The ordinary resolution proposed under item 5.1 of the Agenda,
if passed will empower the Directors to allot and issue shares in
the Company up to an amount not exceeding in total ten
percent (10%) of the issued share capital of the Company for
the time being for such purposes as the Directors consider would
be in the interests of the Company. This would avoid any delay
and costs in convening a general meeting to specifically
approve such an issue of shares. This authority unless revoked or
varied at a general meeting, will expire at the next Annual
General Meeting of the Company.
To transact any other business of which due notice shall
have been given.
By Order of the Board
Lee Ai Leng
Yap Chon Yoke
Authority To Directors To Allot And Issue Shares Pursuant To
Section 132D Of The Companies Act, 1965
ii
Proposed Renewal Of Existing Share Buy-Back Authority
Secretaries
Puchong, Selangor Darul Ehsan
26 September 2002
4
The ordinary resolution proposed under item 5.2 of the Agenda,
if passed will empower the Company to purchase up to ten
percent (10%) of the issued and paid-up ordinary share capital
of the Company through the Kuala Lumpur Stock Exchange.
This authority unless revoked or varied at a general meeting, will
expire at the conclusion of the next Annual General Meeting of
the Company.
Notes (cont’d)
6
Explanatory Statement on Special Business (cont’d)
iii
Proposed Renewal Of Shareholders’ Mandate For Recurrent
Related Party Transactions
The ordinary resolution proposed under item 5.3 of the Agenda is
to renew the Shareholders’ Mandate granted by the
Shareholders of the Company at the Extraordinary General
Meeting held on 30 January 2002. The proposed renewal of
Shareholders’ Mandate will enable the Company and its
subsidiaries to enter into any of the Recurrent Related Party
Transactions of a revenue or trading nature which are necessary
for the day-to-day operations involving the interest of Directors,
Major Shareholders or persons connected with the Directors
and/or Major Shareholders of the Company and its subsidiaries
(“Related Parties”), subject to the transactions being in the
ordinary course of business on normal commercial terms which
are not more favourable to the Related Parties than those
generally available to the public and are not to the detriment of
the minority shareholders of the Company. This authority unless
revoked or varied at a general meeting, will expire at the
conclusion of the next Annual General Meeting of the Company.
The details of the proposal are set out in the Circular to
Shareholders dated 26 September 2002.
Statement Accompanying Notice of Annual General Meeting
■
1
pursuant to paragraph 8.28(2) of the listing requirements of the Kuala Lumpur Stock Exchange
Names of directors who are standing for re-election
Directors retiring pursuant to Article 101 of the Company’s Articles of Association
2
■
■
Dato’ Yeo How
Twenty-Seventh Annual General Meeting of IOI Properties Berhad
Place
■
Putra Room, Renaissance Palm Garden Hotel
IOI Resort, 62502 Putrajaya, Malaysia
Date and Time
■
Friday, 18 October 2002 at 9.30 a.m.
5
“People talk a lot about quality of life. Most of the time it’s an
unaffordable dream. But what does it really mean? For me, it's all
about living in a safe, green and healthy environment where my
little girl can run about with her friends. It’s about having good
schools and shops. Having easy access to KL and KLIA. And of
course value for money.”
“I also look for the reassurance of buying from a reputable developer
who completes on time and delivers consistent quality.”
“That’s why we choose Bandar Puteri, Puchong. It offers all-round
excellence at prices I can afford.”
Tan Sri Dato’ Lee Shin Cheng
Executive Chairman
Dear Shareholders,
On behalf of the Board of Directors of IOI Properties
Berhad, it gives me great pleasure to present to you
the Annual Report and Financial Statements of the
Company and the Group for the financial year
ended 30 June 2002.
8
Operating Background
The slowdown of the housing market which started in the second half of 2000
continued its downward trend until the second half of 2001 which is in tandem with
the underlying economic conditions. The housing market rebounded in the first
quarter of 2002 especially for residential properties in choice locations in the Klang
Valley. A combination of positive factors such as low interest rates, recovery of the
economy and stock market, which have a “wealth creation effect”, together with
actions taken by the government such as stamp duty waiver on residential houses,
relaxation of FIC guidelines and announcement of a pro-growth 2002 Budget has
further encouraged demand for properties.
Against the positive backdrop of a recovering housing market, the Group did very
well to further improve its performance and retain its leadership position in the industry.
9
Financial Review
For the financial year ended 30 June 2002 (FY 2002), the Group managed to improve
on the excellent performance achieved for the previous year. Revenue for FY 2002
increased by 24% to RM528.8 million and pre-tax profit increased by 20% to RM245.2
million. The better than expected performance was due to improvement in all
segments. Contribution from property development segment accounts for 86% of the
increase due to higher progress billings achieved. The progress billings in fact
increased by 40% due to higher property sales value by 14% and higher progress work
done due to increased sales of completed units and properties in advanced stage of
completion. A strong pick-up in the Klang Valley market in the second half of the
financial year also contributed to the overall improvement in our property sales.
Net profit attributable to shareholders after tax and minority interest for FY 2002 was
RM163.6 million as compared to RM134.1 million for FY 2001, higher by 22% due to
overall improvement in profitability and lower share of profit by minority interest as a
result of the acquisition of remaining 25% interest in Nice Frontier Sdn Bhd by the
Company which was completed on 22 August 2001. Consequentially, the earnings
per share (EPS) for the year was higher at 49.18 sen compared to 43.42 sen for the
previous year.
10
Financial Review (cont’d)
After taking into account the above items, the Group NTA as at 30 June 2002 stood
at RM1,421 million or an NTA per share of RM4.27 as compared to RM1,339 million or
an NTA per share of RM4.00 as at 30 June 2001 (after restating the shareholders’
equity in respect of the recognition of dividends).
Dividends
An interim dividend of 15% less income tax or 10.8 sen net per share was paid on 22
March 2002 and a second interim dividend at 20% or 14.4 sen net per share is
payable on 10 September 2002. The total dividend paid in respect of FY 2002 is
therefore 35% less tax per share or 25.2 sen net per share amounting to RM83.8 million
as compared to 21.6 sen per share or a total of RM71.9 million for FY 2001. The higher
dividend payment made correspond with the good performance and the net cash
position of the Company. Your directors do not recommend any final dividend.
11
Review of Operation
Bandar Puteri, Puchong, the flagship development of the Group again recorded an
outstanding performance to account for 64% (FY 2001 : 54%) of Group’s total sales
value. Total sales value generated by Bandar Puteri since its first launch in January
2000 was RM688 million up to 30 June 2002.
With the encouraging sales from Bandar Puteri, total sales for all the Group’s projects
for FY 2002 increased by 14% in terms of value to RM470 million but declined 38% in
number of units over FY 2001 to 1,926 units sold. There was a change in product mix
for the year. The successful launching of semi-detached houses and shopoffices
especially at Bandar Puteri Puchong, has resulted in higher average price per unit of
RM244,000 up from RM132,000 for FY 2001.
The strong sales recorded by the Group in the second half of FY 2002, especially in
respect to Puchong again reflects the Group’s strong adaptability to market conditions
by launching appropriate products according to the needs of the general population.
12
To Kuala
Lumpur
Bandar
Putra Kulai
Sultan Ismail Airport
Palm Resort
Palm Villa
N
Kepong
or
th
Kulai
–S
ou
th
Hig
hw
ay
Senai
Pandan
Plentong
Pa
Skudai
Ampang
UTM
KLCC
s ir
Gu
dan
g Hig h w
ay
Johor Bahru
Kuala
Lumpur
Tampoi
Sen
ai H
igh
Straits of Johor
w
ay
2n
d
Lin
k
Ex
es
pr
sw
KL Sentral
ay
Singapore
Petaling Jaya
New Pantai
Expressway
hway
al Hig
Feder
Subang Jaya
Kinrara
Shah Alam
Expressway
Tasik Selatan
Puchong – Sg. Besi
Developments Road
IOI Mall
Dam
a nsa
Bandar
Puchong Jaya
Sungai Besi
r
ay
sw
res
Exp
s
a – Pu
chong Ex p r e
m
Ala
ah
Sh
s
w
Bandar Puteri
Puchong
ay
Kajang
IOI RESORT
PM's complex
y
lle
Va
ng
Kla
uth
So
Cyberjaya
a
jay
tra
Pu
k
Lin
ay
sw
res
Exp
Multimedia
University
Putrajaya
Putrajaya
Flagship
Zone
Nilai
North South Expressway
Central Link
Salak Tinggi
Kuala Lumpur International Airport (KLIA)
13
Review of Operation (cont’d)
Down south in Bandar Putra Kulai (formerly known as Bandar Putra Senai), new
launches were mainly confined to lower ranged residential houses and apartments.
Notwithstanding the oversupply situation in Johor compared to the Klang Valley, a
total of 707 units were sold with total sales generating a value of about RM96.2
million.
In respect of property investment the portfolio which comprises substantially of
commercial and retail space such as IOI Mall and IOI Business Park in Puchong, IOI
Plaza in Singapore, the Mayang Plaza in Petaling Jaya and IOI Mall in Bandar Putra
Kulai (“BPK”) is now more sizeable with more lettable space rented out. Gross rentals for
the year was RM38.2 million as compared to RM29.1 million for FY 2001 and net
contribution was RM22.2 million, 44% more than the RM15.4 million achieved for FY 2001.
Rental revenues are expected to improve further with the realisation of higher
occupancy rates for IOI Mall in BPK and IOI Business Park. The Mall commenced
business in December 2001 and currently enjoys an occupancy rate of 80%. Since
the opening of the Mall, the BPK township has become more vibrant and this will help
enhance the marketability of the township.
14
Other Corporate Development
The proposed acquisition of 99.9998% stake in Lush Development Sdn Bhd (“LDSB”) by
a wholly-owned subsidiary of IOI Properties Berhad, Cahaya Kota Development Sdn
Bhd was completed during the financial year. LDSB has a right to a 70% stake on a
joint venture with Perbadanan Kemajuan Pertanian Selangor to develop a piece of
500 acres land in Dengkil, Selangor within the Puchong-Putrajaya/Cyberjaya corridor.
This acquisition provides the Group with another good development landbank in the
Klang Valley for future years.
The proposed acquisition of the entire issued and paid-up share capital in Tanda
Bestari Development Sdn Bhd (“TBSB”) by a wholly-owned subsidiary of IOI Properties
Berhad, Cahaya Kota Development Sdn Bhd for a cash consideration of
RM10,226,000 is pending completion. TBSB is in the process of acquiring a piece of
leasehold land measuring 51.13 acres in Dengkil, Selangor which is adjacent to the
LDSB land and this acquisition will provide direct access to Lebuhraya Damansara
Puchong for the entire Dengkil land development.
In the month of July 2001, the Company has acquired a total of 495,000 warrants at
RM1.35 per warrant and 10,874,000 ordinary shares at RM4.35 per share in Palmco
Holdings Berhad. The warrants were subsequently converted to 495,000 ordinary
shares at a conversion premium of RM3.00 per share.
15
Prospects
The Malaysian economy is expected to grow at a moderate pace of 4.0% for year
2002 from a low of 0.5% in year 2001. The continued recovery of the property sector
appears promising for the year and hinges on the overall health of the Malaysian
economy. The prospects for growth, to a large extent, will be driven by private
consumption spending and investments, government fiscal stimulus and external
sector performance in relation to recovery of the world’s industrial economies in
2002/2003.
The outlook for the property sector especially the residential sub-sector in Klang Valley
is expected to be favourable for selected price categories with the help of low
interest rates and higher disposable income. However, we must be cautions of the
increase in supply in certain sectors, especially apartments, where the demand is not
as great as the landed properties. In contrast, the housing market outside of Klang
Valley is still soft and demand is mainly limited to the lower end.
Barring unforeseen circumstances, with our strategy of leveraging on the superior
location of our townships and launching the appropriate product type, we are
confident of a good performance for the current year and retain our leadership
position in property sector.
16
Acknowledgement
Mr Lee Cheng Leang retired as Executive Director on 20 March 2002 after seventeen
years of dedicated service. On behalf of the Company, I would like to express our
heartfelt thanks for his valuable contribution.
To all our employees, on behalf of the Board, I would like to extend our gratitude and
great appreciation for their dedicated service and contribution to the success of the
Group. To our shareholders, customers, business associates and all relevant
authorities, I would like to convey our sincere thanks for their continued support and
confidence in the Group. Last but not least, I would like to thank my fellow Board
members for their invaluable contribution and support during the year.
Executive Chairman
17
quality
“We appreciate the reassurance of buying from a
reputable developer who completes on time and
delivers consistent quality.”
Group Performance Highlights
2002
2001
In RM’000
%
+/(-)
Financial Performance
Revenue
528,847
426,378
24
Profit before interest and taxation (EBIT)
249,694
210,829
18
Profit before taxation
245,195
203,847
20
Net operating profit after taxation (NOPAT)
170,496
149,135
14
Net profit attributable to shareholders
163,605
134,088
22
Average shareholders’ equity*
1,375,810
1,146,169
20
Average capital employed*
1,554,618
1,380,372
13
Operating margin (%)
46
48
(4)
Profit before taxation on average shareholders’ equity (%)
18
18
0
Return on average equity (%)*
11.89
11.70
2
NOPAT/Average capital employed (%)*
10.97
10.80
2
49.18
43.42
13
Gross dividend per share (sen)
35
30
17
Net tangible assets per share (sen)*
427
400
7
Dividend cover (number of times)
1.95
1.87
5
80.73
28.20
186
Sales value
470,025
411,446
14
Sales (unit)
1,926
3,112
(38)
Interest cover (number of times)
Property Development Performance
244
132
85
Revenue
Average selling price (per unit)
475,825
386,739
23
Operating profit
213,518
181,552
18
111
58
91
Operating profit (per unit)
Operating profit on revenue (%)
Progress billings
45
47
(4)
482,544
343,458
40
* In line with the new MASB Standard 19, adjusted for proposed dividends previously classified under current liabilities to conform
with current financial year's presentation as per Note 40 to the financial statements.
20
Group Quarterly Results
1st
Quarter
RM'000
%
2nd
Quarter
RM'000
83,783 16%
Operating profit after interest 39,023 16%
Revenue
%
3rd
Quarter
RM'000
%
4th
Quarter
RM'000
119,391
22%
53,809
22%
%
FY
2002
RM'000
%
137,444
26%
188,229
36%
528,847
100%
68,957
28%
84,138
34%
245,927
100%
Share of (loss)/profit of
associated company
Taxation
Profit after taxation
4 (1)%
(348)
48%
(352)
48%
(36)
5%
(732) 100%
39,027 16%
53,461
22%
68,605
28%
84,102
34%
245,195
(11,433) 15%
(14,090)
18%
(22,279)
29%
(28,374)
38%
(76,176) 100%
27,594 16%
39,371
23%
46,326
27%
55,728
34%
169,019
(1,741)
32%
(1,121)
21%
(1,658)
30%
37,630
23%
45,205
28%
54,070
33%
Minority interests
(894) 17%
100%
100%
(5,414) 100%
Net profit attributable
to shareholders
26,700 16%
163,605
100%
Earnings per share (sen)
Basic
8.03
11.31
13.59
16.25
49.18
Operating profit on segmental basis
Property development
30,558 14%
45,086
Property investment
5,856 26%
Plantation activities
912 25%
Others
21%
62,667
30%
75,207
35%
213,518
100%
5,478
25%
4,512
20%
671
18%
624
17%
6,325
29%
22,171
100%
1,423
40%
3,630
100%
2,976 29%
3,402
33%
1,808
17%
2,189
21%
10,375
100%
249,694
100%
Profit before interest
40,302 16%
54,637
22%
69,611
28%
85,144
34%
Net interest expense
and taxation
(1,275) 28%
(1,176)
26%
(1,006)
22%
(1,042)
24%
39,027 16%
53,461
22%
68,605
28%
84,102
34%
(4,499) 100%
245,195
100%
Financial Calendar
Financial Year End
30 June 2002
Announcement of Results
1st quarter
2nd quarter
3rd quarter
4th quarter
15 November 2001
21 February 2002
14 May 2002
12 August 2002
26 September 2002
Annual General Meeting
Payment of Dividends
First interim
Declaration
Book closure
Payment
Second interim
Declaration
Book closure
Payment
18 October 2002
21 February 2002
12 March 2002
22 March 2002
12 August 2002
29 August 2002
10 September 2002
21
Five Year Financial Highlights
In RM’000
Results
Revenue
Taxation
Minority interests
Dividends
Retained profit for the financial year
2002
2001
2000
1999
1998
528,847
245,195
(76,176)
169,019
(5,414)
163,605
(83,825)
79,780
426,378
203,847
(58,261)
145,586
(11,498)
134,088
(71,856)
62,232
414,475
200,684
(56,411)
144,273
(17,369)
126,904
(46,819)
80,085
353,788
145,282
3,866
149,148
(19,239)
129,909
(13,914)
115,995
258,840
102,904
(30,505)
72,399
(8,139)
64,260
(11,071)
53,189
55,255
50,779
444,409
50,384
618,398
–
3,858
541,879
1,764,962
(210,115)
1,554,847
63,255
49,584
411,478
8,570
476,379
–
4,170
712,920
1,726,356
(234,194)
1,492,162
44,727
46,666
299,699
8,136
471,590
–
4,523
551,696
1,427,037
(335,803)
1,091,234
42,307
43,202
283,849
7,473
495,040
189
4,875
318,664
1,195,599
(210,880)
984,719
42,898
41,155
230,431
10,503
497,729
513
5,228
358,134
1,186,591
(337,732)
848,859
332,668
1,083,365
1,416,033
55,275
43,015
40,524
1,554,847
332,668
1,002,919
1,335,587
96,777
41,641
18,157
1,492,162
282,668
674,082
956,750
70,935
43,749
19,800
1,091,234
128,834
620,371
749,205
57,117
160,000
18,397
984,719
128,834
503,891
632,725
37,878
160,000
18,256
848,859
170,496
1,375,810
1,554,618
149,135
1,146,169
1,380,372
149,960
852,978
1,127,464
157,857
690,965
975,936
77,797
606,530
883,907
Basic earnings per share (sen) **
Net tangible assets per share (sen) **
49.18
427
35.00
43.42
400
30.00
49.21
337
20.00
50.42
289
15.00
24.94
244
12.00
NOPAT /Average capital employed (%)
Return on average equity (%)
Debt/Equity (%) ***
10.97
11.89
–
10.80
11.70
–
13.30
14.88
–
16.17
18.80
17.64
8.80
10.59
26.72
Group Assets
Property, plant and equipment
Associated company
Investment properties
Other long term investments
Land held for development
Other assets
Goodwill on consolidation
Current assets
Total assets
Current liabilities
Financed by
Share capital
Reserves
Shareholders’ equity
Minority interests
Long term borrowings
Deferred taxation
NOPAT
Average shareholders’ equity
Average capital employed*
Financial statistics
*
Average capital employed comprises shareholders’ equity, minority interests, long term borrowings, short term borrowings
and deferred taxation.
**
The figures for financial year 1998 to 2000 have been adjusted following the issue of 128,833,900 new ordinary shares by the
Company in financial year 2000 pursuant to a bonus issue on the basis of one new ordinary share for every existing ordinary
share held.
***
Net debt represents total borrowings less deposits with financial institutions and cash and bank balances.
Note During the financial year, the Group has reclassified the previous years comparative figures to conform with current financial
year’s presentation as per Note 40 and Note 41 to the financial statements.
22
01
99
02
43.42
49.18
01
49.21
00
245
204
201
145
00
50.42
24.94
Earnings per Share Sen
98
Property Invest. Plantation
Profit before interest and taxation
Others
Total assets employed
01
02
Property Dev.
Revenue
Property Invest. Plantation
Profit before interest and taxation
6
2
1
1
5
7
7
13
25
57
Segmental Result – FY2001 %
7
2
4
1
1
5
7
9
27
61
Segmental Result – FY2002 %
Property Dev.
Revenue
103
Profit before Taxation RM Million
529
1,416
02
99
90
86
00
98
90
86
99
02
1,336
01
957
00
749
633
99
98
426
414
354
259
Revenue RM Million
Shareholders’ Equity RM Million
98
Others
Total assets employed
23
Management’s Discussion and Analysis
Highlights
■
The Group’s pre-tax profit for the financial year 2002 recorded another
historical high, surpassing the RM200 million threshold for the third consecutive
year to achieve RM245.2 million, a 20% growth over FY 2001.
■
Group revenue increased by 24% due to increase in all segments. Property
development and property investment recorded an increase of 25% and 31%
respectively compared to previous year. Higher property sales and progress
billings accounted for the increase in property development segment whereas
the new investment properties such as IOI Mall, Kulai resulted in the increase in
the property investment segment.
■
Sales value improved by 14% or RM59 million to RM470 million (FY 2001 : 411
million). However the number of units sold was reduced to 1,926 units from
3,112 units due mainly to the sale of higher price ranged products. This resulted
in the overall sales value per unit to increase to RM244,000 per unit compared
to RM132,000 per unit for FY 2001.
■
Based on an average capital employed of RM1,554.6 million (FY 2001 :
RM1,380.4 million) and a NOPAT of RM170.5 million (FY 2001 : RM149.1 million),
the Return on Capital Employed (“ROCE”) of the Group is 10.97% for fiscal
2002, up marginally from 10.8% recorded in fiscal 2001.
24
■
Net cash flow generated from operations after tax payment was RM184 million.
After accounting for outflows for investing activities such as addition of
investment properties, long-term quoted investments, acquisition of remaining
25% interest in Nice Frontier Sdn Bhd, acquisition of additional landbank at
Dengkil, Selangor as well as payment of dividends, net cash outflow for the
year was RM180 million, reflected by a reduction in the Group cash reserve
position to RM190 million as at 30 June 2002.
■
Based on a net profit attributable to shareholders of RM163.6 million (FY 2001 :
RM134.1 million) and an average shareholders’ equity of RM1,375.8 million (FY
2001 : RM1,146.2 million), the Return on Equity (“ROE”) for the year is 11.9% as
compared to 11.7% for FY 2001. As is the case for ROCE, the increase in ROE is
only marginal.
Economic Profit and Return
An additional management performance measurement system that measures
real economic profit and return was implemented by the Group to supplement
the conventional accounting measures of performance. The new system that
measures how much economic value an economic entity has created is
calculated by deducting a charge (cost of equity and cost of debts) for the
capital employed from NOPAT. Business units must have a NOPAT that is more than
its cost of capital before it is considered to have “created value” or economic
profits. Projects are evaluated on their economic profits and all analysis of
acquisitions, capital expenditure, budget and strategic plans are now based on
economic profit principles.
25
5 Years Economic Profit Trend
An analysis on the distribution of the Group’s NOPAT between cost of equity, cost of
debts and economic profit.
RM'000
175,000
155,000
135,000
115,000
95,000
75,000
55,000
35,000
15,000
(5,000)
1998
1999
Economic Profit
In RM’000
Economic Profit
Total Cost of Debts
2000
2001
Total Costs Debts
1998
2002
Total Cost of Equity
1999
2000
2001
2002
(3,554)
78,625
51,197
37,713
44,016
5,398
8,709
5,687
3,549
1,477
Total Cost of Equity
75,953
70,523
93,076
107,873
125,003
NOPAT
77,797
157,857
149,960
149,135
170,496
The Group’s economic profits was minimal for 1998 because it was a “semi-gestation”
period as a result of some major acquisitions such as Ladang Puchong (now known
as Bandar Puteri) was only officially launched in January 2000. The increased in
economic profits for FY2002 by 17% is due to the increased in NOPAT by 14% and also
slightly lower cost of equity from 8.77% to 8.61%.
The capital structure of the Company consists of substantial equity fund.
26
The above computations were arrived at based on the following variables:
%
20
15
10
5
0
-5
1998
1999
2000
2001
2002
Cost of Equity
Weighted Average Cost of Capital (WACC)
Economic Profit Spread
Return on Capital Employed (ROCE)
Note:
Average shareholders’ equity for FY 1998-2001 have been restated as a result of change in accounting policy on
proposed dividends. Accordingly, the economic profit and cost of equity for the affected years have been
recomputated based on the restated shareholders’ equity. For further details on the change of accounting
policy, please refer Note 40 to the Financial Statement.
27
■
review of core business operations
Introduction
The Group’s property business includes property development and investment
activities. The Property development remains the core business of the Group and
our projects are mainly located in the Klang Valley and Southern Johor, each
involving sizeable tracts of land planned for self contained townships. Whereas
the property investment activities comprise substantially of commercial and retail
space located at our self contained townships.
The Group’s competitive advantage is in township development where we have
excellent track record and hands on experience in planning and tailoring product
mix to prevailing market conditions. The Group’s strong cash flow position is also
an added advantage which enable the Group to constantly look out for
investment opportunity.
Market Environment
Due largely to the contagion effects of the slowdown in global economy and
external risks, growth rate for the Malaysian economy and property sector was
basically flat for the year 2001. However, in the beginning of the year 2002 the
property market begin to show signs of recovery due to a combination of positive
factors which has reversed the downward trend in year 2001.
28
Market Environment (cont’d)
The easy accessibility to housing loans and the all time low interest rates due to
intense competition among banks to capture a greater share of the residential
mortgage market have encouraged more people to purchase houses. The progrowth 2002 Budget which introduced various policy measures also helped to
strengthen the property sector especially the residential housing market. The
Employee Provident Fund (EPF) has also relaxed its policies to permit contributors
to make withdrawals towards the purchase of a second house thereby also
contributed positively to the residential sector.
Although the national growth rate was flat, Selangor State where the Group Klang
Valley landbank is located, had shown a growth rate of 2.5% and 3.5% increase in
terms of volume of transactions and value respectively.
29
■
Operations
In line with the market environment, the Group did very well again in FY 2002
especially the Klang Valley projects. The Klang Valley projects comprising of
Bandar Puteri, Puchong, Bandar Puchong Jaya and IOI Resort account for 80% of
total sales value of the Group.
The Puchong, Putrajaya / Cyberjaya corridor in particular where our three projects
in Klang Valley are located, enjoys very good demand because of the locational
advantages and easy accessibility through a network of new highways, the
perceived potential for capital appreciation and relatively affordable pricing
compared to the older established areas.
Selangor’s Petaling District where our Puchong projects are located is one of the
fastest growing area of the nation. The growth rate for the Petaling District for last
few years was at an exponential rate due to the availability of good infrastructure
and convenience for the buyers. The IOI Mall together with the newly opened
Tesco Hypermarket provide Puchong residents with ample shopping opportunities
and modern conveniences.
30
Operations (cont’d)
Down south, our Bandar Putra Kulai (“BPK”) continues to enjoy steady demand
although the Johor property market is still soft. With the opening of our IOI Mall,
Kulai in December 2001 and the newly completed Club House for Palm Villa Golf
and Country Resort, the BPK township is more vibrant and lively now. The newly
completed facilities are part of our overall plan to develop the BPK township into a
fully integrated self contained township. We are confident more and more buyers
will be attracted to buy houses and invest in BPK township with the availability of a
wide range of affordable houses and commercial properties, good infrastructure
and conveniences.
For the year under review, the group did very well to record an improvement of
14% increase in terms of total sales value. The Group sold a total of 1,926 units with
a total sales value of RM470 million as compared to 3,112 units with a total sales
value of RM411.4 million for FY 2001. Bandar Puteri, Puchong the flagship
development of the Group accounted for 65% of total sales and contributed to
the increase in sales during the year.
31
■
The sales for the various projects are as follows :
Sales revenue
Units
Projects
(RM million)
FY2002
FY2001
FY2002
FY2001
Bandar Puchong Jaya
400
613
71.4
79.4
Bandar Puteri, Puchong
820
1,217
303.3
220.4
Bandar Putra, Kulai
707
1,278
96.2
110.3
Others
Total
(1)
4
1,926
3,112
(0.9)
1.3
470.0
411.4
The Group sold a wide range of products during the year, with better sales volume
recorded for the above RM250,000 price range; 36% (FY 2001 : 14%) and less sales
volume for properties below RM100,000; 28% (FY 2001 : 48%). As a result, the
average price per unit has increased to RM244,000 per unit from RM132,000 per
unit. The range of projects sold, summarised by price range is as follows :
FY2002
Price range
FY2001
%
Units
%
Above RM500,000
124
6
75
2
Between RM250,000 to RM500,000
572
30
364
12
267
14
345
11
431
22
835
27
Below RM100,000
532
28
1,493
48
1,926
100
3,112
100
Total
32
Units
The increase in disposable income of the people together with the all time low
interest rate and easy availability of housing loan has resulted in better sales of
properties which are above RM250,000.
The breakdown in sales by product component are as follows:
FY2002
Price range
Commercial
FY2001
Units
%
Units
%
6
1
7
1
1,163
60
1,588
51
47
Residential
Landed Properties
Apartments
Shop Office
Total
597
31
1,501
160
8
16
1
1,926
100
3,112
100
The Group’s property investment portfolio comprises mainly of retail and office space
totaling approximately RM1.4 million sq ft of net lettable space (FY 2001 : 1.1 million sq
ft), of which about 100,000 sq ft is located in Singapore. The increase in lettable
space is mainly due to the opening of the newly completed IOI Mall at Kulai which
contributed an additional of 261,000 sq ft of lettable space. The Mall, Kulai open for
business in December 2001 and currently enjoy an occupancy rate of 80%. The
higher occupancy rate and more lettable space has resulted in the gross rental
revenue to improve by 31% from RM29.1 million to RM38.2 million and operating
profits to increase by 44% from RM15.4 million to RM22.2 million.
33
■
Results
Our property segment enjoyed another outstanding year for FY 2002, emerging yet
again as the clear leader in the housing sector.
For the year under review, revenue from property development activities was
RM475.8 million whilst EBIT was RM213.5 million as compared to RM386.7 million and
RM181.6 million respectively for the previous year. Margins were lower due to higher
sales of more affordable units down south which were of lower margin.
The Group’s overall EBIT for FY 2002, after taking in property investment, was RM249.7
million, 18% higher than FY 2001 whereas overall NOPAT for FY 2002 was RM170.5
million vs RM149.1 million for FY 2001. Based on an average capital employed of
RM1,554.6 million, the ROCE for the Group is 10.97% (FY 2001 : 10.8%). Returns are
relatively on the low side despite high operating margins because of low yields from
investment properties averaging 5% of book value. Although the yields are low for
investment properties such as shopping malls, they provide strategic value for the
development side of the business. Nevertheless, the Group will rationalise its property
investment portfolio at the appropriate time.
Towards Better Community & Social Services
We are committed to provide our customers with better quality homes located within
a modern and well-planned township. We have completed the following major
community projects todate:
■
Bandar Puchong Jaya Balai Polis together with 28 units of apartments for police
personnel costing RM5.5 million
34
■
Surau and Community Hall for Bandar Puchong Jaya residents costing RM1.2 million
■
Underpass and Flyover at IOI Palm Garden Resort costing RM7 million
■
Interchange at Bandar Putera Kulai costing RM17 million.
The major community projects under construction are;
■
Proposed half Diamond Interchange / Bridge at Bandar Puteri costing RM6 million
■
Proposed Bandar Puteri 15-acre Town Park costing RM5 million
The above projects are in advanced stage of completion. In addition, the group has
launched a community web site for the benefits of Puchong community and our
customers. The site also enables our condominium / apartments owners to pay their
maintenance and related charges/fees, online through the internet.
Outlook / Prospect
The housing market should continue to benefit from our improving domestic
economy and low interest rates. The successful implementation of the various
stimulants put in place by the government is crucial for continued improvement in
the health of the Malaysian economy and indirectly the construction and property
sectors. However the only negative factor is the repatriation of the illegal foreign
workers which may slow the construction sector down if not quickly resolved. Barring
unforeseen circumstances, we are expecting operating results to be good again in
the current year.
This Annual Report contains statements relating to the future that are based on management’s estimates,
assumptions and projections at the time of publication. These statements reflect our current views with respect
to future events and are subject to risks and uncertainties. Some factors, which include, but are not limited to,
changes in general economic and business conditions, changes in currency exchange rates, exceptional
climatic conditions, competitive activities, could cause actual results to differ materially from expectations.
35
Corporate Information
Board of Directors
PSM, DPMS, JP
Executive Chairman
Lee Yeow Chor
Executive Director
Dato’ Yeo How
DIMP
Executive Director
YM Raja Said Abidin b Raja Shahrome
Independent Non-Executive Director
Dato’ Prof Zainuddin b Muhammad
DPMT, JMN, JSM, SMT, KMN, ASK
Dato’ Hj Zakaria @
Shamsuddin b Dahlan
DPMT, JSM, SMT, KMN
Non Independent Non-Executive
Director
Director
Audit Committee
YM Raja Said Abidin b Raja Shahrome*
Chairman
Registered Office
7-10 Jalan Kenari 5
Bandar Puchong Jaya
Off Jalan Puchong
47100 Puchong
Selangor Darul Ehsan
Tel 03 8075 2288 / 8075 1155
Fax 03 8075 3997
Auditors
BDO Binder
Chartered Accountants
15th Floor
Wisma Hamzah Kwong Hing
1 Leboh Ampang
50100 Kuala Lumpur
Tel 03 2072 2755
Fax 03 2078 7045
Registrar
PFA Registration Services Sdn Bhd
1301, Level 13, Uptown 1
No. 1, Jalan SS21/58
Damansara Uptown
47400 Petaling Jaya
Tel 03 7725 4888
Fax 03 7725 8046
Legal Form and Domicile
Public Limited Liability Company
Incorporated and Domiciled
in Malaysia
Dato’ Prof Zainuddin b Muhammad*
Dato’ Yeo How (MIA 4368)
* Independent Non-Executive
Directors
Secretaries
Lee Ai Leng (LS 005809)
Yap Chon Yoke (MAICSA 0867308)
36
Stock Exchange Listing
Main Board Of
The Kuala Lumpur Stock Exchange
Websites
www.ioigroup.com
www.myioi.com
Email Address
[email protected]
[email protected]
Board of Directors
Board of Directors
1 Tan Sri Dato’ Lee Shin Cheng
Executive Chairman
2 Lee Yeow Chor
Executive Director
3 Dato’ Yeo How
Executive Director
4 YM Raja Said Abidin b Raja Shahrome
1
2
4
5
3
5 Dato’ Prof Zainuddin b Muhammad
6 Dato’ Hj Zakaria @ Shamsuddin b Dahlan
Director
7 Puan Sri Datin Hoong May Kuan
Director
6
7
37
Executive Chairman
Malaysian, aged 63
Tan Sri Dato’ Lee Shin Cheng, was first appointed to the Board
Tan Sri is deemed in conflict of interest with the Company by
on 24 December 1975. As Executive Chairman, he actively
virtue of his interest in certain privately-owned companies which
oversees the operations of the Group. He is an entrepreneur
are also involved in property development. However, these
with considerable experience in the plantation and property
privately-owned companies are not in direct competition with
development industries. In recognition of Tan Sri’s immense
the business of the Company. Except for certain recurrent
contributions and selfless devotion to the evolving needs and
related party transactions of revenue nature which are
aspirations of the property industry in Malaysia, Tan Sri was
necessary for day-to-day operations of the Company and its
bestowed the singular honour of FIABCI Malaysia Property
subsidiaries and for which Tan Sri is deemed to be interested as
Man of the Year 2001 Award. In February 2002, Tan Sri was
disclosed under Other Information section of the Annual Report,
conferred the Honorary Doctorate Degree in Agriculture by
there are no other business arrangements with the Company in
University Putra Malaysia in recognition of his contributions to
which he has personal interests.
the palm oil industry. Tan Sri is also active in providing his
advice and guidance to a large number of industry groupings,
Tan Sri attended five out of the seven Board Meetings held
associations and social organisations. He serves as, among
during the financial year ended 30 June 2002.
others, the Adviser to the Real Estate & Housing Developers’
Association and the KL & Selangor Chinese Chamber of
Commerce and Industry, a Council Member of Malaysian
Palm Oil Association and Malaysia-British Business Council, the
Honorary President of Association of Eng Choon Societies of
Malaysia and Federation of Hokkien Association of Malaysia.
Tan Sri is a member of Remuneration Committee of the
Company. He is also the Executive Chairman of IOI
Corporation Berhad and Palmco Holdings Berhad.
Tan Sri is the husband of Puan Sri Datin Hoong May Kuan, a
Director of the Company. He is also the father of Lee Yeow
Chor, an Executive Director of the Company.
38
Lee Yeow Chor
Dato’ Yeo How
Executive Director
Executive Director
Malaysian, aged 36
Malaysian, aged 46
Lee Yeow Chor was first appointed to the Board on 25 April
1996. He graduated with a LLB (Honours) from King’s College,
University of London and is also a Barrister of Gray’s Inn.
He also holds a Diploma in Finance and Accounting from the
London School of Economics. As an Executive Director, he is
actively involved in overseeing the various business
Dato’ Yeo How was first appointed to the Board on 25
January 1992. He is a Certified Public Accountant and a
member of the Malaysian Institute of Accountants. He has
considerable experience in corporate finance and general
management. Dato’ Yeo How has been with the IOI Group
for the past 19 years and, prior to joining the IOI Group in
1983, he was with a public accounting firm for 5 years.
operations of the Group. Prior to his appointment as the
Executive Director of the Company, he acted as a General
Dato’ Yeo How is a member of the Audit Committee. He is also
Manager (Group Operations). He also served in various
the Group Executive Director (Finance & Corporate Affairs) of
capacities in the Attorney General’s Chambers and Judiciary
IOI Corporation Berhad and Palmco Holdings Berhad.
Department for approximately four years. His last posting for
the Judiciary Department was as a Magistrate.
He attended all the seven Board Meetings held during the
financial year ended 30 June 2002.
He is also the Executive Director of IOI Corporation Berhad
and Palmco Holdings Berhad.
Lee Yeow Chor is the eldest son of Tan Sri Dato’ Lee Shin
Cheng and Puan Sri Datin Hoong May Kuan.
Malaysian, aged 57
YM Raja Said Abidin b Raja Shahrome was first appointed to
the Board on 1 December 1999. YM Raja Said holds a
Lee Yeow Chor is deemed in conflict of interest with the
Bachelor’s degree in Economics from the University Malaya. His
Company by virtue of his interest in certain privately-owned
working experience included a spell in Bank Negara Malaysia
companies which are also involved in property development.
and several multi-national corporations like Shell and Citibank.
However, these privately-owned companies are not in
He co-founded Sedaya College in 1984, an established
direct competition with the business of the Company. Except
academic institution and was the former President.
for certain recurrent related party transactions of revenue
nature which are necessary for day-to-day operations of the
YM Raja Said is the Chairman of the Audit Committee, a
Company and its subsidiaries and for which he is deemed to
member of the Remuneration Committee and Nominating
be interested as disclosed under Other Information section of
the Annual Report, there are no other business arrangements
with the Company in which he has personal interests.
Committee of the Company. He is also an independent nonexecutive Director of Palmco Holdings Berhad. He is the
Executive Director of several private limited companies.
39
Dato’ Hj Zakaria @ Shamsuddin b Dahlan
Non Independent Non-Executive Director
Malaysian, aged 57
Malaysian, aged 62
Dato’ Prof Zainuddin b Muhammad was first appointed to the
Dato’ Hj Zakaria @ Shamsuddin b Dahlan was first appointed
Board on 24 July 2001. He had his early education at the
to the Board on 21 August 2001. He graduated with a
Royal Military College before furthering his studies at the
Bachelor of Arts (Honours) in 1966 from University Malaya. In
University of Melbourne Australia. He also holds Master
February 1970, he attended a Management Analysis Course
Degree in Regional and Community Planning from Kansas
(Harvard Programme) and obtained a Certificate of
State University and Certificate in Urban Management from
Management Analysis in February 1971. He later pursued Post
Harvard University, USA.
Graduate Programme (MPA Programme) and obtained a
Master in Public Administration from State University of New
Dato’ Prof Zainuddin held many posts in various states of
York in 1977.
Malaysia before promoted to the post of Director General of
the Malaysian Federal Department of Town and Country
Dato’ Hj Zakaria @ Shamsuddin has had an illustrious career in
Planning from 23 March 1993 to 7 February 2001. In
the civil service and served in several departments and
recognition of Dato’ Prof Zainuddin’s outstanding
Ministry such as Public Service Department, Ministry of
achievement and contribution to planning, he was conferred
Finance, SIRIM, Prime Minister’s Department. His last post
the title of Adjunct Professor of Planning by the University
before retirement in 1995 was as Deputy Secretary General II
Technology Malaysia in 1996, was named Planner of the Year
in the Ministry of Education. Subsequently, he was appointed
in 1995 by the Malaysian Institute of Planners and was named
as a Member of the Public Service Commission Malaysia from
the Paul Harris Fellow in 1995 by the Rotary Club International
1995 until September 2000.
and conferred Alumni Fellow in 1997 by Kansas State
University, USA and Fellow of the Institute for Environment and
Dato’ Hj Zakaria @ Shamsuddin is a member of the
Development (LESTARI) Universiti Kebangsaan Malaysia.
Nominating Committee.
Dato’ Prof Zainuddin is a member of the Audit Committee,
He attended six out of the seven Board Meetings held since
Remuneration Committee and Nominating Committee of the
his appointment on 21 August 2001 to 30 June 2002.
Company. Dato’ Prof Zainuddin is also the Director of TT
Resources Berhad and UDA Holdings Berhad. Currently, Dato’
Prof Zainuddin b Muhammad is the Chairman of Putrajaya
Holdings Sdn Bhd and Board of Town Planners Malaysia.
He attended six out of the seven Board Meetings held since
his appointment on 24 July 2001 to 30 June 2002.
40
Non Independent Non-Executive Director
Malaysian, aged 62
Puan Sri Datin Hoong May Kuan was first appointed to the
Board on 24 December 1975. She was a former teacher and
presently sit on the Board of several private companies.
She is the wife of Tan Sri Dato’ Lee Shin Cheng.
Puan Sri is deemed in conflict of interest with the Company by
virtue of her interest in certain privately-owned companies
which are also involved in property development. However,
these privately-owned companies are not in direct
competition with the business of the Company.
Puan Sri attended all the seven Board Meetings held during
the financial year ended 30 June 2002.
Notes:
1
Save as disclosed above, none of the Directors have:
a
b
2
any family relationship with any directors and/or substantial shareholders
of the Company; and
any conflict of interest with the Company.
None of the Directors have any conviction for offences (other than traffic
offences) within the past 10 years.
41
balance
By striking a harmonious balance between
the needs and aspirations of all our various
stakeholders, we strive for sustainable
growth over the long term.
Audit Committee Report
Members
2
Objectives
The primary objectives of the Audit Committee are to:
Chairman / Independent Non-Executive Director
i
Provide assistance to the Board in fulfilling its fiduciary
responsibilities, particularly in the areas relating to the
Company and its subsidiary companies accounting
Member / Independent Non-Executive Director
and management controls, financial reporting and
business ethics policies.
Dato’ Yeo How
Member / Executive Director
ii
Provide greater emphasis on the audit function by
serving as the focal point for communication between
Terms of Reference
non-Committee directors, the external auditors, internal
auditors and the management and providing a forum
1
Composition of Audit Committee
for discussion that is independent of the management. It
The Committee shall be appointed by the Board of
is to be the Board’s principal agent in assuring the
Directors from among its members and shall consist of no
independence of the Company’s external auditors, the
fewer than three members, with a majority of the
integrity of the management and the adequacy of
Committee being Independent Non-Executive Directors
disclosure to shareholders.
and at least one member of the Committee being a
member of the Malaysian Institute of Accountants.
iii
Undertake such additional duties as may be
appropriate and necessary to assist the Board.
The Committee shall elect a Chairman from among its
members who is an Independent Non-Executive Director.
3
Authority
The Committee is authorised by the Board to investigate
In the event that a member of an audit committee resigns,
any activity within its terms of reference. It shall have :
dies or for any other reason ceases to be a member with
the result that the number of members is reduced below
i
three, the Board of Directors shall, within three months of
Unrestricted access to any information pertaining to
the Company and its subsidiary companies.
that event, appoint such number of new members as may
be required to make up the minimum of three members.
ii
Direct communication channels with both the
external auditors and internal auditors.
iii
Full access to any employee or member of the
management.
The Committee is also authorised by the Board to obtain
outside legal or other independent professional advice it
considers necessary and reasonable for the
performance of its duties.
44
4
Duties and Responsibilities
x
To review the Group’s quarterly financial statements and
In fulfilling its primary objectives, the Audit Committee will
the Group’s and the Company’s annual financial
need to undertake the following duties and responsibilities
statements before submission to the Board.
as summarised below:
The review shall focus on:
i
To review with management on a periodic basis, the
■
any changes in accounting policies and practices
Company’s general policies, procedures and controls
■
major potential risk issues, if any
especially in relation to management accounting,
■
significant adjustments and issues arising from the
audit
financial reporting, risk management and business ethics.
ii
To consider the appointment of the external auditors,
■
the going concern assumption
■
compliance with the applicable approved
accounting standards
the terms of reference of their appointment, the audit
fee and any questions of resignation or dismissal.
■
compliance with stock exchange and legal
requirements
iii
To review with the external auditors their audit plan,
xi
scope and nature of the audit for the Company and
To review any related party transaction and conflict
of interest situations that may arise within the
the Group.
Company or the Group including any transaction,
iv
v
To review the external auditors’ management letter
procedure or course of conduct that raises questions
and management’s response.
of management integrity.
xii To undertake any other activities as authorised by the
To review with the external auditors with regard to
Board.
problems and reservations arising from their interim and
final audits.
5
vi
To review with the external auditors, their audit report.
Meetings
Number of Meetings
The Committee shall meet at least five times a year or
vii To review the assistance given by employees to the
external auditors.
more frequently as circumstances dictate. The Chairman
shall also convene a meeting of the Committee if
requested to do so by any member, the management or
viii To review the adequacy of the scope, functions and
resources of the internal audit department and that it
the internal or external auditors to consider any matter
within the scope and responsibilities of the Committee.
has the necessary authority to carry out its work.
ix
To review the internal audit programme and results of
the internal audit programme and where necessary
ensure that appropriate action is taken on the
recommendations of the internal audit function.
45
Audit Committee Report
Attendance of Meetings
iii
Reviewing the audited financial statements before
The Head of Finance and Head of Internal Audit Division
recommending the same for the Board of Directors’
and representatives of the external auditors shall normally
approval.
be invited to attend meetings of the Committee. However,
at least once a year the Committee shall meet with the
Reviewing the Company’s compliance, in particular the
external auditors without the presence of any executive
quarterly and year end financial statements with the
board member. The Committee may also invite other
Listing Requirements of the Kuala Lumpur Stock Exchange
directors and employees to attend any of its meeting to
and the applicable approved accounting standards
assist in resolving and clarifying matters raised.
issued by the Malaysian Accounting Standards Board.
Quorum
6
iv
v
Review of the quarterly unaudited financial results
A quorum shall consist of a majority of Independent Non-
announcements before recommending them for the
Executive Directors and shall not be less than two.
Board of Directors’ approval.
Secretary to Audit Committee and Minutes
vi Review of the Internal Audit Department’s resources
The Company Secretary shall be the secretary of the
requirement, programmes and plan for the financial year
Committee and as a reporting procedure, the minutes
and the annual assessment of the Internal Audit
shall be circulated to all members of the Board.
Department’s performance.
Summary of Activities
vii Review of the audit reports presented by Internal Audit
Department on findings and recommendations and
During the year, the Audit Committee carried out its duties
management’s responses thereto and ensured that material
and responsibilities in accordance with its terms of reference.
findings are adequately addressed by management.
The main activities undertaken by the Committee were as
follows:
viii Review of related party transactions entered into by the
Group. The Committee had, in December 2001, reviewed
the procedures and guidelines for recurrent Related Party
i
Review of the external auditors’ scope of work and their
Transactions and ascertained that these were adequate in
audit plan.
ensuring that such transactions are carried out on normal
commercial terms consistent with the Group’s operating
ii
Reviewing with the external auditors on the results of
policies which are not more favourable to the related
their audit, the audit report and internal control
parties than those generally available to the public and
recommendations in respect of control weaknesses
are not detrimental to the minority shareholders.
noted in the course of their audit.
46
ix
Review of the extent of the Group’s compliance with the
During the financial year, audit assignments were carried out
relevant provisions set out under the Malaysian Code on
and completed by the Internal Audit Department on the
Corporate Governance for the purpose of preparing the
various operating units of the Group covering property
Corporate Governance Statement and Statement on
development and investments activities. Audit reports were
Internal Control pursuant to the Listing Requirements of the
issued to the Audit Committee members incorporating findings
Kuala Lumpur Stock Exchange.
and recommendations with regard to system and control
weaknesses noted in the course of the audit and
Number of Meetings & Details of Attendance
management’s responses on the audit findings. The Internal
Audit Department also followed up on implementation and
Seven Audit Committee meetings were held during the
disposition of all significant findings and recommendations.
financial year ended 30 June 2002. The attendance record
of each member is as follows:
Audit committee members
Total number
of meetings
Number
of meetings
attended
YM Raja Said Abidin b
7
7
Raja Shahrome (Chairman)
7
7
Dato’ Yeo How
7
7
Internal Audit Function
The Internal Audit Department of the Group was established to
assist the Audit Committee in discharging its duties and
responsibilities.
The Internal Audit Department adopts a risk-based approach,
focusing its work mainly on key processes and principal risk
areas of the operating units. The Internal Audit Department
undertakes regular and systematic reviews of the systems of
internal controls so as to provide reasonable assurance that
such systems continue to operate satisfactorily and effectively.
The department provides the Committee with independent
and objective reports on the state of internal control of the
various operating units within the Group and the extent of
compliance of the operating units with established policies
and procedures.
47
Corporate Governance
The Board of Directors of the Company fully subscribes to the
The Board Of Directors
principles and recommendations embodied in the Malaysian
Code on Corporate Governance (“the Code”) and strives to
Principal Duties
adopt the substance behind the corporate governance
The Board takes full responsibility for the overall performance
prescriptions and not merely the form.
of the Company and of the IOI Group by setting the vision
and objectives and by directing the policies, strategic action
In addition to the implementation of the Code, the
plans and stewardship of the Group’s resources. It focuses
Company’s own corporate governance practices have
mainly on strategies, financial performance and critical
always been guided by its “Vision IOI” framework whereby
business issues, including the following specific areas:
responsible and balanced commercial success is to be
achieved by addressing the interests of all stakeholders,
■
The Group’s strategic action plans
that is, our customers, our shareholders, our people, our
■
Financial performance and key performance indicators
business associates and our nation and the society in which
■
Principal risks and their management
we operate. A set of core values and guiding principles
■
Succession planning for senior management
guides our people at all levels in the conduct and
■
Investor relations programme and shareholder
management of our business and affairs of the Group. We
believe that good corporate governance results in
communication policy
■
Internal control system
quantifiable long term success and creation of long term
shareholder value as well as benefits for all other
Composition of the Board
stakeholders. Hence, the Board of Directors is committed to
The Board is made up of three executive directors, two
ensuring that high standard of corporate governance is
independent directors and two non-independent directors.
practised throughout the IOI Group in the best interest of all
stakeholders.
The Board is pleased to provide the following statement,
which outlines how the Group has applied the principles laid
down in the Code. Except for matters specifically identified,
the Board of Directors has complied with the best practices
set out in the Code.
48
With their intimate knowledge of the Group’s business, the
Number of
three executive directors, with the support of the
Total Number
Meetings
of Meetings
Attended
management team, take on primary responsibility for
managing the Group’s business and resources. The executive
directors, led by Tan Sri Dato’ Lee Shin Cheng, have many
Executive Directors
years of experience in the Group’s core businesses and
7
7
practise a very “hands-on” style of management. The Group is
Lee Yeow Chor
7
7
focused on businesses it is good at and the intimate
Dato’ Yeo How
7
7
knowledge and close involvement of the executive directors
Lee Cheng Leang
6
6
have enabled the Group to have leadership positions in its
(resigned on 20 March 2002)
7
7
The two Independent directors are individuals of seniority,
7
7
calibre, credibility and with vast varied experiences. The
6
6
independent directors are actively involved in various Board
(appointed on 24 July 2001)
committees. They provide a broader view, independent
Dato’ Hj Zakaria @ Shamsuddin b Dahlan 6
6
assessment and opinions on management proposals
(appointed on 21 August 2001)
chosen industries. The specific areas of responsibilities of the
executive directors are shown in the Directors’ profiles.
Non-executive Directors
sponsored by the executive directors.
Board Balance
Although a relatively small board, it provides an effective
The current Board composition of five non-independent
blend of entrepreneurship, business and professional expertise
directors and two Independent directors complies with the
in general management, finance, legal and technical areas
KLSE Listing Requirements that requires a minimum of 2 or 1/3
of the industries the group is involved in. A key strength of this
of the Board to be Independent directors.
structure has been the speed of decision-making.
In his capacity as Executive Chairman, Tan Sri Dato’ Lee Shin
The Board has at least five regularly scheduled meetings
Cheng functions both as Chief Executive Officer and
annually, with additional meetings for particular matters
Chairman of the Board. The Board is mindful of the
convened as and when necessary. Board meetings bring an
convergence of the two roles and has a well-defined
independent judgement to bear on issues of strategy,
framework on the various categories of matters that require
performance, resources and standards of conduct.
the Board's approval, endorsement or notation, as the case
may be. All related party transactions are strictly dealt with in
Seven Board meetings were held during the financial year
accordance with the Listing Requirements and with
ended 30 June 2002. The attendance record of each Director
independent consultants to advise other board members and
since the last financial year end or the date of appointment is
shareholders.
as follows:
There is also balance in the Board with the presence of
independent directors and other representative director who
are individuals of credibility and repute and who demonstrate
objectivity and robust independence of judgement.
49
Corporate Governance
The Board has identified YM Raja Said Abidin b Raja Shahrome
Appointment to the Board
as the Senior Independent Non-Executive Director of the
The Nominating Committee of the Company comprises two
Board to whom concerns (of shareholders, management or
independant non-executive directors and one non-independent
others) may be conveyed.
non-executive director. The committee is responsible for making
recommendations for any appointments to the Board. In making
Other than the two Independent directors and the representative
these recommendations, the Nominating Committee considers
of the significant shareholder, IOI Corporation Berhad, the Board
the required mix of skills and experience which the directors should
also consists of Dato’ Hj Zakaria @ Shamsuddin b Dahlan, a
bring to the Board. Any new nomination received is put to the full
representative from the other major shareholder, i.e. Skim Amanah
Board for assessment and endorsement.
Saham Bumiputra, to fairly reflect its investment in the Company.
As part of the process of appointing new directors, the Board
Supply of Information
ensures that new directors are provided with an orientation
All Board members are supplied with information on a timely
and education programme.
manner. Board reports are circulated prior to the Board
meetings to enable the Directors to obtain further information
All directors have attended the Mandatory Accreditation
and explanation, where necessary, before the meetings.
Programme organised by the Research Institute of Investment
Analysts Malaysia and directors are encouraged to attend
The Board reports provide, amongst others, periodical
Continuous Education Programme to keep abreast with new
financial and corporate information, significant operational,
regulatory development and listing requirements.
financial and corporate issues, performance of the various
business units and management proposals that required
Re-election
Board’s approval.
In accordance with the Company’s Articles of Association
(Articles), all Directors who are appointed by the Board are
Detailed periodic briefings on industry outlook, company
subject to election by shareholders at the first opportunity after
performance and forward previews (forecasts) are also
their appointment. The Articles also provide that at least 1/3 of
conducted for the Directors to ensure the Board is well informed
the remaining Directors be subject to re-election by rotation at
of the latest market and industry trend and development.
each Annual General Meeting provided always that all Directors
including the Managing Director shall retire from office at least
The Board has the services of two Company Secretaries who
once every three years but shall be eligible for re-election.
ensure that all appointments are properly made, that all
necessary information is obtained from the Directors, both for the
Directors Remuneration
company's own records and for the purposes of meeting
statutory requirements as well as obligations arising from the
The Company’s remuneration scheme is linked to performance,
Listing Requirements or other regulatory requirements. The
service seniority, experience and scope of responsibilities and is
Company Secretaries are also charged with highlighting all issues
periodically benchmarked to market/industry survey
which they feel ought to be brought to the Board’s attention.
conducted by human resource consultants.
Beside Company Secretaries, independent directors also have
The Remuneration Committee of the Company comprises the
unfettered access to the financial and legal officers as well as
following Directors:
the internal auditors of the Company.
1
In exercising their duties, Board committees are entitled to
2
obtain professional opinions or advice from external
3
consultant such as merchant bankers, valuers, human
resource consultants and etc.
50
The Committee ascertains and approves remuneration
Shareholders
packages of Executive Directors in accordance with the
Company’s policy guidelines and with reference to external
Dialogue Between the Company and Investors
benchmark reports.
The Company recognises the importance of maintaining a
constructive and effective communication with all
The remuneration package of the Executive Chairman is
shareholders, stakeholders, investors and the public in
approved by the full Board and fees for Independent Directors
general. As such, the Company uses the following key
are determined by the full Board with the approval from
investor relation activities to update investors, to explain its
shareholders at the Annual General Meeting. Individual Directors
business and financial objectives and to solicit feedback
affected are not involved in the approval of their own packages.
from investors:
Directors’ Remuneration
■
The details of the remuneration of Directors of the Company
Meeting with financial analysts and institutional fund
managers;
comprising remuneration received/receivable from the
■
ended 30 June 2002 are as follows:
Participating in roadshows and investor conferences,
both domestically and internationally; and
Company and subsidiary companies during the financial year
■
Participating in teleconferences with investors and
research analysts.
1
Aggregate remuneration of Directors categorised into
During the financial year, the Group had participated in 12
appropriate components:
roadshows and investor conferences and had approximately
100 meetings with financial analysts and investors.
Executive
Non-executive
Directors
Directors
105
105
1,214
–
Historically, the Company’s Annual General Meetings
Bonus & Incentives
759
–
(AGMs) have been well attended. It has always been the
Benefits-in-kind
121
–
practice for the Chairman to provide ample time for the
Others
333
–
Q&A sessions in the AGMs, for suggestions and comments by
2,532
105
shareholders to be noted by management for consideration.
In RM’000
Annual General Meeting and Other Communication with
Fees
Salaries
Total
2
Shareholders
Number of directors whose remuneration falls into the
Timely announcements are made to the public with regard
following bands:
to the Company’s corporate proposals, financial results and
other required announcements.
Number of Directors
Range of remuneration
Executive
Non-executive
The Group has also established websites i.e.
www.ioigroup.com, and www.myioi.com for shareholders
Below RM50,000
–
4
and the public to access corporate information, financial
RM50,001 to RM200,000
–
–
statements, news and events related to the Group.
RM200,001 to RM250,000
1
–
RM250,001 to RM550,000
–
–
RM550,001 to RM600,000
1
–
RM600,001 to RM650,000
1
–
RM650,001 to RM1,100,000
–
–
RM1,100,001 to RM1,150,000
1
–
51
Corporate Gavernance
Accountability and Audit
Internal Control
The information on the Group’s internal control is presented in
Directors’ Responsibility for Preparing the Annual Audited
the Statement on Internal Control.
Financial Statements.
The Directors are required by the Companies Act, 1965 to
Audit Committee
prepare financial statements for each financial year which give
The Company has an Audit Committee whose composition
a true and fair view of the Company and the Group’s state of
meets the Listing Requirements, i.e. Independent Directors forming
affairs. Following discussions with the external auditors, the
the majority and a member that is a qualified accountant.
Directors consider that the Company uses appropriate
accounting policies that are consistently applied and supported
The Audit Committee meets periodically to carry out its
by reasonable as well as prudent judgements and estimates,
functions and duties pursuant to its terms of reference. Other
and that all accounting standards which they consider
Board members also attend meetings upon the invitation of
applicable have been followed during the preparation of the
the Audit Committee. However, at least once a year the
financial statements.
Committee meets with the external auditors without executive
Board members present.
The Directors are responsible for ensuring that the Company
keeps the accounting records and are disclosed with
The Audit Committee is able to obtain external professional
reasonable accuracy which enable them to ensure that the
advice and to invite outsider with relevant experience to
financial statements comply with the Companies Act, 1965.
attend its meeting, if necessary.
They have the general responsibility for taking such steps to
safeguard the assets of the Group, and to detect and
prevent fraud as well as other irregularities.
The role of the Audit Committee in relation to the external
auditors and the number of meetings held during the financial
year as well as the attendance record of each member are
Financial Reporting
shown in the Audit Committee Report.
In presenting the annual financial statements and quarterly
announcement to shareholders, the Directors aim to present
a balanced and understandable assessment of the Group’s
financial position and prospects. In addition to Chairman’s
Statement, the Annual Report of the Company contains the
following information to enhance shareholders’
understanding of the business operations of the Group:
■
Management’s discussion and analysis.
■
Financial trends and highlights, key performance indicators
and other background industry notes deemed necessary.
52
Statement on Internal Control
Introduction
The Board confirms that there is an on-going process for
identifying, evaluating, managing and monitoring the
This Statement of Internal Control by the Board of Directors on
significant risks affecting the achievement of its business
the Group is made pursuant to KLSE Listing Requirements with
objectives throughout the period and the formalised risk
regard to the Group’s compliance with Principle and Best
management framework was in place since the fourth quarter
Practices provisions relating to internal controls provided in the
of the financial year under review. This process is regularly
Malaysian Code on Corporate Governance (‘Code’).
reviewed by the Board and accords with the Guidance.
Outlined below is the statement of internal control of the
Group for the financial year under review prepared in
The Board is pleased to highlight below the state of the
accordance with the Statement on Internal Control:
Group’s existing internal control systems and the additional
Guidance for Directors of Public Listed Companies
efforts carried out by the Group in relation to the Code
(‘Guidance’) issued by KLSE.
during this reporting period.
Board’s Responsibilities
Pillars of Existing Internal Control
The Board of Directors recognises the importance of sound
In the years prior to the introduction of the Code, the Group
internal control to good corporate governance. The Board
has adopted a risk-based approach to its strategic processes
affirms its overall responsibility for the Group’s systems of
and internal Control. Below are key pillars of our existing
internal control which include the establishment of an
internal control systems that are in the Board’s opinion in
appropriate control environment and framework as well as
conformation with the spirit of the Code and the
reviewing the adequacy and integrity of those systems. It
recommended best practices:
should be noted, however, that such systems are designed to
manage rather than eliminate the risk of failure to achieve
Internal Audit Function
business objectives. In addition, it should be noted that these
Our internal audit adopts a risk based audit approach, and is
systems can only provide reasonable but not absolute
independent of the activities they audit with direct remit to
assurance against material misstatement or loss.
the Audit Committee. Brief report on internal audit function is
set out in the Audit Committee Report.
Prior to the introduction of the Code, the Group has in place a
system whereby continuous process of review and adjustment
Control Tool
are being carried out on its control environment, framework and
Our internal control systems are aimed at managing business
standards to ensure overall adequacy and integrity at all times.
risks that may have undesirable effects on our organisation’s
ability to achieve our business objectives and successful
Pursuant to the introduction of the Code, the Board and its
execution of our strategies that are duly aligned with our
management has during the financial year taken steps to
“Vision IOI.” Each division, strategic business unit, and
review the Group’s existing internal control and formalise the
respective functional units within the Group have a clear
existing risk management practices, and where appropriate
understanding of its risk profile vis-à-vis its objectives and goals.
close gaps to conform with the best practices as
Internal controls are well documented and are embedded in
recommended in the Code and the Guidance.
business processes - be it administrative, operational, or
regulatory compliance in nature - to various degrees that
commensurate with the risks.
53
Statement on Internal Control
Strategic Tool
Awareness & Work Culture
We also adopt risk management as a strategic tool in
The workshops involving middle management and non-
strategy formulation, and in our investment and resource
executives also reinforced the existing control practices
allocation processes. For instance, our strategic formulation
particularly on segregation of risk management responsibilities
process is closely aligned to addressing principal risks and
as paraphrased into their day-to-day operations. Beyond the
probable emerging risks, as well as pursuing potential
risk review conducted at senior management level, these
opportunities that could arise thereof. Our investment and
workgroups at middle management and non-executives
resource allocation decisions are made based on risk-
levels also expanded upon the macro-principal risks, reviewed
adjusted required return on investment as key criterion to
their risk management performance gap (covering risk
ensure the optimisation of returns on capital employed, and
identification, measuring & monitoring, and control activities),
the preservation of shareholders’ value.
and developed action plans and programmes to further drive
improvements.
Information Systems
Our information systems covering both the external and
Board’s Conclusion
internal environment (duly aligned with our business structure
and processes) plus key performance indicators of both
Based on the above and on the following basis of review, the
financial and non-financial are firmly in place to
Board is pleased to disclose that the state of the Group’s
communicate and alert on emerging risks, violation of
internal control systems are sufficiently in line with the Code
controls, crystallisation of risks, and overall performance
and the Guidance. No significant control failings or
measure. The integrity, adequacy, timeliness, and security of
weaknesses that would result in material losses and require
the information systems are constantly reviewed.
disclosure in the Group’s annual report were identified during
the financial year under review.
Further Efforts
■
Pursuant to the management’s review, further efforts were
undertaken to ensure that a formal process is in place to
Committee
■
identify, evaluate and manage significant risk faced by the
Group and to achieve a higher standard of conformance
Periodic audit reports and discussion with the Audit
Periodic management report on the state of the company’s
affairs which also covers the state of internal control
■
with the Code.
Report from the management on the risk review exercise
carried out in conjunction with the introduction of the Code
which include an assessment of the adequacy and integrity
Institutionalised Risk Management Framework
The management institutionalised a formal framework that
epitomises our approach to risk management (covering risk
of the Group’s internal control systems in managing those risks
■
Risk management documentation on principal risks and
control activities as compiled by all core divisions of the Group
identification, assessment, and control activities) throughout
the organisation in a series of workshops. In conjunction with
the workshops, a standard of diagnostic risk measure, and
the Group’s risk direction and polices were introduced.
54
Statement on Directors’ Interests
■
in the company and related corporations as at 3 September 2002
Name of Director
Direct
%
Indirect
%
810,200
–
15,000
4,000
10,000
–
–
0.24
–
–
–
–
–
–
3,079,400
3,079,400
3,079,400
–
–
–
–
0.93
0.93
0.93
–
–
–
–
Holding Company
No. of ordinary shares of 50 sen each
Lee Yeow Chor
Dato’ Yeo How
4,349,051
–
238,000
210,000
1,000
0.49
–
0.03
0.02
–
265,613,519
269,962,570
245,028,139
–
–
29.82
30.31
27.51
–
–
No. of warrants 1995/2003
Lee Yeow Chor
1,100,000
200,000
0.62
0.11
98,010,410
90,810,410
55.57
51.49
10,000
–
–
–
100
20
27.03
5.41
The Company
No. of ordinary shares of RM1.00 each
Lee Yeow Chor
Dato’ Yeo How
Dato’ Haji Zakaria @ Shamsuddin b Dahlan
Other Related Corporations
Palmco Holdings Berhad
Kapar Realty And Development Sdn Berhad
No. of ordinary shares of RM1,000 each
Executive Share Option Scheme of IOI Corporation Berhad, the holding company
Name of Director
Lee Yeow Chor
Lee Yeow Chor
Option price
No.of options
RM2.80
RM2.70
RM3.90
500,000
220,000
80,000
By virtue of their interests in the shares of IOI Corporation Berhad, the holding company and the Company, Tan Sri Dato’ Lee Shin
Cheng, Puan Sri Datin Hoong May Kuan and Mr Lee Yeow Chor are also deemed to be interested in the shares of the Company
and its related corporations to the extent IOI Corporation Berhad and the Company have interests.
55
Other Information
Material Contracts
There were no material contracts entered into by the Company and its subsidiary companies which involved Directors’ and major
shareholders’ interests either still subsisting at the end of the financial year ended 30 June 2002 or entered into since the end of
the previous financial year.
Recurrent Related Party Transactions of a Revenue Nature
Recurrent related party transactions of a revenue nature of IOI Properties Berhad (“IOI Properties”) Group for the financial year
ended 30 June 2002 were as follows:
Related parties
Sharikat Pukin Ladang
Kelapa Sawit Sdn Bhd (1)
Type of recurrent
related parties
transactions
Sale of estate produce
by Nice Frontier
Sdn Bhd (2)
Interested Directors /
Major Shareholders and
connected persons
to them
■
■
■
■
■
IOI Landscape
Services Sdn Bhd (1)
Halusah Ladang Sdn Bhd (1)
Purchase of plants and
secure landscaping
services by Pilihan Megah
Sdn Bhd, Dynamic
Management Sdn Bhd
and Flora Development
Sdn Bhd (2) & (3)
■
Rental of properties by
Dynamic Management
Sdn Bhd (2) & (4)
■
■
■
■
■
■
■
■
■
Malayapine Estates Sdn Bhd
56
Property project
management services by
Pilihan Megah Sdn Bhd
■
■
■
Value of
transactions
(RM’000)
IOI (5)
Tan Sri Dato’ Lee Shin Cheng (6)
Puan Sri Datin Hoong May Kuan (7)
Lee Yeow Chor (8)
Dato’ Yeo How (9)
5,292
IOI (5)
Lee Yeow Chor (8)
Dato’ Yeo How (9)
1,558
IOI (5)
Lee Yeow Chor (8)
Dato’ Yeo How (9)
1,260
Lee Yeow Chor (12)
1,276
Note
1
Subsidiaries of IOI Corporation Berhad (“IOI”). The IOI Properties Group may transact with other subsidiaries of IOI for the
transactions mentioned above if the Directors of the Company are of the opinion that the transactions would be entered into
expeditiously and for the benefit of the Company and the IOI Properties Group as a whole.
2
Subsidiaries of IOI Properties. The other subsidiaries of the IOI Properties Group may transact with the Related Parties
concerned for the aforesaid transactions in place of the subsidiaries mentioned above if the Directors of the Company are of
the opinion that the transactions would be entered into expeditiously and for the benefit of the Company and the IOI
Properties Group as a whole.
3
Subsidiaries of IOI Properties which undertake property development activities of the IOI Properties Group. Subsidiaries of the
IOI Properties Group which is involved in property development activities other than those mentioned above may secure the
same landscaping services if the Directors of the Company are of the opinion that the transactions would be entered into
expeditiously and for the benefit of the Company and the IOI Properties Group as a whole.
4
This property relates to an office located at No 7-10, Jalan Kenari 5, Bandar Puchong Jaya, 47100 Puchong, Selangor Darul
Ehsan with a built-up area of 1,376 m2. It is being rented at a monthly rental of RM105,000 under an annually renewable
agreement which expires in the month of April of the respective year.
5
IOI is the Major Shareholder of IOI Properties and its subsidiaries mentioned in the table above.
6
Tan Sri Dato’ Lee Shin Cheng is a Director of IOI and IOI Properties and he is a Major Shareholder of IOI and holds 810,200
shares representing 0.24% stake in IOI Properties.
7
Puan Sri Datin Hoong May Kuan is a Director of IOI Properties and a Major Shareholder of IOI.
8
Mr Lee Yeow Chor is a Director of IOI and IOI Properties and he is a Major Shareholder of IOI and holds 5,000 shares
representing less than 0.01% stake in IOI Properties.
9
Dato’ Yeo How is a Director of IOI and IOI Properties and he holds 22,000 shares representing less than 0.01% stake in IOI and
4,000 shares representing less than 0.01% stake in IOI Properties.
10 Tan Sri Dato’ Lee Shin Cheng is a Director and a Major Shareholder of IOI Properties and Malayapine Estates Sdn Bhd
(“Malayapine”).
11 Puan Sri Datin Hoong May Kuan is a Director of IOI Properties and a Major Shareholder of Malayapine.
12 Mr Lee Yeow Chor is a Director of IOI and Malayapine and he is a Major Shareholder of IOI Properties and Malayapine.
■
Notwithstanding the related party disclosure already presented in the financial statements in accordance with Malaysian
Accounting Standards Board Standard No. 8 (“MASB 8”), the above disclosures are made in order to comply with Paragraph
10.09 of the KLSE Listing Requirements (“Listing Requirements”) with regard to value of related party transactions of a revenue
nature conducted in accordance with shareholders’ mandate during the financial year, as the scope of related party
relationships and disclosure contemplated by the Listing Requirements are, to certain extent, different from those of MASB 8.
■
The shareholdings of the respective interested Directors / Major Shareholders as shown above are based on information
disclosed in the Circular to Shareholders in relation to Proposed Shareholders’ Mandate for Recurrent Related Party Transactions
of a Revenue or Trading Nature dated 8 January 2002.
57
Directors’ Report
For the Financial Year Ended 30.6.2002
Financial Statements
60
directors’ report
66
income statements
67
balance sheets
68
statements of changes in equity
71
cash flow statements
73
notes to the financial statements
101
statement by directors
101
statutory declaration
102
report of the auditors
59
Directors’ Report
■
for the financial year ended 30 June 2002
The Directors of IOI Properties Berhad have pleasure in submitting their report and the audited financial statements of the Group
and of the Company for the financial year ended 30 June 2002.
Principal Activities
The principal activities of the Company consist of property development, property investment and investment holding.
The principal activities of the subsidiary companies and associated company are set out in Note 39 to the financial statements.
There have been no significant changes in the nature of the activities of the Group and of the Company during the financial year.
Financial Results
The audited results of the Group and of the Company for the financial year ended 30 June 2002 are as follows:
In RM’000
Taxation
Minority interests
Group
245,195
(76,176)
169,019
(5,414)
163,605
Company
72,972
(21,398)
51,574
–
51,574
Dividends
A second interim dividend of 20% less income tax in respect of the financial year ended 30 June 2001 amounting to RM47,904,163
was paid on 24 September 2001 as dealt with in the Directors’ Report of that financial year.
On 21 February 2002, the Directors declared a first interim dividend of 15% less income tax amounting to RM35,928,122 in respect of
the financial year ended 30 June 2002. The dividend was paid on 22 March 2002, to shareholders whose names appear in the
Record of Depositors at the close of business on 12 March 2002.
On 12 August 2002, the Directors declared a second interim dividend of 20% less income tax in respect of the financial year ended
30 June 2002. The dividend is payable on 10 September 2002, to shareholders whose names appear in the Record of Depositors at
the close of business on 29 August 2002. Based on the outstanding issued and paid-up ordinary shares of the Company of
332,615,800 as at 30 June 2002, the second interim dividend net of tax amounts to RM47,896,675.
No final dividend was recommended for the financial year ended 30 June 2002.
Issue of Shares and Debentures
The Company has not issued any new shares or debentures during the financial year.
Reserves and Provisions
There were no material transfers to or from reserves or provisions during the financial year other than as disclosed in the financial
statements.
60
Directors
The Directors who have held office since the date of the last report are as follows:
Lee Yeow Chor
Dato’ Yeo How
Dato’ Hj Zakaria @ Shamsuddin b Dahlan
Lee Cheng Leang (resigned on 20 March 2002)
In accordance with Article 101 of the Company’s Articles of Association, Puan Sri Datin Hoong May Kuan and Dato’ Yeo How retire
by rotation at the forthcoming Annual General Meeting and, being eligible, offer themselves for re-election.
Directors’ Interests
According to the Register of Directors’ Shareholdings, the interests of the Directors in office at the end of the financial year in the
ordinary shares and warrants of the Company and its related corporations are as follows:
As at
1 July 2001
Acquired
Disposed/
Exercised
As at
30 June 2002
The Company
Lee Yeow Chor
Dato’ Yeo How
810,200
5,000
4,000
10,000
–
10,000
–
–
–
–
–
–
810,200
15,000
4,000
10,000
Holding Company
Lee Yeow Chor
Dato’ Yeo How
4,349,051
128,000
22,000
1,000
–
140,000
250,000
–
–
30,000
172,000
–
4,349,051
238,000
100,000
1,000
1,100,000
200,000
180,000
–
–
50,000
–
–
230,000
1,100,000
200,000
–
10,000
–
–
10,000
Direct Interests
1
No. of Warrants 1995/2003
Lee Yeow Chor
Dato’ Yeo How
Other Related Corporations
Palmco Holdings Berhad
61
Directors’ Report
■
Direct Interests (cont’d)
No. of ordinary shares of RM1,000 each
Indirect Interests
The Company
Lee Yeow Chor
Holding Company
Lee Yeow Chor
As at
1 July 2001
Acquired
Disposed/
As at
Exercised 30 June 2002
100
20
–
–
As at
1 July 2001
Acquired
3,079,400
3,079,400
3,079,400
–
–
–
–
–
–
3,079,400
3,079,400
3,079,400
272,342,519
276,691,570
251,867,139
1,992,000
1,992,000
1,852,000
8,721,000
8,721,000
8,691,000
265,613,519
269,962,570
245,028,139
85,252,410
78,052,410
12,758,000
12,758,000
–
–
98,010,410
90,810,410
–
–
100
20
Disposed/
As at
1
No. of Warrants 1995/2003
Lee Yeow Chor
1
The exercise period of Warrants 1995/2003 may be extended beyond 30 April 2003, up to two periods of one year each from 1 May
2003 PROVIDED THAT the daily weighted average market price of the shares of the holding company quoted on the Kuala Lumpur
Stock Exchange at a premium of less than twenty percent of the subscription price of RM3.35 on any one of the thirty consecutive
market days prior to the 31st day of January of the year of expiry of the relevant extension period.
2
Executive Share Option Scheme (“ESOS”) of IOI Corporation Berhad
The movements of the options granted under the ESOS of the holding company to the Directors of the Company in office at the
end of the financial year are as follows:
Director
Lee Yeow Chor
Lee Yeow Chor
Lee Yeow Chor
Dato’ Yeo How
Total
2
Option
Price
As at
1 July 2001
RM2.80
RM2.70
RM3.90
RM2.20
RM2.80
500,000
220,000
80,000
140,000
390,000
1,330,000
No. of share options
Offered and
As at
Accepted
–
–
–
–
–
–
–
–
–
140,000
200,000
340,000
500,000
220,000
80,000
–
190,000
990,000
The original option period of 5 years expired on 4 April 2000 has been extended for another 5 years to expire on 4 April 2005.
62
By virtue of their interests in the shares of IOI Corporation Berhad, the holding company and the Company, Tan Sri Dato’ Lee Shin
Cheng, Puan Sri Datin Hoong May Kuan and Mr Lee Yeow Chor are also deemed to be interested in the shares of the Company
and its related corporations to the extent IOI Corporation Berhad and the Company have interests.
None of the other Directors in office at the end of the financial year held any interest in the ordinary shares and warrants of the
Company or its related corporations.
Directors’ Benefits
During and at the end of the financial year, no arrangement subsisted to which the Company is a party, with the object or objects
of enabling Directors of the Company to acquire benefits by means of the acquisition of shares in or debentures of the Company
or any other body corporate, except for the share options granted to Directors of the Company pursuant to the holding
company’s Executive Share Option Scheme.
Since the end of the previous financial year, none of the Directors of the Company has received or become entitled to receive any
benefit (other than benefits disclosed in Note 5 to the financial statements) by reason of a contract made by the Company or by a
related corporation with a 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 except for any benefit which may be deemed to have arisen by virtue of the significant related party
transactions as disclosed in Note 34 to the financial statements.
Statutory Information on the Financial Statements
Before the income statements and balance sheets of the Group and of the Company were made out, the Directors took
reasonable steps:
i
to ascertain that proper action had been taken in relation to the writing off of bad debts and the making of
allowance for doubtful debts, and have satisfied themselves that there are no known bad debts and that adequate
allowance had been made for doubtful debts; and
ii
to ensure that any current assets, other than debts, which were unlikely to realise their book values in the ordinary course of
business of the Group and of the Company have been written down to an amount which they might be expected so to realise.
As at the date of this report, the Directors are not aware of any circumstances:
i
which would necessitate the writing off of bad debts or render the amounts of the allowance for doubtful debts in the
financial statements of the Group and of the Company inadequate to any substantial extent; or
ii
which would render the values attributed to current assets in the financial statements of the Group and of the Company
misleading; or
iii
which have arisen which render adherence to the existing method of valuation of assets or liabilities of the Group and of the
Company misleading or inappropriate.
As 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 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 or other liability has become enforceable, or is likely to become enforceable within the period of twelve months
after the end of the financial year which, in the opinion of the Directors, will or may substantially affect the ability of the Group or of
the Company to meet their obligations when they fall due.
63
Directors’ Report
■
Other Statutory Information
As at the date of this report, the Directors are not aware of any circumstances not otherwise dealt with in this report or the financial
statements of the Group and of the Company that would render any amount stated in the respective financial statements as
misleading.
In the opinion of the Directors:
i
the results of operations of the Group and of the Company for the financial year were not substantially affected by any item,
transaction or event of a material and unusual nature; and
ii
no item, transaction or event of a material and unusual nature has arisen in the interval between the end of the financial year
and the date of this report which is likely to affect substantially the results of the operations of the Group and of the Company
for the financial year in which this report is made.
Significant Events During the Financial Year
Purchase of additional equity interest in Nice Frontier Sdn Bhd
As reported in the previous year’s Annual Report, the Company has entered into a share purchase agreement to acquire a 25%
stake in Nice Frontier Sdn Bhd for a cash consideration of RM104,425,000 in October 2000. The acquisition was completed on 22
August 2001. The Company’s effective stake in Nice Frontier Sdn Bhd has increased from 67.5% to 92.5% following the acquisition.
Purchase of shares in Palmco Holdings Berhad
As reported in the previous year’s Annual Report, the Company has acquired a total of 495,000 warrants at RM1.35 per warrant
and 10,874,000 ordinary shares at RM4.35 per share in Palmco Holdings Berhad in July 2001. The warrants were converted to shares
in November 2001 at the total conversion price of RM1,485,000.
Purchase of equity interest in Lush Development Sdn Bhd (“LDSB”) and the joint venture agreement with Perbadanan Kemajuan
Pertanian Selangor (“PKPS”)
As reported in the previous year’s Annual Report:
i
the proposed subscription of 999,998 ordinary shares by Cahaya Kota Development Sdn Bhd (“CKDSB”) in Riang Takzim Sdn
Bhd (“RTSB”) at a subscription price of RM1.00 per share has been completed on 3 October 2001.
ii
Both CKDSB and RTSB have entered into a conditional agreement to acquire 51% and 49% stake in LDSB for a cash
consideration of RM12,138,000 and RM11,662,000 respectively. LDSB has entered into a joint venture agreement with PKPS to
develop a piece of leasehold land measuring approximately 500 acres located in the Mukim of Dengkil, District of Sepang,
Selangor Darul Ehsan, approximately 5 km from Putrajaya. Cash consideration payable by LDSB for its 70% share of the land
cost is RM28,700,000. The said acquisition by RTSB and CKDSB was completed on 3 October 2001.
Proposed acquisition of the entire issued and paid-up share capital in Tanda Bestari Development Sdn Bhd (“TBDSB”)
The Company had announced on 19 October 2001 that its wholly-owned subsidiary, CKDSB has proposed to acquire the entire
issued and paid-up share capital in TBDSB for a total cash investment cost of RM10,226,000. TBDSB is in the process of acquiring a
piece of leasehold land measuring 51.13 acres located in the Mukim of Dengkil, District of Sepang, Selangor Darul Ehsan. The
proposed acquisition is pending completion.
64
Audit Committee
The Directors who served as members of the Audit Committee since the date of the last report are as follows:
YM Raja Said Abidin b Raja Shahrome (Chairman)
Dato’ Yeo How
Nominating Committee
The Directors who served as members of the Nominating Committee since the date of the last report are as follows:
Dato’ Hj Zakaria @ Shamsuddin b Dahlan (appointed on 26 April 2002)
Remuneration Committee
The Directors who served as members of the Remuneration Committee since the date of the last report are as follows:
Holding Company
The Directors regard IOI Corporation Berhad, a company incorporated in Malaysia and listed on the Main Board of Kuala Lumpur
Stock Exchange, as the holding company.
Auditors
The retiring auditors, Messrs. BDO Binder, have indicated their willingness to accept reappointment.
Signed in accordance with a resolution of the Directors.
On behalf of the Board
Executive Chairman
Dato’ Yeo How
Executive Director
3 September 2002
65
Income Statements
■
Group
In RM’000
Revenue
Cost of sales
Note
4
Gross profit
Other operating income
Marketing and selling expenses
Administration expenses
Other operating expenses
Operating profit
Interest income
Finance costs
Share of loss of associated company
Taxation
– Company and subsidiary companies
– Share of taxation in an associated company
5
6
7
8
Minority interests
Earnings per share (sen)
Basic
First interim dividend
Second interim dividend
Total
2002
2001
2002
Company
2001
528,847
(264,370)
426,378
(207,071)
66,112
–
62,261
–
264,477
5,238
(2,322)
(22,105)
(2,535)
219,307
3,198
(2,712)
(19,637)
(1,063)
66,112
2,046
(24)
(1,646)
(56)
62,261
8
(16)
(1,494)
(334)
242,753
5,226
(2,052)
(732)
199,093
11,178
(4,929)
(1,495)
66,432
8,813
(2,273)
–
60,425
13,069
(1,894)
–
245,195
203,847
72,972
71,600
(76,279)
103
(76,176)
(58,365)
104
(58,261)
(21,398)
–
(21,398)
(20,251)
–
(20,251)
169,019
(5,414)
163,605
145,586
(11,498)
134,088
51,574
–
51,574
51,349
–
51,349
15
20
35
10
20
30
9
49.18
43.42
15
20
35
10
20
30
10
The notes set out on pages 73 to 100 form an integral part of the financial statements.
66
Balance Sheets
■
as at 30 June 2002
Note
2002
Group
2001
2002
Company
2001
Subsidiary companies
Associated company
Other long term investments
11
12
13
14
15
16
17
55,255
–
50,779
444,409
50,384
618,398
3,858
63,255
–
49,584
411,478
8,570
476,379
4,170
434
179,701
48,476
–
50,060
–
–
434
74,963
47,116
–
886
–
–
Current assets
Development properties
Inventories
Trade and other receivables
Amounts due from subsidiary companies
Short term funds
Deposits with financial institutions
Cash and bank balances
18
19
20
12
21
22
23
240,111
4,702
104,218
–
5,000
49,538
138,310
541,879
271,165
4,855
67,220
–
16,000
192,658
161,022
712,920
–
–
9,887
435,758
–
49,538
282
495,465
–
–
22,980
497,745
10,000
156,731
268
687,724
24
25
26
27
12
161,445
1,501
2,764
23,443
–
20,962
210,115
331,764
1,554,847
167,431
1,811
–
36,019
–
28,933
234,194
478,726
1,492,162
555
–
2,764
–
5,686
1,099
10,104
485,361
764,032
8,618
–
–
–
5,906
–
14,524
673,200
796,599
28
29
332,668
1,083,365
332,668
1,002,919
332,668
431,364
332,668
463,931
1,416,033
55,275
43,015
40,524
1,554,847
1,335,587
96,777
41,641
18,157
1,492,162
764,032
–
–
–
764,032
796,599
–
–
–
796,599
In RM’000
Assets Employed
Current liabilities
Trade and other payables
Amounts due to related companies
Bank overdraft
Short term borrowings
Amounts due to subsidiary companies
Taxation
Net current assets
Financed By
Share capital
Reserves
Shareholders’ equity
Minority interests
Long term borrowings
Deferred taxation
30
31
67
Statements of Changes in Equity
In RM’000
Group
As at 30 June 2000
As previously reported
Prior year adjustment
(note 40)
As restated
Minority interest share
of capital reserve in
a subsidiary company
Revaluation of
investment properties
Currency translation
differences
Net gains/(losses)
not recognised in the
income statement
Issue of shares due to
conversion of ICULS
Share
capital
■
Share Revaluation
premium
surplus
Reserve
Capital
arising on
reserves consolidation
Foreign
exchange
fluctuation
reserve
Retained
profits
Treasury
shares
Total
282,668
78,750
–
34,027
6,229
7,499
519,310
–
928,483
–
282,668
–
78,750
–
–
–
34,027
–
6,229
–
7,499
28,267
547,577
–
–
28,267
956,750
–
–
–
(1,672)
–
–
–
–
(1,672)
–
–
98,893
–
–
–
–
–
98,893
–
–
–
–
–
(3,600)
–
–
(3,600)
–
–
98,893
–
(3,600)
–
–
93,621
50,000
157,500
–
–
–
–
–
–
207,500
–
–
–
–
–
134,088
–
134,088
–
–
–
–
–
–
(4,153)
–
–
–
–
–
(28,267)
–
(28,267)
–
236,250
–
98,893
–
32,355
–
2,076
–
3,899
(23,952)
629,446
–
–
(23,952)
1,335,587
Net profit for the
–
financial year
Amortisation of reserve
–
arising on consolidation
Dividend paid in
respect of previous
financial year
–
First interim
dividend declared
–
As at 30 June 2001
332,668
(1,672)
(4,153)
68
In RM’000
Share
capital
Group
As at 30 June 2001
332,668
Prior year adjustment
(Note 40)
–
As restated
332,668
Transfer of revaluation
surplus to retained
profits arising from
disposal of investment
properties
–
Currency translation
differences
–
Net gains/(losses)
not recognised in
the income statement
–
Net profit for the
financial year
–
Amortisation of
reserve arising
on consolidation
–
Dividend paid in
respect of previous
financial year
–
First interim
dividend declared
–
Repurchase of shares
–
As at 30 June 2002
332,668
Share Revaluation
premium
surplus
Reserve
Capital
arising on
reserves consolidation
Foreign
exchange
fluctuation
reserve
Retained
profits
Treasury
shares
Total
236,250
98,893
32,355
2,076
3,899
581,542
–
1,287,683
–
236,250
–
98,893
–
32,355
–
2,076
–
3,899
47,904
629,446
–
–
47,904
1,335,587
–
(71)
–
–
–
71
–
–
–
–
–
–
3,058
–
–
3,058
–
(71)
–
–
3,058
71
–
3,058
–
–
–
–
–
163,605
–
163,605
–
–
–
–
–
–
(2,076)
–
–
–
–
–
(47,904)
–
(47,904)
–
–
236,250
–
–
98,822
–
–
32,355
–
–
–
–
–
6,957
(35,928)
–
709,290
(2,076)
–
(309)
(309)
(35,928)
(309)
1,416,033
69
Statements of Changes in Equity
■
Share
capital
Share
premium
As restated
Issue of shares due to conversion of ICULS
Net profit for the financial year
Dividend paid in respect of previous financial year
First interim dividend declared
282,668
–
282,668
50,000
–
–
–
78,750
–
78,750
157,500
–
–
–
200,284
28,267
228,551
–
51,349
(28,267)
(23,952)
–
–
–
–
–
–
–
561,702
28,267
589,969
207,500
51,349
(28,267)
(23,952)
As at 30 June 2001
332,668
236,250
227,681
–
796,599
As at 30 June 2001
Prior year adjustment (Note 40)
As restated
Issue of shares due to conversion of ICULS
Net profit for the financial year
Dividend paid in respect of previous financial year
First interim dividend declared
As at 30 June 2002
332,668
–
332,668
–
–
–
–
–
332,668
236,250
–
236,250
–
–
–
–
–
236,250
179,777
47,904
227,681
–
51,574
(47,904)
(35,928)
–
195,423
In RM’000
Company
As at 30 June 2000
Prior year adjustment (note 40)
Retained
profits
Treasury
shares
–
–
–
–
–
–
–
(309)
(309)
Total
748,695
47,904
796,599
–
51,574
(47,904)
(35,928)
(309)
764,032
70
Cash Flow Statements
■
Group
In RM’000
Cash Flows From Operating Activities
Adjustments for:
Finance costs
Depreciation of property, plant and equipment
Share of loss of associated company
Amortisation of goodwill on consolidation
Bad debts written off
Allowance for doubtful debts
Property, plant and equipment written off
Inventories written off
Dividend income
Amortisation of discount on acquisition of
additional equity in an associated company
Gain on disposal of
– property, plant and equipment
– investment properties
– other long term investments
Loss on disposal of property, plant and equipment
Foreseeable loss on property projects written back
Amortisation of reserve arising on consolidation
Interest income
Operating profit/(loss) before working capital changes
Decrease/(Increase) in development properties
Decrease/(Increase) in inventories
(Increase)/Decrease in trade and other receivables
(Decrease)/Increase in trade and other payables
Decrease/(Increase) in subsidiary companies
Decrease in amount due to holding company
Decrease in amounts due to related companies
Cash generated from/(used in) operations
Tax paid
Net cash generated from /(used in) operating activities
Note
2002
2001
2002
Company
2001
245,195
203,847
72,972
71,600
2,273
–
–
–
–
–
–
–
(66,112)
1,894
–
–
–
–
–
–
–
(62,259)
2,052
5,243
732
353
–
499
54
–
(1,869)
4,929
4,552
1,495
353
215
198
34
2
(16)
(464)
(69)
(120)
(90)
(1,781)
93
–
(2,076)
(5,226)
242,595
97,367
153
(48,052)
(13,595)
–
–
(310)
278,158
(93,697)
184,461
(198)
(55)
–
–
(796)
(4,153)
(11,178)
199,160
(6,106)
(309)
(91)
19,442
–
(474)
(306)
211,316
(74,629)
136,687
–
–
–
(1,619)
–
–
–
(8,813)
(1,299)
–
–
2,208
(8,063)
61,767
–
–
54,613
(2,156)
52,457
–
–
–
–
–
–
–
(13,069)
(1,834)
–
–
1,423
8,224
(76,648)
(474)
–
(69,309)
(2,090)
(71,399)
71
Cash Flow Statements
■
Group
In RM’000
Cash Flows From Investing Activities
Interest received
Proceeds from disposal of
Dividend received from
– unquoted subsidiary companies
Additional investment in an associated company
Purchase of other long term investments
Additional investment in an indirect subsidiary company
Additions to property, plant and equipment
Deposit paid to minority shareholder for the acquisition
of additional interest in a subsidiary company
Additions to investment properties
Development expenditure incurred to land held for development
Acquisition of subsidiary companies, net of
cash and cash equivalents acquired
Net cash (used in)/generated from investing activities
Cash Flows From Financing Activities
Proceeds from issuance of shares (net of redemption of ICULS)
Net repayments by subsidiary companies to minority shareholders
Repayment of short term borrowings
Dividends paid by subsidiary companies to minority shareholders
Interest paid
Dividend paid
Net cash (used in)/generated from financing activities
Net (decrease)/increase in cash and cash equivalents
Cash and cash equivalents as previously reported
Effect of exchange rate differences
Cash and cash equivalents at beginning of
financial year as restated
Cash and cash equivalents at end of financial year
Note
32
33
2002
2001
2002
Company
2001
5,847
10,796
9,145
12,744
503
612
13,435
291
255
–
–
–
5,670
–
–
–
–
1,826
(1,360)
(53,225)
(94,295)
(22,283)
–
16
(4,240)
(807)
–
(23,207)
46,260
1,819
(1,360)
(53,225)
(94,295)
–
–
(264)
(58,836)
(10,443)
(2,030)
(46,014)
(50,130)
(258,170)
–
(75,383)
–
(85,986)
–
69,144
–
(4,075)
(13,765)
(1,608)
(2,304)
(309)
(83,832)
(105,893)
(179,602)
369,680
6
107,500
(1,500)
(2,777)
(906)
(7,117)
–
(52,219)
42,981
104,285
265,368
27
–
–
–
–
(2,273)
(309)
(83,832)
(86,414)
(119,943)
166,999
–
107,500
–
–
–
(4,285)
–
(52,219)
50,996
48,741
118,258
–
369,686
190,084
265,395
369,680
166,999
47,056
118,258
166,999
–
–
–
71,690
9
(4,240)
(616)
–
–
(10,443)
–
–
72
Notes to the Financial Statements
1
Principal Activities
The principal activities of the Company consist of property development, property investment and investment holding.
The principal activities of the subsidiary companies and associated company are set out in Note 39 to the financial
statements.
There have been no significant changes in the nature of the activities of the Group and of the Company during the financial
year.
2
Basis of Preparation of Financial Statements
The financial statements of the Group and of the Company have been prepared in accordance with the applicable
approved accounting standards in Malaysia and the provisions of the Companies Act, 1965.
The preparation of financial statements in conformity with the applicable approved accounting standards in Malaysia and
the provisions of the Companies Act, 1965 require the Directors to make estimates and assumptions that affect the reported
amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements
and the reported amounts of revenues and expenses during the financial year. Actual results could differ from those
estimates.
3
Significant Accounting Policies
3.1
Basis of Accounting
The financial statements of the Group and of the Company have been prepared under the historical cost convention
(as modified for the revaluation of investment properties), unless otherwise indicated in the significant accounting
policies.
3.2
Basis of Consolidation
The consolidated financial statements incorporate the financial statements of the Company and all its subsidiary
companies made up to the end of the financial year. All subsidiary companies’ financial statements are consolidated
based on the acquisition method of accounting. Under the acquisition method of accounting, the results of the
subsidiary companies acquired or disposed during the financial year are included in the consolidated income statement
from the date of acquisition or up to the date of disposal.
At the date of acquisition, the fair values of the subsidiary companies’ net assets are determined and these values are
reflected in the consolidated financial statements. The difference between the fair value of the purchase consideration
and the Group’s share of the fair value of the separable net assets of the subsidiary company at the date of acquisition is
retained in the consolidated balance sheet either as goodwill or reserve on consolidation, as appropriate. The Group
amortises goodwill or reserve on consolidation over a period of not exceeding 20 years.
The total profits and losses of subsidiary companies are included in the consolidated income statement and the
proportion of the profit or loss applicable to minority shareholders is deducted in arriving at the profit attributable to the
shareholders of the Company.
The total assets and liabilities of the subsidiary companies are included in the consolidated balance sheet and the
interests of minority shareholders in the net assets are stated separately.
The consolidated income statement includes the Group’s share of profits less losses of the associated company based
on the latest financial statements of the company concerned. In the consolidated balance sheet, the Group’s interest in
associated company is stated at cost plus the Group’s share of its post acquisition results and reserves less amortisation of
the premium or discount on acquisition, if any.
73
3
Significant Accounting Policies (cont’d)
3.2
Basis of Consolidation (cont’d)
In line with the Group’s policy on amortisation of goodwill or reserve on consolidation, the Group amortises goodwill or
discount on acquisition of associated company over a period of not exceeding 20 years.
All significant inter-company balances, transactions and unrealised gains or losses are eliminated on consolidation.
3.3
Subsidiary Companies and Associated Company
Subsidiary companies are companies that are controlled by the Company. Control is the power to govern the financial
and operating policies of the subsidiary companies so as to obtain benefits from their activities.
Associated company is a company in which the Group has long term equity investment of between 20% and 50% and is in a
position to exercise significant influence over the financial and operating policies of the investee company.
3.4
Revenue Recognition
Development properties
Revenue from sale of development properties are recognised based on the “percentage of completion” method. The
stage of completion is determined based on the proportion of contract costs incurred for work performed up to the
balance sheet date over the estimated total contract costs. Foreseeable losses, if any, are recognised immediately in
the income statement.
Construction contracts
Revenue from work done on construction contracts is recognised based on “percentage of completion” method. The
stage of completion is determined based on the proportion of contract costs incurred for work performed up to the
balance sheet date over the estimated total contract costs. Foreseeable losses, if any, are recognised immediately in
the income statement.
Commodities, other products and services
Revenue are recognised upon delivery of products and customer acceptance, if any, or performance of services, and
after eliminating inter-company transactions within the Group.
Dividend income
Dividend income is recognised when shareholder’s right to receive payment is established.
Rental income
Rental income from investment properties are recognised based on accrual basis.
3.5
Foreign Currency
Transactions in foreign currencies are converted into Ringgit Malaysia at rates of exchange ruling on transaction dates.
Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are translated into Ringgit
Malaysia at the approximate rates of exchange on that date. Gains or losses on foreign exchange are taken up in the
income statement.
For consolidation purpose, the assets and liabilities of overseas subsidiary company are translated into Ringgit Malaysia
at exchange rates closely approximating to those ruling on the balance sheet date. Income statement items are
translated at average exchange rates for the financial year. Exchange differences arising from the restatement at year
end rates of the opening net investment in the overseas subsidiary company are dealt with through the exchange
fluctuation reserve.
The closing rate of exchange used in translation is as follow:
RM1.00 : SGD0.46 (2001: RM1.00 : SGD0.48)
74
3
3.6
Property, plant and equipment and Depreciation
Property, plant and equipment are stated at cost less accumulated depreciation, and if any, impairment loss.
Freehold land, golf course and construction in progress are not depreciated.
Other property, plant and equipment are depreciated on the straight line method so as to write off the cost of the assets
over their estimated useful lives. The principal annual depreciation rates are as follows:
Leasehold land
Buildings and improvements
Plant and machinery
Motor vehicles
Furniture, fittings and equipment
over the lease period (60 years)
2%
10% –
20 %
20 %
5% – 33 1/3 %
Depreciation on assets under construction commences when the assets are ready for their intended use.
The carrying amounts of property, plant and equipment are reviewed at each balance sheet to determine whether
there is any indication of impairment. If such an indication exists, the asset’s recoverable amount is estimated. An
impairment loss is recognised whenever the carrying amount of an item of property, plant and equipment exceeds its
recoverable amount. In determining the recoverable amount of property, plant and equipment, expected future cash
flows are discounted to their present values. The impairment loss is charged to the income statement unless it reverses a
previous revaluation in which case it will be charged to equity. Any subsequent increase in recoverable amount is
reduced by the amount that would have been recognised as depreciation had the write down or write-off not
occurred. Such subsequent increase in recoverable amount is recognised in the income statement unless it reverses an
impairment loss on revalued asset in which case it is taken to equity.
3.7
Investment Properties
Investment properties are stated at cost upon the completion of the construction or acquisition. These properties are
held for their investment potential and rental income and are therefore not depreciated. These properties will be
revalued at regular intervals of at least once in every 5 years with additional valuation in the intervening years where
market conditions indicate that the carrying value of the revalued asset is materially different from the market value.
Surpluses arising from such valuation will be credited to shareholders’ equity as revaluation surplus and any deficit will be
charged against such surplus to the extent that decrease offset any increase. In all other cases, the deficit will be
charged to income statement.
On disposal of investment properties, the difference between the net disposal proceeds and its carrying amount is
charged or credited to the income statement and the related amounts in revaluation surplus, if any, is transferred to
retained profits.
75
3
3.8
Investments
Investments in subsidiary companies (which are eliminated on consolidation), investments in associated company and other
long term investments are stated at cost less allowance for permanent diminution in value, if any. Permanent diminution in
the value of an investment is recognised as an expense in the financial year in which the diminution is identified.
Short term investments are stated at the lower of cost and market value calculated on a portfolio basis. Investments in
fixed income trust funds that do not meet the definition of cash and cash equivalent are classified as short term
investments. The increase or decrease in the carrying amount of short term investments are credited or charged to the
income statement.
On disposal of an investment, the difference between net disposal proceeds and its carrying amount is charged or
credited to the income statement.
3.9
Land Held For Development
Land held for development is stated at cost and is reclassified as development property upon commencement of
development work on the said land.
3.10 Borrowing Costs
Costs incurred on external borrowings to finance long term assets is capitalised until the assets are ready for their
intended use after which such expense is charged to the income statements.
3.11 Development Properties
The cost of land under development together with the related development expenditure are carried forward at cost
plus profit accrued to the properties sold at their relevant stage of completion less progress billings and foreseeable
losses, if any. Development expenditure comprises construction and other related development costs including interest
costs and administrative overheads relating to the project. Interest costs on borrowings used to finance the relevant
projects are included as development expenditure from commencement to the completion of development.
The portion of property development projects which sales have been launched and/or the projects are expected to be
completed within the normal operating cycle of two to three years are considered as current assets.
3.12 Construction Contracts
When the outcome of a construction contract can be estimated reliably, contract revenue and contract costs
associated with the construction contract are recognised over the period of the contract as revenue and expenses
respectively by reference to the stage of completion of the contract activity at the balance sheet date.
When the outcome of a construction contract cannot be estimated reliably, contract revenue are recognised only to
the extent of contract costs incurred that is probable to be recoverable and contract costs are recognised as an
expense in the period in which they are incurred.
When it is probable that total contract costs will exceed total contract revenue, the foreseeable loss is recognised as an
expense immediately.
76
3
3.12 Construction Contracts (cont’d)
The aggregate of the costs incurred and the profit/loss recognised on each contract is compared against the progress
billings up to the financial year end. Where costs incurred and recognised profits (less recognised losses) exceed progress
billings, the balance is shown as amounts due from customers on contracts. Where progress billings exceed costs
incurred plus recognised profits (less recognised losses), the balance is shown as amounts due to customers on contracts.
Cost represents direct materials, expenses, labour and an appropriate proportion of construction overheads.
3.13 Inventories
Inventories are stated at the lower of cost and net realisable value. Cost is determined on a first in first out or weighted
average basis. Cost comprises the original cost of purchase plus the cost of bringing the inventories to their intended
location and condition. The cost of produce and finished goods includes the cost of raw materials, direct labour and a
proportion of production overheads. Inventories of completed development properties comprise cost of land and the
relevant development expenditure.
Net realisable value is the estimate of the selling price in the ordinary course of business, less the costs of completion and
selling expenses.
3.14 Receivables
Trade receivables are carried at anticipated realisable value. Bad debts are written off in the period in which they are
identified. An estimate is made for doubtful debts based on a review of all outstanding amounts at the financial year end.
3.15 Deferred Taxation
Deferred taxation is provided for under the liability method at the current taxation rate on all material timing differences
except where it is reasonably probable that such timing difference will not reverse in the foreseeable future. Deferred tax
assets are recognised only when there is reasonable assurance of their realisation.
3.16 Treasury Shares
Shares repurchased by the Company are held as treasury shares. These shares are measured and carried at cost of
repurchase.
3.17 Cash and Cash Equivalents
Cash and cash equivalents include cash and bank balances, bank overdrafts, deposits and other short term, highly liquid
investment and short term funds with maturity less than three months which have an insignificant risk of changes in value.
77
4
Revenue
Group
In RM’000
Sales of development properties
Construction contract
Rental income
– related companies
– others
Sales of plantation produce
Rendering of services
Dividend income
– quoted securities
5
2002
2001
2002
Company
2001
469,492
6,333
386,739
–
–
–
–
–
38,233
58
560
5,292
7,010
29,129
156
397
4,054
5,887
–
–
–
–
–
–
–
2
–
–
–
1,869
528,847
–
16
426,378
64,250
1,862
66,112
62,250
9
62,261
Operating Profit
Group
In RM’000
a
78
Operating profit has been arrived at after charging:
Amortisation of goodwill on consolidation
Auditors’ remuneration
– audit
– non-audit
Bad debts written off
Depreciation of property, plant and equipment
Inventories written off
Lease rentals
Property, plant and equipment written off
Remuneration of directors of the Company
– fees
– other emoluments
Rental of premises paid to a related company
Loss on disposal of property, plant and equipment
2002
2001
2002
Company
2001
353
353
–
–
148
9
–
5,243
–
–
54
499
146
–
215
4,552
2
118
34
198
38
–
–
–
–
–
–
–
35
–
–
–
–
–
–
–
210
2,306
1,260
93
184
2,075
712
–
210
1,022
–
–
169
915
–
–
5
Operating Profit (cont’d)
Group
In RM’000
and crediting:
Amortisation of
– reserve arising on consolidation
– discount on acquisition of additional equity
in an associated company
Gain on disposal of
Gross dividend income from
Gross rental income
– related companies
– others
Foreseeable loss on property projects written back
2002
2001
2002
Company
2001
2,076
4,153
–
–
464
69
–
–
120
90
1,781
198
55
–
–
–
1,619
–
–
–
–
1,869
–
16
64,250
1,862
62,250
9
38,233
58
560
–
29,129
156
397
796
–
–
–
–
–
–
2
–
Contract cost of the Group recognised as an expense during the financial year amounted to RM 5,723,000 (2001:Nil).
The estimated monetary value of benefits-in-kind received by the Directors otherwise than in cash from the Group and
Company amounted to RM 121,000 (2001: RM121,000).
b
Employee information
Employee costs
21,280
18,420
1,022
915
The total number of employees of the Group and of the Company (including Executive Directors) at end of the financial year
was 829 (2001:750) and 3 (2001:4) respectively.
6
Interest Income
In RM’000
2002
Group
2001
2002
Company
2001
Short term deposits
Subsidiary companies
Holding company
Others
1,195
–
–
4,031
5,226
3,795
–
3,111
4,272
11,178
1,060
7,749
–
4
8,813
2,635
7,318
3,111
5
13,069
79
7
Finance Costs
Group
In RM’000
Interest expenses:
Bank overdraft
Revolving credits
Loan stocks payable to holding company
Term loan
Subsidiary company
8
2002
2001
2002
Company
2001
11
873
–
1,168
–
2,052
3
1,437
1,891
1,598
–
4,929
11
–
–
–
2,262
2,273
3
–
1,891
–
–
1,894
2002
2001
2002
Company
2001
79,041
(9,490)
69,551
6,728
76,279
62,889
(5,377)
57,512
853
58,365
21,652
–
21,652
(254)
21,398
Taxation
Group
In RM’000
Income taxation – current year
Deferred taxation – current year (Note 31)
Income taxation – prior years
20,251
–
20,251
–
20,251
The effective tax rate of the Company for the current financial year is higher than the statutory tax rate due to certain
expenses which are not deductible for tax purposes.
Subject to agreement with the tax authorities, certain subsidiary companies of the Group have unabsorbed tax losses of
approximately RM36,000 (2001: RM365,000) available to be carried forward for set off against future chargeable income, for
which the related tax effects have not been recognised in the financial statements. The benefits will only be obtained when
these subsidiary companies derive future assessable income of a nature and amount sufficient for the tax losses to be utilised.
9
Earnings Per Share
The basic earnings per share of the Group is calculated based on the net profit attributable to shareholders divided by the
weighted average number of ordinary shares in issue during the financial year after taking into consideration of the treasury shares
held by the Company.
Group
Net profit attributable to shareholders (RM’000)
Weighted average number of ordinary shares in issue (’000)
80
2002
2001
163,605
332,664
49.18
134,088
308,832
43.42
10
Dividends
Group and Company
2002
2001
In RM’000
First interim dividend declared and paid of 15 sen (2001: 10 sen) per share less income tax
Second interim dividend declared of 20 sen (2001:20 sen) per share less income tax
35,928
47,897
83,825
23,952
47,904
71,856
The second interim dividend of 20 sen (2001:20 sen) per share less income tax which was approved by the Board of Directors
subsequent to the financial year end has not been accrued as a liability as at balance sheet dates. This represents a change
in accounting policy from prior years as explained in Note 40.
11
Property, Plant and Equipment
Group 2002
At Cost
In RM’000
Freehold land
Short term leasehold land
Golf course
Plant and machinery
Motor vehicles
Construction in progress
Accumulated Depreciation
In RM’000
Freehold land
Golf course
Plant and machinery
Motor vehicles
*
At
beginning
of financial
year
Additions
6,135
262
13,523
3,124
21,148
8,403
7,803
23,800
84,198
–
–
84
470
10,748
886
1,362
8,733
22,283
At
Current
beginning
year
of financial depreciation
year
charge
–
67
–
641
10,815
5,603
3,817
–
20,943
–
5
–
145
2,931
1,021
1,141
–
5,243
Disposals
–
–
–
–
(28)
(824)
(66)
–
(918)
Disposals
–
–
–
–
(33)
(382)
(31)
–
(446)
Reclassification/
Write-offs
Transfer *
–
–
–
(5)
(51)
–
(23)
–
(79)
–
–
–
5,796
–
–
2,130
(32,436)
(24,510)
Write-offs Reclassification
–
–
–
(4)
(10)
–
(7)
–
(21)
–
–
–
–
–
–
–
–
–
At
end of
financial
year
6,135
262
13,607
9,385
31,817
8,465
11,206
97
80,974
At
end of
financial
year
–
72
–
782
13,703
6,242
4,920
–
25,719
Construction in progress completed during the financial year amounted to RM24,510,000 (2001:Nil) has been transferred to
investment properties.
81
11
Property, Plant and Equipment (cont’d)
Group 2001
At Cost
In RM’000
Freehold land
Golf course
Plant and machinery
Motor vehicles
In RM’000
Freehold land
Golf course
Plant and machinery
Motor vehicles
At
beginning
of financial
year
Additions
5,918
262
14,237
3,091
20,791
7,527
6,487
3,208
61,521
217
–
26
33
377
1,332
1,370
19,852
23,207
At
Current
beginning
year
year
charge
–
63
–
521
8,540
4,738
2,932
–
16,794
–
4
–
120
2,288
1,231
909
–
4,552
Disposals
–
–
–
–
–
(456)
(9)
–
(465)
Disposals
–
–
–
–
–
(366)
(6)
–
(372)
–
–
–
–
(20)
–
(45)
–
(65)
–
–
(740)
–
–
–
–
740
–
–
–
–
–
(13)
–
(18)
–
(31)
At
end of
financial
year
6,135
262
13,523
3,124
21,148
8,403
7,803
23,800
84,198
At
end of
financial
year
–
–
–
–
–
–
–
–
–
–
67
–
641
10,815
5,603
3,817
–
20,943
Company 2002
At Cost
In RM’000
Freehold land
Motor vehicles
In RM’000
Freehold land
Motor vehicles
82
At
beginning
of financial
year
Additions
Disposals
Write-offs
At
end of
financial
year
434
1
435
–
–
–
–
–
–
–
–
–
434
1
435
Disposals
Write-offs
At
end of
financial
year
–
–
–
–
–
–
–
1
1
At
Current
beginning
year
year
charge
–
1
1
–
–
–
11
Property, Plant and Equipment (cont’d)
Company 2001
At Cost
In RM’000
At
beginning
of financial
year
Additions
Disposals
Write-offs
At
end of
financial
year
434
1
435
–
–
–
–
–
–
–
–
–
434
1
435
Disposals
Write-offs
At
end of
financial
year
–
–
–
–
–
–
–
1
1
Freehold land
Motor vehicles
In RM’000
At
Current
beginning
year
year
charge
Freehold land
Motor vehicles
Net Book Value
In RM’000
Freehold land
Golf course
Plant and machinery
Motor vehicles
–
1
1
–
–
–
2002
Group
2001
2002
Company
2001
6,135
190
13,607
8,603
18,114
2,223
6,286
97
55,255
6,135
195
13,523
2,483
10,333
2,800
3,986
23,800
63,255
434
–
–
–
–
–
–
–
434
434
–
–
–
–
–
–
–
434
Certain freehold land and building of the Group at net book value of RM686,000 (2001:RM282,000) has been pledged to a
licensed bank for credit facilities granted to the Company.
12. Subsidiary Companies
In RM’000
At cost
Unquoted shares
Less: allowance for diminution in value
2002
Company
2001
180,829
(1,128)
179,701
76,091
(1,128)
74,963
Details of the subsidiary companies are set out in Note 39.
83
12. Subsidiary Companies (cont’d)
The amounts due from and to subsidiary companies represent outstanding amounts arising from inter-company trade
transactions, advances and payments made on behalf of or by subsidiary companies.
These amounts are unsecured, bear interest at rates ranging from 2.00% to 5.00% (2001: 2.00% to 5.00%) per annum and have
no fixed terms of repayment.
During the financial year, the Company has completed it share purchase agreement to acquire a 25% stake in Nice Frontier
Sdn Bhd which is a 75% owned subsidiary company of Property Skyline Sdn Bhd which in turn is a 90% owned subsidiary
company of IOI Properties Berhad. Accordingly, the investment cost incurred has been included as investment in subsidiary
company.
13
Associated Company
Group
In RM’000
At Cost
Unquoted shares:
Ordinary shares
Preference shares
Share of post acquisition results and reserves of associated company
Discount on acquisition amortised
Interest in associated company (Note 13.1)
2002
2001
2002
Company
2001
13,600
34,876
48,476
12,240
34,876
47,116
13,600
34,876
48,476
12,240
34,876
47,116
1,770
533
50,779
2,399
69
49,584
–
–
48,476
–
–
47,116
Detail of the associated company is set out in Note 39.
As at 30 June 2002, the proportionate cumulative preference dividends of RM16,340,000 (2001: RM13,201,000) to which the
Company is entitled to have not been declared by the associated company.
13.1 Interest in associated company
Group
In RM’000
Share of net tangible assets
Discount on acquisition of additional equity (Note 13.2)
2002
2001
60,000
(9,221)
50,779
57,399
(7,815)
49,584
13.2 Discount on acquisition of additional equity of associated company
Group
In RM’000
2002
2001
The movements in discount on acquisition of additional equity in the associated company during the financial year are
as follows:
Balance at beginning of financial year
Arising during the financial year
Amortisation for the financial year
Balance at end of financial year
84
(7,815)
(1,870)
464
(9,221)
–
(7,884)
69
(7,815)
14
Group
In RM’000
At cost
Freehold land and buildings
Leasehold land and building
At valuation
Freehold land and buildings
Leasehold land and buildings
2002
2001
27,182
1,999
29,181
–
1,999
1,999
212,846
202,382
213,368
196,111
415,228
444,409
409,479
411,478
The investment properties comprise:
Name of building/location
Description
Tenure of land
Net lettable area
IOI Mall
Bandar Puchong Jaya, Puchong
3 storey shopping mall
Freehold
57,507 sq m
Mayang Plaza
Jalan SS 26/2
Taman Mayang Jaya, Petaling Jaya
4 storey commercial complex
Freehold
12,575 sq m
IOI Mall
Bandar Putra
Senai-Kulai
2 storey shopping mall
Freehold
23,784 sq m
IOI Resort
Putrajaya
23 units of residential bungalow
Freehold
15,512 sq m
IOI Plaza
210 Middle Road, Singapore
12 storey office building
Leasehold
8,740 sq m
IOI Business Park
Bandar Puchong Jaya, Puchong
57 units of commercial lot
Freehold
8,418 sq m
Flat 28 Marathon House
200 Marylebone Road
London NW1 5 PW
Residential apartment
Leasehold
Net built up area:
80 sq m
Freehold land and buildings stated at cost amounted to RM27,182,000 in 2002 represent investment properties completed
during the financial year. The Directors are of the view that the fair value of these investment properties as at 30 June 2002
approximates their respective net book value. Leasehold land and building stated at cost amounted to RM1,999,000
(2001:RM1,999,000) represent an investment property acquired in 1999 and has not been revalued as the amount is insignificant.
85
14
Investment Properties (cont’d)
On 30 June 2001, certain investment properties of the Group have been revalued by the Directors based on a valuation
carried out by independent professional valuers using the market value basis. The attributable net surplus (after accounting for
minority interests and deferred taxation and net of disposals) of RM98,822,000 arising from the revaluation exercise has been
credited to revaluation surplus in the shareholders’ equity.
Certain investment property with carrying amount of RM202,382,000 (2001:RM196,111,000) has been pledged to a bank for
credit facilities granted to a foreign incorporated subsidiary company.
15
Other Long Term Investments
Group
In RM’000
At cost
In Malaysia
Quoted Shares
Unquoted Shares
Quoted Warrants
Outside Malaysia
Unquoted Loan Stocks
Less: allowance for diminution in value
At market value
Shares quoted in Malaysia
Warrants quoted in Malaysia
16
2002
2001
2002
Company
2001
50,240
257
–
1,065
257
1
49,916
257
–
742
257
–
–
50,497
(113)
50,384
10,514
11,837
(3,267)
8,570
–
50,173
(113)
50,060
–
999
(113)
886
52,537
–
610
–
52,783
–
817
1
Land Held for Development
Group
In RM’000
At cost
Freehold land
Long term leasehold land
Development expenditure
Transfer to investment properties upon completion
2002
392,610
274
392,884
227,922
(2,408)
618,398
2001
260,697
274
260,971
215,408
–
476,379
Included in freehold land is a piece of land acquired by a subsidiary company in 1994 for future property development. The
said freehold land has been previously held for planting activities. Pending development of the freehold land, income from the
remaining plantation activities has been taken up as a principal income in the financial statements of that subsidiary company.
86
17
Goodwill on Consolidation
Group
18
In RM’000
2002
2001
At beginning of financial year
Arising from acquisition of subsidiary company during the financial year
Amortisation for the financial year
At end of financial year
4,170
41
(353)
3,858
4,523
–
(353)
4,170
Development Properties
Group
In RM’000
At cost
Freehold land
Development expenditure
Profit recognised todate on sold properties under development less
foreseeable losses accrued todate
Progress billings
Transfer to investment properties under construction
2002
2001
96,798
1,172,643
1,269,441
81,883
949,948
1,031,831
840,221
(1,869,551)
–
240,111
626,525
(1,387,007)
(184)
271,165
Included in development expenditure is interest expense incurred during the financial year amounting to
RMNil (2001: RM2,247).
19
Inventories
Group
In RM’000
At cost
Completed development properties
Nursery inventories
Construction materials
Others
At net realisable value
Completed development properties
20
2002
2001
2,301
148
654
144
3,247
2,476
196
569
159
3,400
1,455
4,702
1,455
4,855
Trade and Other Receivables
Group
In RM’000
Trade receivables (Note 20.1)
Other receivables, deposits and prepayments (Note 20.2)
2002
2001
2002
Company
2001
82,032
22,186
104,218
26,925
40,295
67,220
14
9,873
9,887
33
22,947
22,980
87
20
Trade and Other Receivables (cont’d)
20.1 Trade Receivables
Group
In RM’000
Trade receivables
2002
2001
84,722
(2,690)
82,032
29,116
(2,191)
26,925
2002
Company
2001
14
–
14
33
33
Company
2001
20.2 Other Receivables, Deposits and Prepayments
Group
In RM’000
Other receivables
Deposit paid to a minority shareholder (Note 20.2.1)
Other deposits
Prepayments
Allowance for doubtful debts on other receivables
2002
2001
2002
18,574
–
3,285
402
22,261
(75)
22,186
25,478
10,443
3,048
1,401
40,370
(75)
40,295
9,922
–
11
–
9,933
(60)
9,873
12,558
10,443
6
–
23,007
(60)
22,947
20.2.1 Deposit paid to a minority shareholder
This represents the deposit paid by the Company to a minority shareholder of Nice Frontier Sdn Bhd (“NFSB”) for the
acquisition of the additional equity interest in NFSB which has resulted the Group’s effective equity interest in NFSB
increased from 67.5% to 92.5% as further disclosed in Note 37.
21
Short Term Funds
Group
22
In RM’000
2002
2001
2002
Company
2001
Investment in fixed income trust funds in Malaysia
5,000
16,000
–
10,000
Deposits with Financial Institutions
Group
In RM’000
Deposits with licensed banks
Deposits with a discount house
23
2002
2001
2002
Company
2001
21,027
28,511
49,538
141,502
51,156
192,658
21,027
28,511
49,538
105,575
51,156
156,731
Cash and Bank Balances
Included in the cash and bank balances of the Group and of the Company are RM130,263,000 (2001: RM157,397,000) and
RM188,000 (2001: RM183,000) respectively held under the Housing Development Account pursuant to Section 7A of the
Housing Developers (Control and Licensing) Act, 1966 which is not available for general use by the Group.
88
24
Trade and Other Payables
Group
In RM’000
Trade payables (Note 24.1)
Other payables and accruals (Note 24.2)
Amount due to customers on contracts (Note 24.3)
2002
2001
2002
Company
2001
49,026
112,225
194
161,445
60,391
107,040
–
167,431
66
489
–
555
66
8,552
–
8,618
24.1 Trade Payables
Group
In RM’000
Trade payables
Retention monies
2002
2001
2002
Company
2001
20,951
28,075
49,026
34,450
25,941
60,391
52
14
66
52
14
66
24.2 Other Payables and Accruals
Group
In RM’000
Land premium payable
Advances from minority shareholders
Deposits
Other payables
Accruals
2002
2001
2002
Company
2001
33,449
8,669
14,362
51,679
4,066
112,225
33,449
12,467
11,372
46,130
3,622
107,040
–
–
17
434
38
489
–
–
17
8,500
35
8,552
24.3 Amount Due to Customers on Contracts
Group
In RM’000
Aggregate cost incurred to date
Recognised profit
Progress billings
Amount due to customers on contracts
25
2002
5,723
610
6,333
(6,527)
(194)
2001
–
–
–
–
–
Amounts Due to Related Companies
The amounts due to related companies represent trade transactions which are unsecured, do not bear any interest and have
no fixed terms of repayment.
89
26
Bank Overdraft
In RM’000
Secured
Bank overdraft
Group and Company
2002
2001
2,764
–
The bank overdraft of the Company is secured by certain freehold land and building of a subsidiary company. The bank
overdraft bears interest at rates ranging from 7.6% to 7.9% (2001:7.7 % to 7.9%) per annum.
27
Short Term Borrowings
Group
In RM’000
Secured
Revolving Credits
2002
2001
23,443
36,019
The revolving credits of the Group pertaining to a foreign incorporated subsidiary company are secured by a first legal mortgage of
the subsidiary company’s investment property. The revolving credits bear interest at rates ranging from 1.95% to 3.48 % (2001:3.26%
to 4.19%) per annum.
28
Share Capital
In RM’000
Ordinary shares of RM1.00 each:
Authorised
500,000,000 shares (2001:500,000,000 shares)
Issued and fully paid–up:
332,667,800 shares (2001: 282,667,800 shares)
Issue of Nil shares (2001: 50,000,000 shares) on conversion of ICULS 1995/2000
332,667,800 shares (2001: 332,667,800 shares)
Group and Company
2002
2001
500,000
500,000
332,668
–
282,668
50,000
332,668
332,668
The 50,000,000 ordinary shares issued in 2001 arising from the conversion of the remaining RM100,000,000 nominal amount of
4% Irredeemable Convertible Unsecured Loan Stocks 1995/2000 (“ICULS 1995/2000”) under the cash payment option as
reported in the previous year’s Annual Report.
Of the total 332,667,800 (2001:332,667,800) issued and fully paid–up ordinary shares, 52,000 (2001: Nil) are held as treasury
shares (Note 29.2) by the Company. Accordingly, the number of outstanding shares in issue and fully paid–up as at 30 June
2002 is 332,615,800 (2001:332,667,800) ordinary shares of RM1.00 each.
90
29
Reserves
Group
In RM’000
2002
Non – distributable
Share premium
Revaluation surplus
Capital reserves (Note 29.1)
Reserve arising on consolidation
Foreign exchange fluctuation reserve
Treasury shares, at cost (Note 29.2)
236,250
98,822
32,355
–
6,957
(309)
374,075
Distributable
Retained profits
Prior year adjustments
As restated (note 40)
709,290
–
709,290
1,083,365
2001
236,250
98,893
32,355
2,076
3,899
–
373,473
581,542
47,904
629,446
1,002,919
2002
Company
2001
236,250
–
–
–
–
(309)
235,941
236,250
–
–
–
–
–
236,250
195,423
–
195,423
431,364
179,777
47,904
227,681
463,931
The movements in reserves are shown in the statements of changes in equity.
29.1 Capital Reserves
Capital reserves represent accretion in net attributable assets of the Group which has arisen from shares issued by
certain subsidiary companies to minority shareholders.
29.2 Treasury shares
The shareholders of the Company by an ordinary resolution passed in an extraordinary general meeting held on 30
January 2002, approved the Company’s plan to repurchase up to 10% of the issued and paid–up share capital of the
Company which comprises ordinary shares with par value of RM1.00 each (“Share Buy Back”).
The Directors of the Company are committed to enhance the value of the Company to its shareholders and believe that
the Share Buy Back can be applied in the best interests of the Company and its shareholders.
During the financial year, the Company bought back its issued shares from the open market as follows:
In RM’000
2002
Purchases during the financial year
– June 2002
No. of shares
Cost
52,000
309,000
Purchase price per share
Highest
Lowest
Average
5.95
5.80
5.94
The Share Buy Back transactions were financed by internally generated funds. The shares bought back are being held as
treasury shares in accordance with the provision of Section 67A of the Companies Act, 1965.
91
29
Reserves (cont’d)
Distributable reserves
Subject to the agreement with the tax authorities:
30
i
the Company has sufficient tax credit under Section 108 of the Income Tax Act, 1967 to frank the entire retained profits as
at 30 June 2002 as dividends without incurring additional tax liability; and
ii
the Company has approximately RM1,141,000 (2001: RM1,141,000) in its tax exempt account available for distribution of
tax exempt dividends.
Long Term Borrowings
Group
In RM’000
2002
2001
Secured
Term loan
43,015
41,641
The term loan of the Group pertaining to a foreign incorporated subsidiary company is secured by a first legal mortgage of
the subsidiary company’s investment property and is repayable in one lump sum seven years from the first drawn down date
or on June 2003 whichever is earlier. The repayment of the term loan will be extended in principle. The term loan bears interest
at rates ranging from 1.97% to 3.41% (2001: 3.35% to 4.15%) per annum.
31
Deferred Taxation
Group
In RM’000
Transfer to income statements (Note 8)
Provision in respect of revaluation of investment properties
Arising from fair value adjustments on acquisitions
2002
2001
18,157
(9,490)
–
31,857
40,524
19,800
(5,377)
3,734
–
18,157
The deferred taxation provision at the end of the financial year comprise tax effects of:
Group
In RM’000
Timing differences on projects profit recognition
Fair value adjustments on acquisitions
Timing differences on the recognition of certain project expenses
Timing differences arising from the excess of capital allowances over
the corresponding depreciation
Revaluation of investment properties
92
2002
2001
119
30,601
3,745
6,145
2,170
3,589
2,325
3,734
40,524
2,519
3,734
18,157
32
Acquisition of Subsidiary Companies
During the financial year, the Group acquired the following subsidiary companies:
Note
Riang Takzim Sdn Bhd
Lush Development Sdn Bhd
Cash outflow, net of
cash and cash
equivalents acquired
(RM’000)
32.1
32.2
1,000
37,713
11,417
49,130
50,130
No. of
ordinary share
of RM1.00 each
999,998
5,100
4,900
Acquired by
Cahaya Kota Development Sdn Bhd
32.1 Riang Takzim Sdn Bhd
On 3 October 2001, a wholly-owned subsidiary company of the Company, Cahaya Kota Development Sdn Bhd has
acquired 999,998 ordinary shares of RM1.00 each or 99.9998% equity interest in Riang Takzim Sdn Bhd for cash
consideration of RM1,000,000.
Details of the fair value of the net assets acquired and cash outflow on acquisition of subsidiary company is as follows:
In RM’000
Other receivables
Other payables
Net assets acquired
Purchase consideration discharged by cash
Cash outflow on acquisition of a subsidiary company
996
(37)
959
41
1,000
1,000
The above acquisition has no material effect on the financial results of the Group for the financial year ended 30 June
2002 as the company is yet to commence business.
The effect of the above acquisition on the financial position of the Group as at 30 June 2002 is as follows:
In RM’000
Other receivables
Other payables
Increase in Group’s net assets
996
(37)
41
1,000
93
32
Acquisition of Subsidiary Companies (cont’d)
32.2 Lush Development Sdn Bhd
The acquisition of Lush Development Sdn Bhd by Cahaya Kota Development Sdn Bhd and Riang Takzim Sdn Bhd was
completed on 3 October 2001. The equity interest acquired are as follows:
Acquired by
No. of
ordinary share
of RM1.00 each
Equity interest
acquired
(%)
Cash
consideration
(RM’000)
5,100
4,900
10,000
51
49
100
12,138
11,662
23,800
Details of fair value of the net assets acquired and cash outflow on acquisition of subsidiary company is as follows:
In RM’000
Net current liabilities
Deferred taxation
Net assets acquired
74,056
(12,300)
(9,256)
52,500
Purchase consideration discharged by cash
Less deposits paid during the previous financial year
Cash outflow on acquisition of a subsidiary company
52,500
(3,370)
49,130
The above acquisition has no material effect on the financial results of the Group for the financial year ended 30 June
2002 as the Company is yet to commence business.
The effect of the above acquisition on the financial position of the Group as at 30 June 2002 is as follows:
In RM’000
Net current liabilities
Deferred taxation
Increased in Group’s net assets
33
79,246
(12,306)
(9,256)
57,684
Cash and Cash Equivalents
Cash and cash equivalents at end of financial year comprise:
Group
In RM’000
Short term funds
Deposits with financial institutions
Cash and bank balances
Bank overdraft
2002
5,000
49,538
138,310
(2,764)
190,084
2001
16,000
192,658
161,022
–
369,680
2002
Company
2001
–
49,538
282
(2,764)
47,056
10,000
156,731
268
–
166,999
The Group and the Company have undrawn borrowing facilities of RM35,943,000 (2001:RM25,864,000) and RM5,617,000
(2001:RM9,833,000) respectively as at the end of the financial year.
94
34
Significant Related Party Disclosures
Identity of Related Parties
a
The Company has a controlling related party relationship with its direct and indirect subsidiary companies as disclosed in
the financial statements.
b
The Group also has related party relationships with the holding company, IOI Corporation Berhad, its subsidiary and
associated companies, certain directors and key management personnel of the Company and its subsidiary and
associated companies and the close family members of these directors and key personnel. The related parties are as
follows:
Holding company
Associated company
Continental Estates Sdn Bhd
Executive Directors and key management personnel
Lee Yeow Chor
Dato’ Yeo How
David Tan Thean Thye
Affiliated company
Malayapine Estates Sdn Bhd – a company in which Tan Sri Dato’ Lee Shin Cheng and Lee Yeow Chor have substantial
shareholdings.
Significant Related Party Transactions
In the normal course of business, the Group undertakes transactions with certain of its related parties listed above. Set out
below are the significant related party transactions for the financial year (in addition to related party disclosures mentioned
elsewhere in the financial statements). The related party transactions described below were carried out on terms and
conditions not materially different from those obtainable in transactions with unrelated parties.
Group
In RM’000
2002
2001
IOI Corporation Berhad Group
Sales of palm products
Interest income
Loan stock interest
Rental expense
Rental income
Dividend paid
Sales of plants and landscaping services
Web site design and development
5,292
–
–
1,260
58
54,797
1,558
75
4,054
3,111
1,891
712
156
32,288
1,193
344
Sales of palm products
Agency fees
Interest expense
12,509
250
–
9,399
217
10,098
Malayapine Estates Sdn Bhd
Project management fee
1,276
–
95
35
Contingent Liabilities – Unsecured
Group
In RM’000
Counter indemnities to banks for bank guarantees issued
Litigation involving claims for damages and compensation
Claims by house buyers for late delivery
36
2002
2001
11,619
2,183
201
14,003
5,167
2,167
201
7,535
Commitments
Group
In RM’000
Capital Commitments
Authorised capital expenditure not provided in the financial statements
– Contracted
Purchase of property, plant and equipment
– Not contracted
37
2002
2001
896
46
17,200
–
–
4,400
Significant Events During the Financial Year
Purchase of additional equity interest in Nice Frontier Sdn Bhd
As reported in the previous year’s Annual Report, the Company has entered into a share purchase agreement to acquire a
25% stake in Nice Frontier Sdn Bhd for a cash consideration of RM104,425,000 in October 2000. The acquisition was completed
on 22 August 2001. The Company’s effective stake in Nice Frontier Sdn Bhd has increased from 67.5% to 92.5% following the
acquisition.
Purchase of shares in Palmco Holdings Berhad
As reported in the previous year’s Annual Report, the Company has acquired a total of 495,000 warrants at RM1.35 per
warrant and 10,874,000 ordinary shares at RM4.35 per share in Palmco Holdings Berhad in July 2001. The warrants were
converted to shares in November 2001 at the total conversion price of RM1,485,000.
Purchase of equity interest in Lush Development Sdn Bhd (“LDSB”) and the joint venture agreement with Perbadanan
Kemajuan Pertanian Selangor (“PKPS”)
As reported in the previous year’s Annual Report:
i
the proposed subscription of 999,998 ordinary shares by Cahaya Kota Development Sdn Bhd (“CKDSB”) in Riang Takzim
Sdn Bhd (“RTSB”) at a subscription price of RM1.00 per share has been completed on 3 October 2001.
ii
Both CKDSB and RTSB have entered into a conditional agreement to acquire 51% and 49% stake in LDSB for a cash
consideration of RM12,138,000 and RM11,662,000 respectively. LDSB has entered into a joint venture agreement with
PKPS to develop a piece of leasehold land measuring approximately 500 acres located in the Mukim of Dengkil, District
of Sepang, Selangor Darul Ehsan, approximately 5 km from Putrajaya. Cash consideration payable by LDSB for its 70%
share of the land cost is RM28,700,000. The said acquisition by RTSB and CKDSB was completed on 3 October 2001.
Proposed acquisition of the entire issued and paid-up share capital in Tanda Bestari Development Sdn Bhd (“TBDSB”)
The Company had announced on 19 October 2001 that its wholly–owned subsidiary, CKDSB has proposed to acquire the entire
issued and paid-up share capital in TBDSB for a total cash investment cost of RM10,226,000. TBDSB is in the process of acquiring a
piece of leasehold land measuring 51.13 acres located in the Mukim of Dengkil, District of Sepang, Selangor Darul Ehsan. The
proposed acquisition is pending completion.
96
38
Segment Reporting – Group
Major Segment by Activity
In RM’000
2002
Property investment
Non-segment items
Interest expense
Share of net interest expense of associated company
In RM’000
2001
Property investment
Non-segment items
Interest expense
Share of net interest expense of associated company
Total
revenue
475,825
38,233
8,443
9,497
531,998
–
–
531,998
Total
revenue
386,739
29,129
6,010
6,456
428,334
–
–
428,334
Share of
Revenue
revenue of derived from
associated
external
company
customers
–
–
3,151
–
3,151
–
–
3,151
475,825
38,233
5,292
9,497
528,847
–
–
528,847
Share of
Revenue
revenue of derived from
associated
external
company
customers
–
–
1,956
–
1,956
–
–
1,956
386,739
29,129
4,054
6,456
426,378
–
–
426,378
Profit before
interest and
taxation
213,518
22,171
3,630
10,375
249,694
(2,052)
(2,447)
245,195
Profit before
interest and
taxation
181,552
15,421
908
12,948
210,829
(4,929)
(2,053)
203,847
Assets
employed
1,070,392
468,016
90,845
135,709
1,764,962
–
–
1,764,962
Assets
employed
985,990
433,622
88,099
218,645
1,726,356
–
–
1,726,356
Non-segment items are relatively insignificant activities and unrelated to any of the aforementioned major industry segments.
Major Segment by Geographical Area
In RM’000
2002
Malaysia
Singapore
2001
Malaysia
Singapore
Revenue
Profit before
interest and
taxation
Assets
employed
519,847
9,000
528,847
237,087
8,108
245,195
1,562,261
202,701
1,764,962
419,238
7,140
426,378
198,195
5,652
203,847
1,522,328
204,028
1,726,356
97
39
List of Subsidiary Companies and Associated Company
The subsidiary companies and associated company, all incorporated in Malaysia except otherwise stated, are as follows:
Name of Company
Principal Activity
Direct Subsidiary Companies:
100%
100%
Flora Development Sdn Bhd
Kumpulan Mayang Sdn Bhd
Pine Properties Sdn Bhd
100%
68%
100%
100%
100%
68%
100%
100%
Dynamic Management Sdn Bhd
100%
100%
Commercial Wings Sdn Bhd
Property Skyline Sdn Bhd *
100%
90%
100%
90%
Flora Horizon Sdn Bhd
Pilihan Teraju Sdn Bhd
Hartawan Development Sdn Bhd
Jutawan Development Sdn Bhd
Paduwan Development Sdn Bhd
Paska Development Sdn Bhd
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
Property development, property investment
and investment holding
and property investment
Property investment
Provision of management services
Pre–operating
Pre–operating
Inactive
Inactive
Inactive
Inactive
100%
99.99%
99.99%
100%
–
–
Building maintenance services
Inactive
Inactive
100%
100%
100%
100%
General contractors
Property development, property investment
61%
61%
92.50%
67.50%
81%
81%
Subsidiary company of
IOI Building Services Sdn Bhd
Lush Development Sdn Bhd ** ****
Subsidiary companies of
Dynamic Management Sdn Bhd
Paksi Teguh Sdn Bhd
Future Link Properties Pte Ltd *
(Incorporated in Singapore)
Subsidiary companies of
Property Skyline Sdn Bhd
Nice Frontier Sdn Bhd * ***
Property Village Berhad *
98
Effective Group Interest
2002
2001
Property investment
Property development,
property investment and
cultivation of oil palm
Property development, golf club and
recreational services and
investment holding
39
List of Subsidiary Companies and Associated Company (cont’d)
Name of Company
Property Village Berhad
Baycrest Sdn Bhd *
Effective Group Interest
2002
2001
81%
81%
Principal Activity
General contractors
*
**
Subsidiary companies not audited by BDO Binder
Lush Development Sdn Bhd is a 99.9999% subsidiary of Cahaya Kota Development Sdn Bhd by virtue of its equity interest
in Riang Takzim Sdn Bhd which in turn holds 49% equity interest in Lush Development Sdn Bhd
*** The Group effective interest in Nice Frontier Sdn Bhd is 92.50% by virtue of IOI Properties Berhad direct equity interest of
25% in Nice Frontier Sdn Bhd
**** The Joint Venture Partner has a 30% share over the future profits derived from the project pursuant to the term of Joint
Venture Agreement as mentioned in Note 37
Associated Company:
40
25.19%
24.19%
Prior Year Adjustments
Proposed dividends
During the financial year, the Group changed its accounting policy in respect of the recognition of dividends proposed or
declared after the balance sheet date in compliance with the new MASB Standard 19 “Events After The Balance Sheet Date”.
In the previous years, dividends proposed or declared after the balance sheet date were accrued as a liability at the balance
sheet date. Under the new policy, these dividends are disclosed as a separate components of shareholder’s equity in
accordance with MASB Standard 1 “Presentation of Financial Statements” and will be accrued as a liability in the period in
which the obligation to pay is established in accordance with MASB Standard 19.
In RM’000
As
Group
Effect of
previously
stated
change in
policy
As
As
restated
previously
stated
Company
Effect of
change in
policy
As
restated
At 1 July 2000
Retained profits
Proposed dividends (current liabilities)
519,310
28,267
28,267
(28,267)
547,577
–
200,284
28,267
28,267
(28,267)
228,551
–
At 1 July 2001
Retained profits
Proposed dividends (current liabilities)
581,542
47,904
47,904
(47,904)
629,446
–
179,777
47,904
47,904
(47,904)
227,681
–
99
41
Comparative Figures
Short term funds
In the previous financial year, all the Group’s investments in fixed income trust funds are classified as short term investments in
the balance sheet. During the financial year, the Group has reclassified investments in these trust funds that are subject to an
insignificant risk of changes in value and with maturity period of three months or less from short term investments to short term
funds in order to present more appropriately the nature of these amounts in the financial statements.
The changes in comparative figures are as follow:
Group
In RM’000
Balance Sheet
Short term funds
Short term investments
Cash Flow Statement
Cash flow from investing activities
Additions to short term investments
Cash and cash equivalents
As previously
stated
Company
As As previously
restated
stated
–
16,000
16,000
–
(16,000)
353,680
–
369,680
–
10,000
(10,000)
156,999
As
restated
10,000
–
–
166,999
The following comparative figures have been reclassified to present more appropriately the nature of these balances in the
financial statements:
Group
In RM’000
Balance sheet
Land held under development
Cash Flow Statement
Cash flow from investing activities
Additions to investment properties
Additions to property, plant and equipment
42
As previously
As
reported
restated
42,481
434,725
473,906
(19,596)
(5,641)
63,255
411,478
476,379
(2,030)
(23,207)
Authorisation for Issue
The financial statements of the Group and the Company for the financial year ended 30 June 2002 were authorised for issue
by the Board of Directors on 3 September 2002.
100
Statement by Directors
In the opinion of the Directors, the financial statements set out on pages 66 to 100 are drawn up in accordance with applicable
approved accounting standards in Malaysia and the provisions of the Companies Act, 1965 so as to give a true and fair view of:
i
the state of affairs of the Group and of the Company as at 30 June 2002 and of their results for the financial year ended on
that date; and
ii
the cash flows of the Group and of the Company for the financial year ended 30 June 2002.
On behalf of the Board,
Executive Chairman
Dato’ Yeo How
Executive Director
3 September 2002
Statutory Declaration
I, Dato’ Yeo How, being the Director primarily responsible for the financial management of IOI Properties Berhad, do solemnly and
sincerely declare that the financial statements set out on pages 66 to 100 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 Statutory Declaration Act, 1960.
Subscribed and solemnly declared
by the abovenamed
at Puchong, Selangor Darul Ehsan
this 3 September 2002
)
)
)
)
Dato’ Yeo How
Before me:
S. Nirmala Devi
Commissioner for Oaths
No. B076
101
Report of the Auditors
■
to the members of IOI Properties Berhad
We have audited the financial statements set out on pages 66 to 100. These financial statements are the responsibility of the
Directors. Our responsibility is to express an opinion on the financial statements based on our audit.
We conducted our audit in accordance with approved standards on auditing in Malaysia. Those standards required that we plan
and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.
An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant estimates made by the Directors, as well as evaluating
the overall financial statements presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion:
a
the financial statements have been properly drawn up in accordance with applicable approved accounting standards in
Malaysia and the provisions of the Companies Act, 1965 so as to give a true and fair view of the state of affairs of the Group
and of the Company as at 30 June 2002 and of their results and cash flows for the financial year then ended ; and
b
the accounting and other records and the registers required by the Act to be kept by the Company and by the subsidiary
companies of which we have acted as auditors have been properly kept in accordance with the provisions of the Act.
We have considered the financial statements and the auditors’ reports of the subsidiary companies of which we have not acted
as auditors, as indicated in Note 39 to the financial statements, being financial statements that have been included in the
consolidated financial statements.
We are satisfied that the financial statements of the subsidiary companies 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 consolidated
financial statements and we have received satisfactory information and explanations required by us for those purposes.
The auditors’ reports on the financial statements of the subsidiary companies were not subject to any qualification and did not
include any comment made under subsection (3) of Section 174 of the Act.
BDO Binder
AF : 0206
Chartered Accountants
Siew Kah Toong
1045/3/04 (J)
Partner
Kuala Lumpur
3 September 2002
102
Group Properties
A
Development Properties
Tenure
Initial gross
land area
Balance of
net land
area for
development
Bandar Puchong Jaya–Parcel A
Various sub–divided lots in
Puchong, Petaling
Freehold
164 hectares
6 hectares
On-going mix
development
project
4,487
1989
Bandar Puchong Jaya–Parcel B
Various sub–divided lots in
Puchong, Petaling
Freehold
210 hectares
47 hectares
On-going mix
development
project
96,740
1990
Bandar Puteri
Lots 12, 356, 5452-5473
and 5475-5490
Puchong Petaling
Freehold
374 hectares
180 hectares
On-going mix
development
project
256,233
1994
IOI Resort, Lot 3991 (part)
Dengkil, Sepang
Freehold
37 hectares
17 hectares
Condominium
and bungalow
development
41,080
1994
Bandar Putra
Lot 5418 (part)
Senai-Kulai, Johor Bahru
Johor Darul Takzim
Freehold
332 hectares
102 hectares
On-going mix
development
project
72,314
1994
Bandar Putra
Lots 3787, 5418, 26737,
3785 and 3783
Senai-Kulai, Johor Bahru
Johor Darul Takzim
Freehold
1,967 hectares
942 hectares
On-going mix
development
project
Labour lines, staff
quarters,estate
bungalows,stores
135,397
1994
Lot 18485
Sg. Buloh, Petaling
Freehold
–
3,962 sq m
Future
development
land
1,427
1980
HSD 1426 PT No 4466
Mukim of Dengkil
District of Sepang
Leasehold
Expiring
On 2091
202 hectares
116 hectares
Future
development
land
79,044
2001
Location
Net book
value as at
30 June 2002
Usage
RM’000
Year of
acquisition/
revaluation
600
Net book value of the development properties are stated at Group land cost together with the related development expenditure
incurred to the remaining unsold properties.
* year of revaluation
103
Group Properties
B
Net book
Age of
value as at
buildings 30 June 2002
(years)
(RM’000)
Year of
acquisition/
revaluation
Tenure
Land area
Net lettable
area
Leasehold
expiring on
2095
2,600 sq m
8,740 sq m
12 storey
office
building
4
202,382
2001*
IOI Mall
Bandar Puchong Jaya
Puchong
Freehold
68,797 sq m
57,507 sq m
3 storey
shopping
mall
6
127,072
2001*
IOI Business Park
Bandar Puchong Jaya
Puchong
Freehold
38,849 sq m
8,418 sq m
57 units of
commercial
lot
4
29,517
2001*
IOI Resort
Putrajaya
Freehold
48,810 sq m
15,512 sq m
23 units of
residential
bungalow
1-6
39,196
2001*
Mayang Plaza
Jalan SS 26/2
Taman Mayang Jaya
Petaling Jaya
Freehold
11,573 sq m
12,575 sq m
4 storey
commercial
complex
6
19,733
2001*
Leasehold
expiring on
2996
–
Net built
up area :
80 sq m
residential
apartment
4
1,999
1999
Freehold
43,482 sq m
23,784 sq m
2 storey
shopping
mall
1
24,510
1994
Location
IOI Plaza
210 Middle Road
Singapore
Flat 28 Marathon House
28200 Marylebone Road
London NW1 5 PW
IOI Mall
Bandar Putra
Kulai, Johor Bahru
Johor Darul Takzim
Usage
104
C
Other Properties
Location
Net book
Age of
value as at
buildings 30 June 2002
(years)
RM’000
Year of
acquisition/
revaluation
Tenure
Land area
Usage
Freehold
12,040 sq m
Industrial land
and building
for rental
14
686
1979
Leasehold
expiring
on 2046
6,930 sq m
Vacant
industrial land
–
190
1986
HS (D) 45891 PT 9428
Mukim Petaling
Freehold
1,699 sq m
Petrol station
land
–
9
1991
HS (D) 41529 PT 9411
Mukim Petaling
Freehold
2,690 sq m
Petrol station
land
–
313
1993
HS (D) 125263 PT 17727
Mukim Petaling
Freehold
2,601 sq m
Petrol station
land
–
112
1995
No. 1 Lebuh Putra Utama
Bandar Putra
Kulai, Johor Bahru
Johor Darul Takzim
Freehold
Net built
up area :
1,041 sq m
Bandar Putra
corporate office
5
1,407
1994
Palm Villa Golf and
Country Resort
Bandar Putra
Kulai, Johor Bahru
Johor Darul Takzim
Freehold
96 hectares
27-hole
golf course
–
18,531
1994
Palm Villa Golf and
Country Resort
Bandar Putra
Kulai, Johor Bahru
Johor Darul Takzim
Freehold
7 hectares
Clubhouse
1
6,688
1994
Taman Klang Utama
Lot 723 EMR 2244
Jalan Kapar, Kelang
HS (D) 13605 PTD 4911
Mukim Sg Segamat
Segamat
Johor Darul Takzim
105
Shareholders Information
Type of shares
Voting rights
Number of shareholders
■
as at 3 September 2002
: Ordinary shares of RM1.00 each
: One vote per shareholder on a show of hands
One vote per ordinary share on a poll
: 1,359
Distribution of Shareholdings
Size of holdings
1-999
1,000-10,000
10,001-100,000
100,001-16,630,789
16,630,790 and above
Total
No. of holders
Total holdings
%
96
971
204
86
2
1,359
34,980
3,066,300
6,584,120
87,359,400
235,571,000
332,615,800
0.01
0.92
1.98
26.27
70.82
100.00
List of Top 30 Shareholders (without aggregating securities from different securities accounts belonging to the same person)
Name
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
106
Amanah Raya Nominees (Tempatan) Sdn Bhd
Qualifier: Skim Amanah Saham Bumiputera
Employees Provident Fund Board
Qualifier: Amanah Saham Malaysia
Permodalan Nasional Berhad
AMMB Nominees (Asing) Sdn Bhd
Qualifier: Pledged Securities Account for Lee Beng Hong (BK 6/264-0)
Malaysia Nominees (Tempatan) Sendirian Berhad
Qualifier: Great Eastern Life Assurance (Malaysia) Berhad (MLF)
Progressive Holdings Sdn Bhd
HLG Nominee (Tempatan) Sdn Bhd
Qualifier: PB Trustee Services Berhad for HLG Growth Fund
Lai Ming Chun @ Lai Poh Lin
Right Purpose Sdn Bhd
SBBAM Nominees (Tempatan) Sdn Bhd
Qualifier: Employees Provident Fund Board
Qualifier: Sekim Amanah Saham Nasional
Qualifier: Amanah Saham Wawasan 2020
Malaysia National Insurance Berhad
Cartaban Nominees (Tempatan) Sdn Bhd
Qualifier: Amanah SSCM Nominees (Tempatan) Sdn Bhd
For Employees Provident Fund Board (JF404)
Universal Trustee (Malaysia) Berhad
Qualifier: BHLB Pacific Emerging Companies Growth Fund
No. of shares held
%
196,225,800
17,503,200
58.99
5.26
14,623,400
11,457,000
4.40
3.44
10,000,000
10,000,000
7,309,000
3,990,000
3.01
3.01
2.20
1.20
3,183,000
0.96
3,079,400
2,439,000
0.93
0.73
2,215,800
1,980,000
1,900,000
0.67
0.60
0.57
1,842,000
1,786,600
0.55
0.54
1,761,000
0.53
1,732,000
1,640,000
0.52
0.49
1,550,000
0.47
List of Top 30 Shareholders (cont’d)
Name
21
22
23
24
25
26
27
28
29
30
No. of shares held
%
1,212,000
0.36
1,100,000
0.33
1,000,000
0.30
980,000
969,000
0.29
0.29
876,000
810,200
806,000
0.26
0.24
0.24
780,000
755,000
0.23
0.23
305,505,400
91.84
No. of shares held
%
Indirect
%
Cartaban Nominees (Asing) Sdn Bhd
Qualifier: SSBT Fund 2R26 for Bernstein Emerging Markets Value Portfolio
Citicorp Nominees (Asing) Sdn Bhd
Qualifier: CB LDN for Stichting Shell Pensioenfonds
RHB Capital Nominees (Tempatan) Sdn Bhd
Qualifier: Pledged Securities Account for Lai Ming Chun @ Lai Poh Lin
Lembaga Tabung Angkatan Tentera
HSBC Nominees (Asing) Sdn Bhd
Qualifier: BNY Brussels For the State Teachers Retirement System of Ohio (Sanford Emerg)
Takaful Nasional Sdn Berhad
BBMB Securities Nominees (Tempatan) Sdn Bhd
Qualifier: Petroliam Nasional Berhad
Lawrence Lee Beng Teck
AMMB Nominees (Tempatan) Sdn Bhd
Qualifier: AMTrustee Berhad for HLG Penny Stock Fund (5/4-3)
Total
Substantial Shareholders (as per register of substantial shareholders)
Name of shareholders
Direct
1
2
3
4
5
6
Lee Yeow Chor
Amanah Raya Nominees (Tempatan) Sdn Bhd @
Employees Provident Fund Board
*
Deemed interested by virtue of Section 6A of the Companies Act, 1965 in respect of shareholding in IOI Corporation Berhad
and Progressive Holdings Sdn Bhd and shares held by his son, Mr Lee Yeow Chor.
and Progressive Holdings Sdn Bhd and shares held by her spouse, Tan Sri Dato’ Lee Shin Cheng and her son, Mr Lee Yeow Chor.
and Progressive Holdings Sdn Bhd.
Shares held by Amanah Raya Nominees (Tempatan) Sdn Bhd for the benefit of Skim Amanah Saham Bumiputra.
**
***
@
810,200
–
15,000
218,067,800
21,003,200
18,163,400
0.24
–
–
65.56
6.31
5.46
221,162,200 *
221,972,400 **
221,147,200 ***
–
–
–
66.49
66.73
66.49
–
–
–
107
Notes
Proxy Form
I/We _________________________________________________________________________________________________________________(Please use block letters)
of
_________________________________________________________________________________________________________________________________
being a member(s) of IOI Properties Berhad, hereby appoint ____________________________________________________________________________
______________________________________________________________________________________________________________________________________
of
_________________________________________________________________________________________________________________________________
and/or failing him, the Chairman of the Meeting as my/our proxy to vote for me/us on my/our behalf at the Twenty-Seventh Annual
General Meeting of the Company to be held at Putra Room, Renaissance Palm Garden Hotel, IOI Resort, 62502 Putrajaya, Malaysia
on Friday, 18 October 2002 at 9.30 a.m. or any adjournment thereof.
My proxy shall vote as follows:
Resolutions
1
For
Against
To receive and adopt the Audited Financial Statements for the financial year
ended 30 June 2002 and the Reports of the Directors and Auditors thereon
2
To re-elect Puan Sri Datin Hoong May Kuan as a Director
3
To re-elect Dato’ Yeo How as a Director
4
To approve Directors' Fees
5
To re-appoint BDO Binder as Auditors and to authorise the Directors to fix
their remuneration
6
To authorise the Directors to allot and issue shares pursuant to Section 132D
of the Companies Act, 1965
7
To approve the proposed renewal of existing share buy-back authority
8
To approve the proposed renewal of shareholders’ mandate for recurrent
related party transactions
(Please indicate with an "X" or "√" in the space provided as to how you wish your votes to be cast.)
The proportion of my/our holding to be represented by my/our proxy/proxies are as follows:
First proxy
–
Second proxy
–
%
No. of Shares Held
%
100%
Dated this __________day of ______________2002.
Signature of Shareholder ___________________________
Notes
1
2
3
4
5
A member may appoint any person to be his proxy and the provisions of section 149(1)(b) of the Act shall not apply to the Company.
An instrument appointing a proxy must be in writing under the hand of the appointor or of his attorney duly authorised in writing or, if the appointor is a corporation,
either under seal or under the hand of an officer or attorney duly authorised.
If a member appoints two proxies to attend at the same meeting, the instrument of proxy must specify the proportion of his shareholdings to be represented by each
proxy.
An instrument appointing a proxy may specify the manner in which the proxy is to vote in respect of a particular resolution and, where an instrument of proxy so provides,
the proxy is not entitled to vote on the resolution except as specified in the instrument.
An instrument appointing a proxy must be deposited at the Company's registered office at No.7-10, Jalan Kenari 5, Bandar Puchong Jaya, Off Jalan Puchong, 47100
Puchong, Selangor Darul Ehsan, not less than 48 hours before the time for holding the Meeting or any adjournment thereof.
fold here
stamp
IOI Properties Berhad
7-10 Jalan Kenari 5
Bandar Puchong Jaya
Off Jalan Puchong
47100 Puchong
Malaysia
fold here

IOI Properties 2002-cover fa

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