annual report 2013 - Putrajaya Perdana Berhad

Transcription

PUTRAJAYA PERDANA BERHAD
(465327-P)
www.p-perdana.com
PUTRAJAYA PERDANA BERHAD (465327-P)
2nd & 3rd Floor
5, Jalan P16
Precinct 16
62150 Putrajaya
Malaysia
ANNUAL REPORT 2013
ANNUAL REPORT 2013
Contents
2
Mission, Vision & Core Value Statements
3
Corporate Philosophy
4
Corporate Profile
6
Group Corporate Structure
7
Corporate Information
8
Board of Directors
9
Profile of Directors
11
Executive Committee
14
Executive Chairman’s Statement
19
Review of Operations
23
Group Financial Highlights
25
Corporate Milestones
29
Corporate Responsibility
40
Quality, Health and Safety,
Environment Statement
43
Statement on Corporate Governance
50
Audit Committee Report
54
Statement on Risk Management and
Internal Control
57
Financial Statements
123
Properties of PPB Group
2
Putrajaya Perdana Berhad (465327-P)
Annual Report 2013
Our Vision Statement
To become one of the top 5 public listed construction groups in Malaysia in
terms of market capitalisation by 2018.
Our Mission Statement
To be a RESPONSIBLE premier builder of EXCELLENCE in the provision of
INNOVATIVE and SUSTAINABLE integrated services in the construction,
development and concession businesses.
Our Core Values
Integrity
Upholding absolute honesty guided by righteous moral principles.
Reputation
Recognition, trust and confidence accorded by our customers as a result of our excellent track record of timely
delivery as well as high quality and innovative products.
Commitment
The foundation to achieve our business goals through teamwork and the right resources to fulfil our obligation to
the satisfaction of all stakeholders.
Annual Report 2013
3
Corporate Philosophy
Effective Teamwork
Putrajaya Perdana Berhad is built on the solid
experience and expertise of its management team. Its
services are delivered by a workforce of team-oriented
individuals who share the goal of exceeding their clients’
expectations.
These underlying values of PPB - integrity, reputation
and commitment - form the foundation upon which the
Group is built.
The company prides itself with its pool of talented and
skilled workers, which produces a diversity of ideas and
creativity at PPB. It is this dynamic depth of ideas and
expertise, ingrained at every level, which turns visions
into reality and creates outstanding landmarks for our
clients.
Safety and Training
PPB believes that successful projects are not merely
measured by the finished product, but also by the quality
of the process.
Numerous safety courses and drills are implemented
as part of the Safety and Health Plan at all project sites,
reflecting an uncompromising commitment to safety,
training and quality. This plan aims to manage and
eliminate potential workplace hazards as well as creating
a condusive working environment.
Setting New Standards
PPB strives to continually set new standards in
construction and development. Meticulously planned
designs are executed with efficient work practices to
provide intelligent and elegant design solutions.
This foundation built on integrity, reputation and
commitment serves as the cornerstone of PPB, and
fulfills the diverse needs of our highly discerning clients
Menara Felda
4
Annual Report 2013
Corporate Profile
Westport CT6
Corporate Profile
Delivering Integrated Building and Construction Solution
Incorporated in 1998, PPB is recognized as one of
Malaysia’s most innovative and reliable integrated
construction and property development groups. With the
newly added expressway concessionaire business to its
league, PPB continues to deliver prominent and large
scale projects on a turnkey design-and-build basis as
well as pioneering the construction of green buildings in
the country.
Pioneering Sustainable Buildings and
Developments
Over the years, the Group has built a reputation for itself
as a leading player in the construction of sustainable
or commonly known as green buildings in Malaysia.
Our landmark projects include the Low Energy Office
(“LEO”) building for the Ministry of Energy, Green
Technology and Water; the Green Energy Office (“GEO”)
for the Malaysia Green Technology Corporation and the
Diamond Building for the Malaysian Energy Commission,
among others.
infrastructure projects throughout Malaysia. These
include the construction of the majority of the
Government complexes, offices and high-end residential
units within the Federal Government’s administrative
capital of Putrajaya.
Spreading its wings beyond Putrajaya are prominent
commercial and residential projects within Kuala
Lumpur City Centre such as Pavilion Kuala Lumpur and
Pavilion Residences which have received accolades
for architectural and design excellence. Also on its
plates are green buildings such Manipal International
University. Besides commercial and residential projects,
PPB also expanded into building medical facilities and
amongst them was the Sime Darby Parkcity Medical
Centre.
Building the Nation’s Infrastructure
Leveraging on its construction expertise, the Group
builds some of Malaysia’s busiest ports as well as
highways, bridges, utility service tunnels, monorail
With the Malaysian Government advocating green
building development and offering attractive incentives
to those opting to go green, the market is now flooded
with green building opportunities. The Group will
leverage fully on our proven expertise and strong track
record in the development of green buildings to tap
these opportunities and vigorously enlarge our market
share in the green building business segment.
Creating Prominent Landmarks
Since its inception, PPB has been involved in a
multitude of landmark commercial, residential and
Diamond Building
Annual Report 2013
5
Corporate Profile (cont’d)
projects and sub-structure projects in infrastructure
works. Our experience also extends to developing public
amenities and recreational facilities.
Riding on the rapid growth momentum in the country,
PPB branched out to tap into the concession of
expressway via its new subsidiary Putra Perdana
Expressway Sdn Bhd which will contribute to its
construction segment’s order book and generate
recurring income for the Group.
For our commitment to pioneering energy efficiency and
green building development, it won us the “Stamp of
Approval” at the national level when the LEO, GEO and
Diamond Building were showcased on the 2009 stamps
and First-day Covers in support of Malaysia’s green
technology initiatives.
On top of this, we garnered recognition for our corporate
responsibility efforts when we qualified as one of the
20 shortlisted finalists in the CR Awards 2009 and 2010
events organized by The Star Publications and ICR
Malaysia.
Developing Innovative Properties
Our property development division also has a strong
track record in the development of innovative and
luxurious residential units and commercial buildings
including green development projects especially in
Putrajaya.
Leveraging on Strong Core Competencies
We owe our strong growth over the past decade to
focusing on our core competencies in construction and
property development, setting high standards of quality
and efficiency and committing to timely delivery without
compromise.
Our focus on cost effective solutions and our openness
to exploring innovative technologies continues to hold
us in good stead.
Backed by sound business fundamentals and a strong
management team which has the foresight and ability
to tap into lucrative new opportunities, PPB is well
positioned to deliver on our promises in all our projects
and markets.
Recognized for Our Efforts
As a testament to our efforts, the Group’s projects
have received both local and international accolades
from various organizations in several categories in the
industry. These include the Malaysian Construction
Industry Excellence Awards 2010 (for both the
Contractor Awards G7 Category and Special Awards
Innovation Category) for Diamond Building, a green
building with double Platinum Rating Certifications
from both Singapore’s BCA Green Mark and Malaysia’s
Green Building Index. The same building developed and
built by us also bagged the ASEAN Energy Awards as
the winner for the New & Existing Buildings Category
and second placing in the prestige ASHRAE Technology
Award 2013 New Commercial Building Category.
In Pursuit of New Horizons
Going forward, the Group will fully leverage on its core
competencies and strong track record to aggressively
pursue new horizons. With the identification of three
core business segments for the Group, which are
construction, property development and expressway
concessionaire, it will garner great synergy within the
Group to best utilize its resources to add value to its
stakeholders and the community.
We are also committed to delivering high quality
business processes, services and products. We are one
of the first few construction companies in the market
to consolidate our ISO 9001 Quality Management
System, ISO 14001 Environmental Management System
and OHSAS 18001 Occupational Health and Safety
Management System under a singular Integrated
Management System.
Our receiving of the 5-S accreditation for our good
housekeeping and safety management practices from
SIRIM and International 5S Association further attests to
our commitment to upholding international standards.
As we embark on the journey to be a great corporation
in the industry, we will leverage on all our key strengths
to achieve our mission and vision in becoming a key
integrated building and construction solution provider in
the international arena.
Stamp of Approval
6
Annual Report 2013
Group
Corporate
Structure
as at 31 May 2014
Putrajaya Perdana Berhad
100%
100%
Putra Perdana
Construction Sdn Bhd
57.14%
Time
Vantage
Sdn Bhd
100%
Ipoh City
Development
Sdn Bhd
70%
Blue Ocean Master
Sdn Bhd
50%
Brilliant Corridor
Sdn Bhd
100%
Putra Perdana
Development Sdn Bhd
100%
Senandung
Budiman
Sdn Bhd
100%
Perdana Land
Development
Sdn Bhd
100%
Putra Perdana
Expressways Sdn Bhd
100%
Sarjana
Sejati (M)
Sdn Bhd
30%
100%
Misi Serantau
Sdn Bhd
70%
70%
Bumiraya
Samudra
Sdn Bhd
Infra
Satin
Sdn Bhd
60%
Trek Satin
Sdn Bhd
Saluran
Arena
Sdn Bhd
Kuasa
Sezaman
Sdn Bhd
Annual Report 2013
7
Corporate Information
Board of Directors
Principal Place Of Business
Dato’ Rosman Bin Abdullah
(Non-Independent Executive Chairman)
2nd & 3rd Floor
No. 5, Jalan P16, Precinct 16
62150 Putrajaya
Tel : +60 3-8886 8888
Fax : +60 3-8886 8886
Website: www.p-perdana.com
Email: [email protected]
Angie Ang Ai Hoon
(Independent Non-Executive Director)
Dato’ Mohammed Azhar bin Osman Khairuddin
Jerome Lee Tak Loong
Company Secretary
Koo Lai Ngor
MAICSA 7022379
Registered Office
3rd Floor, No. 5
Jalan P16, Precinct 16
62150 Putrajaya
Tel : +60 3-8886 8888
Fax: +60 3-8889 5668
Auditors
KPMG
Chartered Accountants
Level 10, KPMG Tower
8, First Avenue, Bandar Utama
47800 Petaling Jaya
Selangor Darul Ehsan
Tel : +60 3-7721 3388
Fax : +60 3-7721 3399
Principal Bankers
Malayan Banking Berhad
AmBank (M) Berhad
Alliance Bank Malaysia Berhad
Artist’s impression of Desiran Bayu’s semi-detached houses.
8
Annual Report 2013
Board of Directors
1Ms. Angie Ang Ai Hoon
Independent Non-Executive Director
2
2Mr. Jerome Lee Tak Loong
3Dato’ Rosman Bin Abdullah
Executive Chairman
4 Dato’ Mohammed Azhar Bin Osman Khairuddin
1
3
4
Annual Report 2013
9
Profile of Directors
DATO’ ROSMAN BIN ABDULLAH
Executive Chairman
Malaysian, Age 47
Dato’ Rosman bin Abdullah was appointed as the
Executive Chairman of Putrajaya Perdana Berhad
(“PPB”) on 13 September 2012 pursuant to the
acquisition of the entire stake in PPB by Cendana
Destini Sdn Bhd, an investment holding company
controlled by him. He is also the Chairman of PPB’s
Executive Committee.
Dato’ Rosman holds a Bachelor of Commerce
(Accounting) Degree from the Australian National
University and attended the Advanced Management
Programme at Oxford University under the British
Government Chevening Scholarship Award. He is a
member of the Malaysian Institute of Accountants
and the Australian Society of Certified Practising
Accountants.
Dato’ Rosman began his career in Arthur Andersen & Co
in 1989 in the areas of auditing and financial advisory.
He joined Malaysia Airports Holdings Berhad (“MAHB”)
as an Executive Director in 1997. In April 2003, he left
MAHB to join PECD Berhad as its Corporate Affairs
Director. He was promoted to the Group Chief Executive
Officer of PECD Berhad in July 2006. He was the Chief
Executive Officer of Syarikat Air Negeri Sembilan Sdn
Bhd from April 2009 to September 2012.
Dato’ Rosman also sits on the Board of the subsidiaries
of PPB. He is also presently serving as an Independent
Non-Executive Director of Cliq Energy Berhad, Narra
Industries Berhad and Kumpulan FIMA Berhad.
He does not have any family relationship with any
Director and/or major shareholder of PPB, nor any
conflict of interest with PPB. He has had no convictions
for any offences within the past 10 years.
Angie Ang Ai Hoon
Malaysian, Age 57
Ms. Angie Ang Ai Hoon was appointed to the Board
of PPB on 1 August 2013 as an Independent NonExecutive Director. She is the Chairman of the Audit
Committee and Remuneration Committee and a
member of the Nomination Committee.
Ms. Angie Ang graduated from University of Malaya with
a Bachelor in Accounting (Hons). She is an Associate
Chartered Accountant of the Institute of Chartered
Accountants in England and Wales.
Ms. Angie Ang began her career in Touche Ross & Co,
London. She spent about eight years with Hanafiah
Raslan & Mohamad and Price Waterhouse in the areas
of audit and business advisory from 1984 to 1992.
She was a Senior Equity Analyst with Pesaka Jardine
Fleming, SG Warburg (SBC Warburg) and Caspian
Research from 1992 to 1998. She also served with
Nomura Advisory Services Sdn Bhd since 1999 as an
Associate Director, Nomura Malaysia Sdn Bhd as the
Head of Debt Capital Market, and the Head of Fixed
Income/Acting Head of Investment Banking. In 2007
she was appointed as the Country Head, Malaysia by
Standard London (Asia) Sdn Bhd before undertaking
the role as the Managing Director of Theia Sdn Bhd, an
independent consultant to Standard Bank plc.
She does not have any family relationship with
any Director and/or major shareholder of PPB, nor
any conflict of interest with PPB. She has had no
convictions for any offences within the past 10 years.
10
Annual Report 2013
Profile of Directors (cont’d)
Dato’ Mohammed Azhar
Bin Osman Khairuddin
Malaysian, Age 58
Malaysian, Age 37
Dato’ Mohammed Azhar bin Osman Khairuddin was
appointed as an Independent Non-Executive Director
on 1 August 2013. He is the Chairman of Nomination
Committee and member of Audit Committee and
Remuneration Committee.
Mr. Jerome Lee was appointed to the Board of PPB
on 28 March 2014. Mr. Jerome Lee is a member of
the Executive Committee and Audit Committee. He
is also the Chairman of the Long Term Incentive Plan
Committee.
Dato’ Azhar holds a Bachelor of Laws (Honours) Degree
from the University of Malaya. Dato’ Azhar is a member
of the International Bar Association (IBA) and the InterPacific Bar Association and has attended the Wharton
Executive Development Program in 1997.
Mr. Jerome Lee graduated from Royal Melbourne
Institute of Technology, Australia with a Bachelor of
Business majoring in Economics & Finance.
Dato’ Azhar started his career with Petroliam Nasional
Berhad (“PETRONAS”) in 1979 where he worked for
a total of 32 years. Dato’ Azhar was appointed to
the position of Vice President of the Legal Division
before his retirement from PETRONAS. Dato’ Azhar
also held the position of Group Company Secretary of
PETRONAS.
During his tenure in PETRONAS, Dato’ Azhar served
as an audit and board member of PETRONAS Gas
Bhd as well as a board member of KLCC Urusharta
Sdn Bhd, Convex Malaysia Sdn Bhd and the Kuala
Lumpur Convention Centre Sdn Bhd, and has also
served on several other Boards within the PETRONAS
Group, including the Universiti Teknologi Petronas
(UTP), Petrosains, Prince Court Medical Centre. He
also represented PETRONAS on the Board of MalaysiaThailand Joint Development Authority from the mid
1990’s till 2010.
Dato’ Azhar currently sits on the Board of various
private companies.
He does not have any family relationships with any
Director and/or major shareholders of PPB, nor any
Mr. Jerome Lee has 15 years’ experience in Corporate
Finance, Corporate Advisory, Private Equity and
Investment Banking.
Mr. Jerome Lee holds directorships in several private
limited companies.
He does not have any family relationships with any
Director and/or major shareholders of PPB, nor any
Annual Report 2013
Executive Committee
1 Jerome Lee Tak Loong
2Ahmad Ridzal Bin Ahmad
Chief Executive Officer, Development
3Dato’ Rosman Bin Abdullah
Executive Chairman
4 Sit Kam Hock
Group Chief Financial Officer
5 Goh Ceah Chuang
Chief Executive Officer, Construction
4
2
1
3
5
11
Annual Report 2013
‘‘
Executive Committee (cont’d)
‘‘
12
YBhg. Dato’ Rosman bin Abdullah was appointed as the Chairman of the Executive Committee (“EXCO”)
on 2 October 2012 whilst Mr. Jerome Lee Tak Loong was appointed as member of EXCO on 9 April
2014. The profiles of YBhg. Dato’ Rosman bin Abdullah and Mr. Jerome Lee Tak Loong are set out in
page 9 and 10 of this Annual Report.
Goh Ceah Chuang
Malaysian, Age 56
Ahmad Ridzal BIN AHMAD
Malaysian, Age 48
Mr. Goh Ceah Chuang, was appointed as member of
the EXCO on 26 March 2013. Mr. Goh was appointed
as the Chief Executive Officer and Director of Putra
Perdana Construction Sdn Bhd (“PPC”), a wholly-owned
subsidiary of Putrajaya Perdana Berhad on 14 March
2013.
Encik Ahmad Ridzal, was appointed as member of the
EXCO on 28 August 2013. Encik Ahmad Ridzal was
appointed as the Chief Executive Officer and Director of
Putra Perdana Development Sdn Bhd, a wholly-owned
subsidiary of PPB on 16 August 2013 and 28 August
2013 respectively.
Mr. Goh holds a Bachelor of Science Degree in Civil
Engineering from the University of Aberdeen, United
Kingdom. He is a registered Professional Engineer with
the Board of Engineers, Malaysia and is also a member
of the Institute of Engineers, Malaysia.
Encik Ahmad Ridzal graduated from Bradley University,
Illinois, USA with a Bachelor of Science in Civil
Engineering.
Mr. Goh has more than 30 years of experience in the
construction and construction related industries which
include infrastructure and building projects. He started
his career as site engineer in a leading international
construction company before joining a public listed
company listed in the Main Market of Bursa Malaysia
Securities Berhad where he was responsible for the
construction and manufacturing businesses. He also
worked in several other construction and development
companies at different time of his career.
Mr. Goh joined PPC as the Senior General Manager
in 2007 and was later transferred to PPC Abu Dhabi
Branch Office in the United Arab Emirates as Head of
Abu Dhabi Branch. He was subsequently promoted
to Chief Operating Officer of PPC on 23 August 2010
before he assumed the current position.
He has over 24 years of experience in the property and
construction sectors, where he started his career with
Island & Peninsular Berhad and thereafter held key
positions in several property organisations listed in the
Main Market of Bursa Malaysia.
In July 2005, he was appointed as General Manager
(Development) of Guthrie Property Development Holding
Berhad, leading the development of Bukit Jelutong
Township. Subsequently, he was appointed as Vice
President 1 of Sime Darby Property Berhad, following
the merger of Sime Darby Berhad, Kumpulan Guthrie
Berhad and Golden Hope Plantation Berhad.
He then progressed as the Chief Executive Officer of
Glenmarie Properties Sdn Bhd providing the necessary
leadership in planning, development and business
expansion of the organisation.
In 2011, he became the Director for Project Management
of 1Malaysia Development Berhad, leading the
management team in the relocation and development of
Bandar Malaysia.
Annual Report 2013
13
Executive Committee (cont’d)
Sit Kam Hock
Malaysian, Age 54
Mr. Sit Kam Hock, is the Group Chief Financial Officer. He was appointed as member of the EXCO on 26 March
2013. He heads the finance department overseeing the Group’s accounting, finance operations, taxation and
corporate matters. He also oversees the group legal, risk management, information technology and administrative
functions.
He is a member of the Malaysian Institute of Certified Public Accountants and the Malaysian Institute of Accountants
and a Fellow member of CPA Australia.
He was attached to an international firm of Chartered Accountants both in Malaysia and Australia where he
specialised in auditing and consultancy works before joining the corporate sector. He left the accounting profession
in 1989 and joined the corporate sector in various senior positions.
He has over 20 years of consultancy, finance, accounting and general management experience.
Diamond Building - GBI Platinum & Green Mark Platinum
Annual Report 2013
Executive Chairman’s Statement
‘‘
Dear Shareholders,
On behalf of the Board of
Directors, it is my great pleasure
‘‘
14
to present the Annual Report
and Financial Statements of
the Group and the Company
for the financial year ended 31
December 2013
Executive Chairman
Annual Report 2013
15
Executive Chairman’s Statement (cont’d)
OPERATING ENVIRONMENT
Growth in the construction sector in 2013 continued to
expand supported by higher activity in the residential
segment and key infrastructure projects driven
by both public and private spending. The various
projects initiated by the Government in 2013 under the
Economic Transformation Programme had contributed
to the 10.9% growth of the construction sector in
2013. However, the construction sector continued to
experience major challenges one of which is having
sufficient number of skilled construction workers.
FINANCIAL AND BUSINESS REVIEW
For the financial year ended 31 December 2013 ( “FY
2013” ), the Group recorded the highest ever Return
on Equity ( “ROE” ) of 21.2%. The Group also recorded
a higher revenue of RM705.2 million compared with
RM688.6 million in the previous financial year ended
31 December 2012 ( “FY 2012” ), mainly contributed
by good progress and increased activities in both
our construction and development segments. In line
with the higher revenue and coupled with a better
financial discipline, the Group recorded an impressive
73% growth in net profit to RM45.0 million in FY 2013
compared to RM26.1 million in FY 2012.
Apart from the consistent and significant revenue and
profit contribution from our engineering and construction
segment, the development segment had also made a
marked improvement where its revenue growth in FY
2013 was more than triple compared to FY 2012. This
is in line with the Group’s strategy to grow our property
development segment and turning it into one of the
prominent property players in the country.
During Kinta Lake District Development Agreement Signing
16
Annual Report 2013
SIGNIFICANT CORPORATE DEVELOPMENT
In our continuous efforts to turn the Group into a
sustainable and strategically aligned organization the
Group had undergone a thorough review of the strategic
direction, organizational, human resource and business
focus perspectives.
I am pleased to report that the Group had implemented a
Long Term Incentive Plan ( “LTIP” ) for all eligible Group
employees. Under the LTIP, the aggregate amount
shares to be made available, at no cost to the eligible
employees, shall not exceed 5% of the Company’s
enlarged issued and paid up ordinary share capital.
The vesting of the LTIP shares shall be subjected to the
Group and individual performance. During FY 2013, the
Company has granted a total of 6.7 million share grants
to eligible employees of the Group.
The Group’s development arm made significant progress
in FY 2013 when it enters into two main arrangements
that will bring potential Gross Development Value
( “GDV” ) in excess of RM4.5 billion over the next
10 years. Our wholly owned unit, Putra Perdana
Development Sdn Bhd (“PPD”) is partnering the State
Government of Perak to develop a 264-acre land into a
township at the outskirt of Ipoh. PPD has also entered
into a joint venture agreement with Syarikat Prasarana
Negara Berhad to undertake a mixed development
project in Bukit Jalil, Kuala Lumpur not far from the
LRT station. PPD is also well positioned to launch more
projects in Putrajaya and Melaka with estimated GDV of
about RM500 million.
FY 2013, also marked our entry into renewable energy
activity as a concession business. The Group acquired
70% equity interest in Kuasa Sezaman Sdn Bhd
(“KSSB”). KSSB, whose remaining 30% equity is held
by Perak Hydro Renewable Energy Corporation Sdn Bhd
(“PHREC”), is the concession owner of a 7 mega watt
mini hydro plant that had entered into a 2-year Power
Purchase Agreement with Tenaga Nasional Berhad.
Works on the hydro-plant is expected to commence in
2014 and revenue can be expected from 2017 onwards.
The Group’s leadership team was further strengthened
in 2013 through internal promotions and new
appointments. Mr. Goh Ceah Chuang was promoted as
Annual Report 2013
17
the Chief Executive Officer of the construction business
in March 2013. He is supported by Mr. Teh Kian Huat
who rejoined the Group in June 2013 as the construction
business Chief Operating Officer (Building Division)
and Mr. Yong Khoon Seng who was promoted in July
2013 as the construction business Chief Operating
Officer (infrastructure division). Meanwhile, the Group’s
development business saw a slew of management
changes led by the appointment of Encik Ahmad Ridzal
Ahmad as its Chief Executive Officer in August 2013.
CORPORATE GOVERNANCE
Notwithstanding its status as a non-listed entity, the
Group still takes it upon itself to adopt the corporate
governance practices as prescribed by Bursa Malaysia
to listed entities. During the year the Group has reestablished the Audit Committee with terms of reference
as recommended by the Malaysian Code of Corporate
Governance.
Horizon Residences Project
The Board has recommended a payment of a final
single-tier dividend amounting to RM2.2 million in
respect of the FY 2013.
PROSPECTS
DIVIDEND
For FY 2013, the Board had approved and paid five
interim single-tier dividend totaling RM55.1 million at
various dates between 13 June 2013 and 13 March
2014.
The Malaysian economy is expected to remain on
a steady growth trajectory of 4.5% - 5.5% in 2014
(2013:4.7%). Specifically, the construction sector is
expected to continue recording high growth at 10%,
albeit at a more moderate pace in 2014 (2013:10.9%), as
the completion of several large civil engineering projects
will more than offset the progress in existing projects in
the buildings, transport, utility and oil and gas sectors.
Initiatives undertaken by the Group in the past year
have now positioned the company on a more strategic
and stronger footing for the future. I am confident that
the seeds that we are sowing now in strengthening
our position in the construction sector, expanding and
Artis Impression of Serai Bukit Bandaraya
Desiran Bayu - handed over to clients in 2013
18
Annual Report 2013
growing our presence in the property development
sector and investment in concessions business in toll
road and renewable energy, will form the backbone
for the increase and sustainability of the Group future
earnings.
The Group will continue to intensify its tendering
efforts and follow ups to achieve better success rate in
replenishing its order book. Special focus shall be given
on green building projects which are now becoming
a preference in the industry and also infrastructure
projects which we already have expertise in.
Given the above and barring any unforeseen
circumstances, the Board expects the Group to perform
better in the financial year ending 31 December 2014.
through a very difficult transitional year . I would like to
acknowledge the contributions of our past directors Ms
Monica Oh Chin Chin, Encik Ishak Ahmad and Mr. Tan
Vern Tact who resigned in March 2014. Our heartfelt
appreciation for their valuable advice and guidance
to the Group. I wish them the very best in their new
undertakings.
On behalf of the Board, I would like to express our
appreciation to the management team and all the
employees for their contribution, dedication and
commitment to the Group. Without your support we
would not have had such a record year.
I would also like to extend my appreciation to our clients,
business partners and all stakeholders of the Group for
their continuous support, trust and confidence in the
Group.
APPRECIATION
I wish to thank my colleagues on the Board who
have very successfully helped steer the company
Executive Chairman
Journey to Greatness at Ilham Resort, Port Dickson
Annual Report 2013
‘‘
‘‘
Review of Operations
19
Construction Division continues to be the main driver of earnings for the Group, recording 93% of
the total revenue of RM705.2 million in FY2013. The remainder was contribution from the Group’s
Property Development division.
CONSTRUCTION DIVISION
The construction sector is expected to continue
recording high growth backed by the ongoing
implementation of various Government projects,
particularly large-scale projects such as the MRT line 1
and 2, the RAPID project as part of the O&G sector. PPC
continues to benefit from on this impressive performance
which was supported by the robust construction activity
in the civil engineering and residential subsector.
For FY2013, the company registered lower revenue
of RM655.6 million compared to RM672.8 million in
FY2012. This was mainly due to the lower revenue from
projects completed in 2012 and 2013. However, this was
mitigated by the additional revenue from new projects
secured in 2013.
Two new projects were secured in 2013, which includes
The Horizon Residences and Serai Bukit Bandaraya, in
Klang Valley both of which are seeking GBI certification.
Located on a 6-acre land, the last piece of prime real
estate in Bukit Bandaraya, Bangsar, Kuala Lumpur, the
Serai project entails the construction of two towers of
21-storey luxury condominium with a 5-storey carpark
podium cum 2-storey of facilities. This project which
has a contract value of RM381.9 million consists of 121
units of prestigious and luxurious condominiums and
targets to be completed in November 2015. The Horizon
Residences is another green building currently under
construction by PPC. These two 21 to 27-storey blocks
of luxury service apartments are located in the prime
land of KLCC, overlooking the famous Royal Selangor
Golf Club in Kuala Lumpur and has a contract value of
RM156.6 million.
PPC has to date recorded in access of RM2 billion
worth of green buildings constructed under its wings.
Riding on the upward trend of sustainable development
in the country, PPC is confident to secure more green
construction projects over conventional constructions to
chalk up its order book for another two years.
20
Annual Report 2013
Review of Operations (cont’d)
PROPERTY DEVELOPMENT DIVISION
Putra Perdana Development Sdn Bhd (“PPD”), the
property development division of the Group continues
to contribute to the Group’s bottom line and achieved
higher revenue recorded in FY2013 of RM49.6 million.
consist of 13 phases of eco-friendly and sustainable
developments within the site and is expected to be
completed within 15 years. Our first launch of affordable
housing will be in 2014 and followed by retirement
homes in early 2015.
EXPRESSWAY CONCESSIONAIRE DIVISION
Desiran Bayu which was targeted to be handed over in
Q1 2014 was completed one month ahead of time and
handed over in the final quarter of 2013. We continue
to develop our land bank in Precint 16 which has a total
GDV of RM980.76 million and the development will be
carried out in 2014 onwards.
PPD has teamed up with the State Government of Perak
to develop a 264-acre land into a mixed development
project called Bandar Tasik Amanjaya. With a gross
development value (GDV) of RM2.18 billion, this project
Saluran Arena Sdn Bhd (“Saluran Arena”), the
expressway concessionaire for Lebuhraya SerdangKinrara-Putrajaya (SKIP) is anticipating the signing of
the Concession Agreement in 2014. The Group expects
Saluran Arena to begin contributing to the Group’s coffer
sometime between 2018 and 2019. SKIP Expressway, is
an intra-urban expressway dubbed the “missing link” to
the existing highway/expressway network within Greater
Kuala Lumpur.
Annual Report 2013
21
PPB has 70 percent equity interest over Kuasa Sezaman
Sdn Bhd, which has a licence to operate a 7MW mini
hydro plant with a power purchase agreement (PPA)
for 21 years after successfully acquiring Misi Serantau
Sdn Bhd in 2013. This has brought our concessionaire
division to another level, as we foresee the importance
of diversifying our usual concessionaire business and
embarking into hydro projects in attributing attractively
to the future growth of our Group and contributing
recurring income. We expect to start construction in Q3
of 2014 and expect to start operation of the mini hydro
at the end of 2016.
GREEN EFFORTS
We are committed towards sustainable development
and the protection of the earth and Putrajaya Perdana
has been one of the main driving forces behind
Malaysia’s green building movement. Over the years, we
have progressed from being a pioneer in energy efficient
building design and construction, to integrating other
green elements such as indoor environmental quality,
sustainable site planning and management, materials
and resource utilization, water efficiency as well as
innovation, into our projects.
We continue to bring into play our proven expertise and
experience in the development of green or sustainable
buildings. Our portfolio comprises several landmark
buildings which have won awards and accolades
for their innovative, trend-setting architecture and
construction. Manipal International University is among
the building that has LEED Platinum built by us.
ERT-HQ Evacuation in January 2013
The Group continues to pursuit for greener constructions
and our Human Resources Department continues to
double its efforts in beefing up our employees to acquire
more knowledge and trainings pertaining to sustainable
construction via participations in seminars, workshops
and trainings organised by Construction Industry
Development Board Malaysia (“CIDB”), Malaysian Green
Building Confederation (“MGBC”) and other construction
related associations such as GBI Facilitator Basic
and Advance Courses, Seminar Empowering Green
Technology Towards Sustainable Construction and
MGBC Seminar on Green Development.
QUALITY, HEALTH AND SAFETY
We strongly believe that Health & Safety (“H&S”) is a vital
part of our organization as our key business, which is
structural construction.
The Management has openly accepted the full
responsibility of providing a safe working environment
to our employees. At the same time, employees
are expected to take full responsibility of working in
accordance with the H&S standards and practices set by
the Group and monitored by our H&S Committee.
Manipal University
At PPB, we believe that we need to work as a team to
ensure that safety and health is a priority. Therefore,
the Group emphasizes on the 5S Practice endorsed
by SIRIM and HK5SA where everyone has a role to
play in promoting safety and health at the workplace
and taking every reasonable measure to assure a safe
working environment. Our Company H&S Committee
continuously play a critical role in introducing and
improving safety measures to minimize workplace
hazards. Trainings and workshops on tool and
22
Annual Report 2013
machinery handling are carried out extensively at
all construction sites to ensure proper handling of
equipment to reduce possibility of injuries.
The Management also regularly conducts Site Safety
Audits, Review Hazard Identification Risk Assessment
Determining Control (“HIRADC”) and bi-monthly
meetings on H&S related matters to ensure that H&S
issues are given immediate attention and resolved before
any mishap takes place. All tools and machinery are also
routinely checked and serviced to ensure they are in
prime working condition to avoid injuries and downtime.
Top Management has always stressed that Health &
Safety is number 1 in our Priority list. To ensure that the
message is cascaded down to all levels, the Roles &
Responsibilities is regularly briefed to all staff at project
sites, during which, their responsibilities are emphasized
and also highlighted.
CONCLUSIONS
Given the new Mission 190 to spur us to greater
heights, our Construction Division will continue to
work on tenders for both buildings and infrastructure
projects in the country. The infrastructure sub-division
is also expected to be driven by its new job in the
RAPID project in Pengerang, Johor, expected to begin
in mid 2013. The Group shall remain vigilant in our
actions and proactive in management with cautious
optimism while operating in a challenging and robust
business environment. Whilst we have attained a record
performance for the financial year under review, the
Group will continue to improve on its performance with
the aim to achieving sustainable growth and enhancing
shareholder value.
Westport CT6-2 300m wharf and yard zones R&S
Annual Report 2013
23
Group Financial Highlights
Revenue¹
(RM Million)
EBITDA¹
(RM Million)
705.2
2013
688.6
2012
2011
200
400
63.0
2010
744.3
0
58.1
2011
508.9
2009
47.4
2012
822.0
2010
59.3
2013
2009
600
800
1000
50.6
0
Profit Before Tax¹
(RM Million)
40.2
2010
30
40
27.5
39.2
34.0
2009
50
60
70
80
0
568.1
2012
562.6
613.7
2011
673.0
2010
10
20
300
400
500
600
2013
NIL
2012
NIL
2011
NIL
30
40
50
76.3
2010
654.2
2009
200
80
Total Borrowings
(RM Million)
2013
100
70
37.0
Total Assets
(RM Million)
0
60
46.2
2010
43.1
20
50
2011
54.6
10
40
2012
51.4
2011
0
30
2013
62.3
2009
20
Net Profit Attributable
To Owners Of The Company¹
(RM Million)
2013
2012
10
2009
700
800
132.2
0
30
60
Equity Attributable
To Owners Of The Company
(RM Million)
2013
218.9
2012
216.0
208.5
2011
243.1
2010
2009
180.7
0
50
100
150
200
250
90
120
150
24
Annual Report 2013
Group Financial Highlights (cont’d)
RM’Million
Revenue1 Earnings before interest, taxes, depreciation
and amortisation (EBITDA)1
Interest cost1 Profit before tax1
Net profit attributable to equity holders of
the Company1
Total assets Total borrowings
Equity attributable to owners of the Company
59.3 3.0 62.3 47.4 3.0 40.2 58.1 3.8 51.4 63.0 7.1 54.6 50.6
6.5
43.1
46.2 568.1 -
218.9 27.5 562.6 -
216.0 37.0 613.7 -
208.5 39.2 673.0 76.3 243.1 34.0
654.2
132.2
180.7
Financial Indicators:
(%)
Return of average equity1
(%)
Return of total assets1
(sen)
Earnings per share1
Dividend per share (sen)
Net assets per share (sen)
(times)
Gearing ratio2 2013
21.2 7.9 33.0 40.9 156.3 -
2012
12.9 4.6 19.6 16.3 154.3 -
2011
16.4 5.9 26.4 43.2 148.9 -
2010
18.5 5.8 28.0 21.4 173.6 0.3 2009
20.8
5.2
24.3
11.0
129.1
0.7
2013
705.2 Financial Year Ended 31 December
2012
2011
2010
688.6 822.0 508.9 2009
744.3
Note:
1
The comparative figures and ratios for years 2009 to 2011 have excluded the discontinued operations.
2
Gearing ratio is calculated based on loans and borrowings over shareholders’ equity
Sarawak Energy Building
Annual Report 2013
25
Corporate Milestones
YEAR 1998
•
July
Putrajaya Perdana Sdn Bhd (“PPSB”) was incorporated
as a new JV vehicle in place of KCSB.
•
September
KCSB and TMR changed their names to Putra Perdana
Construction Sdn Bhd (“PPC”) and Putra Perdana
Development Sdn Bhd (“PPD”) respectively.
•October
YEAR 1986
PPSB acquired 100% equity interest in both PPC and
PPD.
•December
Indah Tegas Sdn Bhd (“ITSB”) was incorporated in
Malaysia under the Companies Act, 1965 as a whollyowned subsidiary of Kamunting Corporation Berhad
(“KCB”) (now known as E&O Property Development
Berhad).
YEAR 1990
•April
ITSB changed its name to Kamunting Construction Sdn
Bhd (“KCSB”) and commenced construction activities.
YEAR 1990-1996
•April
ITSB changed its name to Kamunting Construction Sdn
Bhd (“KCSB”) and commenced construction activities.
YEAR 1997
•April
Malaysian Plantations Berhad (“MPB”) (now known as
Alliance Financial Group Berhad) acquired KCSB from
KCB to serve as a joint venture (“JV”) vehicle between
K.L. Land Development Sdn Bhd (“K.L. Land”), Putrajaya
Holdings Sdn Bhd (“PJH”) and Kumpulan Pinang Golf &
Country Resort Sdn Bhd (“KPGCR”) to jointly develop
Putrajaya.
•
September
KCSB acquired Taman Melaka Raya Developments
Sdn Bhd (“TMR”) from Bandar Raya Developments
Berhad. TMR was principally engaged in the property
development of Taman Melaka Raya, Melaka.
YEAR 2000
•
July
KCB acquired 62% equity interest in K.L. Land which
holds 55% equity interest in PPSB from MPB.
•August
KCB further acquired 15% equity interest in PPSB from
KPGCR by way of a Mandatory General Offer pursuant
to the provisions of the Malaysian Code on Take-Overs
and Mergers, 1998. As a result of these acquisitions,
KCB holds 49.1% effective equity interest in PPSB.
•
September
Both PPC and PPD were awarded the MS ISO
9002:1994 Quality Systems certification from SIRIM
QAS International Sdn Bhd / UKAS of United Kingdom.
•December
PPD acquired the entire equity interest of Sarjana Sejati
(M) Sdn Bhd (“SSSB”) from KCB. SSSB entered into
a JV with Tunas Eksklusif Holding Sdn Bhd in January
2001 to jointly develop a piece of land in Bukit Katil,
Melaka.
26
Annual Report 2013
Corporate Milestones (cont’d)
YEAR 2006
•
July
The LEO Building built by PPC was awarded with the
ASEAN Energy Efficiency & Conservation Best Practices
for Energy Efficient Building Award under the New &
Existing Category by the ASEAN Center for Energy.
PPC completed the construction of Pavilion Kuala
Lumpur, a renowned shopping mall in the golden
triangle of Kuala Lumpur.
YEAR 2000
PPC won the Builders Award - Building works category
for the commercial/office Building Project for the
Construction and Completion of the Ministry of Finance
Buidling, Putrajaya from CIDB.
•February
PPC successfully secured the design and build project
for the Low Energy Office (“LEO”) Building of the
Ministry of Energy, Green Technology and Water in
Putrajaya, its first involvement in the construction of
energy efficient buildings.
•
June
PPSB converted to a public limited company, known as
Putrajaya Perdana Berhad (“PPB”).
•
July
PPB moved to its own building at Danau Point, located
in Precinct 16, Putrajaya.
YEAR 2003
PPC won the Malaysian Construction Industry Excellent
Awards 2003 under the Project Award Major Engineering
Category for the Ministry of Energy, Water and
Communication’s LEO Building in Putrajaya.
YEAR 2004
•
June
PPD acquired the entire equity interest of Senandung
Budiman Sdn Bhd (“SBSB”) from PJH. SBSB is
principally engaged in property development and
construction.
•
September
PPC obtained the Occupational Health and Safety
Management Systems Certificate from SIRIM QAS
International Sdn Bhd for the successful implementation
of Occupational Health and Safety Management
Systems complying with OHSAS 18001 : 1999. The
scope of the certification covers construction services in
building and civil engineering works.
SBSB launched its first green residential product of
exclusive lake-front energy efficient bungalows, D’Heron
at The Lake in Precinct 16, Putrajaya.
•October
PPB implemented the Employees’ Share Option Scheme
(“ESOS”) which entails the issuance of up to 15% of
PPB’s issued and fully paid-up share capital at any one
time pursuant to the options to be granted under the
ESOS, to eligible directors and employees of the Group.
The ESOS is governed by the ESOS By-Laws approved
by the shareholders at an Extraordinary General Meeting
on 22 August 2006.
Listing of PPB’s entire issued and paid up share capital
on the Main Market of Bursa Malaysia under the
construction sector.
Annual Report 2013
27
YEAR 2007
•August
Swan Symphony Sdn Bhd (“SBSB”), a special purpose
vehicle owned by the Abu Dhabi - Kuwait - Malaysia
Investment Corp (“ADKM Investment”) and Autron
Investment, a subsidiary of Singapore and Australianlisted Autron Corp Ltd emerged as a new substantial
shareholder at PPB after acquiring 50.6% of PPB shares
from Eastern & Oriental Bhd.
PPC completed the construction of Pavilion Kuala
Lumpur, a renowned shopping mall in the golden
triangle of Kuala Lumpur.
•October
PPC completed and handed over the first
GreenBuildingIndex certified green building, Green
Energy Office for Malaysian Green Technology
Corporation in Bangi, Selangor.
YEAR 2008
•October
UBG Berhad (“UBG”) acquired the entire equity interest
held by SSSB in PPB. As a result of the completion of a
conditional take-over offer and placement of shares by
UBG, UBG now holds 85.85% direct interest in PPB.
YEAR 2009
•February
PPC was awarded the MS ISO 14001:2004
Environmental Management System Certification from
SIRIM QAS International Sdn Bhd.
•May
PPB complete its acquisition of the entire equity
interests in CMS Roads Sdn Bhd (“CMS Roads”) and
CMS Pavement Tech Sdn Bhd (“CMS Pavement”)
from UBG. CMS Roads principally undertakes the
road management and maintenance work while CMS
Pavement is a specialist provider of pavement works
encompassing pavement construction, rehabilitation and
maintenance.
YEAR 2010
•March
PPB was named a finalist of StarBiz-ICR Malaysia
Corporate Responsibility Awards 2009. PPB was one
of the 20 finalists shortlisted from more than 300 public
listed companies in Malaysia who participated in this
event. The award is a partnership between The Star and
Institute of Corporate Malaysia, and is supported by the
Securities Commission Malaysia and Bursa Malaysia.
•
June
PPC was awarded its inaugural hospital project at Desa
Parkcity, Kuala Lumpur. This will pave the way for the
company to expand into the medical and health care
sector which requires different expertise and knowledge
from commercial building construction.
•
July
PPC was awarded its first 5S certification from SIRIM
and International 5S Organisation.
•November
PPC won the Malaysian Construction Industry
Excellence Award 2010 for 2 categories:
1. Winner for Contractor Awards: Grade G7
2. Winner for Special Awards: Innovation
For the Diamond Building of Suruhanjaya Tenaga
in Putrajaya. This double platinum rated green
building from GBI and Green Mark was developed
by PPD and built by PPC.
•December
On 21 December 2010, PPB was delisted from the main
market of Bursa Malaysia following the completion of an
unconditional take-over of shareholding by Javace Sdn
Bhd (“Javace”) and Sheikh Tarek Essam Ahmad Obaid.
28
Annual Report 2013
YEAR 2011
YEAR 2013
•February
On 28 February 2011, both the subsidiaries, CMSR
and CMSPT were disposed off following the same
unconditional take-over.
•March
On 14 March 2013, Mr. Goh Ceah Chuang assumed
the position of Chief Executive Officer of PPC from Mr.
Cheah Ham Cheia.
•March
PPB was again named one of the 21 finalists of StarBizICR Malaysia Corporate Responsibility Awards 2010.
•
June
Mr. Teh Kian Huat joined Putra Perdana Construction
Sdn Bhd (“PPC”), a wholly-owned subsidiary of
Putrajaya Perdana Berhad on 17 June 2013 as the
Company’s Chief Operating Officer.
•
To strengthen our core business in the
construction arm, PPC on 11 March 2011 acquired
60% equity interest in a construction company
named Saluran Arena Sdn Bhd.On 30 March 2011,
UBG acquired the remaining PPB’s shares from
Javace, making PPB a wholly-owned subsidiary of
UBG.
•May
On 1 May 2011, Mr. Cheah Ham Cheia was appointed
to the Board and took over the rein of Chief Executive
Officer of PPB from Mr. Wie Hock Kiong.
YEAR 2012
•
September
On 13 September 2012, Dato’ Rosman bin Abdullah was
appointed to the Board as Executive Chairman.On 14
September 2012, Cendana Destini Sdn Bhd (“Cendana
Destini”) completed its acquisition of the entire equity
interest in PPB from UBG, making PPB a wholly-owned
subsidiary of Cendana Destini.
•August
Dato’ Mohammed Azhar bin Osman Khairuddin and
Ms Angie Ang Ai Hoon were appointed as Independent
Non-Executive Directors on 1 August 2013.
On August 16, 2013 Mr. Ahmad Ridzal Bin Ahmad was
appointed as the Chief Executive Officer.
•November
Ipoh City Development Sdn Bhd (ICDSB) and Menteri
Besar Incorporated (MB Inc.) have joined forces to build
a green, mixed-use project in Kinta Lake District, with a
gross development value of RM2.18 billion.
Annual Report 2013
Corporate Responsibility
‘‘
‘‘
29
Putrajaya Perdana Berhad emphasizes the importance of positively contributing to our essential
environment which involves the marketplace, workplace, environment and community.
We adopted the Japanese kaizen which advocates that we apply the principles of continuous improvement
to every level of our CR implementation.
Corporate Responsibility Policy
We look to the following principles to guide us in
our daily operations in order to fulfill our role as a
responsible corporate citizen. We have also in place
Corporate Governance, Risk Management, Quality,
Environment and Health & Safety Policy to manage and
support our CR practices.
•
in our work to minimise any negative impact on the
environment and society.
We endeavor to engage actively with all
stakeholders by anticipating and satisfying
stakeholders’ needs, engaging in ethical
procurement practices, and continuing to deliver
and create value for our shareholders.
Fair Workplace Practices
Reliable Marketplace Practices
•
•
•
•
We are committed to complying with legal and
regulatory requirements in all our activities, and
we strive for continuous improvement in all our
business practices.
We actively promote a strong, healthy and safe
culture within our supply chain, ensuring a safe and
conducive working environment at all our project
sites and the places where our employees and
other business associates work.
We promote sustainable construction and design
•
•
•
We uphold equal opportunities in all areas of work
opportunities.
We are committed to improving the quality of life
of our employees through good remuneration
packages, staff benefits and personal development
programmes.
We strive to cultivate and maintain a conducive
working environment and healthy working culture at
all times.
We practice open-door communication between
employees and management.
30
Annual Report 2013
Corporate Responsibility (cont’d)
monitored by our H&S Committee.
Sustainable Environment Practices
•
•
•
•
We seek to protect and preserve the environment
by promoting and maintaining best practices in our
activities.
We reduce waste through 3R (Reuse, Reduce
and Recycling) whenever possible to enhance our
waste management practices.
We promote energy efficiency and sustainable
development in all our products and services to
reduce global carbon footprint.
We take into consideration the value of all
biodiversity within our construction sites to
minimise any impact on the fauna and flora within
the area.
At PPB, we believe that we need to work as a team
to ensure safety and health. Therefore, the Group
emphasizes on the 5-S Practice endorsed by SIRIM and
I5SA where everyone has a role to play in promoting
safety and health at the workplace and taking every
reasonable measure to assure safe working environment.
Our H&S Committee continuously play a critical role in
introducing and improving safety measures to minimize
workplace hazards. Trainings and workshops on tool
and machinery handling are carried out extensively
at all construction sites to ensure proper handling of
equipment to reduce possibility of injuries.
Management also regularly conduct Site Safety Audits,
Hazard Identification Risk Assessment Determining
Control (“HIRADC”) and quarterly meetings on H&S
related problems to ensure that H&S issues were given
immediate attention and resolved before any mishap
takes place. All tools and machinery are also routinely
checked and serviced to ensure they are in prime
working condition to avoid injuries and also downtime.
Impactful Community Practices
•
•
We are committed to undertaking philanthropic
efforts among the communities we operate in by
supporting them in terms of monetary means and
in kind with the overall aim of elevating their lives.
We are involved in upgrading the standard of living
of the community around our office and work sites
via a structured community programme.
Our Commitment towards Health & Safety
(“H&S”)
H&S Related Activities held in 2013:
We strongly believe that Health & Safety (“H&S”)
has become a vital part of our organization as our
key business, which is structural construction, is a
dangerous working environment, and therefore H&S is
given the highest priority in our operations.
1.
The management has openly accepted full responsibility
of providing a safe working environment to our
employees. At the same time, employees are expected
to take full responsibility of working in accordance with
the H&S standards and practices set by the Group and
4.
4.
2.
3.
5.
Company Health Safety Security Environmental
Committee (CHSSEC) Meeting
Site Safety Assessment (modified from CIDB’s
SHASSIC)
Site Safety & Health Programme (eg. Induction,
Tool Box, Fire Extinguisher Demo etc)
Training (eg. First Aider)
Internal Health & Safety Audit (combined with Q &
E)
Management Review Board Meeting (combined
with Q & E)
Annual Report 2013
31
6.
7.
8.
Health & Safety Audit by SIRIM (combined with Q &
E)
5-S Blue Belt Visit/Audit and 5-S Award (Quarterly)
5-S Audit by Prof Sam /SIRIM (Westport and AraGreens)
Our Engagement with Employees
In PPB, we value our employees’ contribution towards
the company’s success. Just like any other service
industry, having a talent with the right attitude and skills
is the primary factor in successfully delivering of quality
products within a given time.
Throughout 2013, our Human Resource Department
had aggressively rolled out various trainings and internal
communication activities to improve our employees’
technical knowledge and to encourage closer
communication between employees and management.
Particular trainings and workshops were carried out
to help our employees grow and move upward in their
career path. Teambuilding activities were also arranged
to boost each employee’s potential, increase selfconfidence, trust amongst colleagues and readiness for
new challenges.
Human Capital Development
The company prides itself with its pool of talented and
skilled workers, which produces a diversity of ideas
and creativity at Putrajaya Perdana. It is this dynamic
depth of ideas and expertise, ingrained at every level,
which turns visions into reality and creates outstanding
landmarks for our clients.
PPB also fosters a continuous learning culture. This was
further enhanced with the Group-wide implementation of
5S in 2013. It is only through constant self-improvement
and upgrading via trainings, workshops and seminars,
that every employee can remain competitive in the
market. We strongly believe that with this principle,
the Group will have the added advantage to secure
profitable projects which require skilled builders with
advanced construction technology and expertise.
32
Annual Report 2013
Long Service Award. The award is given during
Annual Dinner to staff who has served the Group
for 20 long and dedicated years. For 2012, two
employees received this award. To date, we have
about 14 employees who have already served the
Group for more than 20 years.
3. Non-utilization of Staff Medical Claims Award
PPB appreciates those employees who serve the
company with their utmost effort and as such, the
company awards RM300 cash to those who had
never utilized their Staff Medical Claims.
Recognising Employees Contributions
4. Non-utilization of Medical Leave Award
Every effort contributed towards growing the Group
will not pass unnoticed in PPB. Every employee’s
contribution in the area of Health & Safety, operational
procedures, innovations and improvements for the
betterment of the Group will be recorded and rewarded
accordingly.
1. Good Action Awards (“GAA”)
We encourage our employees to practice a work-life
balance to ensure their work productivity and health are
both excellent. Realizing this, Kelab Sukan Putrajaya
Perdana Berhad (“KSPPB”) was formed to inculcate a
work-life balance culture for the Group’s employees.
GAA is one of the most sought after employee
awards in the Group. Besides the stringent
qualifying procedure, this cash award is wellrecognized for an employee’s contributions
towards the furtherance of the Group. It is
judged based on 5 categories, Standard Based
Management System including 5-S, People’s
Growth, Problem Solving and Innovation,
Productivity and Service Excellence, Company
Image and Branding.
For GAA 2013, a total of 30 nominations were
received and three teams walked away with
the first three prizes and another three with the
consolation prizes.
2. Long Service Awards
PPB’s history dates back to 1986, and over these
years, the Group has grown leaps and bounds,
strongly supported by a team of loyal employees
who went through thick and thin to see the Group
grow from a humble beginning to its current
position as a premier builder especially in energy
efficient buildings in the country.
Therefore, the Group continuously reward its staff
who stayed by the Group all these years with a
To encourage the employees to give their full
commitment, PPB offers the Non-utilization of
Medical Leave Award to those employees who had
never utilized their medical leave.
Building a Work-life Balance Culture
It is the nature of the industry where the employees
regularly work for long hours. By establishing this
KSPBB, it is expected that the employees could use this
as a platform for them to take a break from their daily
routine and socialize with other colleagues.
KSPPB has organized several interactive and sport
activities for all staffs in Head Office, Site Offices, and
the neighborhood community.
Annual Report 2013
33
Activities by KSPPB for year 2013:Activity
CategoryNumber of participants (employees of PPB and external parties)
Trip to Sg Lembing
Employee Interaction
39
Chinese New Year Celebration
400
Bowling Tournament 2013
Sports
60
Hari Raya Celebration
Community and Employee Interaction
400
Annual Dinner 2013
Stakeholder Interaction
800
Group Exercises Sports
20
Recycling Campaign
Environment Conservation
Company-wide
Trip to Sg Lembing
39
Chinese New Year Celebration
400
Employee Dialogue
Balance Scorecard Awareness Briefing
PPB organised its inaugural dialogue with employees
in 2013 to receive the voices of grass-root employees.
This is because the Group wanted to know the heartbeat
of the employees besides creating a platform for the
employees to convey and highlight their concern
to the top management directly and have a better
understanding of the Group’s direction.
On 11 November 2013, HR Department organized a
Balance Scorecard Awareness Briefing, aimed to create
awareness and common understanding of balance
scorecard and to prepare for the focus groups on Key
Performance Indicators (KPI) design.
A series of group dialogues were organized at Head
Office and Site Offices where Executive Chairman, Dato’
Rosman Abdullah hosted the dialogues which covered
employees’ concerns and suggestions to move the
Group forward.
In the briefing, PPB staffs were informed of the new
objectives achieved during the recent “1 Vision, 1
Team” Management Retreat which includes the vision,
mission, core values, goals and KPIs. The Corporate
Scorecard across the four perspectives that PPB has set
for the next three years were also clearly briefed to the
employees.
Employee Dialogue with Executive Chairman
34
Annual Report 2013
Our Commitment toward Stakeholders and
Community
PPB continues to play an active role in constant
engagement with its stakeholders especially with
its employees, customers and industry related
organizations and authorities. Constant engagements
with our stakeholders via formal and informal meetings
enable us to exchange ideas, knowledge and technical
know-how in the industry.
Besides, PPB has also established long tradition of
social involvement, in particular through its corporate
CR programmes to benefit the community and society in
general. PPB has voluntarily taken up the responsibility
to improve the livelihood of its surrounding community
through various upgrading programmes such as
improving the infrastructure of schools and charitable
homes.
Easy To Access Communication Platforms
for Stakeholders
PPB highly values the opportunity to communicate with
our stakeholders and ensures that access to information
that interests our stakeholders are easily available.
Although PPB is not a public-listed company, the Group
continues to produce our annual report and half-yearly
newsletters. These publications are aimed to regularly
update our stakeholders’ about the Group’s progress.
Besides annual reports and newsletters, the Group also
regularly maintains its website with the latest project
updates, statistics, and activities.
Having a reputation of a premier green-builder, we
are also frequently approached by undergraduates for
interviews as part of their course curriculum. Besides
the requests of responding to questionnaires, and
interviews, we also frequently receive requests for field
trips to assist their assignments and thesis requirements.
To improve communication with our business partners,
employees, and surrounding community, PPB frequently
organize corporate events such as the annual golf
tournament, festive gatherings, annual dinner and other
activities that bring our stakeholders together in an
informal platform. We believe that through this informal
setting, it further encourages sharing and exchanging of
views and ideas.
Annual Report 2013
35
Engagements with Government and NGOs
PPB engages with the Government agencies and NGOs
in the industry mainly through membership participations
by its subsidiaries. Among them are CIDB, MBAM,
MGBC and REDHA. Being an active member in these
NGOs has given PPB many opportunities to share
industry know-how and exchange technical ideas among
each other.
As one of the 14 core founders in Malaysia Green
Building Confederation (“MGBC”) back in 2007, PPB
was involved in the development of the Green Building
Index rating tool for Malaysian buildings. Prior to this,
PPB lobbied hard with Government agencies back in
2000 to build sustainable buildings for their offices. As
a result, we delivered three iconic green buildings in the
country for the Ministry of Energy, Green Technology
and Water; Malaysian Green Technology Corporation;
and Malaysian Commission of Energy respectively.
PPB also supported the 2012 quarterly survey
conducted by Bank Negara. We believe that our
contribution towards the questionnaire is important in
helping Bank Negara to obtain a more concrete outlook
of the construction sector including raw material prices,
labor market and work progress for construction jobs.
Chinese New Year celebration
36
Annual Report 2013
Caring for the Underprivileged
As a corporate member of the community, PPB realizes
that it has a responsibility to lend a hand to the less
fortunate and to contribute towards a common good of
our society. As such, it has never stopped giving back to
the society as PPB recognized that investing in our own
community is another great way to give back to those
who have helped support our businesses.
1.
PPB Home Adoption Programme
For 2013, PPB rendered support to three charity
homes which houses orphanages, the elderly, and
people with special needs. PPB has customized
its support to these homes according to their
individual needs such as daily provisions, premises
upgrading and visitations to boost morale of the
residents.
In early 2013 during Chinese New Year, PPB
showered the House of Hope and Light with joy
and laughter. This old folks’ home which is located
in Kajang had the ground floor area tiled up by PPB
and its sub-contractor in the last quarter of 2012.
PPB also contributed RM5,000 for 40 underprivileged children at Pusat Jagaan Baitus Sakinah
Wal Mahabbah, Kota Warisan, Selangor. This
contribution will be used for the children’s school
expenses in 2014.
Annual Report 2013
37
We also visited Pertubuhan Kebajikan Skizofrenia
Malaysia to celebrate Father’s Day with the
patients. At the same time, PPB and its employees
contributed various products mainly food items to
meet their daily needs.
2.
PPB School Adoption Programme
PPB initiated this programme in 2008 and has
since contributed positively towards improving
the infrastructure of the adopted schools. Besides
that, the welfare of deserving and less fortunate
students were also taken care of through financial
aid which we hope to reduce the parents’ financial
burden so that these children can achieve better
academic results through extra tuition classes,
provided meals and transportation.
Contributions made towards the schools in 2013
Name of SchoolDescription of Contributions madeValue of Contribution
in Ringgit
SJK (T) Ladang West Country Barat, Kajang, Selangor
Sponsored transportation cost for Standard One underprivileged students
SJK © Chin Woo, Pudu, Wilayah Persekutuan
Sponsored a year’s tuition classes fees for
16 Standard Six underprivileged students
SJK (T) Sungai Manggis, Banting, Selangor Sponsored lunches to 16 Standard Six
underprivileged students
RM7,260
RM7,200
RM5,520
38
Annual Report 2013
Enhancing Educational Opportunities
1.
PPB Scholarship
PPB upholds its belief in nurturing the young
and giving opportunity to deserving Malaysian
citizens to pursue higher education. Through its
Scholarship Programme, PPB has helped many
undergraduates to complete their higher education
along the way. The scholarship also provides
career opportunity for scholars to gain working
experience at PPB and its subsidiary companies.
This Scholarship Award was first introduced
in 2006 and to date, RM1.08 million has been
awarded to almost 70 scholars. Successful
scholars are selected among the local students
with specific courses mainly Civil/Structural
Engineering, Mechanical/Electrical Engineering,
Quantity Surveying and Building/Construction
Management. The students’ families’ financial
background is also taken into account where
priorities are given to those students who are
financially challenged.
Annual Report 2013
39
2.
Industrial Training Programme
3.
Examination Excellence Reward Programme
In 2013, a total of 64 interns were trained under the
PPB Internship Programme. These undergraduates
who were mainly Year 3 students pursuing courses
related to the construction industry such as civil
engineering, quantity surveying and mechanical
and electrical engineering were guided by
appointed seniors at project sites throughout the
programme.
This programme is to reward children of PPB’s
employees who performed outstandingly in UPSR,
PMR, SPM and STPM (or similar). The Group
realizes that it is also important to support and
reward the children of our own employees. The
Group hopes with such reward, it will drive the
parents to put more effort in nurturing their children
to become high-valued citizens. For FY2013, a total
of 16 students received the reward.
40
Annual Report 2013
Quality, Health, Safety and Environment Statement
‘‘
‘‘
Putrajaya Perdana Berhad’s aspiration to be the region’s Premier Builder builds very much on the
Teamwork, Knowledge and Commitment of our people & business partners.
We are committed to:
•
•
•
Meet the quality requirement of our clients & customers;
Carry out our business in a manner that ensure the health and safety of our employees, workers, suppliers, subcontractors, clients, the public and other interested parties at all times, and
Carry out our business in a manner that preserves the environment at all times.
GROUP POLICY ON QUALITY
•
•
•
•
•
To constantly enhance our Quality Management System conforming to MS ISO 9001 Standards;
To continually improve our business processes and services via teamwork to meet our customers’ needs;
To derive realistic, practical and effective solutions to address issues we face;
To create and maintain a conducive work environment; and
To develop smart partnership with our business associates.
GROUP POLICY ON OCCUPATIONAL HEALTH & SAFETY (OHS)
•
•
•
•
•
•
To constantly enhance our OHS Management System conforming to OHSAS 18001 Standards;
To comply with all applicable OHS legislations and other requirements;
To ensure a healthy and safe workplace for our employees and workers;
To provide continuous training and awareness in OHS practice to employees and workers;
To promote a healthy and safe workplace culture to minimize all forms of accidents and ill health; and
To continuously improve our OHS performance.
GROUP POLICY ON ENVIRONMENT
•
•
•
•
•
To constantly enhance our Environmental Management System conforming to MS ISO 14001 Standards;
To comply with all applicable environmental legislations and other requirements;
To apply 3R practices at workplace i.e. to minimize the amount of resources and energy used / waste and
pollutants generated; and to maximize the frequency for reuse & recycle.
To create awareness, provide training and encourage participation in implementing good environmental
practices among our employees, workers as well as suppliers and subcontractors; and
To continuously improve the environmental friendliness of our businesses.
Annual Report 2013
41
Quality, Health, Safety and Environment Statement (cont’d)
Certifications MS ISO 9001 (Quality)
MS OHSAS 18001 (Health & Safety)
MS ISO 14001 (Environment)
SIRIM/I5SO: 5-S
CIDB “SCORE” Assessment (4-STARS rating)
Company AttainedYear Attained
Putra Perdana Construction Sdn Bhd
Since 2000
Putra Perdana Development Sdn Bhd
Since 2000
Since 2006
Since 2009
Since 2010
Current Rating
To achieve our QHSE objectives, we practise……
TWO-WAY COMMUNICATION
•
•
•
Our day-to-day engagements at PPB involve regular dialogues and open debates at all levels to encourage free
exchange of ideas and information.
Frequent management-led meetings to strategize, plan, design and deliver higher performance and output.
Investment in Information Communication and Technology (“ICT”) system to promote company-wide online
contact.
CONTINUAL IMPROVEMENT
•
•
•
•
•
Key critical processes are regularly identified for improvement.
Constant sourcing for new and improved techniques and technology to improve delivery speed, standards of
performance, and output quality.
Lessons learnt are captured for improved quality control and problem solving.
Regular audits to provide useful feedbacks.
Top management-led reviews and meetings are held regularly to provide guidance to all functional departments
and project teams.
BENCHMARKING STANDARDS: CONQUAS, QLASSIC & SHASSIC
•
•
•
We are trained in quality control and workmanship assessment standards since 2007.
We conduct regular in-house assessments using CONQUAS/QLASSIC/SHASSIC.
We invite independent bodies such as BCA and CIDB to carry out third-party independent assessments, in order
to benchmark our practice against the industry.
42
Annual Report 2013
Quality, Health, Safety and Environment Statement (cont’d)
5-S PRACTICE
•
•
•
•
In 2009, we become the first Malaysian construction contractor to embark on the “5-S Practice” based on the
standards developed by SIRIM and Hong Kong 5-S Association.
All work sites are now required to carry out this practice as it serves as an important foundation for the Group’s
QHSE Management.
To date, we have 10 projects been certified by SIRIM/HK5SA for the implementation of 5-S Practice.
Our 5-S experience has been widely shared with fellow contractors.
5-S AWARDS
•
•
•
The quarterly 5-S Award was introduced in 2012 to further enhances 5-S Practice at project sites.
The award is based Star rating system for five categories, namely Monthly Good Practice Photos; Producing
More Green Belts; Audit Team Review; 3rd Party Recognition and Leadership & 5-S Committee.
Certificates and cash are awarded to team based on the number of Stars received.
GOOD ACTION AWARD (“GAA”)
•
•
•
GAA was introduced in 2006 to encourage all employees to be proactive and creative in carrying out their duties
in workplace.
The award is opened to all employees in the Group.
It is meant to be a simple way to show our appreciation for the extra miles our People have taken in their day-today commitment to work.
Annual Report 2013
43
Statement on Corporate Governance
The Board of Directors is committed to ensure that the standards of corporate governance are practised throughout
the Group as a fundamental part of discharging its responsibilities to protect and enhance shareholders value and the
performance of the Group.
The Board believes that observance with statutory requirements and market regulations are pivotal to sound corporate
governance. A good corporate governance is fundamental to the long term prosperity of the Group. Hence, the
Board is continuously dedicated to evaluate the Group’s corporate governance practices and procedures to ensure
the principles and best practices in corporate governance as promulgated by the Malaysian Code on Corporate
Governance (“the Code”) is applied and adhered to in the best interests of its stakeholders.
This disclosure statement sets out the manner in which the Group has applied and complied with the principles of the
Code throughout the financial year.
1.0 BOARD OF DIRECTORS
PPB is led by a group of members from diversified background, which comprises of a wide spectrum of skills
and experiences in the field of construction, business management, investment, finance, legal, banking and
accounting.
The Board has the overall responsibility for effective performance and control of the Company and the Group,
whereby collective decision and close monitoring is conducted on issues relating to strategic direction,
formulation of policies, significant resource utilisation and investments of the Group. The Board also recognises
its role in implementing an appropriate system of risk management and ensuring the adequacy and integrity of
the Company’s system of internal control.
1.1 Composition of the Board
The Board currently has four (4) members comprising one (1) Executive Director designated as Executive
Chairman and three (3) Independent Non-Executive Directors. The Board is taking the necessary steps to enlarge
its Board composition.
The Board members have vast and diverse experiences in the areas of finance, industry-specific technical
knowledge, commercial and general management, which has been the key to charting the direction of the Group.
The Board believes that this composition of members is well-balanced which reflects the required mix of skills,
background and specialisation and it fairly reflects the investment of minority shareholders. Brief backgrounds of
each of the Directors are presented on Pages 9 to 10 of this Annual Report.
The Independent Non-Executive Directors play a key role in providing unbiased and independent views, advice
and contributing their knowledge and experience towards the formulation of policies and in the decision making
process. The Board structure ensures that no individual or group of individuals dominates the Board’s decisionmaking process.
1.2 Duties and Responsibilities
The Board is fully aware of its role in charting the strategic direction, development and control of the Group and
has adopted the specific responsibilities that are listed in the Code, which facilitates the discharge of the Board’s
stewardship responsibilities.
The Board has assumed the following responsibilities in discharging its stewardship:•
•
•
•
•
Review and adopt a strategic plan for the Group.
Oversee and evaluate the conduct of the Company’s business.
Identify and manage principle risks.
Succession planning.
Review adequacy and integrity of the Company’s internal control system and management information
system, including compliance with applicable laws and regulations.
44
Annual Report 2013
Statement on Corporate Governance (cont’d)
The Board had also adopted matters reserved for the Board where it includes the review of long term objectives
and strategic direction, yearly business plans and budget, dividend policy, system of internal control and risk
management, major capital projects, investments or contracts and issuance of new securities.
There is a clear division of responsibilities between the roles of the Chairman and the chief executives. The
Chairman is overseeing the business operations on the Group basis while the Chief Executive Officer of
subsidiaries (CEOs) are to ensure that there is equilibrium of power and authority in managing and directing the
business of the subsidiaries. The Chairman serves as the primary link between the Board and the Management.
The Chairman is responsible for the orderly conduct and management of the Board and provides leadership to
the Board and ensures that the Board works effectively and discharges its responsibilities. The CEOs oversees
the day-to-day management of the subsidiaries’ business and operations, developing the business strategies,
implementation of policies and strategies adopted by the Board and is accountable to the Board for all authorities
delegated to the Management. These key positions are held by separate individual directors.
The Independent Non-Executive Directors provide considerable depth of knowledge collectively gained from
experiences in a variety of public and private companies. The Independent Non-Executive Directors are
independent of management and free from any business or other relationships, which could materially interfere
with the exercise of their independent judgement. They provide unbiased and independent views in ensuring that
the strategies proposed by the management are fully deliberated and examined, provide an effective check and
balance to the Board’s decision making process in the interest of shareholders, employees, customers, and the
many communities in which the Group conducts its business.
To facilitate effective discharge of responsibilities, various board committees were established. The board
committees are chaired by Independent Non-Executive Directors except the EXCO which is chaired by the
Executive Chairman. Details of the board committees and their respective responsibilities are provided in Section
2 of this Statement.
1.3Board Meetings
During the financial period ended 31 December 2013, the Board met six (6) times, where they have deliberated
and considered significant matters, amongst others, the Group’s financial results, acquisitions and disposals,
Group’s operating performances and business direction of the Group.
The Board met six (6) times during the financial year and the attendance of each Director is as follows :
Name of DirectorDesignationNo. of Meetings Attended
Dato’ Rosman bin Abdullah
Executive Chairman,
Non-Independent Executive Director
6/6
Angie Ang Ai Hoon
(Appointed on 1 August 2013)
2/2
Dato’ Mohammed Azhar bin Osman Khairuddin
2/2
Monica Oh Chin Chin
(Resigned on 28 March 2014)
Non-Independent Non-Executive Director
6/6
Ishak bin Ahmad
5/6
(Appointed on 28 March 2014)
Not applicable
Annual Report 2013
45
1.4Board Appointment Process
All nominees to the Board are considered by the Board, taking into account the required mix of skills and
experience and other qualities.
1.5 Re-election of Directors
In accordance with the Company’s Articles of Association, all new Directors are subject to re-election at the
Annual General Meeting (“AGM”) following their first appointment. The Articles also provide that all other
Directors including the Executive Director are subject to re-election by rotation once at least every three years
and re-election of Directors shall take place at each AGM. Directors over the age of seventy (70) are required to
retire annually. A retiring Director shall be eligible for re-election. The re-election of Directors ensures that the
shareholders have a regular opportunity to reassess the composition and effectiveness of the Board. YBhg’ Dato’
Rosman shall retire pursuant to Article 82 of the Company’s Articles of Association while YBhg. Dato’ Mohammed
Azhar bin Osman Khairuddin, Ms Angie Ang Ai Hoon and Mr. Jerome Lee Tak Loong who were appointed during
the period under review shall retire pursuant to Article 89 of the Company’s Articles of Association.
1.6 Director’s Training
The Group acknowledges that continuous education is important to ensure that Board members are kept up to
date with developments in the Group’s industry and business environment. In this regard, the Board will ensure
that all its members undergo the necessary training programs as prescribed by the regulatory and statutory
bodies. They are provided with the opportunity for training and updates from time to time, particularly on relevant
new laws and regulations, financial reporting, risk management and investor relations to equip themselves with
the knowledge to effectively discharge their duties as Directors.
During the year, the Directors have attended various training programmes and seminars which were relevant to
them in discharging their duties and responsibilities, such as:
•
•
•
•
•
•
•
•
•
•
•
•
•
•
Bursa Malaysia - Advocacy Sessions on Corporate Disclosure for Directors
Invest Malaysia 2013
EY- Risk Management Training
World Islamic Economic Forum (WIEF)
The 18th Malaysian Capital Market Summit - ASLI
Tax Planning and Issue for Property
MFRS Update 2012/2013
MIA International Conference 2013
KPMG Malaysian Tax Summit 2013
MFRS Update 2013/2014 Seminar
IFRS Convergence Workshop for Property Development Industry
Directors Remuneration 2013 “The Best Practice” – MICG
Bursa Malaysia Sustainability Training for Directors Practitioners
Risk Awareness Programme -Tricor Roots
The Directors will continue to attend relevant training programmes to further enhance their skills and knowledge
and fully equip themselves to effectively discharge their duties.
2.0 BOARD COMMITTEES
The Board has established the following committees to assist the Board in the discharge of their duties and
responsibilities. The committees are provided with written terms of reference. The Chairman of the various
committees reports the decision and outcome of the committee meetings to the Board.
Annual Report 2013
46
2.1 Audit Committee
The report of the Audit Committee is set out on pages 50 to 53 of this Annual Report.
2.2 Nomination Committee
The Board had during the Special Board Meeting held on 22 April 2014 established the Nomination Committee
(“NC”). The NC comprises exclusively of Independent Non-Executive Directors.
The NC comprises of the following members :
Chairman :
Members :
YBhg. Dato’ Mohammed Azhar bin Osman Khairuddin
Ms. Angie Ang Ai Hoon
Mr. Jerome Lee Tak Loong
The responsibilities of the NC are as follows:
i)
To assess and recommend to the Board candidature for directors in the Company.
ii) To recommend to the Board, Directors to fill the seats on Board Committees of the Company
iii) To review regularly the Board structure, size and composition and make recommendations to the Board
with regard to any changes.
iv) To review annually the required mix of skills and experience and other qualities, including core competencies
which Non-Executive Directors should bring to the Board.
v) To assess the effectiveness of the Board, committees of the Board and contributions of each individual
director of the Board.
2.3 Remuneration Committee
The Board had during the Special Board Meeting held on 22 April 2014 formed the Remuneration Committee
(“RC”). The RC consists exclusively of Independent Non-Executive Directors.
The members of the RC are as follows:
Chairman :
Members :
Ms. Angie Ang Ai Hoon
YBhg. Dato’ Mohammed Azhar bin Osman Khairuddin
Mr. Jerome Lee Tak Loong
The RC was formed to assist the Board in determining and developing remuneration policy for Directors and
to recommend the appropriate remuneration packages. It is the ultimate responsibility of the entire Board to
approve the remuneration of these Directors.
The responsibilities of the RC are as follows :
i)
ii)
ii)
To review and recommend to the Board the remuneration packages including the terms of employment of
the Executive Directors, and to recommend to the Board the remuneration of the Executive Directors in all
its forms, drawing from outside advice as necessary;
To review and recommend to the Board the remuneration packages including the terms of employment of
the Chief Executives, and to recommend to the Board the remuneration of the Chief Executives in all its
forms, drawing from outside advice as necessary
To recommend the remuneration levels of the Non-Executive Directors with reference to market practice.
Annual Report 2013
47
2.4 Executive Committee
The Executive Committee (“EXCO”) is to assist the Board in discharging its responsibilities in respect of various
matters or aspects that the Board mandates through more frequent meetings of a smaller number of appointed
members of the Board and the Chief Executives of the Group who have the power to provide direction to the
Management of the Company and to ensure the smooth and effective running of the Group.
The functions of the EXCO shall be :
i)
ii)
iii)
The EXCO comprises the following members :
1.
2.
3.
4.
5.
6.
To review and approve the Operation Manual, Human Resources Policy and terms and conditions relating
to the engagement of consultants, contractors, legal or professional advisers of the Group;
To implement all policies and decisions made by the Board, and to assist the Board in implementing the
strategic plans and policies of the Group;
To review the performance of the Group’s operating units; risk management issues and internal control
process improvement and set the key performance indicators for the Board’s approval.
YBhg. Dato’ Rosman bin Abdullah (Chairman)
Mr. Jerome Lee Tak Loong (appointed on 9 April 2014)
Mr. Goh Ceah Chuang
Encik Ahmad Ridzal bin Ahmad
Mr. Sit Kam Hock
Ms. Monica Oh Chin Chin (ceased as member on 28 March 2014)
The profile of the EXCO is set out on pages 11 to 13 of this Annual Report.
2.5 Long Term Incentive Plan Committee
The Long Term Incentive Plan (“LTIP”) Committee has been appointed by the Board to administer the PPB LTIP
in accordance with the objectives and LTIP’s By-laws thereof.
The LTIP Committee comprises the following members :
1.
2.
3.
4.
5.
Mr. Jerome Lee Tak Loong (Chairman, appointed on 14 April 2014)
Mr. Sit Kam Hock
Mr. Goh Ceah Chuang
Ms. Anna Maria Verghis, Head of Human Resource.
Ms. Monica Oh Chin Chin (ceased as the Chairman on 14 April 2014)
3.0 DIRECTORS’ REMUNERATION
The determination of the remuneration of Directors is reviewed and assessed by the Remuneration Committee
which takes into cognisance of market practices. The CEO is paid a salary, bonus and other benefits-in-kind.
Remuneration of Non-Executive Directors is based on standard fixed fee, additional allowances are also paid in
accordance with the number of meetings attended for Non-Executive Directors.
Remuneration is differentiated for the Chairman and other Non-Executive Directors to reflect their respective
contribution and responsibility.
The Committee as a whole recommends the remuneration of Non-Executive Directors for the board’s and
shareholders’ approval at the Annual General Meeting. No Director will participate in the deliberation and decision
in respect of their own remuneration.
48
Annual Report 2013
Details of Directors’ Remuneration for the financial period ended 31 December 2013 are as follow:-
(a) Summary of Directors’ Remuneration is as follows:
Categories of RemunerationsExecutive Non-Executive
DirectorsDirectors
(RM)
(RM)
Salary and other emoluments1,593,000
Fees
-
25,800
179,167
Total1,593,000
204,967
(b) The number of Directors whose total remuneration falls within the following categories:-
Remuneration BandNumber of Directors
ExecutiveNon-Executive
RM 50,000 and below
RM 50,001 - RM 100,000
RM1,550,001 – RM1,600,000
-
-
1
2
2
-
Total
1
4
4.0 BOARD CONDUCT
4.1 Availability of Information to the Board
The Board has unrestricted and timely access to all information necessary for the discharge of its responsibilities.
The Board is supplied with all relevant information and reports on financial, operational, corporate, regulatory,
business development, and audit matters by way of Board papers or upon specific request for informed decision
making and effective discharge of their duties. Notice of Board Meetings and board papers are provided to
directors in advance so that meaningful deliberation and sound decisions can be made at Board meetings.
All Directors, whether as a full Board or in their individual capacity, have access to the advice and services of
Company Secretaries, management representatives and, if deemed necessary, other independent professionals
at the expense of the Group in the discharge of their duties.
4.2 Relationship of the Board with Management
Senior Management staffs are invited to the Board and various committee meetings where necessary to provide
additional information and insights to items being discussed.
All Board decisions are clearly recorded in the minutes. The Secretary will be advised to communicate to the
Management the Board’s decisions for implementation of the decisions and policies.
In order to enhance the accountability of the Board and the Management, the Company has set in place a limit
of authority which sets out the limit to which each level of management is authorised to approve.
Annual Report 2013
49
4.3 Conflict of Interest
The Directors have a continuing responsibility to determine whether they have a potential or actual conflict of
interest in relation to any items being discussed. The Directors must also declare their interest if there is any
related party transaction and abstain from deliberation and voting in respect of such transaction when considering
such matter.
5.0 ACCOUNTABILITY AND AUDIT
5.1 Financial Reporting
The Board of Directors aims to provide and present a balanced and understandable assessment of the Group’s
financial performance and prospects through the annual financial statements, quarterly announcement to
shareholders as well as Chairman’s Statement and Financial Review in the Annual Report. In this respect, the
Audit Committee assists the Board by overseeing the Group’s financial reporting processes and the quality of the
financial reporting.
5.2Directors’ Responsibility Statement
The Directors are required under the Companies Act, 1965 (the Act), to ensure that the maintenance of
accounting records and the preparation of the annual financial statements of the Company and of the Group are
in accordance with the applicable Financial Reporting Standards in Malaysia which give a true and fair view of
the state of affairs of the Company and the Group as at the end of the financial year and of the results and cash
flows of the Company and the Group for the financial year.
In preparing the financial statements, the Directors have:
•
•
•
•
applied appropriate and relevant accounting policies on a consistent basis;
made judgements and estimates that are reasonable and prudent;
prepared the financial statements on a going concern basis; and
kept appropriate accounting records to ensure that the financial statements comply with the provisions of
the Act.
5.3 Internal Control
The Board acknowledges its responsibility for maintaining a sound system of internal control to safeguard
shareholders’ investment and the Group’s assets. Hence reviews to determine the adequacy and effectiveness
of internal control systems were carried out during the year.
The Internal Control Statement of the Group is set out on pages 54 to 56 of this Annual Report.
5.4 Relationship with Auditors
The Company maintained a transparent and appropriate relationship with both the external and internal auditors
through the Audit Committee. The role of the Audit Committee in relation to both the external and internal auditors
is stated on pages 52 of this Annual Report.
50
Annual Report 2013
Audit Committee Report
The Audit Committee assists the Board in fulfilling its responsibilities in relation to the Group’s risk management and
internal control system, internal and external audit functions, accounting policies and practices and financial reporting.
MEMBERS OF THE AUDIT COMMITTEE
The Audit Committee comprises of three (3) members, all of whom are Independent Non-Executive Directors.
The members of the Audit Committee are:Angie Ang Ai Hoon Chairman
Dato’ Mohammed Azhar bin Osman Khairuddin Member
Monica Oh Chin Chin (resigned on 28 March 2014)
Member
Mr. Jerome Lee Tak Loong (appointed on 14 April 2014)
Member
All members of the Audit Committee are Non-Executive Directors, the Chairman is an Independent Non-Executive
Director and a member of the Institute of Chartered Accountants in England and Wales.
MEETING AND ATTENDANCE
The Audit Committee was established on 1 August 2013 and during the financial year under review, the Audit Committee
convened two (2) meetings. Details of the attendance of Audit Committee meetings for the year are as follows:Name of DirectorNo. of Meetings Attended
Angie Ang Ai Hoon Dato’ Mohammed Azhar bin Osman Khairuddin Monica Oh Chin Chin (resigned on 28 March 2014)
Jerome Lee Tak Loong (appointed on 14 April 2014)
2/2
2/2
2/2
n/a
%
100
100
100
n/a
The Audit Committee has met twice with the external auditors without the presence of the executive board members
in the financial year under review.
Representatives of internal audit attended meetings held during the financial year. Other senior management members
and representatives of the external auditors also attended meetings upon invitation to brief on specific issues.
Annual Report 2013
51
Audit Committee Report (cont’d)
TERMS OF REFERENCE
The terms of reference of the Audit Committee are set out below:
1.0 Composition
1.1 The Audit Committee shall be appointed by the Board of Directors from amongst their number and shall consist
of not less than three (3) members, all of whom must be non-executive directors, with a majority of them being
independent directors.
1.2 The Board shall at all times ensure that at least one (1) member of the Audit Committee:
•
•
must be a member of the Malaysian Institute of Accountants (MIA); or
if he is not a member of the MIA, he must have at least three (3) years’ working experience and:
(a)
he must have passed the examinations specified in Part I of the 1st Schedule of the Accountants Act,
1967; or
(b) he must be a member of one of the associations of accountants specified in Part II of the 1st Schedule
of the Accountants’ Act 1967; or
•
fulfils such other requirements as prescribed or approved by Bursa Malaysia Securities Berhad.
1.3 in the event of any vacancy in the Audit Committee resulting in the numbers of member being reduced to below
three (3), the Board of Directors shall within 3 months appoint such number of new members as may be required
to make up the minimum number of three (3) members.
1.4 No alternate director shall be appointed as a member of the Audit Committee.
1.5 The members of the Audit Committee shall elect a Chairman from amongst their number who shall be an
independent director.
1.6 The term of office and performance of the Audit Committee and each of its members shall be reviewed by the
Board at least once every three (3) years.
2.0 Quorum and Procedures of Meetings
2.1 The Audit Committee shall meet as the Chairman deems necessary but not less than four times a year.
2.2 The Audit Committee may, as and when deemed necessary, invite other Board members, senior management
personnel and external independent professional advisers to attend the meetings.
2.3 In order to form a quorum in respect of a meeting of the Audit Committee, the majority of members of the Audit
Committee present at the meeting must be independent directors.
2.4 The Secretary is responsible for sending out notices of meetings, preparing and keeping minutes of meetings and
circulating the minutes of meetings to the Audit Committee.
2.5 The Audit Committee shall meet with the external auditors, without the executive board members present, at
least twice in a financial year.
Annual Report 2013
52
3.0Authority
3.1 The Audit Committee shall have the authority to:
(a)
(b)
(c)
(d)
(e)
(f)
investigate any matter within its terms of reference;
have the resources which are required to perform its duties;
have full and unrestricted access to any information pertaining to the Company;
have direct communication channels with the external auditors or person(s) carrying out the internal audit
function or activity (if any);
obtain independent professional or other advice; and
convene meetings with the external auditors, the internal auditors or both, excluding the attendance of other
directors and employees of the Company, whenever deemed necessary.
4.0Duties and Responsibilities
The Audit Committee shall review and report to the Board of Directors the following, where appropriate:
(a)
Risk Management and Internal Control
•
•
•
•
(b) Internal Audit
•
•
•
•
•
(c)
The outsourced internal audit function will report directly to the Audit Committee
The adequacy of the scope, functions, competency and resources of the outsourced internal audit
function, and that it has the necessary authority to carry out its work
Appraise or assess the performance of the outsourced internal audit function
Approve any appointment or termination of the outsourced internal audit function
Take cognisance of the determination of any outsourced internal audit function and provide it with an
opportunity to submit its reasons for determining its function
External Audit
•
•
•
•
The adequacy and integrity of risk management, internal control and governance systems instituted in
the Company and the Group
Overall risk management processes, risk management policies and implementation of systems to
manage risks
The appointment or termination of the head of risk management unit
The report of the risk management unit
Review of the audit plan and scope of their audits, including any changes to the scope of the audit plan
with the external auditors
The external auditors’ audit report and their evaluation of the system of internal controls
The assistance given by the employees of the Company to the external auditors
The appointment and performance of external auditors, the audit fee and any question of resignation
or dismissal including any written explanations before making recommendations to the Board
(d) Audit Reports
•
•
The internal audit programme, processes, the results of the internal audit programme, processes or
investigation undertaken and whether or not appropriate action is taken on the recommendations of
the internal audit function
The major findings of internal investigations and related management responses
Annual Report 2013
53
(e)
Financial Reporting
The quarterly results and the year end financial statements of the Company and the Group for recommendation
to the Board of Directors for approval, focusing particularly on:
•
•
•
•
Changes in or implementation of accounting policies and practices;
Significant and unusual events;
Compliance with accounting standards and other legal requirements; and
Going concern assumption
(f)
Related Party Transactions
Any related party transaction and conflict of interest situation that may arise within the Company or the Group
including any transaction, procedure or course of conduct that raises questions of management integrity
(g)
Allocation of Share Options
Verification on the allocation of share options to ensure compliance with the criteria for allocation of share options
pursuant to the share scheme for employees of the Group at the end of each financial year, if any.
(h)
Other Functions
Any such other functions as the Audit Committee considers appropriate or as authorised by the Board of Directors.
ACTIVITIES DURING THE YEAR
Summary of Activities of the Audit Committee
The Audit Committee had reviewed and deliberated the following matters during the year under review:
(a)
the external auditors’ audit planning memorandum for the financial year ended 31 December 2013 and considered
their proposed audit fees;
(b) discussed with the external auditors the overview of the audit process, updates of new developments on
accounting standards issued by the Malaysian Accounting Standards Board;
(c)
quarterly and annual financial reporting and made recommendation to the Board for approval;
(d) the outsourced Internal Auditors’ report, findings and areas for improvement by the management. Follow-up
audits reports were also reviewed to ensure that appropriate actions are taken to improve the system of internal
control and procedures;
(e)
related party transactions of the Group and recurrent related party transactions entered during the financial year
based on the disclosures submitted by the Management; and
(f)
The quarterly reports of the enterprise risk management programme.
STATEMENT ON INTERNAL AUDIT FUNCTION
The Group outsourced its internal audit function to Audex Governance Sdn Bhd, a professional service provider firm
to assist the Audit Committee in discharging its duties and responsibilities by executing independent reviews on the
Group’s system of internal control on a systematic basis.
The activities carried out by internal audit during the year include execution of internal audits in accordance with the
approved audit plan and reporting of the audit results, findings and follow-up actions to the Audit Committee on a
quarterly basis.
Annual Report 2013
54
Statement on Risk Management and Internal Control
for financial year ended 31 December 2013
INTRODUCTION
The Board of Directors (“the Board”) of Putrajaya Perdana Berhad (“PPB”) is pleased to present its Statement on
Risk Management and Internal Control for the financial year ended 31 December 2013, which has been prepared in
accordance with the Statement on Risk Management and Internal Control: Guidelines for Directors of Listed Issuers
(“the Guidance”).The statement below outlines the nature and scope of risk management and internal control of the
Group during the financial year under review.
BOARD RESPONSIBILITY
The Board acknowledges its overall responsibility for maintaining a sound system of risk management and internal
control to safeguard shareholders’ investments and the Group’s assets as well as for reviewing the adequacy and
integrity of such system, except for joint ventures and associate companies which are not under the control of the
group.
However, as there are inherent limitations in any system of internal control, such system can only reduce but cannot
eliminate the risks that may impede the achievement of the Group’s business objectives. Therefore, such internal
control system can only provide reasonable and not absolute assurance against material misstatement or loss.
KEY ELEMENTS OF THE GROUPS RISK MANAGEMENT AND INTERNAL CONTROL SYSTEM
Key elements of the Group’s risk management and internal control system that have been established to facilitate the
proper conduct of the Group’s businesses are described below.
1.
Control Environment
•
Organisation Structure & Authorisation Procedures
The Group maintains a formal organisation structure with well-defined lines of reporting as well as clear
delegation of responsibilities and accountability within the Group. The Group also sets out roles and
responsibilities, appropriate authority limits as well as structured review and approval procedures in order
to enhance the decision making process and the internal control system of the Group.
•
ISO Procedures
Clearly defined ISO procedures are in place and are undergoing constant improvements to ensure that they
continue to support the Group’s business activities as the Group continues to grow.
•
Monitoring and Reporting Procedures
Appropriate infrastructures, controls, systems and people are in place throughout the Group’s businesses
to ensure operational risks are mitigated. Key organisational controls employed in managing operating
risks include segregation of duties, transaction authorisation, monitoring of financial performance and
management reporting.
•
Human Resource Policy
Comprehensive and rigorous guidelines on employment, performance appraisal, training and retention
of employees are in place to ensure that the Group has a team of employees who are well trained and
equipped with all the necessary knowledge, skills and abilities to carry out their roles and responsibilities
effectively.
•
Annual Budget
In monitoring the performance of the Group, an elaborate annual budgetary planning and review process
is practised. This is to ensure that the performance of the various business units are monitored and
benchmarked, and the interests of all stakeholders are safeguarded.
Annual Report 2013
55
Statement on Risk Management and Internal Control (cont’d)
2.Risk Management Framework
The Group has a structured risk management framework, which includes a risk management assessment process
to identify significant risks and the mitigating measures thereof. The framework also addresses the compilation of
risk register and specific risk profiles of each company in the Group Key risks relating to the Group’s operations,
strategic and business directions are addressed at periodic management meetings. In addition, the responsibility
of managing the risks of each department and projects lies with the respective Heads of Department and, Head
of Project and Senior General Manager in-charge. During the periodic management meetings significant risks
identified and the corresponding controls implemented are communicated to the Chief Executive Officer, Chief
Finance Officer and Senior Management. The action plans and internal controls that Management has taken and/
or is taking are documented and discussed in the Risk Committee Meetings.
3.
Internal Audit Function
The responsibility for reviewing the adequacy and integrity of the internal control system has been delegated
by the Board to the Audit Committee. The Audit Committee in turn assesses the adequacy and integrity of the
Group’s internal control system based on reports from independent reviews conducted by the external auditors,
internal auditors and the Management. Significant internal control matters are brought to the attention of the
Audit Committee who will in turn highlights them to the Board.
The Group has outsourced its internal audit function to a professional services firm as part of its strategy to
provide the Board with assurance on the adequacy and integrity of the Group’s system of internal control. The
outsourced internal audit function focuses its review on areas which are related to the significant risks of PPB
Group. The areas of review are set out in a risk based internal audit plan which has been approved by the Audit
Committee.
During the financial year, scheduled reviews on the Group’s system of internal control were completed according
to approved audit plan. Although a number of internal control weaknesses were identified, none of the weaknesses
have resulted in any material losses, contingencies or uncertainties that would require separate a disclosure in
this annual report.
The costs incurred in maintaining the outsourced internal audit function for the financial year ended 31 December
2013 amounted to RM87, 613.
4.Management Style
Enhancing the Group’s ability to achieve its business objectives remains as the Board’s primary objective and
direction in managing PPB Group. In ensuring that this objective is achieved, the Board will continue to rely
on Senior Management to ensure that the performances of their businesses are within the agreed business
strategies. The Board will in turn monitor the performances and profitability through the reports it received and
its involvement in operational and strategic meetings. Matter arising which are significant in nature are brought
to the attention of the Chief Executive Officer, who in turn, will direct these matters, if necessary, to the Board for
its attention.
The Group continues to maintain its proven ‘open-door’ and ‘hands-on’ approach to allow for the efficient
resolution of matters arising.
5.
Information and Communication
Information critical to the achievement of the Company’s business objectives are communicated through
established reporting lines across the Group. This is to ensure that matters that require the Board and Senior
Management’s attention are highlighted for review, deliberation and decision on a timely basis.
56
Annual Report 2013
Statement on Risk Management and Internal Control (cont’d)
6.Review & Monitoring Process
Regular management meetings are held to discuss and monitor the Group’s operations and performances,
including meetings to discuss deviation of results against performance targets, with significant variances
explained for and corrective action formulated and implemented, where necessary. In addition to the above,
scheduled and ad-hoc meetings are held at operational and management levels to identify, discuss and resolve
business and operational issues as and when necessary.
For the financial year ended 31 December 2013 the Group has investments in jointly controlled entities and
associate companies. The Group’s interest in these companies is served through representation in the joint
management committee or representation on the Board. This representation provided the Board with access
to review and monitor the performance of these investments. The Board is provided with periodic reports and
information on their activities.
CONCLUSION
In line with the Guideline, the Group Chief Executive Officer and Chief Financial Officer have provided assurance to the
Board that the Group’s risk management and internal control systems have operated adequately and effectively, in all
materials aspects, to meet Group’s objectives during the financial year under review.
The Board is of the view that the Group’s system of risk management and internal controls is adequate to safeguard
shareholders’ investments and the Company’s assets. However, the Board is also cognizant of the fact that the
Group’s system of internal control and risk management practices must continuously evolve to meet the changing and
challenging business environment. Therefore, the Board will, when necessary, put in place appropriate action plans to
further enhance the system of risk management and internal control.
This statement is made in accordance with the Board’s resolution dated 22 April 2014.
Financial Statements
58 Directors’ Report 63 Statements of Financial Position 64
Statements of Profit or Loss and Other Comprehensive Income
65 Statements of Changes in Equity 68 Statements of Cash Flows 70 Notes to the Financial Statements 120 Statement by Directors / Statutory Declaration 121 Independent Auditors’ Report 58
Annual Report 2013
Directors’ Report
for the year ended 31 December 2013
The Directors have pleasure in submitting their report and the audited financial statements of the Group and of the
Company for the year ended 31 December 2013.
Principal activities
The Company is principally engaged in investment holding whilst the principal activities of the subsidiaries are disclosed
in Note 5 to the financial statements. There have been no significant changes in the nature of these activities during
the financial year.
Results
GroupCompany
RM’000RM’000
Profit/(Loss) for the year attributable to:
Owners of the Company
Non-controlling interests
46,170
(1,163)
66,929
-
Profit for the year
45,007
66,929
Reserves and provisions
There were no material transfers to or from reserves and provisions during the financial year under review other than
as disclosed in the financial statements.
Dividends
Since the end of the previous financial year, dividends paid by the Company were as follows:
In respect of the financial year ended 31 December 2012
(i)
second interim single-tier dividend of approximately 2.00 sen per ordinary share totalling RM2,810,000 on 13
March 2013.
In respect of the financial year ended 31 December 2013
(i) first interim single-tier dividend of approximately 2.05 sen per ordinary share totalling RM2,870,000 on 13 June
2013;
(ii)
second interim single-tier dividend of approximately 14.28 sen per ordinary share totalling RM20,000,000 on 13
June 2013;
(iii) third interim single-tier dividend of approximately 12.55 sen per ordinary share totalling RM17,571,000 on 13
September 2013;
(iv) fourth interim single-tier dividend of approximately 1.69 sen per ordinary share totalling RM2,360,000 on 13
December 2013; and
(v)
fifth interim single-tier dividend of approximately 8.777 sen per ordinary share totalling RM12,290,000 declared
on 27 February 2014 and paid on 13 March 2014.
Annual Report 2013
59
Directors’ Report
for the year ended 31 December 2013 (cont’d)
Dividends (Cont’d)
At the forthcoming Annual General Meeting, a final single-tier dividend in respect of the financial year ended 31
December 2013, of approximately 1.58 sen per ordinary share amounting to RM2,212,395 at book closure date, will be
proposed for shareholders’ approval. The financial statements for the current financial year do not reflect this proposed
dividend. Such dividend, when approved by the shareholders, will be accounted for in equity as an appropriation of
retained earnings in the financial year ending 31 December 2014.
Directors of the Company
Directors who served since the date of the last report are:
Dato’ Mohammed Azhar Bin Osman Khairuddin
Ang Ai Hoon
Monica Oh Chin Chin
Ishak Bin Ahmad
Tan Vern Tact, alternate director to
Monica Oh Chin Chin
(Appointed on 28 March 2014)
Directors’ interests
The interests and deemed interests in the shares and options over shares of the Company and of its related corporations
(other than wholly-owned subsidiaries) of those who were Directors at financial year end (including the interests of the
spouses or children of the Directors who themselves are not Directors of the Company) as recorded in the Register of
Directors’ Shareholdings are as follows:
Number of ordinary shares of RM0.50 each
AtAt
1.1.2013
BoughtSold
31.12.2013
Deemed interests in the Company:
140,025,000
-
- 140,025,000
Number of options over ordinary shares of RM0.50 each
AtAt
1.1.2013
GrantedVested
31.12.2013
Interests in the Company:
-
393,000
-
393,000
Number of ordinary shares of RM1.00 each
AtAt
1.1.2013
BoughtSold
31.12.2013
Interests in a related company
Rosetta Stone Sdn Bhd:
Ishak Bin Ahmad
Deemed interests in ultimate holding company
Cendana Destini Sdn Bhd:
99
1
-
-
-
-
99
1
10,000,000
20,500,000
-
30,500,000
60
Annual Report 2013
Directors’ Report
Directors’ interests (Cont’d)
By virtue of his deemed interests in the shares of the Company, Dato’ Rosman Bin Abdullah is also deemed interested
in the shares of the subsidiaries during the financial year to the extent that Putrajaya Perdana Berhad has an interest.
None of the other Directors holding office at 31 December 2013 had any interest in the shares, options over shares and
Long Term Incentive Plan of the Company and of its related corporations during the financial year.
Directors’ benefits
Since the end of the previous financial year, no Director of the Company has received nor become entitled to receive
any benefit (other than benefits included in the aggregate amount of emoluments received or due and receivable by
Directors or the fixed salary of a full time employee of the Company or of related corporations as shown in Note 20
to the financial statements) by reason of a contract made by the Company or a related corporation with the Director
or with a firm of which the Director is a member, or with a company in which the Director has a substantial financial
interest.
There were no arrangements during and at the end of the financial year which had the object of enabling Directors of
the Company to acquire benefits by means of the acquisition of shares in or debentures of the Company or any other
body corporate, other than those arising from the share options under the Company’s Long Term Incentive Plan.
Issue of shares and debentures
There were no changes in the authorised, issued and paid-up capital of the Company during the financial year.
There were no debentures issued during the financial year.
Options granted over unissued shares
No options were granted to any person to take up unissued shares of the Company during the financial year, apart
from the issue of options pursuant to the Long Term Incentive Plan (“LTIP”), which is governed by LTIP By-Laws.
At an extraordinary general meeting held on 31 May 2013, the Company’s shareholders approved the establishment
of the LTIP to eligible Directors and employees of the Group.
The salient terms and features, including the vesting conditions of the LTIP are disclosed in Note 30 to the financial
statements.
During the financial year, the Company awarded a total of 6,751,400 shares under the LTIP to its eligible Directors
(including the Executive Chairman) and employees of the Group.
The Company has been granted an exemption by the Companies Commission of Malaysia from having to disclose in
this report the names and details of holdings of persons to whom have been granted not more than 139,600 options
during the financial year as required by Section 169(11) of the Companies Act, 1965.
Annual Report 2013
61
Directors’ Report
Options granted over unissued shares (Cont’d)
The names of the persons who were awarded LTIP shares of RM0.50 each of 139,600 or more during the financial
year are as follows:
No of share options under the LTIP of RM0.50 each
At Granted onAt
Interests in the Company:
1.1.2013
31.5.2013Vested
31.12.2013
Goh Ceah Chuang
Sit Kam Hock
Wie Hock Kiong
Yong Khoon Seng
Yang Kon Bee @ Wong Kon Bee
Ong Eng Swee
Tang Yee Thong
Ng Lean Wu
Wong Chin Moo
-
-
-
-
-
-
-
-
-
-
434,700
393,000
388,900
300,000
233,200
192,500
178,500
159,600
148,700
139,600
-
-
-
-
-
-
-
-
-
-
434,700
393,000
388,900
300,000
233,200
192,500
178,500
159,600
148,700
139,600
Other statutory information
Before the financial statements of the Group and of the Company were made out, the Directors took reasonable steps
to ascertain that:
i)
all known bad debts have been written off and adequate provision made for doubtful debts, and
ii)
any current assets which were unlikely to be realised in the ordinary course of business have been written down
to an amount which they might be expected so to realise.
At the date of this report, the Directors are not aware of any circumstances:
i)
that would render the amount written off for bad debts, or the amount of the provision for doubtful debts in the
financial statements of the Group and of the Company inadequate to any substantial extent, or
ii)
that would render the value attributed to the current assets in the financial statements of the Group and of the
Company misleading, or
iii)
which have arisen which render adherence to the existing method of valuation of assets or liabilities of the Group
and of the Company misleading or inappropriate, or
iv)
not otherwise dealt with in this report or the financial statements, that would render any amount stated in the
financial statements of the Group and of the Company misleading.
At the date of this report, there does not exist:
i)
any charge on the assets of the Group or of the Company that has arisen since the end of the financial year and
which secures the liabilities of any other person, or
ii)
any contingent liability in respect of the Group or of the Company that has arisen since the end of the financial
year.
62
Annual Report 2013
Directors’ Report
Other statutory information (Cont’d)
No contingent liability or other liability of any company in the Group has become enforceable, or is likely to become
enforceable within the period of twelve months after the end of the financial year which, in the opinion of the Directors,
will or may substantially affect the ability of the Group and of the Company to meet their obligations as and when they
fall due.
In the opinion of the Directors, the financial performance of the Group and of the Company for the financial year ended
31 December 2013 have not been substantially affected by any item, transaction or event of a material and unusual
nature nor has any such item, transaction or event occurred in the interval between the end of that financial year and
the date of this report.
Subsequent event
The details of the subsequent event are disclosed in Note 32 to the financial statements.
Auditors
The auditors, Messrs KPMG, have indicated their willingness to accept re-appointment.
Signed on behalf of the Board of Directors in accordance with a resolution of the Directors:
Ang Ai Hoon
Kuala Lumpur,
22 April 2014
Annual Report 2013
63
Statements of Financial Position
as at 31 December 2013
GroupCompany
Note
2013
2012
2013
2012
RM’000RM’000RM’000RM’000
Assets
Property, plant and equipment
3
Intangible assets
4
Investments in subsidiaries
5
Land held for property development
6
Club memberships
Deferred tax assets
7
41,137
11,930
-
54,279
493
14,734
37,953
3,267
-
47,592
280
12,639
-
-
106,670
-
-
-
89,864
-
Total non-current assets
122,573
101,731
106,670
89,864
-
2,182
308,653
4,660
986
129,092
2,785
11,579
270,071
4,007
951
171,464
-
-
21,314
-
228
2,329
6,575
178
15,057
Total current assets
445,573
460,857
23,871
21,810
Total assets
568,146
562,588
130,541
111,674
Equity
Share capital
Share premium
Reserves
70,013
18,518
130,337
70,013
18,518
127,470
70,013
18,518
34,232
70,013
18,518
10,743
Total equity attributable to owners
of the Company
13
218,868
6,225
216,001
1,845
122,763
-
99,274
-
Total equity
225,093
217,846
122,763
99,274
7
4
8
-
-
Total non-current liabilities
4
8
-
-
Trade and other payables
14
Other current liabilities
15
Current tax liabilities
323,407
17,021
2,621
316,837
18,101
9,796
7,778
-
-
12,392
8
Total current liabilities
343,049
344,734
7,778
12,400
Total liabilities
343,053
344,742
7,778
12,400
Total equity and liabilities
568,146
562,588
130,541
111,674
Inventories
8
Property development costs
9
Trade and other receivables
10
Other current assets
11
Current tax assets
Cash and cash equivalents
12
Liabilities
Deferred tax liabilities
The notes on pages 70 to 119 are an integral part of these financial statements.
64
Annual Report 2013
Statements of Profit or loss and Other Comprehensive Income
GroupCompany
Note
2013
2012
2013
2012
RM’000RM’000RM’000RM’000
Revenue
16
Cost of sales
705,225
(611,112)
688,627
(609,984)
67,500
-
20,000
-
Gross profit
Other income
Administrative expenses
Selling and marketing expenses
Other expenses
94,113
3,677
(38,647)
(440)
(2,663)
78,643
2,401
(32,068)
(346)
(14,740)
67,500
-
(973)
-
(34)
20,000
(264)
(60)
Results from operating activities
Finance income
17
Finance costs
18
56,040
9,232
(2,997)
33,890
9,328
(3,032)
66,493
416
-
19,676
1,016
-
Profit before tax
Tax expense
62,275
(17,268)
40,186
(14,123)
66,909
20
20,692
(139)
Profit for the year
45,007
26,063
66,929
20,553
Other comprehensive income/(expense),
net of tax
Items that are or may be reclassified
subsequently to profit or loss
Foreign currency translation differences
for foreign operations
137
(8)
-
-
Total other comprehensive income/
(expense) for the year
137
(8)
-
-
Total comprehensive income for the year
45,144
26,055
66,929
20,553
Profit/(Loss) attributable to:
46,170
(1,163)
27,468
(1,405)
66,929
-
20,553
-
Profit for the year
Total comprehensive income/
(expense) attributable to:
45,007
26,063
66,929
20,553
46,307
(1,163)
27,460
(1,405)
66,929
-
20,553
-
Total comprehensive income for the year
Basic earnings per ordinary share (sen):
23
45,144
26,055
66,929
20,553
32.97
19.62
19
21
Annual Report 2012
Annual Report 2013
65
Statements of Changes in Equity
Attributable to owners of the Company
Non-distributable
Distributable
ShareNon-
ShareShare
optionTranslationRetained controllingTotal
GroupNote
capital premium reserve
reserve
earningsTotal
interests equity
RM’000RM’000RM’000RM’000RM’000RM’000RM’000RM’000
At 1 January 2012
Total other
comprehensive
income for the year
- foreign currency
translation differences
for foreign operations Profit/(loss) for the year
70,013
18,518
-
(117)
120,127
208,541
-
-
-
-
-
-
(8)
-
-
27,468
(8)
27,468
-
(1,405)
(8)
26,063
-
-
-
(8)
27,468
27,460
(1,405)
26,055
-
-
-
-
(20,000)
(20,000)
-
(20,000)
Total transactions
with owners of
the Company
-
-
-
-
(20,000)
(20,000)
-
(20,000)
At 31 December 2012
70,013
18,518
-
(125)
127,595
216,001
Total comprehensive
(expense)/ income
for the year
Dividend to owners
of the Company
22
3,250 211,791
1,845 217,846
66
Annual Report 2013
Non-distributable
Distributable
ShareNon-
ShareShare
optionTranslationRetained controllingTotal
GroupNote
capital premium reserve
reserve
earningsTotal
interests equity
RM’000RM’000RM’000RM’000RM’000RM’000RM’000RM’000
At 1 January 2013
Total other
comprehensive
income for the year
- foreign currency
translation differences
for foreign operations Profit/(loss) for the year
Total comprehensive
income/(expense)
for the year
Share-based payment
under LTIP
30
Dividends to owners
of the Company
22
Changes in ownership
interest in subsidiaries
Total transactions
with owners of the
Company
At 31 December 2013
70,013
18,518
-
(125)
127,595
216,001
-
-
-
-
-
-
137
-
-
46,170
137
46,170
-
(1,163)
137
45,007
-
-
-
137
46,170
46,307
(1,163)
45,144
-
-
2,171
-
-
2,171
-
2,171
-
-
-
-
(45,611)
(45,611)
-
(45,611)
-
-
2,171
-
(45,611)
(43,440)
-
(43,440)
-
-
-
-
-
-
5,543
5,543
-
-
2,171
-
(45,611)
(43,440)
5,543
(37,897)
70,013
18,518
2,171
12
128,154
218,868
6,225 225,093
1,845 217,846
Annual Report 2013
67
Non-distributable
Distributable
Share
ShareShare option Retained
CompanyNote
capital
premium
reserve
earningsTotal
RM’000RM’000RM’000RM’000RM’000
At 1 January 2012
70,013
18,518
-
10,190
98,721
Profit and total comprehensive
income for the year
-
-
-
20,553
20,553
Dividend to owners of the
Company
22
-
-
-
(20,000)
(20,000)
At 31 December 2012/
1 January 2013
Profit and total comprehensive
income for the year
Share-based payment
transactions
Dividends to owners of the
Company
22
At 31 December 2013
70,013
18,518
-
10,743
99,274
-
-
-
66,929
66,929
-
-
2,171
-
2,171
-
-
-
(45,611)
(45,611)
70,013
18,518
2,171
32,061
122,763
68
Annual Report 2013
Statements of Cash Flows
GroupCompany
Note
2013
2012
2013
2012
RM’000RM’000RM’000RM’000
Cash flows from operating activities
Profit before tax
Adjustments for:
Finance income
17
Finance costs
18
- depreciation
3
- written off
- net loss/(gain) on disposals
Intangible assets - amortisation
4
- written off
- loss on disposal
Short term accumulating
compensated absences
Impairment loss on goodwill upon
acquisition of subsidiaries Dividend income
16
Share-based payment under LTIP
30
Reversal of impairment loss
on receivables
Impairment loss on receivables
62,275
40,186
66,909
20,692
(9,232)
2,997
(9,328)
3,032
(416)
-
(1,016)
-
2,568
304
51
3,707
602
(536)
-
-
-
-
694
-
-
514
301
2
-
-
-
-
(5)
43
-
-
-
-
2,171
1,158
-
-
-
(67,500)
-
(20,000)
-
(1,795)
-
(533)
12,500
-
-
-
60,028
51,648
(1,007)
(324)
2,710
(1,261)
2,785
(31,149)
3,189
-
380
-
-
7,770
(6,256)
-
-
-
-
(1)
842
(4)
(47)
(230)
(12,573)
617
(3,318)
-
-
Cash generated from/(used in) operations Interest received
Interest paid
Income tax refunded
Income tax paid
36,919
3,740
(9)
20
(26,597)
50,224
4,751
(8)
3
(17,524)
(170)
155
-
20
(58)
(13,174)
513
3
(224)
Net cash generated from/(used in)
operating activities
14,073
37,446
(53)
(12,882)
Operating profit/(loss) before changes
in working capital
Change in land held for property
development and property
development costs
Change in development costs
Change in inventories
Change in trade and other receivables
Change in trade and other payables
Change in subsidiaries’ balances
Change in other current assets and other
current liabilities
Annual Report 2013
69
Statements of Cash Flows
GroupCompany
Note
2013
2012
2013
2012
RM’000RM’000RM’000RM’000
Cash flows from investing activities
Acquisition of land
6
Acquisition of intangible assets
4
Acquisition of subsidiaries, net of
cash acquired
31
Increase in investment in a subsidiary
5
- proceeds from disposal
- acquisition
3
Purchase of club memberships
Dividends received
-
(449)
(4,037)
(1,462)
-
-
-
(7,433)
-
1
-
(7,435)
(7,200)
-
479
(8,772)
(213)
-
1,137
(6,943)
-
-
-
-
-
47,571
34,625
Net cash (used in)/generated from
investing activities
(16,388)
(11,304)
32,936
34,625
Cash flows from financing activities
Non-controlling interest contribution
Acquisition of non-controlling interest
Dividends paid
6,543
(1,000)
(45,611)
-
-
(40,500)
-
-
(45,611)
(40,500)
Net cash used in financing activities
(40,068)
(40,500)
(45,611)
(40,500)
Net decrease in cash and cash equivalents
Effect of exchange rate fluctuations on
cash held Cash and cash equivalents at 1 January
(42,383)
(14,358)
(12,728)
(18,757)
11
171,464
264
185,558
-
15,057
33,814
Cash and cash equivalents at 31 December
129,092
171,464
2,329
15,057
Cash and cash equivalents included in the statements of cash flows comprise the following statements of financial
position amounts:
GroupCompany
Note
2013
2012
2013
2012
RM’000RM’000RM’000RM’000
Deposits placed with licensed banks
Cash and bank balances
12
12
99,603
29,489
144,837
26,627
2,000
329
15,000
57
129,092
171,464
2,329
15,057
Annual Report 2013
70
Notes to the Financial Statements
Putrajaya Perdana Berhad is a private limited liability company, incorporated and domiciled in Malaysia. The addresses
of the principal place of business and registered office of the Company are as follows:
Principal place of business Registered office
2nd and 3rd Floor, No. 5
3rd Floor, No. 5
62150 Putrajaya
62150 Putrajaya
The consolidated financial statements of the Company as at and for the year ended 31 December 2013 comprise the
Company and its subsidiaries (together referred to as the “Group” and individually referred to as “Group entities”). The
financial statements of the Company as at and for the year ended 31 December 2013 do not include other entities.
The Company is principally engaged in investment holding whilst the principal activities of the subsidiaries are as
stated in Note 5 to the financial statements. There have been no significant changes in the nature of these principal
activities during the financial year.
The immediate and ultimate holding company is Cendana Destini Sdn Bhd, incorporated in Malaysia.
These financial statements were authorised for issue by the Board of Directors on 22 April 2014.
1.
Basis of preparation
(a)Statement of compliance
The financial statements of the Group and the Company have been prepared in accordance with Financial
Reporting Standards (“FRSs”) and the Companies Act, 1965 in Malaysia.
The following are accounting standards, amendments and interpretations that have been issued by the
Malaysian Accounting Standards Board (“MASB”) but have not been adopted by the Group and the
Company:
FRSs, Interpretations and Amendments effective for annual periods beginning on or after 1 January
2014
•
Amendments to FRS 10, Consolidated Financial Statements: Investment Entities
•
Amendments to FRS 12, Disclosure of Interests in Other Entities: Investment Entities
•
Amendments to FRS 127, Separate Financial Statements (2011): Investment Entities
•
Amendments to FRS 132, Financial Instruments: Presentation – Offsetting Financial Assets and
Financial Liabilities
•
Amendments to FRS 136, Impairment of Assets – Recoverable Amount Disclosures for Non-Financial
Assets
•
Amendments to FRS 139, Financial Instruments: Recognition and Measurement – Novation of
Derivatives and Continuation of Hedge Accounting
•
IC Interpretation 21, Levies
FRSs, Interpretations and Amendments effective for annual periods beginning on or after 1 July 2014
•
Amendments to FRS 2, Share-based Payment (Annual Improvements 2010-2012 Cycle)
•
Amendments to FRS 3, Business Combinations (Annual Improvements 2010-2012 Cycle and 20112013 Cycle)
•
Amendments to FRS 8, Operating Segments (Annual Improvements 2010-2012 Cycle)
•
Amendments to FRS 13, Fair Value Measurement (Annual Improvements 2010-2012 Cycle and 20112013 Cycle)
Annual Report 2013
71
Notes to the Financial Statements (cont’d)
1.
Basis of preparation (Cont’d)
(a)Statement of compliance (Cont’d)
FRSs, Interpretations and Amendments effective for annual periods beginning on or after 1 July 2014
(Cont’d)
•
Amendments to FRS 116, Property, Plant and Equipment (Annual Improvements 2010-2012 Cycle)
•
Amendments to FRS 119, Employee Benefits – Defined Benefit Plans: Employee Contributions
•
Amendments to FRS 124, Related Party Disclosures (Annual Improvements 2010-2012 Cycle)
•
Amendments to FRS 138, Intangible Assets (Annual Improvements 2010-2012 Cycle)
•
Amendments to FRS 140, Investment Property (Annual Improvements 2011-2013 Cycle)
FRSs, Interpretations and Amendments effective from a date yet to be confirmed
•
FRS 9, Financial Instruments (2009)
•
FRS 9, Financial Instruments (2010)
•
FRS 9, Financial Instruments – Hedge Accounting and Amendments to FRS 9, FRS 7 and FRS 139
•
Amendments to FRS 7, Financial Instruments: Disclosures – Mandatory Effective Date of FRS 9 and
Transition Disclosures
The Group and the Company plan to apply the abovementioned accounting standards, amendments and
interpretations, where applicable:
•
from the annual period beginning on 1 January 2014 for those accounting standards, amendments or
interpretations that are effective for annual periods beginning on or after 1 January 2014.
•
from the annual period beginning on 1 January 2015 for those accounting standards, amendments or
interpretations that are effective for annual periods beginning on or after 1 July 2014.
The initial application of the other accounting standards, amendments and interpretations are not expected
to have any material financial impacts to the current period and prior period financial statements of the
Group and the Company.
The Group falls within the scope of IC Interpretation 15, Agreements for the Construction of Real Estate.
Therefore, the Group is currently exempted from adopting the Malaysian Financial Reporting Standards
(“MFRS”) and is referred to as a “Transitioning Entity”. Being a Transitioning Entity, the Group will adopt the
MFRS and present its first set of MFRS financial statements when adoption of the MFRS is mandated by
the MASB.
(b) Basis of measurement
The financial statements have been prepared on the historical cost basis other than as disclosed in Note 2.
(c)Functional and presentation currency
These financial statements are presented in Ringgit Malaysia (“RM”), which is the Company’s functional
currency. All financial information is presented in RM and has been rounded to the nearest thousand, unless
otherwise stated.
(d)Use of estimates and judgements
The preparation of the financial statements in conformity with FRSs requires management to make
judgements, estimates and assumptions that affect the application of accounting policies and the reported
amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.
Annual Report 2013
72
1.
Basis of preparation (Cont’d)
(d)Use of estimates and judgements (Cont’d)
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates
are recognised in the period in which the estimates are revised and in any future periods affected.
There are no significant areas of estimation uncertainty and critical judgements in applying accounting
policies that have significant effect on the amounts recognised in the financial statements other than those
disclosed in the following notes:
•
•
•
•
•
•
•
Intangible assets Deferred tax assets/(liabilities)
Property development
Impairment of receivables Construction contracts Provision for foreseeable losses
Provisions for maintenance warranties (Note 4)
(Note 7)
(Note 9)
(Note 10)
(Note 11 and 15)
(Note 11)
(Note 14)
2.Significant accounting policies
The accounting policies set out below have been applied consistently to the periods presented in these financial
statements and have been applied consistently by Group entities, unless otherwise stated.
(a) Basis of consolidation
(i)Subsidiaries
Subsidiaries are entities controlled by the Company.
The Group adopted FRS 10, Consolidated Financial Statements in the current financial year. This
resulted in changes to the following policies:
•
Control exists when the Group is exposed, or has rights, to variable returns from its involvement
with the entity and has the ability to affect those returns through its power over the entity. In the
previous financial years, control exists when the Group has the ability to exercise its power to
govern the financial and operating policies of an entity so as to obtain benefits from its activities.
•
Potential voting rights are considered when assessing control only when such rights are
substantive. In the previous financial years, potential voting rights are considered when assessing
control when such rights are presently exercisable.
•
The Group considers it has de facto power over an investee when, despite not having the majority
of voting rights, it has the current ability to direct the activities of the investee that significantly
affect the investee’s return. In the previous financial years, the Company did not consider de
facto power in its assessment of control.
The change in accounting policy has been made retrospectively and in accordance with the transitional
provision of FRS 10. The adoption of FRS 10 has no significant impact to the financial statements of
the Group.
Investments in subsidiaries are measured in the Company’s statement of financial position at cost less
any impairment losses, unless the investment is classified as held for sale or distribution. The cost of
investments includes transaction costs.
Annual Report 2013
73
2.Significant accounting policies (Cont’d)
(a) Basis of consolidation (Cont’d)
(ii)Accounting for business combinations
Business combinations are accounted for using the acquisition method from the acquisition date,
which is the date on which control is transferred to the Group.
Acquisitions on or after 1 January 2011
For acquisitions on or after 1 January 2011, the Group measures goodwill at the acquisition date as:
•
•
•
•
the fair value of the consideration transferred; plus
the recognised amount of any non-controlling interests in the acquiree; plus
if the business combination is achieved in stages, the fair value of the existing equity interest in
the acquiree; less
the net recognised amount (generally fair value) of the identifiable assets acquired and liabilities
assumed.
When the excess is negative, a bargain purchase gain is recognised immediately in profit or loss.
Costs related to the acquisition, other than those associated with the issue of debt or equity securities,
that the Group incurs in connection with a business combination are expensed as incurred.
Any contingent consideration payable is recognised at fair value at the acquisition date. If the contingent
consideration is classified as equity, it is not remeasured and settlement is accounted for within equity.
Otherwise, subsequent changes to the fair value of the contingent consideration are recognised in
profit or loss.
Acquisition of subsidiaries that meets the conditions of a merger are accounted for using the merger
method. Under the merger method of accounting, the results of entities or businesses under common
control are presented as if the merger had been effected throughout the current and previous financial
periods. The assets and liabilities combined are accounted for based on the carrying amounts from
the perspective of the common control shareholder at the date of transfer.
The consideration transferred does not include amounts related to the settlement of pre-existing
relationships. Such amounts are generally recognised in profit or loss.
On consolidation, the difference between the carrying value of the investment in the subsidiaries over
the nominal value of the share acquired is taken to merger reserve and regarded as a non-distributable
reserve. Merger deficit is set-off against suitable reserves on the consolidated financial statements.
(iii)Acquisitions of non-controlling interests
The Group treats all changes in its ownership interest in a subsidiary that do not result in a loss
of control as equity transactions between the Group and its non-controlling interest holders. Any
difference between the Group’s share of net assets before and after the change, and any consideration
received or paid, is adjusted to or against Group reserves.
74
Annual Report 2013
(a) Basis of consolidation (Cont’d)
(iv)Loss of control
Upon the loss of control of a subsidiary, the Group derecognises the assets and liabilities of the former
subsidiary, any non-controlling interests and the other components of equity related to the former
subsidiary from the consolidated statement of financial position. Any surplus or deficit arising on the
loss of control is recognised in profit or loss. If the Group retains any interest in the former subsidiary,
then such interest is measured at fair value at the date that control is lost. Subsequently it is accounted
for as an equity-accounted investee or as an available-for-sale financial asset depending on the level
of influence retained.
(v)Non-controlling interests
Non-controlling interests at the end of the reporting period, being the equity in a subsidiary not
attributable directly or indirectly to the equity holders of the Company, are presented in the consolidated
statement of financial position and statement of changes in equity within equity, separately from equity
attributable to the owners of the Company. Non-controlling interests in the results of the Group is
presented in the consolidated statement of profit or loss and other comprehensive income as an
allocation of profit or loss and the comprehensive income for the year between non-controlling
interests and owners of the Company.
Losses applicable to the non-controlling interests in a subsidiary are allocated to the non-controlling
interests even if doing so causes the non-controlling interests to have a deficit balance.
(vi)Transactions eliminated on consolidation
Intra-group balances, transactions and any unrealised income and expenses arising from intra-group
transactions are eliminated in the consolidated financial statements.
Unrealised gains arising from transactions with equity–accounted associates and joint ventures are
eliminated against the investment to the extent of the Group’s interest in the investees. Unrealised
losses are eliminated in the same way as unrealised gains, but only to the extent that there is no
evidence of impairment.
(b)Foreign currency
(i)Foreign currency transactions
Transactions in foreign currencies are translated to the respective functional currencies of Group
entities at exchange rates at the dates of the transactions.
Monetary assets and liabilities denominated in foreign currencies at the end of the reporting period are
retranslated to the functional currency at the exchange rate at that date.
Non-monetary assets and liabilities denominated in foreign currencies are not retranslated at the
end of the reporting period except for those that are measured at fair value are retranslated to the
functional currency at the exchange rate at the date that the fair value was determined.
Foreign currency differences arising on retranslation are recognised in profit or loss, except for
differences arising on the retranslation of available-for-sale equity instruments or a financial instrument
designated as a hedge of currency risk, which are recognised in other comprehensive income.
Annual Report 2013
75
(b)Foreign currency (Cont’d)
(ii)Operations denominated in functional currencies other than Ringgit Malaysia
The assets and liabilities of operations denominated in functional currencies other than RM are
translated to RM at exchange rates at the end of the reporting period. The income and expenses of
foreign operations are translated to RM at exchange rates at the dates of the transactions.
Foreign currency differences are recognised in other comprehensive income and accumulated in the
translation reserve in equity. When a foreign operation is disposed of, the cumulative amount in the
translation related to that foreign operation is reclassified to profit or loss as part of the profit or loss
on disposal.
(c)Financial instruments
(i)Initial recognition and measurement
A financial asset or a financial liability is recognised in the statement of financial position when, and
only when, the Group or the Company becomes a party to the contractual provisions of the instrument.
A financial instrument is recognised initially, at its fair value plus, in the case of a financial instrument
not at fair value through profit or loss, transaction costs that are directly attributable to the acquisition
or issue of the financial instrument.
An embedded derivative is recognised separately from the host contract and accounted for as a
derivative if, and only if, it is not closely related to the economic characteristics and risks of the host
contract and the host contract is not categorised at fair value through profit or loss. The host contract,
in the event an embedded derivative is recognised separately, is accounted for in accordance with
policy applicable to the nature of the host contract.
(ii)Financial instrument categories and subsequent measurement
The Group and the Company categorise and measure financial instruments as follows:
Financial assets
(a) Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss category comprises financial assets that
are held for trading, including derivatives (except for a derivative that is a financial guarantee
contract or a designated and effective hedging instrument) or financial assets that are specifically
designated into this category upon initial recognition.
Derivatives that are linked to and must be settled by delivery of unquoted equity instruments
whose fair values cannot be reliably measured are measured at cost.
Other financial assets categorised as fair value through profit or loss are subsequently measured
at their fair values with the gain or loss recognised in profit or loss.
At the reporting date, the Group and the Company do not have any financial assets at fair value
through profit or loss.
76
Annual Report 2013
(c)Financial instruments (Cont’d)
(ii)Financial instrument categories and subsequent measurement (Cont’d)
Financial assets (Cont’d)
(b) Held-to-maturity investments
Held-to-maturity investments category comprises debt instruments that are quoted in an active
market and the Group or the Company has the positive intention and ability to hold them to
maturity.
Financial assets categorised as held-to-maturity investments are subsequently measured at
amortised cost using the effective interest method.
At the reporting date, the Group and the Company do not have any held-to-maturity investments.
(c) Loans and receivables
Loans and receivables category comprises debt instruments that are not quoted in an active
market.
Financial assets categorised as loans and receivables are subsequently measured at amortised
cost using the effective interest method. Gains and losses are recognised in profit or loss when
the loans and receivables are derecognised or impaired, and through the amortisation process.
(d) Available-for-sale financial assets
Available-for-sale category comprises investment in equity and debt securities instruments that
are not held for trading.
Investments in equity instruments that do not have a quoted market price in an active market
and whose fair value cannot be reliably measured are measured at cost. Other financial assets
categorised as available-for-sale are subsequently measured at their fair values with the gain or
loss recognised in other comprehensive income, except for impairment losses, foreign exchange
gains and losses arising from monetary items and gains and losses of hedged items attributable
to hedge risks of fair value hedges which are recognised in profit or loss. On derecognition, the
cumulative gain or loss recognised in other comprehensive income is reclassified from equity
into profit or loss.
Interest calculated for a debt instrument using the effective interest method is recognised in
profit or loss.
At the reporting date, the Group and the Company do not have any available-for-sale financial
assets.
All financial assets, except for those measured at fair value through profit or loss, are subject to review
for impairment (see Note 2(l)(i)).
Annual Report 2013
77
(ii)Financial instrument categories and subsequent measurement (Cont’d)
Financial liabilities
(a) Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss category comprises financial liabilities that
are derivatives (except for a derivative that is a financial guarantee contract or a designated
and effective hedging instrument) or financial liabilities that are specifically designated into this
category upon initial recognition.
Derivatives that are linked to and must be settled by delivery of unquoted equity instruments
whose fair values cannot be reliably measured are valued at cost.
Other financial liabilities categorised as fair value through profit or loss are subsequently
measured at their fair values with the gain or loss recognised in profit or loss.
At the reporting date, the Group and the Company do not have any financial liabilities at fair value
through profit or loss.
(b) Other financial liabilities
As at the reporting date, other financial liabilities of the Group and the Company comprised of
trade and other payables, other current liabilities and amount due to subsidiaries.
Trade payables, other payables and amount due to subsidiaries are subsequently measured at
amortised cost using the effective interest method.
Gains and losses on other financial liabilities are recognised in profit or loss when the liabilities
are derecognised and through the amortisation process.
(iii)Regular way purchase or sale of financial assets
A regular way purchase or sale is a purchase or sale of a financial asset under a contract whose terms
require delivery of the asset within the time frame established generally by regulation or convention in
the marketplace concerned.
A regular way purchase or sale of financial assets is recognised and derecognised, as applicable,
using trade date, ie. the date that the Group and the Company commit to purchase or sell the asset.
(iv)Derecognition
A financial asset or part of it is derecognised when, and only when the contractual rights to the cash
flows from the financial asset expire or the financial asset is transferred to another party without
retaining control or substantially all risks and rewards of the asset. On derecognition of a financial
asset, the difference between the carrying amount and the sum of the consideration received (including
any new asset obtained less any new liability assumed) and any cumulative gain or loss that had been
recognised in equity is recognised in profit or loss.
78
Annual Report 2013
(iv)Derecognition (Cont’d)
A financial liability or a part of it is derecognised when, and only when, the obligation specified in the
contract is discharged or cancelled or expires. On derecognition of a financial liability, the difference
between the carrying amount of the financial liability extinguished or transferred to another party and
the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised
in profit or loss.
(d) Property, plant and equipment
(i)Recognition and measurement
All items of property, plant and equipment are initially recorded at cost. The cost of an item of property,
plant and equipment is recognised as an asset if, and only if, it is probable that future economic
benefits associated with the item will flow to the Group and the cost of the item can be measured
reliably.
Subsequent to recognition, items of property, plant and equipment are measured at cost less any
accumulated depreciation and any accumulated impairment losses.
Cost includes expenditures that are directly attributable to the acquisition of the asset and any other
costs directly attributable to bringing the asset to working condition for its intended use, and the costs
of dismantling and removing the items and restoring the site on which they are located. The cost of
self-constructed assets also includes the cost of materials and direct labour. For qualifying assets,
borrowing costs are capitalised in accordance with the accounting policy on borrowing costs.
When significant parts of an item of property, plant and equipment have different useful lives, they are
accounted for as separate items (major components) of property, plant and equipment.
The gains or losses on disposal of an item of property, plant and equipment are determined by
comparing the proceeds from disposal with the carrying amount of property, plant and equipment and
are recognised net within “other income” or “other expenses” respectively in profit or loss.
(ii)Subsequent costs
The cost of replacing a component of an item of property, plant and equipment is recognised in the
carrying amount of the item if it is probable that the future economic benefits embodied within the
component will flow to the Group or the Company, and its cost can be measured reliably. The carrying
amount of the replaced component is derecognised to profit or loss. The costs of the day-to-day
servicing of property, plant and equipment are recognised in profit or loss as incurred.
(iii)Depreciation
Depreciation is calculated over the depreciable amount, which is the cost of an asset, or other amount
substituted for cost, less its residual value. Significant components of individual assets are assessed,
and if a component has a useful life that is different from the remainder of that asset, then that
component are depreciated separately.
Annual Report 2013
79
(d) Property, plant and equipment (Cont’d)
(iii)Depreciation (Cont’d)
Depreciation is recognised in profit or loss on a straight-line basis over the estimated useful lives of
each component of an item of property, plant and equipment except for those assets that are related
directly to specific projects which are capitalised as part of construction contract costs. Leased assets
are depreciated over the shorter of the lease term and their useful lives unless it is reasonably certain
that the Group will obtain ownership by the end of the lease term. Freehold land is not depreciated.
Property, plant and equipment under construction are not depreciated until the assets are ready for
their intended use. The estimated useful lives of the property, plant and equipment for the current and
comparative periods are as follows:
•
•
•
•
Buildings Machineries and construction equipments
Motor vehicles
Office equipment, furniture and fittings
50 years
5 years
5 years
5 years
Depreciation methods, useful lives and residual values are reviewed, and adjusted as appropriate at
the end of the reporting period.
For impairment policy, please refer to Note 2(l)(ii).
(e)Leased assets
(i)Finance lease
Leases in terms of which the Group or the Company assumes substantially all the risks and rewards
of ownership are classified as finance leases. Upon initial recognition, the leased asset is measured at
an amount equal to the lower of its fair value and the present value of the minimum lease payments.
Subsequent to initial recognition, the asset is accounted for in accordance with the accounting policy
applicable to that asset.
Minimum lease payments made under finance leases are apportioned between the finance expense
and the reduction of the outstanding liability. The finance expense is allocated to each period during
the lease term so as to produce a constant periodic rate of interest on the remaining balance of the
liability. Contingent lease payments are accounted for by revising the minimum lease payments over
the remaining term of the lease when the lease adjustment is confirmed.
Leasehold land which in substance is a finance lease is classified as property, plant and equipment.
(ii)Operating lease
Leases where the Group or the Company does not assume substantially all the risks and rewards of
ownership are classified as operating leases and, except for property interest held under operating
lease, the leased assets are not recognised in the statement of financial position. Property interest
held under an operating lease, which is held to earn rental income or for capital appreciation or both,
is classified as investment property.
80
Annual Report 2013
(e)Leased assets (Cont’d)
(ii)Operating lease (Cont’d)
Payments made under operating leases are recognised in profit or loss on a straight-line basis over
the term of the lease. Lease incentives received are recognised in profit or loss as an integral part of
the total lease expense, over the term of the lease. Contingent rentals are charged to profit or loss in
the reporting period in which they are incurred.
Leasehold land which in substance is an operating lease is classified as prepaid lease payments.
(f)Intangible assets
(i)
Goodwill
Goodwill arises on business combinations is measured at cost less any accumulated impairment
losses. In respect of equity-accounted investees, the carrying amount of goodwill is included in the
carrying amount of the investment and an impairment loss on such an investment is not allocated to
any asset, including goodwill, that forms part of the carrying amount of the equity-accounted investee.
(ii)Other intangible assets
Intangible assets that are acquired by the Group, which have finite useful lives, are measured at cost
less any accumulated amortisation and any accumulated impairment losses.
Gains or losses arising from derecognition of an intangible asset are measured as the difference
between the net disposal proceeds and the carrying amount of the asset and are recognised in profit
or loss when the asset is derecognised.
(iii)Subsequent expenditure
Subsequent expenditure is capitalised only when it increases the future economic benefits embodied
in the specific asset to which it relates. All other expenditure is recognised in profit or loss as incurred.
(iv)Amortisation
Amortisation is based on the cost of an asset less its residual value.
Intangible assets with indefinite useful lives are not amortised but are tested for impairment annually
and whenever there is an indication that they may be impaired. Other intangible assets are amortised
from the date that they are available for use.
Amortisation is recognised in profit or loss on a straight-line basis over the estimated useful lives
of intangible assets, except for those assets that are related directly to specific projects which are
capitalised as part of construction contract costs.
The estimated useful lives of intangible assets for the current and comparative periods are as follows:
•
Software costs
3 years
Amortisation methods, useful lives and residual values are reviewed at the end of each reporting
period and adjusted as appropriate.
For impairment policy, please refer to Note 2(l)(ii).
Annual Report 2013
81
(g)Inventories
Inventories of completed properties are measured at the lower of cost and net realisable value. Cost is
determined on the specific identification basis and includes costs of land, construction, development costs
and appropriate overheads.
Net realisable value is the estimated selling price in the ordinary course of business, less the estimated
costs of completion and the estimated costs necessary to make the sale.
(h)Construction contracts
Where the outcome of a construction contract can be reliably estimated, contract revenue and contract
costs associated with construction contracts are recognised as revenue and expenses respectively by
using the stage of completion method. The stage of completion is measured by reference to the proportion
of contract costs incurred for the work performed to date to the estimated total contract costs.
Where the outcome of a construction contract cannot be estimated reliably, contract revenue is recognised
to the extent of contract costs incurred that are likely to be recoverable. Contract costs are recognised as
expense in the period in which they are incurred.
When it is probable that total contract costs will exceed total contract revenue, the expected loss is
recognised as an expense immediately. Provision is made for all anticipated losses on construction work.
Provision for maintenance warranties is made for expected or estimated repair costs for making good
certain defects and damages during the warranty periods.
Contract revenue comprises the initial amount of revenue agreed in the contract and variations in contract
work, claims and incentive payments to the extent that it is probable that they will result in revenue and they
are capable of being reliably measured. Contract costs include all expenditure related directly to specific
projects and an allocation of fixed and variable overheads incurred in the Group’s construction contract
activities based on normal operating capacity.
When the total of costs incurred on a construction contract plus recognised profits (less recognised losses)
exceeds progress billings, the balance is classified as amount due from customers on contracts in the
statement of financial position. When progress billings exceed costs incurred plus recognised profits (less
recognised losses), the balance is classified as amount due to customers on contracts in the statement of
financial position.
(i)Land held for property development
Land held for property development consist of land or such portions thereof on which no development
activities have been carried out or where development activities are not expected to be completed within
the Group’s normal operating cycle. Such land is classified as non-current assets and is stated at cost less
accumulated impairment losses.
Land held for property development is reclassified as property development costs at the point when
development activities have commenced and where it can be demonstrated that the development activities
can be completed within the Group’s normal operating cycle.
Annual Report 2013
82
(j)
Property development costs
Property development costs comprise costs associated with the acquisition of land and all costs that
are directly attributable to development activities or that can be allocated on a reasonable basis to such
activities.
When the financial outcome of a development activity can be reliably estimated, property development
revenue and expenses are recognised in profit or loss by using the stage of completion method. The stage
of completion is determined by the proportion that property development costs incurred for work performed
to date bear to the estimated total property development costs.
Where the financial outcome of a development activity cannot be reliably estimated, property development
revenue is recognised only to the extent of property development costs incurred that is probable will be
recoverable. Property development costs on properties sold are recognised as an expense in the period in
which they are incurred.
Any expected loss on a development project, including costs to be incurred over the defects liability period,
is recognised as an expense immediately.
Property development costs not recognised as an expense is recognised as an asset and is stated at the
lower of cost and net realisable value. The excess of revenue recognised in profit or loss over billings to
purchasers is shown as accrued billings under other current assets in the statement of financial position and
the excess of billings to purchasers over revenue recognised in the income statement is shown as progress
billings under other current liabilities in the statement of financial position.
(k)Cash and cash equivalents
Cash and cash equivalents consist of cash in hand, balances and deposits with banks and highly liquid
investments which have an insignificant risk of changes in fair value. For the purpose of the statement of
cash flows, cash and cash equivalents are presented net of bank overdrafts, if any.
(l)Impairment
(i)Financial assets
All financial assets (except for financial assets categorised as fair value through profit or loss and
investments in subsidiaries) are assessed at each reporting date whether there is any objective
evidence of impairment as a result of one or more events having an impact on the estimated future
cash flows of the asset. Losses expected as a result of future events, no matter how likely, are not
recognised. For an investment in an equity instrument, a significant or prolonged decline in the fair
value below its cost is an objective evidence of impairment. If any such objective evidence exists, then
the impairment loss of the financial assets is estimated.
An impairment loss in respect of loans and receivables and held-to-maturity investments is recognised
in profit or loss and is measured as the difference between the asset’s carrying amount and the
present value of estimated future cash flows discounted at the asset’s original effective interest rate.
The carrying amount of the asset is reduced either directly or through the use of an allowance account.
An impairment loss in respect of available-for-sale financial assets is recognised in profit or loss and
is measured as the difference between the asset’s acquisition cost (net of any principal repayment
and amortisation) and the asset’s current fair value, less any impairment loss previously recognised.
Where a decline in the fair value of an available-for-sale financial asset has been recognised in other
comprehensive income, the cumulative loss in other comprehensive income is reclassified from equity
to profit or loss.
Annual Report 2013
83
(l)Impairment (Cont’d)
(i)Financial assets (Cont’d)
An impairment loss in respect of unquoted equity instrument that is carried at cost is recognised in
profit or loss and is measured as the difference between the financial asset’s carrying amount and
the present value of estimated future cash flows discounted at the current market rate of return for a
similar financial asset.
Impairment losses recognised in profit or loss for an investment in an equity instrument classified as
available-for-sale is not reversed through profit or loss.
If, in a subsequent period, the fair value of a debt instrument increases and the increase can be
objectively related to an event occurring after the impairment loss was recognised in profit or loss, the
impairment loss is reversed, to the extent that the asset’s carrying amount does not exceed what the
carrying amount would have been had the impairment not been recognised at the date the impairment
is reversed. The amount of the reversal is recognised in profit or loss.
(ii)Other assets
The carrying amounts of non-financial assets (except for inventories, amount due from contract customers
and deferred tax assets) are reviewed at the end of each reporting period to determine whether there is any
indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated.
For goodwill, and intangible assets that have indefinite useful lives or that are not yet available for use, the
recoverable amount is estimated each period at the same time.
For the purpose of impairment testing, assets are grouped together into the smallest group of assets that
generates cash inflows from continuing use that are largely independent of the cash inflows of non-financial
assets or cash-generating units. The goodwill acquired in a business combination, for the purpose of
impairment testing, is allocated to group of cash-generating units that are expected to benefit from the
synergies of the combination.
The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair
value less costs of disposal. In assessing value in use, the estimated future cash flows are discounted to
their present value using a pre-tax discount rate that reflects current market assessments of the time value
of money and the risks specific to the asset or cash-generating unit.
An impairment loss is recognised if the carrying amount of an asset or its related cash-generating unit
exceeds its estimated recoverable amount.
Impairment losses are recognised in profit or loss. Impairment losses recognised in respect of cashgenerating units are allocated first to reduce the carrying amount of any goodwill allocated to the cashgenerating unit (or a group of cash-generating units) and then to reduce the carrying amounts of the nonfinancial assets in the cash-generating unit (or a group of cash-generating units) on a pro rata basis.
An impairment loss in respect of goodwill is not reversed. In respect of other assets, impairment losses
recognised in prior periods are assessed at the end of each reporting period for any indications that the
loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the
estimates used to determine the recoverable amount since the last impairment loss was recognised. An
impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying
amount that would have been determined, net of depreciation or amortisation, if no impairment loss had
been recognised. Reversals of impairment losses are credited to profit or loss in the financial year in which
the reversals are recognised.
Annual Report 2013
84
(m)Share capital
Instruments classified as equity are measured at cost on initial recognition and are not remeasured
subsequently.
Costs directly attributable to the issue of instruments classified as equity are recognised as a deduction
from equity.
(n)Employee benefits
(i)Short term employee benefits
Short-term employee benefit obligations in respect of salaries and annual bonuses are measured on
an undiscounted basis and are expensed as the related service is provided.
A liability is recognised for the amount expected to be paid under short term cash bonus if the Group
has a present legal or constructive obligation to pay this amount as a result of past service provided
by the employee and the obligation can be estimated reliably.
(ii)Defined contribution plans
The Group makes contributions to the statutory pension scheme as required by the law. Such
contributions are recognised as an expense in profit or loss as and when incurred.
(iii)Share-based payment transactions
The grant date fair value of share-based payment granted to employees is recognised as an employee
expense, with a corresponding increase in equity, over the period that the employees unconditionally
become entitled to the awards. The amount recognised as an expense is adjusted to reflect the
number of awards for which the related service and non-market vesting conditions are expected to
be met, such that the amount ultimately recognised as an expense is based on the number of awards
that meet the related service and non-market performance conditions at the vesting date.
For share-based payment awards with non-vesting conditions, the grant date fair value of the sharebased payment is measured to reflect such conditions and there is no true-up for differences between
expected and actual outcomes.
The fair value of employee share options is measured using a binomial lattice model. Measurement
inputs include share price on measurement date, exercise price of the instrument, expected volatility
(based on weighted average historic volatility adjusted for changes expected due to publicly available
information), weighted average expected life of the instruments (based on historical experience
and general option holder behaviour), expected dividends, and the risk-free interest rate (based on
government bonds). Service and non-market performance conditions attached to the transactions are
not taken into account in determining fair value.
(iv)Employees’ leave entitlements
Employees’ leave entitlements are recognised as an expense when services are rendered by employees
that increase their entitlement to future compensated absences. The estimated liability is recognised
based on the existing employees of the Group as at financial year end. Short term non-accumulating
compensated absences such as sick leave, maternity and paternity leave are recognised when the
absences occur.
Annual Report 2013
85
(o) Provisions
A provision is recognised if, as a result of a past event, the Group has a present legal or constructive
obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be
required to settle the obligation.
Maintenance warranties
A provision for maintenance warranties is recognised when the underlying project is completed. The
provision is based on historical warranty data and a weighting of all possible outcomes against their
associated probabilities. Provisions for maintenance warranties are reviewed at each reporting date and
adjusted to reflect current best estimate. If it is no longer probable that an outflow of economic resources
will be required to settle the obligation, the provision will be reversed.
(p)Revenue and other income
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and
the Company and the amount of revenue can be measured reliably. Revenue is measured at fair value of the
consideration received or receivable. If it is probable that discounts will be granted and the amount can be
measured reliably, then the discount is recognised as a reduction of revenue as the sales are recognised.
(i)Construction contracts
Revenue from construction contracts is accounted for by the stage of completion method as described
in Note 2(h).
(ii)Sale of properties
Revenue from sale of properties is recognised based on the stage of completion method as described
in Note 2(j).
Revenue from sale of completed properties is recognised upon the finalisation of sale and purchase
agreements and when the risks and rewards of ownership have been transferred to the purchasers.
(iii) Building maintenance contract
Revenue from building maintenance contract is based on fixed rate in accordance to the terms as
stipulated in the Maintenance Agreement. The revenue is recognised upon performance of work.
(iv)Rental income
Rental income is recognised in profit or loss on a straight-line basis over the term of the lease. Rental
income from subleased property is recognised as other income.
(v)Dividend income
Dividend income is recognised in profit or loss on the date that the Group’s or the Company’s right to
receive payment is established.
(vi)Interest income
Interest income is recognised as it accrues using the effective interest method in profit or loss unless
collectability is in doubt which in this case, it is recognised on receipt basis.
Annual Report 2013
86
(q) Borrowing costs
Borrowing costs that are not directly attributable to the acquisition, construction or production of a qualifying
asset are recognised in profit or loss using the effective interest method.
Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets that
necessarily take a substantial period of time to get ready for their intended use or sale, are capitalised as
part of the cost of those assets.
The capitalisation of borrowing costs as part of the cost of a qualifying asset commences when expenditure
for the asset is being incurred, borrowing costs are being incurred and activities that are necessary to
prepare the asset for its intended use or sale are in progress. Capitalisation of borrowing costs is suspended
or ceases when substantially all the activities necessary to prepare the qualifying asset for its intended use
or sale are interrupted or completed.
Investment income earned on the temporary investment of specific borrowings pending their expenditure
on qualifying assets is deducted from the borrowing costs eligible for capitalisation.
(r)Income tax
Income tax expense comprises current and deferred tax.
(i)Current tax
Current tax is recognised in profit or loss except to the extent that it relates to a business combination
or items recognised directly in equity or other comprehensive income.
Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or
substantively enacted by the end of the reporting period, and any adjustment to tax payable in respect
of previous years.
(ii)Deferred tax
Deferred tax is recognised in profit or loss except to the extent that it relates to a business combination
or items recognised directly in equity or other comprehensive income.
Deferred tax is recognised using the liability method, providing for temporary differences between
the carrying amounts of assets and liabilities in the statement of financial position and their tax
bases. Deferred tax is not recognised for the following temporary differences: the initial recognition of
goodwill, the initial recognition of assets or liabilities in a transaction that is not a business combination
and that affects neither accounting nor taxable profit or loss. Deferred tax is measured at the tax rates
that are expected to apply to the temporary differences when they reverse, based on the laws that
have been enacted or substantively enacted by the end of the reporting period.
Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax
liabilities and assets, and they relate to income taxes levied by the same tax authority on the same
taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on
a net basis or their tax assets and liabilities will be realised simultaneously.
Annual Report 2013
87
(r)Income tax (Cont’d)
(ii)Deferred tax (Cont’d)
A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be
available against which the temporary difference can be utilised. Deferred tax assets are reviewed at
the end of each reporting period and are reduced to the extent that it is no longer probable that the
related tax benefit will be realised.
A tax incentive that is not a tax base of an asset is recognised as a reduction of tax expense in profit or
loss as and when it is granted and claimable. Any unutilised portion of the tax incentive is recognised
as a deferred tax asset to the extent that it is probable that future taxable profits will be available
against which the unutilised tax incentive can be utilised.
(s)Earnings per ordinary share
The Group presents basic and diluted earnings per share data for its ordinary shares (EPS).
Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the Company
by the weighted average number of ordinary shares outstanding during the period, adjusted for own shares
held.
Diluted EPS is determined by adjusting the profit or loss attributable to ordinary shareholders and the
weighted average number of ordinary shares outstanding adjusted for own shares held for the effects of all
dilutive potential ordinary shares.
(t)Operating segments
An operating segment is a component of the Group that engages in business activities from which it may
earn revenues and incur expenses, including revenues and expenses that relate to transactions with any
of the Group’s other components. An operating segment’s operating results are reviewed regularly by
the chief operating decision maker, which in this case is the Executive Chairman of the Group, to make
decisions about resources to be allocated to the segment and to assess its performance, and for which
discrete financial information is available.
(u)Fair value measurement
From 1 January 2013, the Group adopted FRS 13, Fair Value Measurement which prescribed that fair value
of an asset or a liability, except for share-based payment and lease transactions, is determined as the price
that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market
participants at the measurement date. The measurement assumes that the transaction to sell the asset or
transfer the liability takes place either in the principal market or in the absence of a principal market, in the
most advantageous market.
For non-financial asset, the fair value measurement takes into account a market participant’s ability to
generate economic benefits by using the asset in its highest and best use or by selling it to another market
participant that would use the asset in its highest and best use.
In accordance with the transitional provision of FRS 13, the Group applied the new fair value measurement
guidance prospectively, and has not provided any comparative fair value information for new disclosures.
The adoption of FRS 13 has not significantly affected the measurements of the Group’s assets or liabilities.
88
Annual Report 2013
3.
Office
Machineries equipment,
and furniture
construction
Motor
andConstruction
GroupLand Buildings equipments vehicles
fittings in-progressTotal
RM’000RM’000RM’000RM’000RM’000RM’000RM’000
Cost
At 1 January 2012
Additions
Disposals
Written off
13,229
828
-
-
9,101
-
-
-
77,511
2,474
(2,261)
(192)
14,593
1,773
(1,994)
(780)
11,435
780
(187)
(1,024)
- 125,869
1,088
6,943
-
(4,442)
-
(1,996)
1 January 2013
Additions
Disposals
Written off
14,057
21
-
-
9,101
2,120
-
-
77,532
4,768
(537)
(311)
13,592
735
(1,315)
(391)
11,004
666
(121)
(1,115)
1,088 126,374
462
8,772
-
(1,973)
-
(1,817)
14,078
11,221
81,452
12,621
10,434
1,550 131,356
21
2,054
71,526
5,884
8,620
-
88,105
1
305
1,931
712
758
-
3,707
-
-
1,067
406
371
-
1,844
1
-
-
305
-
-
2,998
(2,191)
(191)
1,118
(1,536)
(218)
1,129
(114)
(985)
-
-
-
5,551
(3,841)
(1,394)
22
2,359
72,142
5,248
8,650
-
88,421
2
329
584
1,074
579
-
2,568
-
-
1,535
280
371
-
2,186
2
-
-
329
-
-
2,119
(537)
(302)
1,354
(789)
(129)
950
(117)
(1,082)
-
-
-
4,754
(1,443)
(1,513)
24
2,688
73,422
5,684
8,401
-
90,219
At 31 December 2013
Accumulated
depreciation
At 1 January 2012
Depreciation charge
for the year
- recognised in profit
or loss - capitalised in
construction
contract costs
(Note 11)
Disposals
Written off
1 January 2013
Depreciation charge
for the year
- recognised in profit
or loss - capitalised in
construction
contract costs
(Note 11)
Disposals
Written off
At 31 December 2013
Annual Report 2013
89
3.
Property, plant and equipment (Cont’d)
Office
Machineries equipment,
and furniture
construction
Motor
andConstruction
GroupLand Buildings equipments vehicles
fittings in-progressTotal
RM’000RM’000RM’000RM’000RM’000RM’000RM’000
Carrying amounts
At 1 January 2012
13,208
7,047
5,985
8,709
2,815
-
37,764
1 January 2013
14,035
6,742
5,390
8,344
2,354
1,088
37,953
At 31 December 2013
14,054
8,533
8,030
6,937
2,033
1,550
41,137
3.1Land
Group
2013
2012
RM’000RM’000
Included in the carrying amounts of land are:
Freehold land
Leasehold land with unexpired lease period of more than 50 years
13,978
76
13,957
78
14,054
14,035
4.Intangible assets
SoftwareExpresswayDevelopment
Group
Goodwill
costs
concession
costsTotal
RM’000RM’000RM’000RM’000RM’000
Cost
At 1 January 2012
Additions Disposal
Written off
-
-
-
-
3,376
60
(4)
(78)
1,156
1,402
-
(301)
-
-
-
-
4,532
1,462
(4)
(379)
1 January 2013
Acquisition through business
combinations (Note 31)
Additions -
3,354
2,257
-
5,611
7,811
-
-
205
-
244
1,261
-
9,072
449
At 31 December 2013
7,811
3,559
2,501
1,261
15,132
90
Annual Report 2013
4.Intangible assets (Cont’d)
SoftwareExpresswayDevelopment
Group
Goodwill
costs
concession
costsTotal
RM’000RM’000RM’000RM’000RM’000
Accumulated amortisation
At 1 January 2012
Amortisation for the year
- recognised in profit or loss - capitalised in construction
contract costs (Note 11)
Disposal
Written off
-
1,763
-
-
1,763
-
514
-
-
514
-
-
-
147
(2)
(78)
-
-
-
-
-
-
147
(2)
(78)
-
2,344
-
-
2,344
-
694
-
-
694
-
164
-
-
164
At 31 December 2013
-
3,202
-
-
3,202
Carrying amounts
At 1 January 2012
-
1,613
1,156
-
2,769
1 January 2013
-
1,010
2,257
-
3,267
At 31 December 2013
7,811
357
2,501
1,261
11,930
1 January 2013
Amortisation for the year
- recognised in profit or loss - capitalised in construction
contract costs (Note 11)
Development costs
A subsidiary of the Company is involved in the initial stage of developing and subsequently constructing a mini
hydro power plant. Currently, all associated costs attributable to this project are recognised as development
costs until the project reaches construction stage.
5.Investments in subsidiaries
Company
2013
2012
RM’000RM’000
At cost:
Unquoted shares
106,670
89,864
On 16 December 2013, the Company has further subscribed 7,199,998 shares in Putra Perdana Expressways
Sdn Bhd (“PPE”) for cash consideration of RM7,199,998.
Acquisitions of subsidiaries during the year are further explained in Note 31.
Annual Report 2013
91
5.Investments in subsidiaries (Cont’d)
Details of the subsidiaries are as follows:
Effective ownership
Country of
interest and
Name of subsidiary
incorporation
voting interest
2013
2012
%
%
(i)Subsidiaries of Putrajaya Perdana Berhad
Putra Perdana Construction
Malaysia
Construction
Sdn Bhd
Putra Perdana Development
Malaysia
Property development,
Sdn Bhd property management
and investment holding
Putra Perdana Expressways
Sdn Bhd
Malaysia
Investment holding
Misi Serantau Sdn Bhd
Malaysia
Investment holding
(ii) Subsidiaries of Putra Perdana Development Sdn Bhd
Perdana Land Development
Malaysia
Dormant
Sdn Bhd
Sarjana Sejati (M) Sdn Bhd
Malaysia
Senandung Budiman
Malaysia
Sdn Bhd and construction
Ipoh City Development
Malaysia
Sdn Bhd
Time Vantage Sdn Bhd
Malaysia
Investment holding
(iii) Subsidiaries of Putra Perdana Expressways Sdn Bhd
Saluran Arena Sdn Bhd
Malaysia
Expressway concessionaire*
Infra Satin Sdn Bhd
Malaysia
Investment holding
(iv)Subsidiary of Infra Satin Sdn Bhd
Trek Satin Sdn Bhd
Malaysia
Dormant
(v)Subsidiary of Misi Serantau Sdn Bhd (Note 31)
Kuasa Sezaman Sdn Bhd
Malaysia
Mini hydro power plant concessionaire*
100
100
100
100
100
100
100
-
100
100
100
100
100
100
100
-
57.14
-
70
60
100
100
60
60
70
-
Annual Report 2013
92
5.Investments in subsidiaries (Cont’d)
Details of the subsidiaries are as follows:
Effective ownership
Country of
interest and
Name of subsidiary
incorporation
voting interest
2013
2012
%
%
(vi)Subsidiary of Time Vantage Sdn Bhd (Note 31)
Blue Ocean Master Sdn Bhd
Malaysia
Property development*
(vii)Subsidiary of Blue Ocean Master Sdn Bhd (Note 31)
Brilliant Corridor Sdn Bhd
Malaysia
Property development*
* The physical construction/development has yet to commence as at year end.
70
-
50
-
For the financial year ended 31 December 2013, all subsidiaries are audited by KPMG.
6.Land held for property development
LeaseholdFreeholdDevelopment Development
Group land
land
rights
costsTotal
RM’000RM’000RM’000RM’000RM’000
At 1 January 2012
-
36,845
-
18,056
54,901
Additions
4,037
-
-
277
4,314
Transfer to property
development costs
(Note 9)
-
(4,967)
-
(6,656)
(11,623)
1 January 2013
Additions
4,037
-
31,878
-
-
6,000
11,677
687
47,592
6,687
At 31 December 2013
4,037
31,878
6,000
12,364
54,279
(i)Freehold land
Pursuant to the Development Agreement dated 30 January 2004, a subsidiary of the Company is the
beneficial owner for the land held for development in Precinct 16 and Precinct 2, Putrajaya. The land titles
of these lands are registered under Putrajaya Holdings Sdn Bhd, the Master Developer of Putrajaya.
(ii)Leasehold land
A subsidiary of the Company is the beneficial owner for the land held in Mukim Ayer Panas, Daerah Jasin,
Melaka. The leasehold term expires on 26 February 2100.
Annual Report 2013
93
6.Land held for property development (Cont’d)
(iii)Development rights
This is in relation to the Development Agreement (“DA”) entered into between Menteri Besar Incorporated
Negeri Perak Darul Ridzuan (“MBInc”) and a newly acquired subsidiary of the Company on 19 November
2013, for a Development Sum of RM46.06 million, of which RM6 million commitment fee has been paid
upon the execution of the DA. The remaining Development Sum are to be paid on an annual basis over 7
payments to MBInc from year 2014 to year 2020. Pursuant to the DA, the subsidiary will develop the 264.37
acres land located at Kinta, Perak. The land is a 99-year lease expiring on 16 July 2111. MBInc is entitled to
20% audited net profit from the development.
7.Deferred tax assets/(liabilities)
Recognised deferred tax assets/(liabilities)
Deferred tax assets and liabilities are attributable to the following:
AssetsLiabilitiesNet
Group
2013
2012
2013
2012
2013
2012
RM’000RM’000RM’000RM’000RM’000RM’000
Property, plant and
equipment
-
-
(3,328)
(3,450)
(3,328)
(3,450)
Payables
50
528
-
-
50
528
Provisions
16,772
14,144
-
-
16,772
14,144
Other items
1,236
1,409
-
-
1,236
1,409
Tax assets/(liabilities)
Set off of tax
18,058
(3,324)
16,081
(3,442)
(3,328)
3,324
(3,450)
3,442
14,730
-
12,631
-
Net tax assets/(liabilities)
14,734
12,639
(4)
(8)
14,730
12,631
Movement in temporary differences during the year
RecognisedRecognised
in profitAt
in profit
At
or loss 31.12.2012/
or lossAt
Group
1.1.2012
(Note 21)
1.1.2013
(Note 21) 31.12.2013
RM’000RM’000RM’000RM’000RM’000
(3,898)
448
(3,450)
122
(3,328)
Receivables
2,640
(2,640)
-
-
Payables
-
528
528
(478)
50
Provisions
4,912
9,232
14,144
2,628
16,772
Other items
1,396
13
1,409
(173)
1,236
5,050
7,581
12,631
2,099
14,730
94
Annual Report 2013
8.Inventories
Group
2013
2012
RM’000RM’000
Properties held for sale
-
2,785
9. Property development costs
FreeholdDevelopment
Group
land
costsTotal
RM’000RM’000RM’000
Cumulative property development costs
At 1 January 2012
Costs incurred during the year
Transfer from land held for property development (Note 6)
5,419
461
4,967
27,125
9,072
6,656
32,544
9,533
11,623
At 31 December 2012/1 January 2013
Costs incurred during the year
10,847
83
42,853
24,702
53,700
24,785
At 31 December 2013
10,930
67,555
78,485
Cumulative costs recognised in profit or loss
At 1 January 2012
Recognised during the year
(4,808)
(1,806)
(27,124)
(8,383)
(31,932)
(10,189)
At 31 December 2012/1 January 2013
Recognised during the year
(6,614)
(4,316)
(35,507)
(29,866)
(42,121)
(34,182)
(10,930)
(65,373)
(76,303)
Property development costs at 1 January 2012
612
Property development costs at 31 December 2012/1 January 2013
11,579
Property development costs at 31 December 2013
2,182
At 31 December 2013
Annual Report 2013
95
10.Trade and other receivables
GroupCompany
Note
2013
2012
2013
2012
RM’000RM’000RM’000RM’000
Current
Trade Third parties
Less: Impairment loss Stakeholders sum in respect of
properties sold
10.1
Retention sums on contracts
10.2
Non-trade
Deposits
Other receivables
10.3
Amount due from subsidiaries
10.4
Dividend receivable
Less: Impairment loss
184,623
-
189,278
(10,027)
-
-
-
184,623
179,251
-
-
3,194
84,338
1,329
74,331
-
-
-
272,155
254,911
-
-
15,263
33,735
-
-
(12,500)
4,994
22,666
-
-
(12,500)
-
814
571
19,929
-
50
503
6,022
-
36,498
15,160
21,314
6,575
308,653
270,071
21,314
6,575
10.1 Stakeholder sums in respect of properties sold in which collections are expected in future periods are
recognised at amortised cost using effective interest method. The amount stated is net of the amortisation
cost which is the difference between the amount receivable and the present value of the estimated future
cash flow at the applicable discounting rates at the time of billings.
10.2 Retention sum receivables relating to construction contracts are unsecured, interest-free and collections
are expected in future periods and are recognised at amortised cost using the effective interest method.
The amounts stated are net of amortisation cost which is the difference between the contractual amounts
receivable and the present value of the estimated future cash flows at the applicable discounting rate at
the time of billings.
10.3 Included in other receivables is an amount of approximately RM3,015,000 (2012: RM4,008,000) which
represents the amount due from the non-controlling interests to the Group.
10.4 Amount due from subsidiaries is non-trade in nature, unsecured and repayable on demand.
96
Annual Report 2013
11.Other current assets
GroupNote
2013
2012
RM’000RM’000
Amounts due from customers on contracts
11.1
Prepayments
Accrued billings in respect of property development activities
4,660
-
-
3,327
30
650
4,660
4,007
863,146
72,044
(21,497)
809,042
85,084
(23,412)
913,693
(926,054)
870,714
(885,488)
(12,361)
(14,774)
4,660
(17,021)
3,327
(18,101)
(12,361)
(14,774)
11.1Amount due from/(to) customers on contracts
Construction contract costs incurred to date
Add: Attributable profits
Less: Provision for foreseeable losses
Less: Progress billings
Represented by:
Amounts due from customers on contracts
Amounts due to customers on contracts (Note 15)
The costs incurred to date on construction contracts include the following charges for the year.
GroupNote
2013
2012
RM’000RM’000
Employee benefits expense
Depreciation of property, plant and equipment
Amortisation of intangible assets
20
3
4
25,964
2,186
164
23,395
1,844
147
12.Cash and cash equivalents
GroupCompany
2013
2012
2013
2012
RM’000RM’000RM’000RM’000
Cash and bank balances
99,603
29,489
144,837
26,627
2,000
329
15,000
57
129,092
171,464
2,329
15,057
Annual Report 2013
97
12.Cash and cash equivalents (Cont’d)
Included in cash and bank balances of the Group are amounts of RM695,000 (2012: RM797,000) held pursuant
to Section 7A of the Housing Development (Control and Licensing) Act, 1966 and are restricted from use in other
operations.
The weighted average effective interest rates of the deposits placed with licensed banks of the Group and the
Company are 3.15% and 2.97% (2012: 3.14% and 3.35%) per annum, respectively.
13.Capital and reserves
Share capital
Group and Company
NumberNumber
Amount
of sharesAmount
of shares
2013
2013
2012
2012
RM’000
’000RM’000
’000
Authorised:
Ordinary shares of RM0.50 each
At 1 January/31 December
100,000
200,000
100,000
200,000
Issued and fully paid:
Ordinary shares of RM0.50 each
At 1 January/31 December
70,013
140,025
70,013
140,025
Ordinary shares
The holders of ordinary shares are entitled to receive dividends as declared from time to time, and are entitled to
one vote per share at meetings of the Company and rank equally with regard to the Company’s residual assets.
Share premium
This comprises the premium paid on subscription of shares in the Company over and above the par value of the
shares.
Translation reserve
Translation reserve represents the exchange differences arising from the translation of the financial statements
of the foreign operations with functional currencies other than RM.
Share option reserve
The share option reserve represents the equity-settled share options granted to employees. Further details are
disclosed in Note 30 to the financial statements.
Annual Report 2013
98
14.Trade and other payables
GroupCompany
Note
2013
2012
2013
2012
RM’000RM’000RM’000RM’000
Trade Third parties
Retention sum payables
14.1
Non-trade
Other payables
14.2
Accruals and provisions
14.3
Amount due to subsidiaries
14.4
204,217
65,921
207,973
73,421
-
-
-
270,138
281,394
-
-
6,484
46,785
-
977
34,466
-
75
870
6,833
26
77
12,289
53,269
35,443
7,778
12,392
323,407
316,837
7,778
12,392
14.1 These amounts which are unsecured and non-interest bearing and are payable to contractors in future
periods, are recognised at amortised cost using the effective interest method.
14.2 Included in other payables are advance payments received from clients prior to commencement of
construction contract of approximately RM4,238,000 (2012: Nil) by a subsidiary of the Company. These
advances are to be recouped progressively against progress claims for work done.
14.3 Included in accruals and provisions are provisions made in respect of maintenance warranties for
construction projects undertaken by a subsidiary of the Company for expected or estimated repair costs
for making good certain defects during the warranty periods.
Group
2013
2012
RM’000RM’000
At 1 January
Provisions made during the year
Provisions used during the year
Provisions reversed during the year
21,240
10,539
(707)
(172)
7,814
15,318
(300)
(1,592)
At 31 December
30,900
21,240
14.4 These are unsecured advances which arose from non-trade activities, are non-interest bearing and
repayable on demand.
Annual Report 2013
99
15.Other current liabilities
GroupNote
2013
2012
RM’000RM’000
Amounts due to customers on contracts
11.1
17,021
18,101
16.Revenue
GroupCompany
2013
2012
2013
2012
RM’000RM’000RM’000RM’000
Construction activities
Property development activities
Building maintenance
Dividend income from subsidiary
655,636
49,589
-
-
672,777
14,538
1,312
-
-
-
-
67,500
20,000
705,225
688,627
67,500
20,000
17.Finance income
GroupCompany
2013
2012
2013
2012
RM’000RM’000RM’000RM’000
Interest income from:
Financial institutions
Unwinding of discount*
*
4,144
5,088
5,415
3,913
416
-
1,016
-
9,232
9,328
416
1,016
Represents the effect of unwinding of discount due to passage of time of financial assets of the Group
measured at amortised cost.
18.Finance costs
GroupCompany
2013
2012
2013
2012
RM’000RM’000RM’000RM’000
Interest expense on:
Bank overdrafts
Unwinding of discount* *
10
2,987
8
3,024
-
-
-
2,997
3,032
-
-
Represents the effect of unwinding of discount due to passage of time of financial liabilities of the Group
measured at amortised cost.
100
Annual Report 2013
19. Profit before tax
GroupCompany
Note
2013
2012
2013
2012
RM’000RM’000RM’000RM’000
Profit before tax is arrived at after
charging/(crediting):
Auditors’ remuneration:
- statutory audit current year
- KPMG
- under/(over) provision in prior years
- KPMG
- other auditors
- other services current year
- KPMG
- depreciation
3
- written off
- net loss/(gain) on disposals
Intangible assets
- amortisation
4
- written off
- loss on disposal
Net foreign exchange loss/(gain)
Dividend income from subsidiary
(unquoted)
16
Reversal of impairment loss on
receivables
Impairment loss on receivables
Impairment loss on goodwill upon
acquisition of subsidiaries
Provision for foreseeable losses
11
Rental income
- on premises
- from letting of machinery
Operating expenses:
- minimum lease payments on
motor vehicles and equipment
- minimum lease payments on
buildings
162
138
25
25
(2)
-
8
(13)
-
-
5
-
1
1
-
-
2,568
304
51
3,707
602
(536)
-
-
-
-
694
-
-
135
514
301
2
(2)
-
-
-
-
-
-
-
(67,500)
(20,000)
(1,795)
-
(533)
12,500
-
-
-
-
-
1,158
23,412
-
-
-
(415)
(175)
(396)
(217)
-
-
-
11
1
-
-
226
304
-
-
Annual Report 2013
101
20.Employee benefits expense and key management personnel compensation
Employee benefits expense
Group
2013
2012
RM’000RM’000
Recognised in profit or loss
25,927
20,213
Capitalised under construction contract costs incurred to date (Note 11)
25,964
23,395
51,891
43,608
Analysis:
Wages and salaries
Defined contribution plan
Social security contributions
Employees’ leave entitlements
Other benefits
Long term incentives
39,820
5,455
217
-
4,228
2,171
31,751
4,239
209
132
7,277
-
51,891
43,608
Included in the employee benefits expense of the Group are Executive Directors’ remuneration (including benefitsin-kind) amounting to RM1,733,000 (2012: RM1,401,000).
The key management personnel compensations are as follows:
GroupCompany
2013
2012
2013
2012
RM’000RM’000RM’000RM’000
Executive Director:
- Remuneration (including benefits-in-kind)
- Other long term benefits
- Long term incentives
Non-executive Directors:
- Fees
- Other emoluments
Total Directors’ remuneration
Other key management personnel:
- Short term employee benefits
- Other long term benefits
- Long term incentives
Total key management personnel compensation
1,610
-
123
1,017
384
-
-
-
-
-
1,733
1,401
-
-
179
26
224
14
179
26
224
14
205
238
205
238
1,938
1,639
205
238
6,531
113
694
4,602
1,892
-
-
-
-
-
7,338
6,494
-
-
9,276
8,133
205
238
102
Annual Report 2013
21.Tax expense
GroupCompany
2013
2012
2013
2012
RM’000RM’000RM’000RM’000
Current tax expense
Current year
Under/(Over) provision in prior years
Deferred tax expense
Origination and reversal of temporary differences
Under provision in prior years
Reconciliation of effective tax expense
Profit before tax
Income tax calculated using Malaysian
tax rate of 25%
Non-deductible expenses
Non-taxable income
Other tax items
Under/(Over) provision of current tax in prior years
Under provision of deferred tax in prior years
19,357
10
24,420
(2,716)
-
(20)
140
(1)
19,367
21,704
(20)
139
(2,168)
69
(10,170)
2,589
-
-
-
(2,099)
(7,581)
-
-
17,268
14,123
(20)
139
62,275
40,186
66,909
20,692
15,569
2,164
(547)
3
10
69
10,047
4,738
(527)
(8)
(2,716)
2,589
16,727
249
(16,976)
-
(20)
-
5,173
93
(5,126)
(1)
-
17,268
14,123
(20)
139
22.Dividends
Dividends recognised by the Group and the Company are:
Sen per Total
share
amountDate of payment
RM’000
2013
Second interim single-tier 2012 ordinary
First interim single-tier 2013 ordinary
Second interim single-tier 2013 ordinary
Third interim single-tier 2013 ordinary
Fourth interim single-tier 2013 ordinary
2.00
2.05
14.28
12.55
1.69
2,810
2,870
20,000
17,571
2,360
45,611
2012
First interim single-tier 2012 ordinary
20,000
14.28
13 March 2013
13 June 2013
13 June 2013
13 September 2013
13 December 2013
12 July 2012
Annual Report 2013
103
22.Dividends (Cont’d)
On 27 February 2014, a fifth interim single-tier dividend of approximately 8.777 sen per ordinary share totalling
RM12,290,000 was declared for the financial year ended 31 December 2013 and was paid on 13 March 2014.
At the forthcoming Annual General Meeting, a final single-tier dividend in respect of the financial year ended 31
December 2013, of approximately 1.58 sen per ordinary share amounting to RM2,212,395 at book closure date,
will be proposed for shareholders’ approval. The financial statements for the current financial year do not reflect
this proposed dividend.
Such dividend, when approved by the shareholders, will be accounted for in equity as an appropriation of retained
earnings in the financial year ending 31 December 2014.
23.Earnings per ordinary share
Basic earnings per ordinary share
Basic earnings per ordinary share is calculated based on the profit attributable to ordinary shareholders over
weighted average number of ordinary shares outstanding as at 31 December, as follows:
Group
2013
2012
RM’000RM’000
Profit for the year attributable to owners of the Company
46,170
27,468
Weighted average number of ordinary shares
140,025
140,025
Basic earnings per ordinary share (sen)
32.97
19.62
24.Financial instruments
24.1Categories of financial instruments
The table below provides an analysis of financial instruments categorised as follows:
(a) Loans and receivables (“L&R”); and
(b) Financial liabilities measured at amortised cost (“FL”).
Carrying
2013
amountL&RFL
RM’000RM’000RM’000
Financial assets
Group
Financial assets
Company
308,653
4,660
129,092
308,653
4,660
129,092
-
442,405
442,405
-
21,314
2,329
21,314
2,329
-
23,643
23,643
-
104
Annual Report 2013
24.Financial instruments (Cont’d)
24.1Categories of financial instruments (Cont’d)
Carrying
2013
amountL&RFL
RM’000RM’000RM’000
Group
Trade and other payables* Other current liabilities
(280,851)
(17,021)
-
-
(280,851)
(17,021)
(297,872)
-
(297,872)
(7,778)
-
(7,778)
270,071
3,977
171,464
270,071
3,977
171,464
-
Financial assets
Company
445,512
445,512
-
6,575
15,057
6,575
15,057
-
Group
Trade and other payables*
21,632
21,632
-
(286,261)
(18,101)
-
-
(286,261)
(18,101)
(304,362)
-
(304,362)
(12,392)
-
(12,392)
Company
2012
Financial assets
Group
Company
* Excluding provisions
Annual Report 2013
105
24.2Net gains and losses arising from financial instruments
GroupCompany
2013
2012
2013
2012
RM’000RM’000RM’000RM’000
Loans and receivables
Financial liabilities measured at
amortised cost
11,098
(2,599)
416
1,016
(2,997)
(3,032)
-
-
Net gains/(losses)
8,101
(5,631)
416
1,016
24.3Financial risk management
The Group and the Company have exposure to the following risks from its use of financial instruments:
•
•
•
Credit risk
Liquidity risk
Market risk
24.4Credit risk
Credit risk is the risk of a financial loss to the Group if a customer or counterparty to a financial instrument
fails to meet its contractual obligations. The Group’s and Company’s exposure to credit risk arises principally
from their trade and other receivables.
Receivables
Risk management objectives, policies and processes for managing the risk
The Group’s objective is to seek continual revenue growth while minimising losses incurred due to increased
credit risk exposure. The Group trades only with recognised and creditworthy third parties. It is the Group’s
policy that all customers wish to trade on credit terms are subject to credit evaluations procedures and the
exposure to credit risk is monitored on an ongoing basis.
For other financial assets (including investment securities and cash and bank balances), the Group and the
Company minimise credit risk by dealing exclusively with high credit rating counterparties.
Exposure to credit risk, credit quality and collateral
As the Group and the Company do not hold any collateral, the maximum exposure to credit risk arising from
the financial assets is the carrying amount of each class of financial assets as recognised in the statements
of financial position. A significant portion of these receivables are regular customers that have been
transacting with the Group. The Group uses ageing analysis to monitor the credit quality of the receivables.
Any receivables having significant balances past due more than 90 days, which are deemed to have higher
credit risk, are monitored individually.
At the end of the reporting period, approximately 74% (2012: 64%) of the Group’s trade receivables were
due from 5 major customers located in Malaysia.
106
Annual Report 2013
24.4Credit risk (Cont’d)
Receivables (Cont’d)
Exposure to credit risk, credit quality and collateral (Cont’d)
The exposure of credit risk for trade receivables as at the end of the reporting period by industry sector and
geographic region were:
Group
2013
2012
RM’000
% of totalRM’000
% of total
By industry sector:
Construction
By geographical:
Malaysia
United Arab Emirates
258,642
13,513
95
5
245,736
9,175
96
4
272,155
100
254,911
100
272,155
-
100
-
254,785
126
99
1
272,155
100
254,911
100
Impairment losses
The ageing of receivables as at the end of the reporting period was:
Individual
Group
Gross impairmentNet
RM’000RM’000RM’000
2013
Not past due
267,396
-
267,396
Past due 1 - 30 days
36,271
-
36,271
2,814
-
2,814
546
-
546
Past due more than 90 days
14,126
(12,500)
1,626
321,153
(12,500)
308,653
2012
Not past due
Past due more than 90 days
249,220
14,606
-
2,994
25,778
-
-
-
-
(22,527)
249,220
14,606
2,994
3,251
292,598
(22,527)
270,071
Annual Report 2013
107
24.4Credit risk (Cont’d)
Receivables (Cont’d)
Impairment losses (Cont’d)
The movements in the allowance for impairment losses on receivables during the financial year were:
Group
2013
2012
RM’000RM’000
At 1 January
Impairment loss recognised
Impairment loss reversed
Impairment loss written-off
22,527
-
(1,795)
(8,232)
10,560
12,500
(533)
-
At 31 December
12,500
22,527
Other financial assets
Investments are allowed only in liquid securities and transactions involving financial instruments are with
approved financial institutions.
As at the end of the reporting period, the Group has only invested in domestic securities. The maximum
exposure to credit risk is represented by the carrying amounts in the statement of financial position.
The other financial assets are unsecured.
Inter company balances
The Company provides advances to subsidiaries. The Company monitors the results of the subsidiaries
regularly.
As at the end of the reporting period, the maximum exposure to credit risk was represented by their carrying
amounts in the statement of financial position.
Impairment losses
As at the end of the reporting period, there was no indication that the advances to the subsidiaries were not
recoverable. The Company monitored these advances regularly.
108
Annual Report 2013
24.5Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The
Group’s exposure to liquidity risk arises principally from its various payables.
The Group maintains a level of cash and cash equivalents and bank facilities deemed adequate by the
management to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they
fall due.
Maturity analysis
The table below summarises the maturity profile of the Group’s and the Company’s financial liabilities as at
the end of the reporting period based on undiscounted contractual payments:
CarryingContractualUnder
amount cash flows
1 year
RM’000RM’000RM’000
Group
2013
Non-derivative financial liabilities
280,851
284,777
284,777
17,021
17,021
17,021
297,872
301,798
301,798
2012
286,261
290,057
290,057
18,101
18,101
18,101
304,362
308,158
308,158
Company
2013
7,778
7,778
7,778
2012
12,392
12,392
12,392
Annual Report 2013
109
24.6
Market risk
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and
other prices will affect the Group’s financial position or cash flows.
24.6.1Currency risk
The Group is exposed to foreign currency risk on balances that are denominated in a currency other than
the respective functional currencies of Group entities. At the reporting date the currency giving rise to this
risk is primarily United Arab Emirates Dirham (AED).
As at the reporting date, the Group did not enter into any forward exchange contracts.
Exposure to foreign currency risk
The Group’s exposure to foreign currency (a currency which is other than the functional currency of the
Group entities) risk, based on carrying amounts as at the end of the reporting period was:
Denominated in AED
Group
2013
2012
RM’000RM’000
Other receivables
579
44
(557)
658
168
(742)
Net exposure
66
84
Currency risk sensitivity analysis
A 3% (2012: 3%) strengthening of the Ringgit Malaysia against the following currencies at the end of the
reporting period would have increased (decreased) pre-tax profit or loss by the amounts shown below.
This analysis assumes that all other variables, in particular interest rates, remained constant and ignores
any impact of forecasted sales and purchases.
Group profit or loss
2013
2012
RM’000RM’000
AED
(2)
(3)
A 3% (2012: 3%) weakening of Ringgit Malaysia against the above currencies at the end of the reporting
period would have had equal but opposite effect on the above currencies to the amounts shown above,
on the basis that all other variables remained constant.
110
Annual Report 2013
24.6
Market risk (Cont’d)
24.6.2Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of the Group’s and the Company’s
financial instruments will fluctuate because of changes in market interest rates.
The Group manages its interest rate exposure by maintaining a mix of fixed and floating rate loans and
borrowings. This strategy allows it to capitalise on cheaper funding in a low interest rate environment
and achieve a certain level of protection against rate hikes. Currently, the Group have no loans and
borrowings.
Exposure to interest rate risk
The Group’s investments in financial assets are mainly short term in nature and are not held for speculative
purposes and include funds in fixed deposit or funds in asset management companies which yield better
returns than cash at bank.
The interest rate profile of the Group’s and the Company’s significant interest-bearing financial
instruments, based on carrying amounts as at the end of the reporting period were:
GroupCompany
2013
2012
2013
2012
RM’000RM’000RM’000RM’000
Floating rate instruments
99,603
144,837
2,000
15,000
Interest rate risk sensitivity analysis
(a)
Cash flow sensitivity analysis for variable rate instruments
The Group’s and Company’s placements with financial institutions are exposed to a risk of change
in cash flows due to changes in interest rates. The management monitors these rates on a regular
basis and the exposure is not expected to be material.
24.7Fair value of financial instruments
The carrying amounts of cash and cash equivalents, short term receivables and payables and short term
borrowings approximate fair values due to the relatively short term nature of these financial instruments.
25.Capital management
The Group’s objectives when managing capital is to maintain a strong capital base and safeguard the Group’s
ability to continue as a going concern, so as to maintain investor, creditor and market confidence and to sustain
future development of the business. The Group monitors and is determined to maintain an optimal debt-toequity ratio that complies with debt covenants of the immediate and ultimate holding company and regulatory
requirements.
Annual Report 2013
111
26.Operating leases
Leases as lessee
The Group has entered into commercial leases on office buildings and residential houses for purposes of branch
office and staff quarters. These leases have an average tenure of between one and three years with renewal
option at the discretion of the lessor. The Group is restricted from subleasing the leased properties to third
parties.
Minimum leased payments recognised during the financial year were as follows:
2013
2012
RM’000RM’000
Capitalised in construction contract costs
226
1,043
304
478
Future minimum rentals payable under non-cancellable operating leases at the reporting date are as follows:
Group
2013
2012
RM’000RM’000
Within 1 year
Between 1 year to 5 years
807
437
286
55
1,244
341
Leases as lessor
Future minimum rentals receivable under non-cancellable operating leases at the reporting date are as follows:
The Group has entered into commercial property leases on its buildings. These non-cancellable leases have
remaining lease terms of between two and three years.
Group
2013
2012
RM’000RM’000
Within 1 year
Between 1 year to 3 years
487
216
517
291
703
808
112
Annual Report 2013
27.Capital commitments
Capital expenditure commitments as at the reporting date are as follows:
Group
2013
2012
RM’000RM’000
Contracted but not provided for
Authorised but not contracted for
Land held for property development
Contracted but not provided for
-
12,449
3
11,282
12,449
11,285
96,060
-
28.Related parties
Identity of related parties
For the purposes of these financial statements, parties are considered to be related to the Group or the Company
if the Group or the Company has the ability, directly or indirectly, to control the party or exercise significant
influence over the party in making financial and operating decisions, or vice versa, or where the Group or the
Company and the party are subject to common control. Related parties may be individuals or other entities.
Related parties also include key management personnel defined as those persons having authority and
responsibility for planning, directing and controlling the activities of the Group either directly or indirectly. Key
management personnel include all the Directors of the Group, and certain members of senior management of the
Group.
The Group has related party relationship with its holding company, Directors and key management personnel.
Related party transactions
The related party transactions of the Group and the Company, other than key management personnel
compensation (see Note 20) and dividend income from subsidiaries (see Note 16), are as follows:
Group
Amount transacted during the year 2013
2012
RM’000RM’000
Letting of machinery
- Pesona Metro Sdn Bhd*
175
217
Provision of consultancy services
- Warisan Az-Sya Sdn Bhd*
65
Balances with related parties at the reporting date are disclosed in Note 10 and Note 14 to the financial statements.
These transactions have been entered into on a negotiated term basis.
*
Company in which a Director of a subsidiary has significant influence in making decisions.
Annual Report 2013
113
29.Operating segments
The Group operates mainly within construction and property development industry in Malaysia and the Group’s
foreign operation is not material. Hence, the reporting on geographical segment is not presented. For management
purposes, the Group’s strategic business units are organised into two reportable operating segments as follows:
(a)
Construction contracts
The construction contracts segment is in the business of design and construction of residential and
commercial buildings as well as infrastructures.
(b) Property development
The property segment is in the business of developing and selling of properties.
Management monitors the operating results of its business units separately for the purpose of making decisions
about resource allocation and performance assessment. Segment performance is evaluated based on segment
profit before tax, interest, depreciation and amortisation, as included in the internal management reports that are
reviewed by the Executive Chairman, who is the Group’s chief operating decision maker. Segment profit is used
to measure performance as management believes that such information is the most relevant in evaluating the
results of these segments relative to other entities that are operate within the same industries.
Transfer prices between operating segments, if any are on arm’s length basis in a manner similar to transactions
with third parties. Segment revenue, expenses and results include transfers between operating segments are
eliminated on consolidation.
Segment results, assets and liabilities include items directly attributable to a segment as well as those that can be
allocated on a reasonable basis. Unallocated items comprise mainly corporate assets, liabilities and expenses.
Segment assets
The total of segment asset is measured based on all assets of a segment, as included in the internal management
reports that are reviewed by the Group’s Executive Chairman. Segment total asset is used to measure the return
of assets of each segment.
114
Annual Report 2013
29.Operating segments (Cont’d)
Elimination
of inter-
Construction
PropertySub-
segment
Group
contracts developmentOthers
total transactionsTotal
2013RM’000RM’000 RM’000RM’000RM’000RM’000
Segment profit/(loss)
Included in the measure of
segment profit/(loss) are:
Revenue from external
customers
Other non-cash expenses
- Property, plant and
equipment written off
- Reversal of impairment
loss on receivables
Not included in the measure
of segment profit/(loss) but
provided to Executive
Chairman:
Amortisation of intangible
assets
Depreciation of property,
plant and equipment
Finance costs
Finance income
Tax expense
53,599
8,570
(2,867)
59,302
-
59,302
655,636
49,589
-
705,225
-
705,225
(304)
-
-
(304)
-
(304)
1,795
-
-
1,795
-
1,795
(679)
(4)
(11)
(694)
-
(694)
(2,143)
(2,899)
12,264
(15,649)
(331)
(3,517)
387
(1,619)
(99)
-
-
-
(2,573)
(6,416)
12,651
(17,268)
5
3,419
(3,419)
-
(2,568)
(2,997)
9,232
(17,268)
Segment assets
Unallocated assets
450,252
6,445
99,194
9,274
2,981
-
552,427
15,719
-
-
552,427
15,719
Total assets
456,697
108,468
2,981
568,146
-
568,146
8,397
7,230
281
15,908
-
15,908
segment assets are:
Additions to non-current
assets other than financial
instruments and deferred
tax assets
Annual Report 2013
115
Elimination
of inter-
Construction
PropertySub-
segment
Group
contracts developmentOthers
total transactionsTotal
2012RM’000RM’000 RM’000RM’000RM’000RM’000
Segment profit/(loss)
segment profit/(loss) are:
Revenue from external
customers
Other non-cash expenses
- Property, plant and
equipment written off
- Impairment loss on
receivables
- Reversal of impairment
loss on receivables
59,218
(18,840)
(2,267)
38,111
-
38,111
672,777
15,850
-
688,627
-
688,627
(602)
-
-
(602)
-
(602)
(12,500)
-
-
(12,500)
-
(12,500)
533
-
-
533
-
533
Not included in the measure of
segment profit/(loss) but
provided to Executive
Chairman:
Amortisation of intangible
assets
Depreciation of property,
plant and equipment
Finance costs
Finance income
Tax expense
(506)
(2)
(6)
(514)
-
(514)
(3,306)
(2,958)
8,966
(18,750)
(310)
(74)
362
4,627
(96)
-
-
-
(3,712)
(3,032)
9,328
(14,123)
5
-
-
-
(3,707)
(3,032)
9,328
(14,123)
Segment assets
Unallocated assets
456,389
4,146
89,832
9,444
2,777
-
548,998
13,590
-
-
548,998
13,590
Total assets
460,535
99,276
2,777
562,588
-
562,588
5,893
4,330
1,107
11,330
-
11,330
segment assets are:
Additions to non-current
assets other than financial
instruments and deferred
tax assets
116
Annual Report 2013
Reconciliations of reportable segment revenues, profit or loss, assets and other material items
GroupNote
2013
2012
RM’000RM’000
Profit or loss
Total profit or loss for reportable segments
Finance income
17
Depreciation and amortisation
Finance costs
18
Consolidated profit before tax 59,302
9,232
(3,262)
(2,997)
38,111
9,328
(4,221)
(3,032)
62,275
40,186
30. Long Term Incentive Plan
The Putrajaya Perdana Berhad Long Term Incentive Plan (“LTIP”) is governed by the by-laws approved by the
shareholders at an Extraordinary General Meeting held on 31 May 2013. The LTIP was implemented on 31 May
2013 and is to be in force for a maximum period of five (5) years from the effective date, and it may be extended
subject to approval by the shareholders of the Company.
The salient terms and features of the LTIP are as follows:
1.
The aggregate amount of the LTIP shares which may be made available shall not exceed 5% of the
Company’s enlarged issued and paid-up ordinary share capital (excluding treasury shares, if any).
2.
The plan will entail the issuance of ordinary shares to eligible employees of the Group. The shares will be
issued to the eligible employees at no cost. Any employee of the Group shall be eligible to participate in the
LTIP if the following conditions are satisfied:
(i)
(ii)
He/She must be at least eighteen (18) years of age and is not an undischarged bankrupt;
His/Her employment has been confirmed in writing and continues to be employed by the Group as at
the offer date; and
(iii) He/She meets any other criteria as may be determined by the LTIP committee in its sole discretion
from time to time.
3.
The LTIP will be subject to vesting conditions. Amongst others, at each vesting date (except for the first
vesting), the Group has to achieve 90% of the net profit after tax which is budgeted for the financial year
immediately prior to the vesting date.
The shares are to be vested over a period of time as follows:
(i) 40% on first vesting date, being the proposed listing date of PPB;
(ii) 30% on the first anniversary of the listing date; and
(iii) 30% on the second anniversary of the listing date
The fair value of LTIP shares granted was estimated based on approximate net asset value at grant date of
RM1.52 per share.
During the financial year, the Company granted a total of 6,751,400 share options to Executive Directors, key
management personnel and also eligible employees. As at 31 December 2013, total expenses recognised as
share based payments are RM2,171,000.
Annual Report 2013
117
31.Acquisitions of subsidiaries
During the financial year, the following subsidiaries were acquired by the Group:
31.1Acquisitions of subsidiary – Ipoh City Development Sdn Bhd
On 2 July 2013, Putra Perdana Development Sdn Bhd (“PPDSB”) acquired 1 share in Ipoh City Development
Sdn Bhd (“ICDSB”), a company incorporated in Malaysia for cash consideration of RM1, representing
50% equity interest in ICDSB. On 15 July 2013 and 23 December 2013, PPDSB subscribed for additional
999,997 shares and 6,000,000 shares in ICDSB for cash consideration of RM999,997 and RM6,000,000
respectively. Upon the subscription of additional shares, PPDSB holds 100% equity interest in ICDSB
effective 15 July 2013.
ICDSB is principally engaged in property development. For the post acquisition period during the financial
year ended 31 December 2013, the subsidiary incurred loss after tax of RM551,588.
The Group did not assume any assets or liabilities in the acquisition of ICDSB and the acquisition had no
material financial impact on the Group.
31.2Acquisitions of subsidiary – Time Vantage Sdn Bhd
On 5 July 2013, PPDSB acquired 2 shares in Time Vantage Sdn Bhd (“TVSB”), a company incorporated
in Malaysia for cash consideration of RM2, representing 50% equity interest in TVSB. On 29 August 2013
and 12 December 2013, PPDSB subscribed for additional 5,712 shares and 4,194,076 shares in TVSB for
cash consideration of RM5,712 and RM4,194,076 respectively. Upon the subscription of additional shares,
PPDSB holds 57.14% equity interest in TVSB effective 29 August 2013.
TVSB is principally engaged in investment holding. For the post acquisition period during the financial year
ended 31 December 2013, the subsidiary incurred loss after tax of RM43,334.
The Group did not assume any assets or liabilities in the acquisition of TVSB and the acquisition had no
31.3Acquisitions of subsidiary – Blue Ocean Master Sdn Bhd
On 5 July 2013, TVSB acquired 70 shares in Blue Ocean Master Sdn Bhd (“BOMSB”), a company
incorporated in Malaysia for cash consideration of RM70, representing 70% equity interest in BOMSB. On
12 December 2013, TVSB subscribed for an additional 7,349,930 shares in BOMSB for cash consideration
of RM7,349,930.
BOMSB’s intended principal activity is property development. For the post acquisition period during the
financial year ended 31 December 2013, the subsidiary incurred loss after tax of RM275,673.
The Group did not assume any assets or liabilities in the acquisition of BOMSB and the acquisition had no
31.4Acquisitions of subsidiary – Brilliant Corridor Sdn Bhd
On 16 August 2013, BOMSB acquired 1 share in Brilliant Corridor Sdn Bhd (“BCSB”), a company incorporated
in Malaysia for cash consideration of RM1, representing 50% equity interest in BCSB.
BCSB’s intended principal activity is property development. For the post acquisition period during the
financial year ended 31 December 2013, the subsidiary incurred loss after tax of RM51,158.
The Group did not assume any assets or liabilities in the acquisition of BCSB and the acquisition had no
118
Annual Report 2013
31.Acquisitions of subsidiaries (Cont’d)
31.5 Acquisitions of subsidiaries – Misi Serantau Sdn Bhd and Kuasa Sezaman Sdn Bhd
The Company acquired 100% equity interest in Misi Serantau Sdn Bhd (“MSSB”), which in turn owns 70%
equity interest in Kuasa Sezaman Sdn Bhd (“KSSB”) (both referred as “MSSB Group”) for a total cash
consideration of RM 8 million. Both MSSB and KSSB were incorporated in Malaysia.
The principal activity of MSSB is investment holding, whilst KSSB’s intended principal activity is a mini
hydro power plant concessionaire. The acquisition of MSSB Group was completed on 30 December 2013.
The financial results of these companies for the financial year ended 31 December 2013 are not significant
and hence, not taken into account for the Group’s consolidation purposes.
The following summarises the major classes of consideration transferred, and the recognised amounts of
assets acquired and liabilities assumed at the acquisition date for MSSB Group.
Group results of acquisitions
MSSB
MSSB KSSBConsolidation
Group
30.12.13 – 30.12.13 –
30.12.13 – 30.12.13 –
31.12.13
31.12.13
31.12.13
31.12.13
RM’000RM’000RM’000RM’000
Loss for the period
-
-
-
Identifiable assets acquired
and liabilities assumed
Investment in subsidiary
565
-
(565)
Development costs
-
1,260
-
1,260
-
2
-
2
Other payables and accruals
(2)
(829)
-
(831)
Amount due to outgoing holding company
(565)
-
-
(565)
-
-
(242)
(242)
Total identified net (liabilities)/assets
(2)
433
(807)
(376)
MSSB
MSSBKSSB
Group
RM’000RM’000RM’000
Net cash outflow arising from acquisition of subsidiaries
Purchase consideration settled in cash and cash equivalents
Less: Waiver of amount due to outgoing holding company
for debt owing by MSSB
(8,000)
-
(8,000)
565
-
565
Net purchase consideration
Cash on hand acquired
(7,435)
-
-
2
(7,435)
2
Acquisition of subsidiaries, net of cash acquired
(7,435)
2
(7,433)
Annual Report 2013
119
31.Acquisitions of subsidiaries (Cont’d)
31.5 Acquisitions of subsidiaries – Misi Serantau Sdn Bhd and Kuasa Sezaman Sdn Bhd (Cont’d)
MSSB
Group
RM’000
Goodwill at date of acquisition
Total consideration transferred
Fair value of identified net liabilities
Goodwill
7,435
376
7,811
32.Subsequent event
On 1 April 2014, the Group has entered into a sale and purchase agreement (“Agreement”) for the acquisition of
37.5% equity interest in Iskandar (Holdings) Company Ltd (“IHC”), a company incorporated in Cayman Islands
for a total cash consideration of RM240.0 million. IHC is an investment holding company. IHC has a 60% equity
interest in Global Capital and Development Sdn Bhd (“GCD”) which owns land bank in Medini, Iskandar Malaysia,
Johor. This transaction is undertaken on a willing buyer willing seller basis and based on the valuation undertaken
on a comparison basis.
The purchase consideration shall be paid in the following manner:
(i)
(ii)
Upon payment of Deposit, the vendor shall transfer 25% equity interest in IHC to the Group and upon payment
of Balance Sum, the vendor shall transfer the balance of 12.5% in IHC to the Group.
In the event that the Group is unable to make payment of the Balance Sum within 90 days from the date of the
Agreement, the vendor shall be entitled to elect to either terminate the Agreement and refund the Deposit free of
interest to the Group or to provide the Group with an additional period of 90 days to pay the Balance Sum or to
waive the payment of the Balance Sum and deem that the Deposit paid for the 25% equity interest so transferred
to the Group represents the full consideration for the fulfilment of the Agreement while the balance of 12.5%
equity interest in IHC shall not be purchased by the Group.
RM100.0 million (“Deposit”) shall be paid immediately upon approval from the relevant authority; and
RM140.0 million (“Balance Sum”) shall be paid within 90 days from the date of the Agreement.
120
Annual Report 2013
Statement by Directors
pursuant to Section 169(15) of the Companies Act, 1965
In the opinion of the Directors, the financial statements set out on pages 63 to 119 are drawn up in accordance with
Financial Reporting Standards and the Companies Act, 1965 in Malaysia so as to give a true and fair view of the
financial position of the Group and of the Company as of 31 December 2013 and of their financial performance and
cash flows for the financial year then ended.
Signed on behalf of the Board of Directors in accordance with a resolution of the Directors:
Dato’ Rosman bin Abdullah
Ang Ai Hoon
Kuala Lumpur,
22 April 2014
Statutory Declaration
pursuant to Section 169(16) of the Companies Act, 1965
I, Sit Kam Hock, the officer primarily responsible for the financial management of Putrajaya Perdana Berhad, do
solemnly and sincerely declare that the financial statements set out on pages 63 to 119 are, to the best of my knowledge
and belief, correct and I make this solemn declaration conscientiously believing the same to be true, and by virtue of
the provisions of the Statutory Declarations Act, 1960.
Subscribed and solemnly declared by the above named in Kuala Lumpur on 22 April 2014.
Sit Kam Hock
Before me:
Lee Chin Hin
No. W493
Commissioner for Oaths
Annual Report 2013
121
Independent Auditors’ Report
to the members of Putrajaya Perdana Berhad
Report on the Financial Statements
We have audited the financial statements of Putrajaya Perdana Berhad, which comprise the statements of financial
position as at 31 December 2013 of the Group and of the Company, and the statements of profit or loss and other
comprehensive income, changes in equity and cash flows of the Group and of the Company for the year then ended,
and a summary of significant accounting policies and other explanatory information, as set out on pages 63 to 119.
Directors’ Responsibility for the Financial Statements
The Directors of the Company are responsible for the preparation of financial statements so as to give a true and fair
view in accordance with Financial Reporting Standards, and the requirements of the Companies Act, 1965 in Malaysia.
The Directors are also responsible for such internal control as the Directors determine is necessary to enable the
preparation of financial statements that are free from material misstatement, whether due to fraud or error.
Auditors’ Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit
in accordance with approved standards on auditing in Malaysia. Those standards require that we comply with ethical
requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements
are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial
statements. The procedures selected depend on our judgement, including the assessment of risks of material
misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, we consider
internal control relevant to the entity’s preparation of financial statements that give a true and fair view in order to
design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion
on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting
policies used and the reasonableness of accounting estimates made by the Directors, as well as evaluating the overall
presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit
opinion.
Opinion
In our opinion, the financial statements give a true and fair view of the financial position of the Group and of the
Company as of 31 December 2013 and of their financial performance and cash flows for the year then ended in
accordance with Financial Reporting Standards and the requirements of the Companies Act, 1965 in Malaysia.
Report on Other Legal and Regulatory Requirements
In accordance with the requirements of the Companies Act, 1965 in Malaysia, we also report the following:
(a)
In our opinion, the accounting and other records and the registers required by the Act to be kept by the Company
and its subsidiaries have been properly kept in accordance with the provisions of the Act.
(b) We are satisfied that the accounts of the subsidiaries that have been consolidated with the Company’s financial
statements are in form and content appropriate and proper for the purposes of the preparation of the financial
statements of the Group and we have received satisfactory information and explanations required by us for those
purposes.
(c)
The audit reports on the accounts of the subsidiaries did not contain any qualification or any adverse comment
made under Section 174(3) of the Act.
122
Annual Report 2013
Independent Auditors’ Report
to the members of Putrajaya Perdana Berhad (cont’d)
Other Matters
This report is made solely to the members of the Company, as a body, in accordance with Section 174 of the Companies
Act, 1965 in Malaysia and for no other purpose. We do not assume responsibility to any other person for the content
of this report.
KPMG Ahmad Nasri Abdul Wahab
Firm Number: AF 0758
Approval Number: 2919/03/16(J)
Chartered Accountants
Chartered Accountant
Petaling Jaya,
Date: 22 April 2014
Annual Report 2013
123
as at 31 December 2013
Approx.Net Book
ApproximateAge OfValue As At
Year OfLand Area /Description And
Building
31.12.2013
LocationTenureAcquisition
Units Existing Use
(Years)
(RM’000)
Danau Point
Freehold
2005
1 unit
PT 2494 HS(D) 794,
Presint 16, Bandar &
Daerah Putrajaya,
Wilayah Persekutuan
Putrajaya
4-storey
commercial building
with one (1) level
sub-basement car
park (principally
used as the main
office of PPB Group.
The remaining
areas are for rent)
11
7,339
PT 2395 HS(D) 712,
Freehold
2005
20.283 acres
Land held for
-
PT 2317 HS(D) 680 -
development
PT 2320 HS(D) 683,
PT 2328 HS(D) 685-
PT 2330 HS(D) 687,
PT 2332 HS(D) 689,
PT 2334 HS(D) 691,
PT 2336 HS(D) 693,
PT 2338 HS(D) 695,
PT 2396 HS(D) 713 -
PT 2403 HS(D) 720,
PT 2450 HS(D) 756 -
PT 2461 HS(D) 767,
PT 2463 HS(D)769 -
PT 2467 HS(D) 773,
PT 2469 HS(D) 775,
PT 2471 HS(D) 777,
PT 2472 HS(D) 778,
Presint16, Bandar &
Daerah Putrajaya,
Wilayah Persekutuan
Putrajaya (¹) 30,403
PT 7555 HS(D) 6955
Freehold
2010
3,250 sq m
Presint 2, Bandar &
Daerah Putrajaya,
Wilayah Persekutuan
Putrajaya (¹) Lot 969 PN 14416
(previously HS(D) 29486),
Kawasan Bandar XXXIX,
Melaka Tengah,
Melaka
(Plot No. 82)
Lease
1999
1 unit
expiring
20.3.2094
Land held for
development
-
13,806
3-Storey Shop
Office (vacant)
17
243
124
Annual Report 2013
as at 31 December 2013 (cont’d)
Approx.Net Book
ApproximateAge OfValue As At
Year OfLand Area /Description And
Building
31.12.2013
LocationTenureAcquisition
Units Existing Use
(Years)
(RM’000)
HS(D) 360860 & 360861
Freehold
2008
2 units
PTD 5118 & 5119
Mukim Jelutong,
Johor Bahru, Johor
Double Storey
Terrace
Shop Office
11
613
Lot 12460 Mukim Dengkil Freehold
2011
1 unit
Store
Daerah Sepang, Selangor
-
13,846
Office No.1-6, 2nd flr & Lease
2013
11 units
Office No.8-12, 3rd flr,
expiring
Bangunan Umno 29.8.2106
Bahagian Pekan,
Jalan Teng Quee,
Pekan, Pahang
Darul Makmur
Stratified office
Lots (vacant)
6
2,095
9.387
hectare
Land held for
development
-
4,037
Kinta Lake district, Perak Leasehold
2013
264.37 acres
PT 183716 HS(D) 206982 (expiring
PT 183717 HS(D) 206983 16.7.2111)
PT 183718 HS(D) 206984
PT 183719 HS(D) 206985
PT 183720 HS(D) 206986
PT 183721 HS(D) 206987
PT 183726 HS(D) 206992
Mukim Belanja Daerah Kinta, Perak. (2)
Land held for
development
-
6,033
TOTAL
78,415
HS(D) 10226 PT 8783,
Leasehold
2012
Lot 24709, PN 54124,
(expiring
(previously HS(D) 26.2.2100) 10227 PT 8784),
Mukim Ayer Panas,
Daerah Jasin, Melaka.
Note:-
¹ Held as beneficial owner pursuant to the Development Agreement dated 30 January 2004.
Pursuant to the development agreement dated 19 November 2013, PPB Group is granted an exclusive right to carry out
2
and complete the development of part of the Kinta Lake District project measuring approximately 264.37 acres. Legal
ownership of the land will be transferred to PPB Group upon payment of the full development sum of RM46.06 million.
The commitment fee of RM6.0 million has been paid and the balance development sum will be paid by seven (7) yearly
instalment of RM6.0 million each for the first six (6) instalments and RM4.06 million for the last instalment.
PUTRAJAYA PERDANA BERHAD
(465327-P)
for excellence
P A S S I O N
www.p-perdana.com
PUTRAJAYA PERDANA BERHAD (465327-P)
2nd & 3rd Floor
5, Jalan P16
Precinct 16
62150 Putrajaya
Malaysia
ANNUAL REPORT 2013
ANNUAL REPORT 2013

annual report 2013 - Putrajaya Perdana Berhad

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