DKLS DKLS - Bursa Malaysia Stock

Transcription

CONTENTS
Mission Statement

2
Corporate Information

3
Notice of Annual General Meeting

4
Corporate Structure

6
Profile of Board of Directors

7
Group Financial Charts

11
Group Corporate Diary of Significant Events for Year 2012

12
Chairman’s Statement

14
Statement of Corporate Governance

17
Corporate Social Responsibility Statement

25
Statement on Risk Management and Internal Control

30
Audit Committee Report

34
Statement of Directors’ Responsibility in Relation to the
Financial Statements

37
Directors’ Report and Financial Statements

38
Supplementary Information

148
Properties Owned by the Group

149
Analysis of Shareholdings
Form of Proxy
155

Enclosed
DKLS INDUSTRIES BERHAD (369472-P)
Annual Report 2012
1
MISSION STATEMENT
DKLS
aims to be an international renowned
construction and property market leader
by year 2020
DKLS
strives to be the best and to
remain the best
Environment, Health And Safety Statement
The Board of Directors of DKLS recognises and
values the importance of environmental safety and
health issues and is thereby committed in
undertaking projects in a safe and
environmentally sustainable manner
2
Annual Report 2012
CORPORATE INFORMATION
BOARD OF DIRECTORS
Chairman
Dato’ Ding Pei Chai, DPTJ, PMP
Executive Director
Ir Sam Tuck Wah
Managing Director
Mr Ding Poi Bor
Non-executive Directors
Dato’ Ir Lim Choo Boon, DPMP, JSM, PCM, KMN, PKT, AMN
Dato’ Seri Haji Omar bin Haji Ahmad
Ms Soh Yoke Yan
Finance Director
Ms Ding Soo King
AUDIT COMMITTEE
Chairman
NOMINATION AND REMUNERATION COMMITTEE
Chairman
Members
Ms Soh Yoke Yan
Members
Ms Soh Yoke Yan
COMPANY SECRETARIES
Mr Cheai Weng Hoong
Ms Chan May Yoke
INVESTMENT COMMITTEE
Chairman
Mr Ding Poi Bor
PRINCIPAL PLACE OF BUSINESS
16th Floor & Penthouse, Ipoh Tower
Jalan Dato’ Seri Ahmad Said
30450 Ipoh, Perak Darul Ridzuan
Tel : 05-2532 688
Fax : 05-2532 701
REGISTERED OFFICE
D-3-7, Greentown Square
Tel : 05-2530 760
Fax : 05-2416 761
REGISTRAR
Shared Services & Resources Sdn Bhd
Tel : 05-2530 760
Fax : 05-2416 761
Members
Ir Sam Tuck Wah
Ms Soh Yoke Yan
AUDITORS
Ernst & Young
PRINCIPAL BANKERS
AmBank (M) Berhad
CIMB Bank Berhad
Hong Leong Bank Berhad
Malayan Banking Berhad
United Overseas Bank (Malaysia) Bhd
SOLICITOR
Skrine
STOCK EXCHANGE LISTING
Main Market - Bursa Malaysia Securities Berhad
Stock Code : 7528
Stock Name : DKLS
Annual Report 2012
3
NOTICE OF ANNUAL GENERAL MEETING
NOTICE IS HEREBY GIVEN that the Seventeenth Annual General Meeting of the Company will be held at 11th Floor, Ipoh
Tower, Jalan Dato’ Seri Ahmad Said, 30450 Ipoh, Perak Darul Ridzuan on Wednesday, 22 May 2013 at 9.30 a.m. to transact
the following businesses:
AGENDA
1.
To receive and adopt the Audited Financial Statements for the year ended 31 December 2012
together with the Directors’ and Auditors’ Reports thereon.
Resolution 1
2.
To approve the payment of a first and final single tier dividend of 3 sen per share for the year
ended 31 December 2012.
Resolution 2
3.
To approve the payment of Directors’ Fees for the year ended 31 December 2012.
Resolution 3
4.
To re-elect the following Directors who retire in accordance with Article 105 of the Company’s
Articles of Association:
a.
Ir Sam Tuck Wah
b.
Ms Soh Yoke Yan
Resolution 4
Resolution 5
5.
To re-appoint Dato’ Ir Lim Choo Boon, DPMP, JSM, PCM, KMN, PKT, AMN as Director of the Company
to hold office until the conclusion of the next Annual General Meeting (“AGM”) pursuant to
Section 129(6) of the Companies Act, 1965 (“the Act”).
Resolution 6
6.
To re-appoint Messrs Ernst & Young as Auditors of the Company and to authorise the Directors
to fix their remuneration.
Resolution 7
7.
As Special Business
To consider and, if thought fit, to pass the following Ordinary Resolutions:Ordinary Resolutions - Continuing in office as Independent Non-executive Directors
8.
a.
“That subject to the passing of the Ordinary Resolution No. 5, authority be and is hereby
given to Ms Soh Yoke Yan who has served as an Independent Non-executive Director
of the Company for a cumulative term of more than nine (9) years to continue to act as
Independent Non-executive Director of the Company.”
Resolution 8
b.
“That subject to the passing of the Ordinary Resolution No. 6, authority be and is hereby
given to Dato’ Ir Lim Choo Boon, DPMP, JSM, PCM, KMN, PKT, AMN who has served as an
Independent Non-executive Director of the Company for a cumulative term of more than
nine (9) years to continue to act as Independent Non-executive Director of the
Company.”
Resolution 9
To transact any other business appropriate to an AGM of which due notice shall have been
given in accordance with the Act and the Company’s Articles of Association.
By order of the Board
CHEAI WENG HOONG
CHAN MAY YOKE
Company Secretaries
Ipoh
30 April 2013
4
Annual Report 2012
Notice Of Annual General Meeting (cont’d)
NOTES:
a.
A member of the Company entitled to attend and vote at the Meeting is entitled to appoint a proxy to attend and vote in his/her stead. A proxy may but
need not be a member of the Company and a member may appoint any person to be his/her proxy without limitation and the provisions of Section 149(1)
(b) of the Companies Act, 1965 shall not apply to the Company. There shall be no restriction as to the qualification of the proxy. A proxy appointed to
attend and vote at a meeting of the Company shall have the same rights as the member to speak at the meeting.
b.
This instrument appointing a proxy shall be in writing under the hand of the appointor or of his/her attorney duly authorised in writing or, if the appointor is
a corporation, either under the corporation’s seal or under the hand of an officer or attorney duly authorised.
c.
This instrument appointing a proxy must be deposited at the Registered Office of the Company at D-3-7, Greentown Square, Jalan Dato’ Seri Ahmad Said,
30450 Ipoh, Perak Darul Ridzuan not less than forty eight (48) hours before the time appointed for holding the meeting or any adjournment thereof.
d.
Where a member of the Company is an Exempt Authorised Nominee which holds ordinary shares in the Company for multiple beneficial owners in one
securities account (“omnibus account”), there is no limit to the number of proxies which the Exempt Authorised Nominee may appoint in respect of each
omnibus account it holds.
e.
Only members whose names appear in the Record of Depositors as at 15 May 2013 will be entitled to attend and vote at the meeting.
f.
Statement Accompanying Notice of AGM
Resolutions 4 to 6
The profiles of the Directors standing for re-election/re-appointment are disclosed under Profile of Board of Directors on pages 8 to 10 of the Annual
Report and the details of their interest in the securities of the Company are disclosed under Analysis of Shareholdings on pages 155 and 156 of the Annual
Report.
Resolutions 8 and 9
The Board has assessed the independence of Dato’ Ir Lim Choo Boon, DPMP, JSM, PCM, KMN, PKT, AMN and Ms Soh Yoke Yan, who each served on the Board
as Independent Non-executive Directors of the Company for a cumulative term of more than nine (9) years, and concurred with the recommendation of the
Nomination and Remuneration Committee that the approval of the shareholders be sought to re-appoint Dato’ Ir Lim Choo Boon, DPMP, JSM, PCM, KMN, PKT, AMN and
Ms Soh Yoke Yan as Independent Non-executive Directors as both of them possess the following aptitudes necessary in discharging their roles and
functions as Independent Non-executive Directors of the Company:i.
They have fulfilled the criteria under the definition of an Independent Director as stated in the Main Market Listing Requirements of Bursa Malaysia
Securities Berhad;
ii.
They have ensured effective check and balance in the proceedings of the Board and Board Committee;
iii.
They have actively participated in Board deliberations, provided independent voice on the Board to ensure that objectivity in decision-making of
the Board is achieved and that no judgement can be compromised by, amongst others, familiarity or close relationship with other Board members;
iv.
They have exercised due care in the interest of the Company and shareholders during their tenure as independent directors of the Company; and
v.
They have attended all the meetings held and participation in and contributions to the activities of the Board.
NOTICE OF FIRST AND FINAL DIVIDEND PAYMENT AND CLOSURE OF REGISTER
Subject to the approval of the shareholders, a first and final single tier dividend of 3 sen per share will be paid on 15 August 2013.
Notice is hereby given that the Register of Members of the Company will be closed on 31 July 2013, to determine shareholders’
entitlement to the dividend payment.
A depositor will qualify for entitlement only in respect of:
a)
Share transferred into the Depositors’ Securities account before 4.00 p.m. on 31 July 2013 in respect of ordinary
transfers; and
b)
Share bought on Bursa Malaysia Securities Berhad on a cum entitlement basis according to the Rules of Bursa Malaysia
Securities Berhad.
Annual Report 2012
5
CORPORATE STRUCTURE
100% DKLS CONSTRUCTION SDN BHD
100% DKLS QUARRY & PREMIX SDN BHD
100% DKLS DEVELOPMENT SDN BHD
100% DKLS PRECAST SYSTEM SDN BHD
100% DKLS MANAGEMENT SDN BHD
40% JINBAOLONG (FUJIAN)
ELECTRONIC CO LTD
100% RATUS VISTA SDN BHD
40% FUJIAN ZHONGGUAN
CONSTRUCTION MATERIALS
CO LTD
100% SYABAS AWANSARI SDN BHD
100% DKLS PREMIERHOME SDN BHD
100% DKLS LAKEVIEW SDN BHD
30% UMW FABRITECH SDN BHD
100% DKLS EQUITY SDN BHD
80.2% DKLS AUST TRUST
80.2% SWENSTON PTE LTD
70% DKLS MARKETING SDN BHD
60% DKLS-PJI VENTURE CAPITAL SDN BHD
100%
ZHANGPU BAOHU
RUNNING WATER CO LTD
30%
YONG YU HYDRO
ELECTRIC DEVELOPMENT
COMPANY CO LTD
63%
SAVAN-DKLS WATER SUPPLY
CO LTD
60% GERBANG PRISMA SDN BHD
60% DKLS HOMEBUILDERS SDN BHD
51% DKLS ENERGY SDN BHD
49% ALTIDEX CONSTRUCTION SDN BHD
45% DKLS CLEARWATER SDN BHD
6
Annual Report 2012
PROFILE OF BOARD OF DIRECTORS
Dato’ Ding Pei Chai,
DPTJ, PMP
aged 57 and a Malaysian, is a founding member of DKLS Industries Berhad and was
appointed to the Board as an Executive Director of the Company on 12 August 1996. He
was the Managing Director of the Company since his appointment to the Board and was
redesignated as Non-executive Chairman of the Company on 18 April 2007. Dato’ Ding
serves as a member of the Audit Committee, Nomination and Remuneration Committee
and Investment Committee of the Company.
Dato’ Ding is a Civil Engineer graduated from Monash University (Australia) and has
more than 30 years of working experience. His engineering experience is fairly wideranging, having established excellent track record in a wide range of civil and structural
engineering projects, buildings, marine structures, road works, land and marine piling
works, and land reclamation works.
Dato’ Ding is currently the Executive Chairman of Isyoda Corporation Berhad, a public
limited company. He also sits on the Board of several other private limited companies.
Dato’ Ding, Mr Ding Poi Bor and Ms Ding Soo King are siblings whilst Ir Sam Tuck Wah
is his brother-in-law. He does not have any conflict of interest with the Company except
for those transactions disclosed in pages 129 to 132 of the Annual Report. Within the
past 10 years, he has no conviction for any offences.
Mr Ding Poi Bor
aged 58 and a Malaysian, is a founding member of DKLS Industries Berhad and was
appointed to the Board as an Executive Director of the Company on 12 November
1996. He was appointed as Deputy Managing Director of the Company on 1 March
2003 and redesignated as Managing Director on 18 April 2007. Mr Ding serves as the
Chairman of the Investment Committee of the Company. He also holds directorships
in the subsidiary companies within the DKLS Group and several other private limited
companies.
With over three decades of diversified exposure and experience in quarry and
construction, Mr Ding’s experiences include civil and structural engineering projects,
road works and buildings. He is also well versed in land and marine piling works and
marine structures. Specialised works related to runway construction is also his forte.
Overseas project negotiation also falls into his realm of responsibility.
Mr Ding, Dato’ Ding Pei Chai, DPTJ, PMP and Ms Ding Soo King are siblings whilst
Ir Sam Tuck Wah is his brother-in-law. He does not have any conflict of interest with the
Company except for those transactions disclosed in pages 129 to 132 of the Annual
Report. Within the past 10 years, he has no conviction for any offences.
Annual Report 2012
7
Profile Of Board Of Directors (cont’d)
Ir Sam Tuck Wah
aged 53 and a Malaysian, is a founding member of DKLS Industries Berhad and was appointed
to the Board as an Executive Director of the Company on 12 August 1996. Ir Sam serves as
a member of the Investment Committee of the Company. He also holds directorships in the
subsidiary companies within the DKLS Group and several other private limited companies.
Ir Sam graduated from the University of Southwestern Louisiana (United States of America)
with a Bachelor of Science in Civil Engineering. With over three decades of experience,
he has since established excellent track record in civil and structural engineering projects,
buildings, as well as land and marine piling works and marine structures. Road works and
land reclamation works are also his forte.
Ir Sam is the spouse of Ms Ding Soo King and the brother-in-law of Dato’ Ding Pei Chai, DPTJ,
PMP and Mr Ding Poi Bor. He does not have any conflict of interest with the Company except
for those transactions disclosed in pages 129 to 132 of the Annual Report. Within the past 10
years, he has no conviction for any offences.
Ms Ding Soo King
aged 51 and a Malaysian, was appointed to the Board as an Executive Director of DKLS
Industries Berhad on 6 December 2007. She also holds directorships in the subsidiary
companies within the DKLS Group.
Ms Ding graduated from the University of Southwestern Louisiana, (United States of
America) with a B. Sc. in Business Administration. She started her career as Finance Officer
and was promoted to Financial Controller of DKLS Group after the Company was listed in
Bursa Malaysia Securities Berhad. She acted as Corporate Advisor to DKLS Group prior
to her appointment to the Board.
Ms Ding has more than 30 years experience in Financial Management and has extensive
exposure in various industries ranging from Construction, Quarry Masters, Property
Development and International Trade.
Ms Ding is the spouse of Ir Sam Tuck Wah and the sister of Dato’ Ding Pei Chai, DPTJ, PMP
and Mr Ding Poi Bor. She does not have any conflict of interest with the Company except
for those transactions disclosed in pages 129 to 132 of the Annual Report. Within the past
10 years, she has no conviction for any offences.
8
Annual Report 2012
Dato’ Ir. Lim Choo Boon,
DPMP, JSM, PCM, KMN, PKT, AMN
aged 76 and a Malaysian, was appointed to the Board as an Independent Non-executive
Director of DKLS Industries Berhad on 8 August 1996. He was the Acting Chairman of the
Company from 24 February 2005 till 3 April 2007 when he vacated his office as Director
of the Company. Dato’ Ir Lim was re-appointed as Independent Non-executive Director of
the Company on 24 April 2007 and subsequently was appointed as Chairman of the Audit
Committee on 14 May 2007. Dato’ Ir Lim also serves as a Chairman of the Nomination and
Remuneration Committee and a member of the Investment Committee of the Company.
Dato’ Ir. Lim is a Civil Engineer graduated from University of Malaya. After graduation, he
started his career with the Public Works Department of the Federation of Malaya in 1960.
He served in various positions in the Department until his retirement in 1992, as the Deputy
Director-General (II) of the Public Works Department, Malaysia.
Dato’ Ir. Lim has an earned reputation with wide experience in both the private and public
sectors. He was an Executive Director of an engineering consultancy firm, SMHB Sdn Bhd,
from 1992 to 1997 and continued as a consultant to the firm after his retirement in 1997, until
October 2001. He also served as an Independent Non-executive Director and member of the
Audit Committee of Road Builder (M) Holdings Berhad from 1993 to 1997.
Dato’ Ir. Lim has no family relationship and is not related to any other director and/or substantial
shareholder of the Company. He does not have any conflict of interest with the Company.
Within the past 10 years, he has no conviction for any offences.
Dato’ Seri Haji Omar
bin Haji Ahmad
Director of DKLS Industries Berhad on 1 July 2007.
Dato’ Seri Haji Omar was attached to Jabatan Penjara Malaysia, Alor Setar, Kedah Darul
Aman from 1975 to 1985. He was a Director of Skoga Redimix Sdn Bhd from 1985 to 2004,
the last position held being the Executive Chairman of the company.
Dato’ Seri Haji Omar has no family relationship and is not related to any other director and/
or substantial shareholder of the Company. He does not have any conflict of interest with the
Company. Within the past 10 years, he has no conviction for any offences.
Annual Report 2012
9
Ms Soh Yoke Yan
Director of DKLS Industries Berhad on 24 December 2001. She serves as an independent
member of the Audit Committee of the Company. She is also a member of the Nomination
and Remuneration Committee and the Investment Committee of the Company.
Ms Soh is a holder of Chartered Institute of Management Accountant (CIMA, UK) and
Diploma in Management Accounting with Tunku Abdul Rahman College. She is also a
member of Malaysian Institute of Accountants (CA, MAL) and Associate Member of Chartered
Management Accountant (ACMA, UK).
She has more than 15 years of corporate and commercial accounting experiences. She
joined Isyoda Corporation Berhad as a Financial Controller in 2003 prior to her appointment
as an Executive Director of Isyoda Corporation Berhad in 2006. She is an Independent Nonexecutive Director of KNM Group Berhad. She also sits on the Board of several other private
limited companies.
Ms Soh has no family relationship and is not related to any other director and/or substantial
shareholder of the Company. She does not have any conflict of interest with the Company.
Within the past 10 years, she has no conviction for any offences.
10
Annual Report 2012
GROUP FINANCIAL CHARTS
Revenue
(RM)
Year
2006
151,406,236
2007
190,858,188
2008
238,508,868
2009
276,188,585
190,742,121
2010
2011
183,865,430
213,813,034
2012
Profit Before Taxation (RM)
Profit After Taxation and Minority Interests (RM)
Year
Year
2006
2006
2007
4,358,965
2007
13,651,873
2008
2009
2010
2011
2012
43,711,939
15,711,880
2010
15,119,269
24,686,188
24,320,157
9,283,202
2011
19,246,798
2012
Year
20,304,164
Earnings Per Share (RM cents)
Year
178,588,944
2006
2007
190,500,298
2007
226,200,886
240,352,042
2009
2010
248,586,357
2010
265,982,684
282,838,602
2.37
15.44
2008
2009
2012
37,747,545
2009
23,356,296
2006
2011
14,316,456
2008
Shareholders' Fund (RM)
2008
2,194,233
40.72
16.95
10.01
2011
2012
20.76
21.90
Annual Report 2012
11
GROUP CORPORATE DIARY OF SIGNIFICANT EVENTS FOR YEAR 2012
27 February 2012
Announcement on the Fourth Quarterly Financial Report in respect of the unaudited consolidated
results for the financial year ended 31 December 2011 with RM24.699 million cumulative pre-tax
profit for the year.
20 April 2012
Announcement on the Proposed Acquisition of Tower 8, Avenue 5, The Horizon, Phase 2,
Bangsar South, Kuala Lumpur (“Property”) for a total consideration of RM93,800,000.
26 April 2012
Announcement on the Notice of the Sixteenth Annual General Meeting to be held on 21 May
2012.
Announcement on the first and final single tier dividend of 3.00 sen per share in respect of the
financial year ended 31 December 2011 with the ex-dividend date on 27 July 2012 and payment
date on 15 August 2012.
30 April 2012
Announcement on the acquisition of the entire equity interest of DKLS Equity Sdn Bhd (“DESB”),
resulted in DESB becoming a wholly-owned subsidiary of the Company.
4 May 2012
Announcement on the execution of Heads of Agreement between the Company and Selangor
State Development Corporation for the redevelopment of land in Petaling Jaya, Selangor.
21 May 2012
Announcement on the First Quarterly Financial Report in respect of the unaudited consolidated
results for the period ended 31 March 2012 with RM4.309 million pre-tax profit for the quarter.
Sixteenth Annual General Meeting of the Company held in Ipoh, Perak Darul Ridzuan with all
resolutions duly passed.
20 July 2012
DKLS Quarry & Premix Sdn Bhd, a wholly-owned subsidiary of the Company, passed the
re-certification audit by SIRIM QAS International Sdn Bhd for the certification of the MS ISO
9001:2008 Quality Management System for the “Provision of Quality Management System
Support Services for Production and Delivery of Ready Mixed Concrete”.
15 August 2012
Announcement on the Second Quarterly Financial Report in respect of the unaudited consolidated
results for the period ended 30 June 2012 with RM11.479 million cumulative pre-tax profit for the
six months.
Payment to shareholders of the Company on the first and final single tier dividend of 3.00 sen per
share in respect of the financial year ended 31 December 2011.
28 August 2012
DKLS Development Sdn Bhd, a wholly-owned subsidiary of the Company, passed the surveillance
audit by SIRIM QAS International Sdn Bhd for the certification of the MS ISO 9001:2008 Quality
Management System for the “Development of Residential and Commercial Properties”.
DKLS Construction Sdn Bhd, a wholly-owned subsidiary of the Company, passed the surveillance
audit by SIRIM QAS International Sdn Bhd for the certification of the MS ISO 9001:2008 Quality
Management System for the “Provision of Design and Build Projects, Construction and Project
Development, Structure and Civil Engineering Works”.
12
Annual Report 2012
Group Corporate Diary Of Significant Events For Year 2012 (cont’d)
4 October 2012
Announcement on the Notice of the Extraordinary General Meeting to be held on 22 October
2012 to seek the shareholders’ approval for the Proposed Acquisition of Property by DESB for a
total cash consideration of RM93,800,000.
19 October 2012
Letter of Agreement Signing Ceremony on DKLS-British Council-Cambridge Essay Competition
between the Company and British Council Malaysia.
22 October 2012
Extraordinary General Meeting of the Company held in Ipoh, Perak Darul Ridzuan with the
resolution duly passed.
12 November 2012
Announcement on the Third Quarterly Financial Report in respect of the unaudited consolidated
results for the period ended 30 September 2012 with RM17.258 million cumulative pre-tax profit
for the nine months.
Annual Report 2012
13
CHAIRMAN’S STATEMENT
Dear Shareholders,
On behalf of the Board of Directors of DKLS Industries Berhad, it is my pleasure to
present the Seventeenth Annual Report and Audited Financial Statements for the
financial year ended 31 December 2012.
DKLS-BRITISH COUNCIL-CAMBRIDGE Driving English
Language Excellence Agreement Signing Ceremony at
Ipoh DKLS Corporate Office- 19th October 2012
Exchange of Document for DKLS-BRITISH COUNCILCAMBRIDGE Driving English Language Excellence
Agreement at Ipoh DKLS Corporate Office- 19th
October 2012
FINANCIAL PERFORMANCE
For the financial year under review, the Group registered a revenue of RM213.813 million from its operations. Such level of
performance indicated 16% higher than the revenue of RM183.865 million in the preceding financial year.
The increase in revenue was attributed to higher sales of residential properties and manufactured products and higher
revenue recognized from construction contracts.
Despite the higher turnover, the Group recorded a slightly lower profit after tax of RM16.237 million as compared to RM17.544
million in the preceding financial year. The lower profit after tax was mainly attributed to the share of loss of associates of
RM5.431 million (2011 : RM2.262 million) and fair value loss of RM1.819 million (2011 : fair value gain of RM2.095 million)
adjusted on investment properties. If these were to be excluded, the Group would have shown a higher profit after tax of
RM23.487 million as compared to RM17.711 million in the preceding financial year. The increase in profit after tax was a result
of higher profit recognized upon the completion of certain construction projects.
Generally, the Group’s overall profit margin has improved as compared to the preceding financial year. The basic earnings per
share for the financial year amounted to 21.90 sen as compared to 20.76 sen in the preceding financial year.
14
Annual Report 2012
Chairman’s Statement (cont’d)
OVERVIEW
The Malaysian economy remained moderately resilient against numerous
external negative sentiments. Overall, the multiplier effects arising from
various infrastructural development activities under Economic Transformation
Programme (ETP) helped to sustain domestic growth and consumer
confidence to a larger extent albeit confined to Greater Kuala Lumpur Region
(Greater KLR) and a few known states. The potential business opportunities
expected of ETP related infrastructure projects did not offer a good chance
for the Group to participate as envisaged due to factors beyond our control.
On the property development sector, the Group’s revised strategy in directing
resources towards residential property development to counter-balance a
dip in construction activities has proven to be favourable. To-date, most
residential property development projects have reached an advance stage
of completion. Capitalising on strong customer support, maximum effort
would be made to pursue this sector aggressively whilst keeping vigilant on
other potential business opportunities. With prudent management, the Group
managed to achieve an encouraging level of financial performance.
SAVAN-DKLS Water Supply Co., Ltd. Business
Operation Office in SAVANNAKHET, LAOS.
FUTURE PROSPECTS
On the global perspective, the economic trend appears to be heading towards
a high degree of uncertainty. This is reflected by the stressful effects arising
from Eurozone debt crisis, the protracted economic recovery in the United
States and China’s economic growth adjustments. There are few visible
positive signs that the advanced economies of the world will be out of the
doldrums in the short term. The global economic dynamics will invariably
pose new challenges to the economic performance of Malaysia as its
sources of national revenue derived from its export performance would likely
be affected. However, the Government has taken some strategic countermeasures to cushion-off the external negative impacts by accelerating the
implementations of various Economic Transformation Projects aimed at
sustaining a viable level of domestic growth and consumer confidence. It is
envisaged that the economic counter-measures taken by the Government
will be able to neutralise against the negative external impacts. Against
such backdrop, the Group will internalise the challenges ahead and make
appropriate preparations to respond to the business realities.
Apart from the above efforts, internal effective risk management measures
will continue to be practised. Creativity and innovation will be focused for
cost-effective and capacity maximisation in enabling the Group to become
more resilient in the industry. We are cautiously optimistic of maintaining
the business momentum for the immediate future. The Group’s good track
records in the civil engineering and construction business, driven by our
philosophy of prudence and sound talent management combined with strong
balance sheet to cope with the emerging market dynamics, will continually
enable the Group to sustain its reputation for reliability, innovation, cost
effectiveness and resilience for future growth.
Sample House & Gate Entrance Victoria
Cottage @ Residen Perdana Residential
Project
Annual Report 2012
15
Chairman’s Statement (cont’d)
Construction Works of Victoria Cottage
@ Residen Perdana Residential Project in Progress
Residential Project in Venice of Perak Fasa 3B
- in Advance Stage of Completion
DIVIDEND
In respect of the current financial year, the Board is pleased to recommend a first and final single tier dividend of 3.00 sen
per share for the approval of the shareholders at the forthcoming Annual General Meeting. The total dividend payment to the
shareholders for the financial year 2012 will involve RM2,780,988.
APPRECIATION
The Board and I would like to convey our appreciation to the DKLS Business Community comprising our valued clients,
bankers, suppliers and business partners for their support. The Board would especially like to commend the management and
staff who have shown resilience, dedication and undivided loyalty to the Group throughout the year.
Last but not least, the Board records its gratitude to the Securities Commission, Bursa Malaysia Securities Berhad, various
Government agencies and other regulatory authorities for their assistance, support and cooperation. To our shareholders, we
pledge our commitment of further enhancing shareholder value.
Chairman
Casuarina Hotel Ipoh Project- Construction in Progress
16
Annual Report 2012
STATEMENT OF CORPORATE GOVERNANCE
The Board of Directors strongly believes that good corporate governance forms an integral part of the Group’s corporate
culture and business decision making process for long term sustainable business growth and the creation and protection of
shareholders’ value.
The Company is well-placed to harmonise the corporate governance fundamentals with the principles and recommendations
expressed in the Malaysian Code on Corporate Governance 2012 (“MCCG 2012”), except where stated otherwise.
BOARD OF DIRECTORS
The Board and its Responsibilities
The Company’s Board Charter (“Charter”) set out the roles and responsibilities of the Board of Directors. The Board has the
overall responsibility for corporate governance, strategic direction, formulation of policies and overseeing the investment and
business of the Group. The Board assumes, amongst others, the following duties and responsibilities:
•
•
•
•
•
•
Adopt overall strategic direction and planning of the Group
Oversee and evaluate the conduct and management of the Group’s businesses
Review adequacy and integrity of the internal control system
Identify principal risks and ensure appropriate systems for risk management
Establish succession planning for senior management
Oversee the development and implementation of a shareholder communication policy
The charter is established to reflect the current best practices and the applicable rules and regulations. The Board is guided
by the Charter which provides reference for the directors in relation to their role, powers, duties and functions. The Charter
outlines the processes and procedures for the Board and its committees to be effective and efficient. The Board will periodically
review the Charter to ensure its relevance in assisting the Board in discharging its duties and to remain consistent with the
Board’s objectives and responsibilities.
Composition of the Board
The Board currently has seven (7) members, comprising three (3) executive and four (4) non-executive directors. The
non-executive directors include the Chairman of the Board who is non-independent. The remaining three (3) non-executive
directors are independent as defined in the Main Market Listing Requirements of Bursa Malaysia Securities Berhad (“Listing
Requirements”).
All directors of the Company have a wealth of experience as well as skills and knowledge of business and finance. With their
intimate knowledge of the Group’s businesses, the three (3) executive directors take on the primary responsibility for the
conduct of the Group’s businesses and operations. The executive directors, led by the managing director, have many years
of experience in the Group’s core businesses and they practise “hands-on” style of management.
The profiles of the directors are presented on pages 7 to 10 of the Annual Report.
Two (2) existing independent directors of the Company, Dato’ Ir Lim Choo Boon, DPMP, JSM, PCM, KMN, PKT, AMN and Ms Soh Yoke
Yan have served the Board for seventeen (17) and eleven (11) years respectively. The MCCG 2012 recommends that the
tenure of an independent director should not exceed a cumulative term of nine (9) years. However, the Nomination and
Remuneration Committee and the Board have carefully assessed and reviewed that status of Dato’ Ir Lim Choo Boon, DPMP,
JSM, PCM, KMN, PKT, AMN and Ms Soh Yoke Yan and are satisfied with their independence.
They are persons of high calibre and integrity and based on their immense knowledge, skills and expertise as well as
experience, the Board concluded that there are sufficient justifications, as stated below, for the Board to recommend that the
approval of the shareholders be sought to re-appoint Dato’ Ir Lim Choo Boon, DPMP, JSM, PCM, KMN, PKT, AMN and Ms Soh Yoke Yan
as independent directors of the Company.
Annual Report 2012
17
Statement Of Corporate Governance (cont’d)
a)
They have fulfilled the criteria under the definition of an Independent Director as stated in the Listing Requirements;
b)
They have ensured effective check and balance in the proceedings of the Board and Board Committee;
c)
They have actively participated in Board deliberations, provided independent voice on the Board to ensure that objectivity
in decision-making of the Board is achieved and that no judgement can be compromised by, amongst others, familiarity
or close relationship with other Board members;
d)
They have exercised due care in the interest of the Company and shareholders during their tenure as independent
directors of the Company; and
e)
They have attended all the meetings held and participation in and contributions to the activities of the Board.
There is clear division of responsibility between the non-executive non-independent Chairman and managing director to
ensure a proper balance of power and authority. The managing director has overall responsibilities over the operating units,
organisational effectiveness and implementation of Board’s policies and decisions. The Chairman’s responsibility is to ensure
effectiveness and proper conduct of the Board.
The MCCG 2012 recommends that the Board must comprise a majority of independent directors where the Chairman of the
Board is not an independent director. However, the Board has carefully assessed and reviewed the performance carried out
by the existing three (3) independent directors of the Company and concluded that they are able to discharge their duties and
responsibilities effectively to ensure that there is a balance of power and authority on the Board.
The presence of the three (3) independent directors fulfils a pivotal role in corporate accountability. Although all the directors
are jointly responsible for the Group’s strategic business direction, the role of these independent directors is particularly
important as they provide unbiased and independent views, advice and judgment taking into account the long term interests
of our stakeholders, namely the Company’s shareholders, employees, customers, business associates and the community
as a whole. In addition, the Board has identified a senior independent director to whom concerns relating to the Group may
be conveyed by the shareholders and other stakeholders.
Board Gender Diversity Policy
The Corporate Governance Blueprint 2011 launched by the Securities Commission envisioned women participation on
boards to reach 30% by 2016 and the progress towards this goal will be monitored and assessed in 2013.
The Board recognises the importance of gender diversity in the boardroom and considers that gender diversity contribute
positively to the performance of the Board which is vital to the sustainability of the Group’s businesses. Currently, the Board
has two (2) female directors out of a total of seven (7) directors, representing approximately 30% of women participation in
the boardroom. The Board will work towards maintaining this percentage.
The Nomination and Remuneration Committee is responsible for developing measurable objectives to facilitate the
achievement of at least 30% female representation at board level and to review the board gender diversity policy regularly.
18
Annual Report 2012
Code of Conduct
The Board is committed to creating a corporate culture within the Group to operate the businesses and affairs in an ethical
and professional manner and to uphold the highest standards of integrity and exemplary corporate conduct.
The Board has formalised a Code of Conduct (“Code”) to assist the directors and all personnel of the Group in defining the
ethical standards and conduct at work and beyond normal working hours which they should possess in discharging their
duties and responsibilities at the highest standards of personal integrity and professionalism.
The Code covers the following core areas of conduct:
•
•
•
•
•
•
•
•
•
Compliance with laws and regulations
No conflict of interests
Maintenance of confidential information
Safeguard insider information
Protection of properties, assets, business records and control
Business courtesies and gifts
Health and safety
Fair and courteous behaviour
Misconduct
Whistle Blowing Policy
In line with the commitment to maintaining the highest possible standards of ethical and legal conduct within the Group, and
in order to enhance good governance and transparency, the Board has developed a whistle blowing policy and procedure
with the aim to provide and facilitate a mechanism for any persons to report concerns related to any suspected and/or known
misconduct, wrongdoing, corruption, fraud, waste and/or abuse of which they become aware, and to ensure that the reporting
person can report allegation of such malpractice or misconduct in an appropriate manner and without fear of retaliation.
Confidentiality and anonymity are offered to the reporting persons who report their concerns in good faith and in doing
so, have to follow the appropriate channel of reporting accordingly. This will ensure that issues could be addressed to the
appropriate person and proper course of actions could be taken.
The policy and procedures also include the contact details of the Audit Committee Chairman, being the senior independent
director, should the reporting person be in doubt of the Management’s independence and objectivity on the concerns raised.
All reports will be investigated promptly and dealt with fairly and equitably. Actions will be taken based on the nature of the
allegation and may be resolved by agreed action. The Audit Committee Chairman may initiate the formation of an investigation
team, if deemed necessary.
Corporate Disclosure Policies and Procedures
The Board is committed to provide shareholders and other stakeholders with comprehensive, accurate and quality material
information on a timely and regular basis. Given the size of the Group and its business complexity, the Board is of the view
that internal corporate disclosure procedures are adequate to facilitate the handling and disclosure of material information in a
timely and accurate manner that ensures the Company’s compliance with the disclosure requirements as set out in the Listing
Requirements and other applicable laws.
Annual Report 2012
19
Board Meetings and Supply of Information
The Board meets at least four (4) times a year and additional meetings are convened as necessary. During the financial year,
four (4) meetings were held and majority of the directors have attended all the meetings held during their tenure in office. The
following are the details of the attendance of each director in respect of the meetings held:
Number of meetings attended
by Directors
Directors
3
Mr Ding Poi Bor
4
Ir Sam Tuck Wah
4
Ms Ding Soo King
4
4
4
Ms Soh Yoke Yan
4
The directors have full and unrestricted access to all information pertaining to the Group’s businesses and affairs to enable
them to discharge their duties. The agenda and a full set of papers for consideration are distributed in advance before each
meeting of the Board to ensure that directors have sufficient time to study them and be properly prepared for discussion and
decision-making.
In addition, there is a schedule of matters reserved specifically for the Board’s decision which includes the approval of
corporate plans and budgets, material acquisitions and disposals of assets, major capital projects, financial results, dividend
recommendations and board appointments. Minutes of Board meetings are maintained.
All directors have access to the advice and services of the company secretaries who are responsible for ensuring that Board
meeting procedures are followed and that applicable rules and regulations are complied with. The directors may obtain
independent professional advice in furtherance of their duties.
Appointment and Re-election of Directors
The Nomination and Remuneration Committee is empowered to nominate and recommend new appointments of directors to
the Board. In discharging this duty, the Committee will assess the suitability of the individual to be appointed to the Board by
taking into account the person’s knowledge, skills, expertise, experience, professionalism and integrity. The directors who are
appointed by the Board are subjected to re-election by the shareholders at the next Annual General Meeting (“AGM”) held
following their appointment.
In accordance with the Company’s Articles of Association, all directors shall retire from the office at least once in three (3)
years but shall be eligible for re-election at the AGM. Pursuant to Section 129(6) of the Companies Act, 1965, directors who
are over the age of 70 years are required to submit themselves for re-appointment annually at the AGM.
The directors seeking re-election and re-appointment at the forthcoming AGM are shown on the Notice of AGM on page 4 of
the Annual Report.
20
Annual Report 2012
Directors’ Training
All directors have attended and completed the Mandatory Accreditation Programme prescribed by Bursa Malaysia Securities
Berhad. The directors are regularly updated by the Company Secretaries on the new statutory as well as regulatory requirements
relating to their duties and responsibilities. The directors will continue to attend other relevant training programmes to keep
abreast with regulatory, business and financial developments on a continuous basis in compliance with paragraph 15.08 of
the Listing Requirements.
During the financial year, the directors have attended regular briefings and updates conducted internally on the new statutory
as well as regulatory requirements relating to their duties and responsibilities. In addition, the following directors have also
attended external training programmes to further broaden their perspective and knowledge and to keep abreast with the
relevant changes in law, regulations and the business environment:
Name
Seminars
Mr Ding Poi Bor
•
Governance, Risk Management and Compliance : What Directors Should Know
Ir Sam Tuck Wah
•
Continuing Professional Development Seminar, covering the following topics:
i.
Memorandum & Articles of Association : Handling Changes and Amendments
ii. Joint Venture Agreements
iii. Practices of Board and Company Meetings
Ms Ding Soo King
•
•
•
Licensed Secretaries Training Programme – Level 1 to 3
2013 Budget Seminar
Change Begins With Me
BOARD COMMITTEES
The Board has delegated certain responsibilities to the Board Committee which operate within defined terms of reference.
The Board Committees include the Audit Committee, the Nomination and Remuneration Committee and the Investment
Committee. The respective Committees report to the Board on the matters considered and their recommendation thereon.
The ultimate responsibility for the final decision on all matters, however, lies with the Board.
a)
Audit Committee (established in 1996)
The Audit Committee is established with the primary objective of assisting the Board in fulfilling its responsibilities
relating to accounting and reporting practices of the Company and its subsidiaries and to ensure an objective and
professional relationship is maintained with the external auditors. The Committee has full access to the auditors both
internally and externally who, in turn, have full access at all times to the Chairman of the Committee.
The Committee meets at least four (4) times a year. The members of the Committee and the attendance of each
member is furnished in the Audit Committee Report set out on page 34 of the Annual Report. Representatives of the
Company’s external auditors and internal auditors of the Group are normally invited to attend the meetings, as and when
required.
Annual Report 2012
21
b)
Nomination and Remuneration Committee (established in 2001)
The Nomination and Remuneration Committee is established with the primary objective of assisting the Board in
overseeing the selection and assessment of directors. In addition, the Committee is responsible for developing policies
on the remuneration packages of the executive directors. In case of non-executive directors, the level of remuneration
shall be the responsibility of the Board as a whole.
The Committee comprises three (3) non-executive directors, a majority of whom are independent, as follows:i.
ii.
iii.
Dato’ Ir Lim Choo Boon, DPMP, JSM, PCM, KMN, PKT, AMN (Chairman)
Ms Soh Yoke Yan
The Chairman of the Committee is the senior independent director of the Board. The Committee meets as and when
required. The Committee has met two (2) times during the financial year.
The Committee is responsible for proposing new nominees for appointment to the Board, and recommends to the Board
for approval on the appointment, re-appointment, re-election and annual assessment of directors.
The Committee will consider and recommend to the Board the qualified candidates who demonstrate integrity, reliability
and knowledge of corporate affairs; and the candidate’s professional experience and personal accomplishments. The
Committee will also consider the ability of the candidate to attend Board and committee meetings regularly and devote
sufficient time and effort to carry out their duties and responsibilities effectively, and be committed to serve on the
Board for an extended period of time. In the case of candidates for the position of independent directors, the Committee
also evaluate the candidates’ ability to discharge such duties and responsibilities as expected from independent
directors.
The Committee also conducts annual assessment of each individual director to ensure the effectiveness of the Board
as a whole and recommends for the re-appointment and re-election of Directors who are seeking for the re-appointment
and re-election at the AGM. In determining the independence of individual directors, the Committee conducts assessment
on the independent directors annually.
In terms of Board composition, the Committee will consider the diversity in business background, area of expertise,
skills, educational background, gender, and ethnicity as well as other factors that may provide the Board with a
range of informative viewpoints and perspectives. In determining whether to recommend a director for re-election or
re-appointment, the Committee will consider the director’s past attendance at meetings and participation in and
contributions to the activities of the Board.
Based on the recent annual review, the Committee was satisfied that the Board composed of directors with appropriate
mix of skill and experience to meet the Company’s requirements and the independent directors have fulfilled the criteria
as defined in the Listing Requirements.
The Committee reviews and assess annually the framework of executive remuneration and its cost and to determine on
behalf of the Board specific remuneration packages and conditions of employment for executive directors to ensure that
the Company attracts and retains those executives needed to run the Company successfully.
The Committee recommends to the Board the executive and non-executive directors’ remuneration packages of the
Company, and may draw from outside advice whenever necessary, to be structured so as to link rewards to corporate
and individual performance, reflecting the experience and level of responsibilities undertaken by the individual
concerned.
22
Annual Report 2012
The ultimate decisions of the determination of the level of remuneration shall be the responsibility of the Board as a
whole after considering the recommendations of the Committee. Directors, whether executive or non-executive, shall
not participate in decisions on their own remuneration packages.
Details of directors’ remuneration and benefits received/receivable from the Company and its subsidiaries for the
financial year ended 31 December 2012 are set out on page 84 of the Annual Report.
c)
Investment Committee (established in 2002)
The Investment Committee is established with the primarily responsible of assisting the Board in evaluating all new and
potential investments or projects of the Group, which arise out of the ordinary course of business, and assessing its
viability before recommending to the Board for approval.
The Committee comprises two (2) executive and three (3) non-executive directors (of which two (2) are independent) as
follows:
i.
ii.
iii.
iv.
v.
Mr Ding Poi Bor (Chairman)
Ir Sam Tuck Wah
Ms Soh Yoke Yan
The Committee meets as and when required.
INVESTOR RELATIONS AND SHAREHOLDERS COMMUNICATION
The Board acknowledges the need for shareholders to be informed of all material business matters affecting the Group. The
Board values the importance of having effective communication with its shareholders and other stakeholders. Information
disseminated need to be clear, relevant and comprehensive, which is timely and readily accessible by all stakeholders.
The Annual Report of the Company remains a key channel of communication with the Group’s shareholders and other
stakeholders. The contents of the Annual Report have enhanced the transparency level of the Group generally and meet the
Listing Requirements and other governing regulatory requirements. Effective communication through timely announcements
and release of financial results on a quarterly basis also provides the shareholders and the investing public with an overview
of the Group’s performance and operations.
The AGM which is held each year (not later than 30 June each year), provides a means of communication with shareholders.
Shareholders who are unable to attend are allowed to appoint proxies to attend and vote on their behalf. Members of the
Board as well as the auditors of the Company are present to answer questions raised at the meeting.
The Company also maintains a website at www.dkls.com.my which provides detailed information on the latest developments
of the Group. In order to promote wider dissemination of corporate and financial disclosures, information that is made public,
such as the Annual Report, the quarterly financial result announcement and other corporate information are made available on
the website. The Company has included in the website a dedicated section on information relating to corporate governance.
Corporate events are also made available on the website.
The Board has designated Dato’ Ir Lim Choo Boon, DPMP, JSM, PCM, KMN, PKT, AMN as the senior independent director to whom the
shareholders may address their concerns relating to the Group. At all times, shareholders may contact the Company through
the company secretaries for information.
Annual Report 2012
23
ACCOUNTABILITY AND AUDIT
i)
Financial Reporting
In its financial reporting to the shareholders and other interested parties by means of the annual financial statements
and quarterly results announcements, the Board aims to present a balanced and understandable assessment of the
Group’s financial position and prospects. The Board, assisted by the Audit Committee, oversees the financial reporting
processes and the quality of the financial reporting by the Group. The Audit Committee assists the Board by reviewing
the information to be disclosed, to ensure completeness, accuracy and adequacy prior to release to Bursa Securities.
The Statement of Directors’ Responsibility in relation to the preparation of the annual audited financial statements of the
Company and the Group is set out on page 37 of the Annual Report.
ii)
Internal Control
The Statement on Risk Management and Internal Control of the Group is set out on pages 30 to 33 of the Annual
Report.
iii)
Relationship with Auditors
The Audit Committee meets with the external auditors at least twice a year to review the scope and adequacy of the
audit process, the annual financial statements and their audit findings. The Audit Committee also meets additionally
with the external auditors whenever it deems necessary.
The Audit Committee reviews the services provided by the external auditors, include statutory audit and non-audit
services, and the proposed fees of the services thereon and thereafter recommends to the Board for approval. The nonaudit fees paid to the external auditors for the financial year ended 31 December 2012 amounted to RM37,367.
As part of the annual assessment, the Audit Committee will review and monitor the suitability and independence of the
external auditors.
The activities of the Audit Committee involving the external auditors is set out on pages 34 to 36 of the Annual Report.
ADDITIONAL COMPLIANCE INFORMATION
(i)
Options, warrants or convertibles securities
During the financial year, the Company has not issued any options, warrants or convertibles securities.
(ii)
Material contracts
The material contracts entered into by the Company and its subsidiaries involving directors and major shareholders
either subsisting at the end of the financial year or entered into since the end of the previous financial year are disclosed
in Note 40 to the financial statements under “Related Party Transactions” on pages 129 to 132 of the Annual Report.
(iii)
Recurrent related party transactions
During the financial year, the Company did not seek mandate from the shareholders for the Company and its subsidiaries
to enter into recurrent related party transactions of a revenue or trading nature as there are no recurrent related party
transactions which exceeded the materiality threshold stated in paragraph 10.09(1) of the Listing Requirements.
24
Annual Report 2012
CORPORATE SOCIAL RESPONSIBILITY STATEMENT
DKLS Industries Berhad as a Group (“the Group”) has established a sustainability framework which places a firm commitment
towards achieving a realistic balance between profitability and contributions in supporting Corporate Social Responsibility
(“CSR”) initiatives.
Commencing from 2009, the Group has established the Corporate Excellence Department (“CED”) to define, plan, implement
and monitor the performance of CSR initiatives. The ultimate goal is to organise various CSR initiatives in a more sustainable
and responsible manner.
Our CSR commitments encompass initiatives which will benefit the environment, nation, community, workplace and the
marketplace.
9 Environmental Dimension
- protection of ecosystems and promoting green living culture
Greening the environment in Victoria Cottage Residential Project during the event of appreciation evening on 8 September
2012 was an effective approach adopted by the Group in integrating green living culture in its business strategy:
•
Other initiatives include performing quarry operations in accordance with the environmental regulations and set in place
exemplary environmental friendly procedures, such as watering of internal roads to prevent dust pollution as well as
on-going quarry rehabilitation works, including replanting of trees and onsite man-made lake,
•
Explores ways to protect our flora and fauna in the development projects of the Group, and
•
Promotes a paperless environment and reduce the usage of papers via electronic communication and recycling paper
waste.
Annual Report 2012
25
Corporate Social Responsibility Statement (cont’d)
SCHOLARSHIP FOUNDATION
9 Nation Building Dimension
- promoting scholastic excellence
Transforming Life
SINCE 2001
CSR Programme Smart Partnership
DKLS-BRITISH COUNCIL-CAMBRIDGE aimed at
promoting English Language excellence in Malaysia
Group photo Best Academia &
All Rounder Winner Year 2012
The Group accords the highest priority to education excellence, which focuses on developing talents for the nation through
various CSR initiatives. Cash rewards with trophy for “Best Academia SPM & STPM and BEST All Rounder SPM & STPM”
were given to top performers selected from 18 secondary schools in Manjung District through DKLS Scholarship Foundation
(being the Group’s CSR platform).
Best Academia & All Rounder SPM &
STPM Winner Year 2012
26
Annual Report 2012
Contribution for Lumut SRJK (C) Eng Ling
Education Fund during Victoria Cottage
Residential Project Appreciation Evening
on 8 September 2012.
9 Community Dimension
- promoting better quality of life in the community
Participation of DKLS employees in blood donation drive Year 2012 jointly organised by General Hospital Manjung and
Sitiawan Wesley Church to beef up Manjung General Hospital blood bank during fasting month.
Badminton friendly match with Sitiawan Wesley Church team in conjunction with its 60th anniversary on 13 May 2012 was
one of the activities organised in promoting mental and physical wellbeing of DKLS staff.
Annual Report 2012
27
9 Workplace Dimension
- promoting life long learning in the workplace
Team building training Year 2012 for executives to enhance DKLS’s social capital and organisational effectiveness
•
We believe that employees’ total involvements are vital to the success of the Group. We strive to motivate, develop and
retain the best employees, and inspire them to excel and be productive at all times. Continuous business solution
learning session and team building in the form of seminars/workshops were provided to our staff and employees
throughout year 2012 to enable them to effectively discharge their duties.
•
Our staff and employees have also benefited from some programmes of management excellence scheduled and
conducted by CED. Through such programmes, the Group will be in the right direction and on a steady path of progression
towards achieving its Corporate Excellence Transformation Plan.
•
Our employees are the heart of the Group and the key to the competitive success in the global marketplace. As a policy,
we do not discriminate against any race, gender, age and minorities.
28
Annual Report 2012
C
S
R
9 Marketplace Dimension
- strengthening DKLS Business Community spirit in the market place
Market Place
Victoria Cottage @ Residen Perdana Residential Project Appreciation Evening 8 September 2012
•
The Group recognises the importance of building and maintaining positive relationships with the key stakeholders. We
believe our business should uphold high standard of behaviour and integrity. We ensure management and staff
continuously uphold high standards of conduct in the performance of their duties and practise good business ethics.
•
We will find the most appropriate way to express our appreciation to reciprocate the support from DKLS Business
Community.
Annual Report 2012
29
STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL
The Board of Directors is pleased to provide the following Statement on Risk Management and Internal Control pursuant to
paragraph 15.26(b) of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad (“Listing Requirements”).
The Board is committed to fulfilling its responsibility of maintaining a sound risk management framework and internal control
system in the Group in accordance with the Malaysian Code on Corporate Governance 2012.
BOARD RESPONSIBILITY
The Board of Directors acknowledges the responsibilities of establishing and maintaining a good risk management framework
and internal control system. The risk management framework and internal control system, however, are designed to manage
the Group’s risks within an acceptable level, rather than eliminate the risk of failure to achieve the business objectives of the
Group. It can therefore only provide reasonable and not absolute assurance against material misstatement of management
and financial information or against financial losses and fraud.
The Board has established an on-going process for identifying, assessing, evaluating and managing principal risks of the
Group. The process has been in operation during the financial year under review and up to the date of approval of this
statement for inclusion in the annual report.
The role of Management includes:
•
Identifying, assessing and evaluating the risks faced, and the achievement of business objectives and strategies.
•
Establishing risk profiles for major business activities.
•
Formulating relevant policies and procedures to manage these risks.
•
Designing, implementing, and monitoring a sound system of internal control.
•
Implementing the policies approved by the Board.
•
Reporting in a timely manner to the Board any changes to the risks and corrective actions taken.
For purpose of preparing this statement, associated companies are not dealt with as part of the Group.
The Board’s Statement on Risk Management and Internal Control, which is set out below, outlines the nature and state of risk
management framework and internal control of the Group during the financial year.
RISK MANAGEMENT FRAMEWORK
Following the Risk Management Framework, the management (with the participation of the key personnel) has established
risk profiles for major business activities. The risk profiles have identified the principal risks and established the controls to
mitigate these risks to safeguard shareholders’ investment and the Group’s assets. The principal risks and control measures
are described below:
Operational Risk
Operational risk is the risk of loss resulting from inadequate or failed internal processes, people and systems.
To mitigate and manage operational risks, the management has integrated risk management into the day-to-day activities
across all functions. Risk management includes the establishment of planning and control systems and guidelines, information
technology control systems, and operational reporting and monitoring procedures. The operational risk management system
is regularly monitored and examined to ensure effectiveness.
30
Annual Report 2012
Statement On Risk Management And Internal Control (cont’d)
All risk management frameworks are designed to ensure that the appropriate processes and procedures are in place to
prevent, manage and mitigate any operational risk.
Investment Risk
Investment risk is the risk of loss arising from inappropriate investments.
The main sources of growth of the Group are the acquisition of land bank and investment properties. The risks involved in
such investment activities are managed via thorough analysis on yield accretion, rental sustainability and growth potential
before investing in properties. Subsequent to acquisition, the management manage the risks through continuous monitoring
the state of the property market and determine actions (such as to dispose or hold, continue or postpone development of
these properties based on the current and expected future trend of property market) need to be taken to manage and mitigate
risks as early as possible.
Interest Rate Risk
Interest rate risk is the risk of loss arising from changes in market interest rates.
The Group’s exposure to changes in interest rates relates primarily to interest bearing loans and borrowings. Interest rate risk
is managed on an on-going basis with the primary objective of limiting the extent to which interest expense could be affected
by adverse movements in interest rates. To reduce the Group’s exposure, the management’s closely review the direction of
interest rate and the magnitude of interest rate changes. As at 31 December 2012, the Group’s total loans and borrowings
was RM58.359 million. There is no immediate refinancing risk as the tranches of the Group’s term loan have tenures ranging
from four to eight years.
Credit Risk
Credit risk is the risk of loss that may arise should a counterparty default on its obligations.
The Group’s exposure to credit risk arises primarily from trade receivables. To mitigate the credit risk, the Group transacts only
with recognised, creditworthy and appropriate credit history third parties. The Group also has maintained strict control over
its outstanding receivables and has a credit control department to monitor outstanding and overdue balances on an on-going
basis to ensure that credit risk is minimised.
Liquidity Risk
Liquidity risk is the risk that the Group will encounter difficulty in meeting financial obligations due to shortage of funds.
The Group’s exposure to liquidity risk arises primarily from mismatches of the maturities of financial assets and liabilities. To
mitigate this risk, the management actively monitor the Group’s cash flow position and maintain sufficient level of cash and
adequate amounts of credit facilities to meet its financial obligations.
Currency Risk
Foreign currency risk is the risk of loss arising from changes in foreign exchange rates.
The Group has transactional currency exposures arising from contact revenue and costs that are denominated in foreign
currency. The Group is also exposed to currency risk arising from its cash and cash equivalents denominated in foreign
currencies for working capital purposes and net investments in foreign operations, including People’s Republic of China, Lao
People’s Democratic Republic, Australia and Singapore. The Group’s net investments in foreign operations are not hedged
as the currency positions involved are considered to be long-term in nature.
Annual Report 2012
31
Market Risk
Market risk is the risk of loss arising from movements in market variables, such as equity prices, other than interest and
exchange rates.
The Group is exposed to equity price risk arising from its investment in quoted trust funds, classified as available-for-sale
investments. To mitigate the market risk, the Group only invests in trust funds which maintain an investment portfolio in fixed
deposits and bonds funds with steady dividend yield.
INTERNAL AUDIT FUNCTION
The Group has outsourced the internal audit function to a professional services firm. The Board appointed the professional
services firm to carry out internal audits on various operating units within the Group based on risk-based audit plan approved
by the Audit Committee.
The internal audit team, reporting to the Audit Committee, regularly reviews the effectiveness, adequacy and the integrity of
the Group’s internal control system. The Audit Committee shall review the audit report and assess the performance, scope of
work and resources of the internal audit department. The Board, through the Audit Committee, has conducted regular reviews
of the system of internal control of the Group.
All of the internal control weaknesses identified during the year have been or are being addressed. None of these weaknesses
will result in material losses, contingencies or uncertainties that would require disclosure in the Group’s Annual Report.
OTHER KEY ELEMENTS OF INTERNAL CONTROL
The other key elements of the internal control system are presented below.
•
Regular Board meetings ensure the Board maintaining full control and supervision over major issues.
•
Existence of various Board Committees assists to discharge the Board’s stewardship more efficiently and effectively.
The Board Committees include Audit Committee, Nomination and Remuneration Committee and Investment
Committee.
•
Existence of a clearly-defined organisation structure and job description of the staff.
•
Policies and procedures for most operations/activities of the Group have been awarded the ISO Quality Management
System.
•
Existence of Group’s internal financial control procedures to deal with all financial and related matters.
•
Project budgets, in respect of the construction and property development works, are prepared by the assigned personnel.
Variances against the budgets are monitored and management action taken where necessary.
•
Corporate values, which emphasise behaviour, quality products and services, are set out in the Group’s Employee
Handbook.
•
The executive directors meet quarterly on an informal basis with divisional and departmental heads to consider the
Group’s financial performance, business development, management and corporate issues.
•
An independent review by the internal audit team on the internal control system.
32
Annual Report 2012
Based on the above-mentioned key elements of internal control, the Board opined, with the concurrence of the Audit
Committee, that there are adequate internal controls in place within the Group addressing financial, operational and
compliance risks.
ASSURANCE FROM MANAGEMENT
The Board has also received reasonable assurance from the Managing Director and Finance Director that the Group’s risk
management and internal control system are operating adequately and effectively, in all material respects, based on the risk
management model adopted by the Group.
REVIEW OF THE STATEMENT BY EXTERNAL AUDITORS
The External Auditors have reviewed this Statement on Risk Management and Internal Control pursuant to paragraph 15.23
of the Listing Requirements and have reported to the Board that it appropriately reflects the processes that the Board has
adopted in reviewing the adequacy and integrity of the system of internal control.
Annual Report 2012
33
AUDIT COMMITTEE REPORT
COMPOSITION AND ATTENDANCE OF MEETINGS
Number of
meetings
attended
Number of
meetings held
in the year
Dato’ Ir Lim Choo Boon, DPMP, JSM, PCM, KMN, PKT, AMN (Chairman)
Senior Independent Non-executive Director
4
4
Dato’ Ding Pei Chai, DPTJ, PMP (Member)
Chairman/Non-independent Non-executive Director
3
4
Ms Soh Yoke Yan (Member)
Independent Non-executive Director
4
4
KEY FUNCTIONS, ROLES AND RESPONSIBILITIES
The Audit Committee shall:
i)
Provide assistance to the Board in fulfilling its fiduciary responsibilities relating to the corporate accounting and reporting
practices of the Company and the Group.
ii)
Maintain, through regularly scheduled meetings, a direct line of communication between the Board and the External
Auditors as well as Internal Auditors.
iii)
Act upon the Board’s request to investigate and report on any issue or concerns in regard to management of the
Company and the Group.
iv)
Obtain independent professional or other advice, whenever necessary and reasonable for the performance of its
duties.
v)
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.
vi)
Prepare an Audit Committee Report for the consideration of the Board at the end of each financial year for inclusion in
the Annual Report of the Company.
vii)
Report to Bursa Malaysia Securities Berhad (“Bursa Securities”) where the Audit Committee is of the view that a matter
reported by it to the Board has not been satisfactorily resolved resulting in a breach of the Main Market Listing
Requirements of Bursa Securities.
viii)
Establish policies and procedures to assess the suitability and independence of the External Auditors taking into account
the provision of non-audit services will not impair their independence and to obtain written assurance from the External
Auditors that the conduct of audit engagement is in accordance with the terms of all relevant professional and regulatory
requirements.
ix)
Carry out the responsibilities as required under Whistle Blowing Policy and Procedures upon receiving reports on
misconduct, wrongdoing, corruption, fraud, waste and/or abuse.
34
Annual Report 2012
Audit Committee Report (cont’d)
The Audit Committee shall review, appraise and report to the Board on:
i)
The effectiveness of accounting, financial reporting, risk management and internal control system within the Company
and the Group.
ii)
The propriety of the accounting policies and practices adopted by management and accepted by the External Auditors,
where alternatives are also acceptable.
iii)
The scope of the External Auditors’ audit plan, their evaluation of the system of internal controls and the audit reports on
the financial statements and the assistance given by the Company’s officers to the External Auditors.
iv)
The quarterly results and year end financial statements before submission to the Board for approval, focusing particularly
on:•
Changes in or implementation of major accounting policy changes;
•
Significant and unusual events; and
•
Compliance with accounting standards and other legal requirements.
v)
The adequacy of the scope, functions, competency and resources of the Internal Audit Function and that it has the
necessary authority to carry out its work.
vi)
The internal audit programme, processes, the results of the internal audit programme, process or investigation undertaken
and whether or not appropriate action is taken on the recommendations of the Internal Audit Function.
vii)
The scope of the Internal Auditors’ plan, their evaluation of the system of internal control and the internal audit reports.
viii)
Any related party transactions and conflict of interest situations that may arise within the Company and the Group,
including any transaction, procedure or course of conduct that raises questions of management integrity.
ix)
The nomination, appointment and re-appointment of the External Auditors and their remuneration, and any matters
arising from their resignation or dismissal.
x)
The appointment and termination of the Internal Auditors and any matters arising from their resignation or dismissal.
SUMMARY OF ACTIVITIES
The activities of the Audit Committee during the financial year ended 31 December 2012 include the review of following:
a)
The Group’s quarterly financial results and the recommendation of the same to the Board for approval and the
announcement to Bursa Securities and Securities Commission;
b)
The audit strategy and plan with the External Auditors prior to the commencement of annual audit as well as the audit
fees proposed by the External Auditors and the recommendation to the Board the audit fees of the External Auditors for
approval;
c)
The Group’s audited financial statements and the audit report on the financial statements as presented by the External
Auditors and the recommendation of the same to the Board for approval;
d)
The related party transactions entered into by the Company and its subsidiary companies;
e)
The risk management policy and procedures and the recommendation of the same to the Board for approval;
Annual Report 2012
35
Audit Committee Report (cont’d)
f)
The risk assessment status report of the Group and the recommendation of the same to the Board for approval;
g)
The role and scope of the Internal Audit Function on the adequacy and effectiveness of the risk management and control
framework within the operations of the Group; and
h)
The internal audit reports presented by the Internal Auditors on findings and recommendations with respect to system
and controls weaknesses and ensure implementation of corrective actions.
INTERNAL AUDIT FUNCTION
The Internal Audit Function has been established to assist the Audit Committee in discharging its duties and responsibilities.
The role of the Internal Auditors is to provide the Audit Committee with independent and objective reports on the state of
internal control and compliance to policies and procedures. The Internal Auditors also reviewed the risk assessment, risk
evaluation and control activities implemented by the management to manage such identified risk.
Since 2005, the Company has outsourced the Internal Audit Function to Messrs KPMG Management & Risk Consulting Sdn
Bhd (formerly known as KPMG Business Advisory Sdn Bhd), a professional services firm. The appointment of the professional
services firm is to carry out independent internal audit services on various operating units within the Group based on riskbased audit plan approved by the Audit Committee.
The cost incurred for the internal audit function for the financial year ended 31 December 2012 amounted to RM30,000.
36
Annual Report 2012
STATEMENT OF DIRECTORS’ RESPONSIBILITY
IN RELATION TO THE FINANCIAL STATEMENTS
This statement is prepared as required by the Main Market Listing Requirements of Bursa Malaysia Securities Berhad.
The Directors are required to prepare financial statements which give a true and fair view of the state of affairs of the Group
and of the Company as at the end of each financial year and of their results and cash flows for that year then ended.
The Directors consider that in preparing the financial statements :•
the Group and the Company have used appropriate accounting policies and are consistently applied;
•
reasonable and prudent judgments and estimates were made; and
•
all applicable approved accounting standards in Malaysia have been followed.
The Directors are responsible for ensuring that the Group and the Company maintain accounting records that disclose with
reasonable accuracy the financial position of the Group and of the Company, and which enable them to ensure that the
financial statements comply with the Companies Act, 1965.
The Directors have general responsibilities for taking such steps that are reasonably available to them to safeguard the assets
of the Group, and to prevent and detect fraud and other irregularities.
Annual Report 2012
37
DIRECTORS REPORT
The directors have pleasure in presenting their report together with the audited financial statements of the Group and of the
Company for the financial year ended 31 December 2012.
PRINCIPAL ACTIVITIES
The principal activities of the Company are investment holding and provision of management services.
The principal activities of the subsidiaries are described in Note 17 to the financial statements.
There have been no significant changes in the nature of the principal activities during the financial year.
RESULTS
Profit for the year
Attributable to:
Owners of the Company
Non-controlling interests
Group
RM
Company
RM
16,236,616
16,924,566
20,304,164
(4,067,548)
16,236,616
16,924,566
16,924,566
There were no material transfers to or from reserves or provisions during the financial year.
In the opinion of the directors, the results of the operations of the Group and of the Company during the financial year were
not substantially affected by any item, transaction or event of a material and unusual nature.
DIVIDEND
The amount of dividend paid by the Company since 31 December 2011 was as follows:
RM
In respect of the financial year ended 31 December 2011 as reported in the directors’ report of that year:
First and final single tier dividend of 3 sen per share on 92,699,600 ordinary
shares, approved on 21 May 2012 and paid on 15 August 2012
2,780,988
At the forthcoming Annual General Meeting, a first and final single tier dividend in respect of the financial year ended 31
December 2012, of 3 sen per share on 92,699,600 ordinary shares, amounting to a total dividend payable of RM2,780,988
will be proposed for shareholders’ approval. The financial statements for the current financial year do not reflect this proposed
dividend. Such dividend, if approved by the shareholders, will be accounted for in equity as an appropriation of retained profits
in the financial year ending 31 December 2013.
38
Annual Report 2012
Directors Report (contd)
DIRECTORS
The names of the directors of the Company in office since the date of the last report and at the date of this report are:
Ding Poi Bor
Sam Tuck Wah
Soh Yoke Yan
Dato’ Ir. Lim Choo Boon, DPMP, JSM, PCM, KMN, PKT, AMN
Ding Soo King
DIRECTORS’ BENEFITS
Neither at the end of the financial year, nor at any time during that year, did there subsist any arrangement to which the
Company was a party, whereby the directors might acquire benefits by means of acquisition of shares in or debentures of the
Company or any other body corporate.
Since the end of the previous financial year, no director has received or become entitled to receive a benefit (other than
benefits included in the aggregate amount of emoluments received or due and receivable by the directors or the fixed salary
of a full-time employee of the Company as shown in Note 8 to the financial statements) by reason of a contract made by the
Company or a related corporation with any director or with a firm of which he is a member, or with a company in which he has
a substantial financial interest, except as disclosed in Note 40 to the financial statements.
DIRECTORS’ INTERESTS
According to the register of directors’ shareholdings, the interests of directors in office at the end of the financial year in shares
in the Company and its related corporations during the financial year were as follows:
Number of ordinary shares of RM1 each
1 January
31 December
2012
Bought
Sold
2012
The Company
Direct interest
Dato’ Ding Pei Chai, DPTJ, PMP*
Ding Poi Bor*
Sam Tuck Wah*
Ding Soo King*
12,361,163
28,614,362
11,828,571
1,518,000
3,150,000
854,663
3,327,841
1,518,000
11,828,571
854,663
-
(3,150,000)
-
12,361,163
28,614,362
11,828,571
2,372,663
Indirect interest
Dato’ Ding Pei Chai, DPTJ, PMP**
Sam Tuck Wah**
Ding Soo King**
-
3,327,841
2,372,663
11,828,571
Annual Report 2012
39
DIRECTORS’ INTERESTS (CONT’D)
*
By virtue of their interests in shares in the Company, Dato’ Ding Pei Chai, DPTJ, PMP, Ding Poi Bor, Sam Tuck Wah and Ding Soo King are also deemed
interested in shares in all of the Company’s subsidiaries to the extent the Company has an interest.
**
Deemed interested through spouse.
Other than as stated above, none of the other directors in office at the end of the financial year had any interest in the shares
of the Company or its related corporations during the financial year.
OPTIONS GRANTED OVER UNISSUED SHARES
No options were granted to any person to take up unissued shares of the Company during the financial year.
OTHER STATUTORY INFORMATION
(a)
(b)
Before the statements of comprehensive income and statements of financial position of the Group and of the Company
were made out, the directors took reasonable steps:
(i)
to ascertain that proper action had been taken in relation to the writing off of bad debts and the making of provision
for doubtful debts and satisfied themselves that all known bad debts had been written off and that adequate
provision had been made for doubtful debts; and
(ii)
to ensure that any current assets which were unlikely to realise their value as shown in the accounting records in
the ordinary course of business had 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 which would render:
(i)
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; and
(ii)
the values attributed to the current assets in the financial statements of the Group and of the Company
misleading.
(c)
At the date of this report, the directors are not aware of any circumstances which have arisen which would render
adherence to the existing method of valuation of assets or liabilities of the Group and of the Company misleading or
inappropriate.
(d)
At the date of this report, the directors are not aware of any circumstances not otherwise dealt with in this report or
financial statements of the Group and of the Company which would render any amount stated in the financial statements
misleading.
(e)
As at the date of this report, there does not exist:
40
(i)
any charge on the assets of the Group or of the Company which has arisen since the end of the financial year
which secures the liabilities of any other person; or
(ii)
any contingent liability in respect of the Group or of the Company which has arisen since the end of the financial
year.
Annual Report 2012
OTHER STATUTORY INFORMATION (CONT’D)
(f)
In the opinion of the directors:
(i)
no contingent or other liability has become enforceable or is likely to become enforceable within the period of
twelve months after the end of the financial year which will or may affect the ability of the Group or of the Company
to meet their obligations when they fall due; and
(ii)
no item, transaction or event of a material and unusual nature has arisen in the interval between the end of the
financial year and the date of this report which is likely to affect substantially the results of the operations of the
Group or of the Company for the financial year in which this report is made.
SIGNIFICANT EVENTS
The significant events during the financial year are as disclosed in Note 45 to the financial statements.
SUBSEQUENT EVENTS
Details of subsequent events are as disclosed in Note 46 to the financial statements.
AUDITORS
The auditors, Ernst & Young, have expressed their willingness to continue in office.
Signed on behalf of the Board in accordance with a resolution of the directors dated 22 April 2013.
Ding Poi Bor
Sam Tuck Wah
Ipoh, Perak Darul Ridzuan, Malaysia
Annual Report 2012
41
STATEMENT BY DIRECTORS
Pursuant to Section 169(15) of the Companies Act 1965
We, Ding Poi Bor and Sam Tuck Wah, being two of the directors of DKLS Industries Berhad, do hereby state that, in the
opinion of the directors, the accompanying financial statements set out on pages 45 to 147 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 at 31 December 2012 and of their financial performance and cash flows for
the year then ended.
The information set out in Note 47 to the financial statements on page 148 have been prepared in accordance with the
Guidance on Special Matter No. 1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure
Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian Institute of Accountants.
Signed on behalf of the Board in accordance with a resolution of the directors dated 22 April 2013.
Ding Poi Bor
Sam Tuck Wah
STATUTORY DECLARATION
Pursuant to Section 169(16) of the Companies Act 1965
I, Francisca Lo Fui Khiun, being the officer primarily responsible for the financial management of DKLS Industries Berhad,
do solemnly and sincerely declare that the accompanying financial statements set out on pages 45 to 148 are, in my opinion
correct, and I make this solemn declaration conscientiously believing the same to be true and by virtue of the provisions of
the Statutory Declarations Act 1960.
Subscribed and solemnly declared by the
abovenamed Francisca Lo Fui Khiun at Ipoh
in the State of Perak Darul Ridzuan on
22 April 2013
)
)
)
)
Before me,
NASARUDDIN BIN AHMAD
NO. A181
Commissioner For Oaths
Ipoh, Perak Darul Ridzuan
Malaysia
42
Annual Report 2012
Francisca Lo Fui Khiun
AUDITORS REPORT
REPORT ON THE FINANCIAL STATEMENTS
We have audited the financial statements of DKLS Industries Berhad, which comprise the statements of financial position
as at 31 December 2012 of the Group and of the Company, and the statements of comprehensive income, statements of
changes in equity and statements of 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 45 to 147.
Directors’ responsibility for the financial statements
The directors of the Company are responsible for the preparation of financial statements that give a true and fair view in
accordance with Financial Reporting Standards and the Companies Act 1965 in Malaysia, and for such internal control as the
directors determine are necessary to enable the preparation of financial statements that are free from material misstatement,
whether due to fraud or error.
Auditors’ responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in
accordance with approved standards on auditing in Malaysia. Those standards require that we comply with ethical requirements
and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material
misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial
statements. The procedures selected depend on our judgement, including the assessment of risks of material misstatement
of the financial statements, whether due to fraud or error. In making those risk assessments, we consider internal 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 the accounting policies used and the reasonableness
of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the financial statements have been properly drawn up in accordance with Financial Reporting Standards
and the Companies Act 1965 in Malaysia so as to give a true and fair view of the financial position of the Group and of the
Company as at 31 December 2012 and of their financial performance and cash flows for the year then ended.
Annual Report 2012
43
Auditors Report (contd)
REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS
In accordance with the requirements of the Companies Act 1965 in Malaysia, we also report the following:
(a)
In our opinion, the accounting and other records and the registers required by the Act to be kept by the Company and
its subsidiaries of which we have acted as auditors have been properly kept in accordance with the provisions of the
Act.
(b)
We have considered the financial statements and the auditors’ reports of the subsidiaries of which we have not acted
as auditors, which are indicated in Note 17 to the financial statements, being financial statements that have been
included in the consolidated financial statements.
(c)
We are satisfied that the financial statements of the subsidiaries that have been consolidated with the financial statements
of the Company are in form and content appropriate and proper for the purposes of the preparation of the consolidated
financial statements and we have received satisfactory information and explanations required by us for those
purposes.
(d)
The auditors’ reports on the financial statements of the subsidiaries were not subject to any qualification and did not
include any comment required to be made under Section 174(3) of the Act.
OTHER MATTERS
The supplementary information set out in Note 47 on page 148 is disclosed to meet the requirement of Bursa Malaysia
Securities Berhad. The directors are responsible for the preparation of the supplementary information in accordance with
Guidance on Special Matter No. 1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure
Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian Institute of Accountants (“MIA
Guidance”) and the directive of Bursa Malaysia Securities Berhad. In our opinion, the supplementary information is prepared,
in all material respects, in accordance with the MIA Guidance and the directive of Bursa Malaysia Securities Berhad.
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.
Leong Chooi May
No. 1231/03/15 (J)
Chartered Accountant
Ernst & Young
AF: 0039
Chartered Accountants
Date: 22 April 2013
44
Annual Report 2012
STATEMENTS OF COMPREHENSIVE INCOME
For the financial year ended 31 December 2012
Group
2011
RM
2012
RM
2011
RM
213,813,034
4,199,398
183,865,430
7,583,326
36,963,336
1,806,863
9,243,012
4,381,613
(29,736,009)
(21,626,615)
(46,352,967)
(12,837,387)
-
-
5
(49,279,096)
(31,846,410)
-
-
6
(2,597,984)
(30,994,848)
(29,381,348)
(10,328,768)
(2,884,534)
(8,441)
(26,634,891)
(26,144,144)
(10,251,518)
(2,809,188)
(2,237,853)
(154,294)
(2,606,066)
(169,192)
(34,086)
(9,220,959)
31,928,185
(2,177,147)
(5,430,881)
24,320,157
(8,083,541)
16,236,616
14,001
(6,605,851)
27,971,960
(1,023,699)
(2,262,073)
24,686,188
(7,141,763)
17,544,425
14,001
(1,650,580)
(8,047,839)
(1,010,536)
25,683,098
(121,802)
25,561,296
(8,636,730)
16,924,566
14,001
(118,199)
(928,064)
9,817,105
(64,678)
9,752,427
(1,876,434)
7,875,993
Note
Revenue
Other income
Construction contract costs
recognised as contract expenses
Purchase of materials for sale
Cost of sales in respect of
property development
Changes in work-in-progress
and finished goods
Raw materials and consumables used
Other expenses
Employee benefits expense
Depreciation
(Provision for)/write back of
impairment losses on:
- property, plant and equipment
- investments in subsidiaries
- unquoted investments
Administrative expenses
Operating profit
Interest expense
Share of loss of associates
Profit before taxation
Income tax expense
Profit for the year, net of tax
Company
2012
RM
3
4
7
8
13
9
10
11
Annual Report 2012
45
Statements Of Comprehensive Income (contd)
Group
2012
RM
2012
RM
2011
RM
(213,184)
347,254
-
-
50,780
(10,556)
-
-
90,374
(276)
-
-
336,422
-
-
16,164,586
17,880,847
16,924,566
7,875,993
20,304,164
(4,067,548)
16,236,616
19,246,798
(1,702,373)
17,544,425
16,924,566
16,924,566
7,875,993
7,875,993
20,261,482
(4,096,896)
16,164,586
19,482,068
(1,601,221)
17,880,847
16,924,566
16,924,566
7,875,993
7,875,993
Note
Other comprehensive income, net of tax
Foreign currency translation
Gain/(Loss) on fair value changes
on available-for-sale investments
Share of other comprehensive
income of associates
Other comprehensive
income for the year, net of tax
(72,030)
Total comprehensive
income for the year
Profit attributable to:
Total comprehensive
income attributable to:
Company
2011
RM
Earnings per share
attributable to owners
of the Company (sen):
Basic/Diluted, for profit for the year
12
21.90
20.76
The accompanying accounting policies and explanatory notes form an integral part of the financial statements.
46
Annual Report 2012
STATEMENTS OF FINANCIAL POSITION
As at 31 December 2012
Group
Company
2012
RM
2011
RM
2012
RM
2011
RM
13
14
15
16
17
18
19
20
21
22
34
56,843,996
44,156,828
61,853,330
193,416
51,953,369
19,380
624,808
1,271,186
1,753,235
218,669,548
58,684,124
20,762,297
23,320,000
203,110
53,122,301
17,765
714,067
1,188,024
578,886
158,590,574
10,519,195
25,085,000
58,717,497
450,000
64,111,391
158,883,083
10,637,234
24,490,000
60,254,128
450,000
29,315,041
125,146,403
Property development costs
Inventories
Trade and other receivables
Other current assets
Available-for-sale investments
Tax recoverable
Cash and bank balances
14
24
22
25
20
49,515,101
34,604,783
77,980,752
6,957,744
9,148,470
1,181,626
51,664,802
231,053,278
15,372,565
10,020,646
86,049,681
6,255,012
5,063,680
1,921,893
77,171,276
201,854,753
30,932,921
69,045
1,167,921
4,035,233
36,205,120
17,669,915
8,582
940,778
37,765,246
56,384,521
Non-current assets classified as held-for-sale
27
6,568,615
237,621,893
201,854,753
36,205,120
56,384,521
456,291,441
360,445,327
195,088,203
181,530,924
Note
Assets
Non-current assets
Property, plant and equipment
Land held for property development
Investment properties
Land use rights
Investments in subsidiaries
Interests in associates
Other investments
Quarry extraction exclusive right
Trade receivable
Deferred tax assets
Current assets
Total assets
26
Annual Report 2012
47
Statements Of Financial Position (contd)
As at 31 December 2012
Group
Company
2012
RM
2011
RM
2012
RM
2011
RM
28
29
30
31
92,699,600
8,757,596
179,924,585
1,456,821
282,838,602
7,412,170
290,250,772
92,699,600
8,757,596
163,025,985
1,499,503
265,982,684
9,213,216
275,195,900
92,699,600
9,184,043
90,859,141
192,742,784
192,742,784
92,699,600
9,184,043
76,715,563
178,599,206
178,599,206
32
34
69,004,615
9,318,226
78,322,841
12,229,414
8,019,008
20,248,422
1,484,000
79,633
1,563,633
2,048,000
90,760
2,138,760
32
35
36
11,897,120
54,869,022
18,162,979
2,788,707
87,717,828
13,271,716
43,649,630
6,696,599
1,383,060
65,001,005
564,000
217,786
781,786
564,000
228,958
792,958
Total liabilities
166,040,669
85,249,427
2,345,419
2,931,718
Total equity and liabilities
456,291,441
360,445,327
195,088,203
181,530,924
Note
Equity and liabilities
Equity attributable to owners
of the Company
Share capital
Share premium
Retained profits
Reserves
Total equity
Non-current liabilities
Loans and borrowings
Deferred tax liabilities
Current liabilities
Trade and other payables
Other current liabilities
Tax payable
48
Annual Report 2012
At 31 December 2012
Transactions with owners:
Changes in equity interests in
a subsidiary
Dividend on ordinary shares
Total comprehensive income
Issuance of shares by subsidiary
to non-controlling interests
At 1 January 2012
Transaction with owners:
Dividend on ordinary shares
At 31 December 2011
Issuance of shares by subsidiaries
to non-controlling interests
At 1 January 2011
Group
37
37
Note
8,757,596
-
-
92,699,600
-
8,757,596
-
92,699,600
8,757,596
-
-
92,699,600
-
8,757,596
Share
premium
RM
-
92,699,600
Share
capital
RM
(150,019)
-
(92,630)
(57,389)
(57,389)
-
245,826
(303,215)
1,567,909
-
-
1,567,909
1,567,909
-
-
1,567,909
38,931
-
49,948
(11,017)
(11,017)
-
(10,556)
(461)
(624,576)
(2,780,988)
(3,405,564)
179,924,585
-
20,304,164
163,025,985
(2,085,741)
163,025,985
-
19,246,798
145,864,928
Attributable to owners of the Company
Non-distributable
Distributable
Foreign
currency
Asset
Fair value
translation revaluation adjustment
Retained
reserve
reserve
reserve
profits
RM
RM
RM
RM
(624,576)
(2,780,988)
(3,405,564)
282,838,602
-
20,261,482
265,982,684
(2,085,741)
265,982,684
-
19,482,068
248,586,357
Total
RM
714,576
714,576
7,412,170
1,581,274
(4,096,896)
9,213,216
9,213,216
1,120
(1,601,221)
10,813,317
Noncontrolling
interests
RM
90,000
(2,780,988)
(2,690,988)
290,250,772
1,581,274
16,164,586
275,195,900
(2,085,741)
275,195,900
1,120
17,880,847
259,399,674
Total
equity
RM
STATEMENTS OF CHANGES IN EQUITY
Annual Report 2012
49
Statements Of Changes In Equity (contd)
Note
Share
capital
RM
Nondistributable
Share
premium
RM
Distributable
Retained
profits
RM
Total
equity
RM
92,699,600
-
9,184,043
-
70,925,311
7,875,993
172,808,954
7,875,993
92,699,600
9,184,043
(2,085,741)
76,715,563
(2,085,741)
178,599,206
92,699,600
-
9,184,043
-
76,715,563
16,924,566
178,599,206
16,924,566
92,699,600
9,184,043
(2,780,988)
90,859,141
(2,780,988)
192,742,784
Company
At 1 January 2011
Dividend on ordinary shares,
representing total transaction
with owners
At 31 December 2011
At 1 January 2012
Dividend on ordinary shares,
representing total transaction
with owners
At 31 December 2012
37
37
50
Annual Report 2012
STATEMENTS OF CASH FLOWS
Group
2012
RM
Cash flows from operating activities
24,320,157
Adjustments for:
Amortisation of land use rights
4,443
Amortisation of quarry extraction exclusive right
89,259
Bad debts written off
462
Depreciation
4,121,013
Dividend income from:
- subsidiaries
- available-for-sale investments
(172,196)
Fair value adjustments of investment properties, net
1,819,111
Gain on dilution in equity interest in an associate
(11,157)
Gain on disposal of investment in a subsidiary (partial)
Gain on disposal of property, plant and
equipment, net
(43,354)
(Gain)/Loss on disposal of available-for-sale
investments
(68,507)
Interest expense
2,523,902
Interest income
(1,359,680)
Provision for/(write back of) impairment losses on:
34,086
- investment in subsidiaries
- trade and other receivables, net
133,218
Property, plant and equipment written off
56
5,430,881
Unrealised loss/(gain) on foreign exchange
1,252,537
(Write back of inventories written down)/
write-down of inventories
(113,930)
Operating profit/(loss) before changes in
working capital
37,960,301
Changes in working capital:
(27,706,041)
Inventories
(24,470,207)
Receivables
6,883,115
Short term borrowings
1,340,775
Payables
22,686,336
Cash flows from/(used in) operations
16,694,279
Interest paid
(321,293)
Interest received
597,868
Taxes paid
(7,319,705)
Net cash flows from/(used in) operating activities
9,651,149
Company
2011
RM
2012
RM
2011
RM
24,686,188
25,561,296
9,752,427
4,556
89,258
4,176,795
154,294
169,192
(83,861)
(2,095,061)
(394,910)
(35,500,000)
(595,000)
(3,951)
(8,000,000)
(2,170,866)
-
-
-
2,126
1,032,770
(2,273,376)
121,802
(1,081,332)
64,678
(2,055,035)
(14,001)
1,026,645
73,638
2,262,073
(330,142)
(14,001)
1,650,580
8,047,839
281,961
(14,001)
118,199
1,320
(46,663)
349,373
-
-
28,512,071
(1,376,512)
(2,180,749)
1,878,371
(754,352)
(22,020,720)
1,897,225
(5,043,192)
4,469,403
(237,912)
345,533
(8,239,540)
(3,662,516)
(60,463)
(3,720)
(1,440,695)
109,238
(1,331,457)
(5,551)
79,396
(2,106,904)
48,653
(2,058,251)
Annual Report 2012
51
Statements Of Cash Flows (contd)
Group
2012
RM
Cash flows from investing activities
Acquisition of subsidiary
Interest received
(Advances to)/Repayment from associates
Advance to subsidiaries
Net dividend received from:
- subsidiaries
Placement of deposit pledged
Proceeds from disposal of:
- investment in subsidiary (partial)
- investment property
Purchase of:
- investment properties
- additional shares in subsidiaries
- shares in associates
Net cash flows used in investing activities
Cash flows from financing activities
Dividend paid
Drawdown from term loan
Interest paid
Proceeds from issue of ordinary shares in
subsidiaries to non-controlling interests
Proceeds from issue of NCRPS in
a subsidiary to non-controlling interests
Repayment of term loan
Repayment of hire purchase liabilities
Net cash flows from/(used in) financing activities
Net decrease in cash and cash equivalents
Effects of exchange rate differences
Cash and cash equivalents at 1 January
Cash and cash equivalents at 31 December
Cash and cash equivalents comprise:
Deposits with licensed banks
Deposits with licensed financial institution
Bank overdrafts
Less: Deposit pledged for banking facilities
Company
2011
RM
2012
RM
678,649
(9,809,665)
(29,831,026)
1,850,122
1,145,432
(1,320,042)
(100,000)
246,670
250,000
(13,820,895)
-
(4,552)
1,252,588
1,145,432
(10,624,844)
-
172,052
(1,374,654)
83,861
(3,358)
26,625,000
(3,836)
6,000,000
(3,358)
43,154,501
1,231,388
90,000
230,000
3,006,215
1,923,913
-
(40,582,441)
(3,491,619)
(47,121,619)
(86,654,434)
(7,895,779)
(8,043,626)
(8,086,960)
(5,777,134)
(23,117,356)
(22,254)
(99,998)
(42,100,000)
(28,935,313)
(7,895,779)
(7,551,982)
(17,682,495)
(2,780,988)
56,723,420
(1,409,299)
(2,085,741)
2,753,000
(179,537)
(2,780,988)
(121,802)
(2,085,741)
2,753,000
(64,678)
-
1,120
90,000
-
-
Annual Report 2012
-
-
4,900,000
(564,000)
(995,850)
55,873,283
(141,000)
(2,792,413)
(2,444,571)
(564,000)
(3,466,790)
(141,000)
461,581
(21,130,002)
(1,575,809)
70,679,260
47,973,449
(29,224,443)
97,494
99,806,209
70,679,260
(33,733,560)
(289)
37,639,790
3,905,941
(19,279,165)
24,986
56,893,969
37,639,790
23,015,719
28,501,982
147,101
51,664,802
(2,191,243)
49,473,559
(1,500,110)
47,973,449
16,912,229
58,536,513
1,722,534
77,171,276
(6,366,560)
70,804,716
(125,456)
70,679,260
705,941
3,329,292
4,035,233
4,035,233
(129,292)
3,905,941
2,631,242
35,134,004
37,765,246
37,765,246
(125,456)
37,639,790
52
2011
RM
NOTES TO THE FINANCIAL STATEMENTS
31 December 2012
1.
CORPORATE INFORMATION
The principal activities of the Company are investment holding and provision of management services. The principal
activities of the subsidiaries are described in Note 17. There have been no significant changes in the nature of the
principal activities during the financial year.
The Company is a public limited liability company, incorporated and domiciled in Malaysia, and is listed on the Main
Market of Bursa Malaysia Securities Berhad. The registered office of the Company is located at D-3-7, Greentown
Square, Jalan Dato’ Seri Ahmad Said, 30450 Ipoh, Perak Darul Ridzuan. The principal place of business of the Company
is located at 16th Floor & Penthouse, Ipoh Tower, Jalan Dato’ Seri Ahmad Said, 30450 Ipoh, Perak Darul Ridzuan.
The financial statements were authorised for issue by the Board of Directors in accordance with a resolution of the
directors on
2.
SIGNIFICANT ACCOUNTING POLICIES
2.1
Basis of preparation
The financial statements of the Group and of the Company have been prepared in accordance with Financial
Reporting Standards (“FRS”) and the Companies Act 1965 in Malaysia. At the beginning of the current financial
year, the Company adopted new and revised FRS and IC interpretations which are mandatory for financial periods
beginning on or after the dates as described fully in Note 2.2.
The financial statements have been prepared on a historical cost basis except for investment properties, derivative
financial instruments and available-for-sale financial assets that have been measured at fair value.
The financial statements are presented in Ringgit Malaysia (“RM”).
2.2
Changes in accounting policies
The accounting policies adopted are consistent with those of the previous financial year except as follows:
On 1 January 2012, the Group and the Company adopted the following new and amended FRS and IC
Interpretations mandatory for annual financial periods beginning on or after the dates stated below:
Effective for
annual periods
beginning
on or after
FRS, Amendments to FRS and IC Interpretations
IC Interpretation 19 : Extinguishing Financial Liabilities with Equity Instruments
Amendments to IC Interpretation 14 : Prepayments of a Minimum Funding Requirement
Amendments to FRS 1 : Severe Hyperinflation and Removal of Fixed Dates for
First-time Adopters
Amendments to FRS 7 : Transfers of Financial Assets
Amendments to FRS 112 : Deferred Tax : Recovery of Underlying Assets
FRS 124 : Related Party Disclosures
1 July 2011
1 July 2011
1 January 2012
1 January 2012
1 January 2012
1 January 2012
Adoption of the above standards and interpretations did not have any effect on the financial performance or
position of the Group and of the Company except for those discussed below:
Annual Report 2012
53
Notes To The Financial Statements (contd)
31 December 2012
2.
SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
2.2
Changes in accounting policies (cont’d)
(a)
Amendments to FRS 7 : Transfers of Financial Assets
The amendments require additional disclosure about financial assets that have been transferred but not
derecognised to enable the user of the Group’s financial statements to understand the relationship with those
assets that have not been derecognised and their associated liabilities. In addition, the amendments requires
disclosures about continuing involvement in derecognised assets to enable the user to evaluate the nature
of, and risks associated with, the entity’s continuing involvement in those derecognised assets. The
amendment affects disclosure only and has no impact on the Group’s financial position or performance.
(b)
Amendments to FRS 112 : Deferred Tax : Recovery of Underlying Assets
The amendments clarified the determination of deferred tax on investment property measured at fair value
and introduces a rebuttable presumption that deferred tax on investment property measured using the fair
value model in FRS 140 should be determined on the basis that its carrying amount will be recovered
through sale. It includes the requirement that deferred tax on non-depreciable assets that are measured using
the revaluation model in FRS 116 should always be measured on a sale basis. The amendment is effective
for annual periods beginning on or after 1 January 2012 and has no effect on the Group ‘s financial position,
performance or its disclosure.
(c)
Revised FRS 124 : Related Party Disclosures
The revised FRS 124 clarifies the definition of a related party to simplify the identification of such relationships
and to eliminate inconsistencies in its application. The revised FRS 124 expands the definition of a related
party and would treat two entities as related to each other whenever a person (or a close member of that
person’s family) or a third party has control or joint control over the entity, or has significant influence over the
entity. The revised standard also introduces a partial exemption of disclosure requirements for governmentrelated entities. The amendment affects disclosure only and have no impact on the financial position or
financial performance of the Group and of the Company.
2.3
Standards issued but not yet effective
The Group and the Company have not adopted the following standards and interpretations that have been issued
but not yet effective:
FRS 101 : Presentation of Items of Other Comprehensive Income
(Amendments to FRS 101)
Amendments to FRS 101 : Presentation of Financial Statements
(Improvements to FRSs (2012))
FRS 10 : Consolidated Financial Statements
FRS 11 : Joint Arrangements
FRS 12 : Disclosure of Interests in Other Entities
FRS 13 : Fair Value Measurement
54
Annual Report 2012
Effective for
annual periods
beginning
on or after
1 July 2012
1 January 2013
1 January 2013
1 January 2013
1 January 2013
1 January 2013
31 December 2012
2.
2.3
Standards issued but not yet effective (cont’d)
Effective for
annual periods
beginning
on or after
FRS 119 : Employee Benefits
FRS 127 : Separate Financial Statements
FRS 128 : Investments in Associates and Joint Ventures
Amendments to IC Interpretation 2 : Members’ Shares in Co-operative Entities and
Similar Instruments (Improvements to FRSs (2012))
IC Interpretation 20 : Stripping Costs in the Production Phase of a Surface Mine
Amendments to FRS 7 : Disclosures - Offsetting Financial Assets and Financial Liabilities
Amendments to FRS 1 : First-time Adoption of Financial Reporting Standards
- Government Loans
Amendments to FRS 1 : First-time Adoption of Financial Reporting Standards
Amendments to FRS 116 : Property, Plant and Equipment (Improvements to FRSs (2012))
Amendments to FRS 132 : Financial Instruments : Presentation
Amendments to FRS 134 : Interim Financial Reporting (Improvements to FRSs (2012))
Amendments to FRS 10 : Consolidated Financial Statements : Transition Guidance
Amendments to FRS 11 : Joint Arrangements : Transition Guidance
Amendments to FRS 12 : Disclosures of Interests in Other Entities : Transition Guidance
Amendments to FRS 132 : Offsetting Financial Assets and Financial Liabilities
Amendments to FRS 10, FRS 12 and FRS 127 : Investment Entities
FRS 9 : Financial Instruments
1 January 2013
1 January 2013
1 January 2013
1 January 2013
1 January 2013
1 January 2013
1 January 2013
1 January 2013
1 January 2013
1 January 2013
1 January 2013
1 January 2013
1 January 2013
1 January 2013
1 January 2014
1 January 2014
1 January 2015
The directors expect that the adoption of the above FRS and IC Interpretations will have no material impact on the
financial statements of the Group and of the Company in the period of initial application, except as discussed
below:
(a)
Amendments to FRS 101 : Presentation of Items of Other Comprehensive Income
The amendments to FRS 101 change the grouping of items presented in other comprehensive income
(“OCI”). Items that could be reclassified (or “recycled”) to profit or loss at a future point in time (for example,
exchange differences on translation of foreign operations and net loss or gain on available-for-sale financial
assets) would be presented separately from items which will never be reclassified (for example, actuarial
gains and losses on defined benefit plans and revaluation of land and buildings). The amendment affects
presentation only and has no impact on the Group’s and the Company’s financial position or performance.
Annual Report 2012
55
31 December 2012
2.
2.3
(b)
FRS 10 : Consolidated Financial Statements
FRS 10 replaces part of FRS 127 Consolidated and Separate Financial Statements that deals with
consolidated financial statements and IC Interpretation 112 Consolidation – Special Purpose Entities.
Under FRS 10, an investor controls an investee when (a) the investor has power over an investee, (b) the
investor has exposure, or rights, to variable returns from its investment with the investee, and (c) the investor
has ability to use its power over the investee to affect the amount of the investor’s returns. Under FRS 127
Consolidated and Separate Financial Statements, control was defined as the power to govern the financial
and operating policies of an entity so as to obtain benefits from its activities.
FRS 10 includes detailed guidance to explain when an investor that owns less than 50 per cent of the voting
shares in an investee has control over the investee. FRS 10 requires the investor to take into account
all relevant facts and circumstances, particularly the size of the investor’s holding of voting rights relative to
the size and dispersion of holdings of the other vote holders.
The application of FRS 10 is expected to affect the accounting for the Group’s equity interest in DKLS
Clearwater Sdn Bhd (“DCSB”), which was previously treated as an associate of the Group and accounted
for using the equity method of accounting, as discussed below:
The directors consider that the Group has control of DCSB even though it has less than 50% of the voting
rights as the Group is actively involved in the management of financial and operating policies of DCSB. The
directors assessed that the Group has had control over DCSB since acquisition in October 2009. Therefore,
in accordance with the requirements of FRS 10, DCSB will be treated as a subsidiary of the Company since
October 2009.
The change in accounting policy affecting of the Group’s investment in DCSB will be applied in accordance
with the relevant transitional provision as set out in FRS 10 as if the acquisition of DCSB had been accounted
for in accordance with FRS 3 : Business Combinations at the date of acquisition.
The above change in accounting policy is expected to affect the amounts reported in the Group’s consolidated
financial statements as follows:
56
Annual Report 2012
31 December 2012
2.
2.3
(b)
FRS 10 : Consolidated Financial Statements (cont’d)
Increase/(Decrease)
As at
As at
31 December
1 January
2012
2012
Statements of financial position
Inventories
Trade and other receivables
Other current assets
Tax recoverable
Foreign currency translation reserve
8,293,145
(948,120)
398,893
(1,933,851)
21,130
200
4,675,778
8,405,433
2,101,742
7,855,661
(288,539)
2,009
(2,906,573)
35,643
139
2,751,732
7,096,187
(552)
353,333
Statements of comprehensive income
Revenue
Other income
Raw materials and consumables used
Other expenses
Employee benefits expenses
Depreciation
Administrative expenses
Income tax expense
Other comprehensive income for the year, net of tax
5,322,304
(273,709)
277,429
919,519
694,174
671,004
396,222
558,050
227,369
Annual Report 2012
43,377
351,694
8,670
38,898
53,480
132,283
61
889
57
31 December 2012
2.
2.3
(c)
FRS 11 : Joint Arrangements
FRS 11 replaces FRS 131 Interests in Joint Ventures and IC Interpretation 113 Jointly - Controlled Entities –
Non-monetary Contributions by Venturers.
The classification of joint arrangements under FRS 11 is determined based on the rights and obligations of
the parties to the joint arrangements by considering the structure, the legal form, the contractual terms agreed
by the parties to the arrangements and when relevant, other facts and circumstances. Under FRS 11, joint
arrangements are classified as either joint operations or joint ventures.
A joint operation is a joint arrangement whereby the parties that have joint control of the arrangement have
rights to the assets, and obligations for the liabilities, relating to the arrangement. A joint venture is
a joint arrangement whereby the parties that have joint control of the arrangement have rights to the net
assets of the arrangement.
FRS 11 removes the option to account for jointly controlled entities (“JCE”) using proportionate consolidation.
Instead, JCE that meet the definition of a joint venture must be accounted for using the equity method.
Based on the preliminary analysis performed, FRS 11 is not expected to have any impact on the currently
held investments of the Group.
(d)
FRS 12 : Disclosures of Interest in Other Entities
FRS 12 includes all disclosure requirements for interests in subsidiaries, joint arrangements, associates and
structured entities. A number of new disclosures are required. This standard affects disclosures only and has
no impact on the Group’s and the Company’s financial position or performance.
(e)
FRS 13 : Fair Value Measurement
FRS 13 establishes a single source of guidance under FRS for all fair value measurements. FRS 13 does
not change when an entity is required to use fair value, but rather provides guidance on how to measure fair
value under FRS when fair value is required or permitted. The Group is currently assessing the impact that
this standard will have on the financial position and performance, but based on preliminary analysis, no
material impact is expected.
(f)
FRS 127 : Separate Financial Statements
As a consequence of the new FRS 10 and FRS 12, FRS 127 is limited to accounting for subsidiaries, jointly
controlled entities and associates in separate financial statements.
(g)
FRS 128 : Investments in Associates and Joint Ventures
As a consequence of the new FRS 11 and FRS 12, FRS 128 is renamed as FRS 128 Investments in
Associates and Joint Ventures. This new standard describes the application of the equity method to
investments in joint ventures in addition to associates.
58
Annual Report 2012
31 December 2012
2.
2.3
(h)
Amendments to FRS 7 : Disclosures - Offsetting Financial Assets and Financial Liabilities
These amendments require an entity to disclose information about rights to set-off and related arrangements
(for example, collateral agreements). The disclosures would provide users with information that is useful
in evaluating the effect of netting arrangements on an entity’s financial position. The new disclosures
are required for all recognised financial instruments that are set off in accordance with FRS 132 Financial
Instruments : Presentation. The disclosures also apply to recognised financial instruments that are subject to
an enforceable master netting arrangement or similar agreement, irrespective of whether they are set off in
accordance with FRS 132. These amendments will not impact the Group’s and the Company’s financial
position or performance.
(i)
Amendments to FRS 132 : Offsetting Financial Assets and Financial Liabilities
These amendments clarify the meaning of “currently has a legally enforceable right to set-off”. The
amendments also clarify the application of the FRS 132 offsetting criteria to settlement systems (such as
central clearing house systems) which apply gross settlement mechanisms that are not simultaneous. These
amendments are not expected to impact the Group’s and the Company’s financial position or performance.
(j)
FRS 9 : Financial Instruments : Classification and Measurement
FRS 9 reflects the first phase of the work on the replacement of FRS 139 : Financial Instruments :
Recognition and Measurement and applies to classification and measurement of financial assets and
financial liabilities as defined in FRS 139 : Financial Instruments : Recognition and Measurement. The
adoption of the first phase of FRS 9 will have an effect on the classification and measurement of the Group’s
and the Company’s financial assets. The Group and the Company’s will quantify the effect in conjunction
with the other phases, when the final standard including all phases is issued.
Malaysian Financial Reporting Standards
On 19 November 2011, the Malaysian Accounting Standards Board (“MASB”) issued a new MASB approved
accounting framework, the Malaysian Financial Reporting Standards (“MFRS”) Framework.
The MFRS Framework is to be applied by all Entities Other Than Private Entities for annual periods beginning on
or after 1 January 2012, with the exception of entities that are within the scope of MFRS 141 Agriculture (“MFRS
141”) and IC Interpretation 15 Agreements for Construction of Real Estate (“IC 15”), including its parent,
significant investor and venturer (herein called “Transitioning Entities”).
Transitioning Entities will be allowed to defer adoption of the new MFRS Framework. Consequently, adoption of
the MFRS Framework by Transitioning Entities will be mandatory for annual periods beginning on or after
1 January 2014.
The Company and its subsidiary, DKLS Development Sdn Bhd, fall within the scope definition of Transitioning
Entities and have opted to defer adoption of the new MFRS Framework. Accordingly, the Group and the Company
will be required to prepare financial statements using the MFRS Framework in their first MFRS financial statements
for the year ending 31 December 2014. In presenting their first MFRS financial statements, the Group and the
Company will be required to restate the comparative financial statements to amounts reflecting the application
of MFRS Framework. The majority of the adjustments required on transition will be made, restrospectively, against
opening retained profits.
Annual Report 2012
59
31 December 2012
2.
2.3
Malaysian Financial Reporting Standards (cont’d)
The Group and the Company have commenced transitioning their accounting policies and financial reporting from
the current Financial Reporting Standards to the MFRS Framework by establishing a project team to plan and
manage the adoption of the MFRS Framework.
At the date of these financial statements, the Group and the Company have not completed their assessment of
the financial effects of the differences between Financial Reporting Standards and accounting standards under the
MFRS Framework. Accordingly, the financial performance and financial position as disclosed in these financial
statements for the year ended 31 December 2012 could be different if prepared under the MFRS Framework.
The Group and the Company expect to be in a position to fully comply with the requirements of the MFRS
Framework for the financial year ending 31 December 2014.
2.4
Summary of significant accounting policies
(a)
Subsidiaries and basis of consolidation
(i)
Subsidiaries
Subsidiaries are entities over which the Group has the ability to control the financial and operating
policies so as to obtain benefits from their activities. The existence and effect of potential voting rights
that are currently exercisable or convertible are considered when assessing whether the Group has
such power over another entity.
In the Company’s separate financial statements, investments in subsidiaries are stated at cost less any
accumulated impairment losses. On disposal of such investments, the difference between net disposal
proceeds and their carrying amounts is included in profit or loss.
(ii)
Basis of consolidation
The consolidated financial statements comprise the financial statements of the Company and its
subsidiaries as at the reporting date. The financial statements of the subsidiaries used in the preparation
of the consolidated financial statements are prepared for the same reporting date as the Company.
Consistent accounting policies are applied to like transactions and events in similar circumstances.
All intra-group balances, income and expenses and unrealised gains and losses resulting from intragroup transactions are eliminated in full.
Acquisitions of subsidiaries are accounted for by applying the purchase method except for two of
the Group’s subsidiaries as disclosed in Note 17 which were accounted for using the merger method in
accordance with Malaysian Accounting Standard 2-Accounting for Acquisitions and Mergers, which
was the generally accepted accounting principle prevailing at that time. Identifiable assets acquired
and liabilities assumed in a business combination are measured initially at their fair values at the
acquisition date. Acquisition-related costs are recognised as expenses in the periods in which the
costs are incurred and the services are received.
60
Annual Report 2012
31 December 2012
2.
2.4
Summary of significant accounting policies (cont’d)
(a)
Subsidiaries and basis of consolidation (cont’d)
(ii)
Basis of consolidation (cont’d)
If the business combination is achieved in stages, previously held equity interests in the acquiree are
remeasured to fair value at the acquisition date and any corresponding gain or loss is recognised in
profit or loss.
The Group elects for each individual business combination, whether non-controlling interest in the
acquiree (if any) is recognised on the acquisition date at fair value, or at the present ownership
instruments’ proportionate share of the acquiree’s net identifiable assets.
Any excess of the sum of the fair value of the consideration transferred in the business combination,
the amount of non-controlling interest in the acquiree (if any) and the fair value of the Group’s previously
held equity interest in the acquiree (if any), over the net fair value of the acquiree’s identifiable assets
and liabilities is recorded as goodwill in the statement of financial position.
In instances where the latter amount exceeds the former, the excess is recognised as a gain on
bargain purchase in profit or loss on the acquisition date.
Subsidiaries are consolidated from the date of acquisition, being the date on which the Group obtains
control and continue to be consolidated until the date that such control effectively ceases.
A change in the ownership interest of a subsidiary, without loss of control, is accounted for as an equity
transaction. If the Group loses control over a subsidiary, it:
-
derecognises the assets (including goodwill) and liabilities of the subsidiary;
derecognises the carrying amount of any non-controlling interest;
derecognises the cumulative translation differences recorded in equity;
recognises the fair value of the consideration received;
recognises the fair value of any investment retained;
recognises any surplus or deficit in the profit or loss; and
reclassifies the parent’s share of components previously recognised in other comprehensive income.
The accounting policies for goodwill are disclosed in Note 2.4(c).
(iii)
Transactions with non-controlling interests
Non-controlling interests represent the portion of profit or loss and net assets in subsidiaries not held
directly or indirectly by the Group. Non-controlling interests are presented separately in the statement
of comprehensive income of the Group and within equity in the statement of financial position of the
Group, separately from parent shareholder’s equity.
All total comprehensive income is proportionately allocated to non-controlling interests, even if this
results in the non-controlling interests having a deficit balance.
A change in the ownership interest of a subsidiary (without loss of control), is accounted for as
transaction with owners in their capacity as owners.
Annual Report 2012
61
31 December 2012
2.
2.4
(b)
Associates
An associate is an entity, not being a subsidiary or a joint venture, in which the Group has significant influence.
An associate is equity accounted for from the date the Group obtains significant influence until the date the
Group ceases to have significant influence over the associate.
The Group’s investments in associates are accounted for using the equity method. Under the equity method,
the investment in associates is measured in the statements of financial position as cost plus post-acquisition
changes in the Group’s share of net assets of the associates.
Goodwill relating to associates is included in the carrying amount of the investment.
Any excess of the Group’s share of the net fair value of the associate’s identifiable assets, liabilities and
contingent liabilities over the cost of the investment is excluded from the carrying amount of the investment
and is instead included as income in the determination of the Group’s share of the associate’s profit or loss
in the period in which the investment is acquired.
When the Group’s share of losses in an associate equals or exceeds its interest in the associate, including
any long-term interests that, in substance, form part of the Group’s net investment in the associate, the
Group does not recognise further losses, unless it has incurred obligations or made payments on behalf of
the associate.
After application of the equity method, the Group determines whether it is necessary to recognise any
additional impairment loss on the Group’s investment in its associates. The Group determines at each
reporting date whether there is any objective evidence that the investment in the associate is impaired. If
this is the case, the Group calculates the amount of impairment as the difference between the recoverable
amount of the associate and its carrying value and recognises the amount in profit or loss.
The financial statements of an associate is prepared as of the same reporting date as the Group. Where
necessary, adjustments are made to bring the accounting policies in line with those of the Group.
In the Company’s separate financial statements, investments in associates are stated at cost less accumulated
impairment losses.
On disposal of such investments, the difference between net disposal proceeds and their carrying amount is
included in profit or loss.
(c)
Goodwill
Goodwill is initially measured at cost, being the excess of the aggregate of the consideration transferred
and the amount of consideration for non-controlling interest over the net identifiable assets acquired and
liabilities assumed. Following initial recognition, goodwill is measured at cost less accumulated impairment
losses. Goodwill is reviewed for impairment annually, or more frequently, if events or changes in circumstances
indicate that the carrying value may be impaired.
For the purpose of impairment testing, goodwill acquired is allocated, from the acquisition date, to each of
the Group’s cash-generating units that are expected to benefit from the synergies of the combination.
62
Annual Report 2012
31 December 2012
2.
2.4
(c)
Goodwill (cont’d)
The cash-generating unit to which goodwill has been allocated is tested for impairment annually and
whenever there is an indication that the cash-generating unit may be impaired, by comparing the carrying
amount of the cash-generating unit, including the allocated goodwill with the recoverable amount of the cashgenerating unit. Where the recoverable amount of the cash-generating unit is less than the carrying amount,
an impairment loss is recognised in profit or loss. Impairment losses recognised for goodwill are not reversed
in subsequent periods.
Where goodwill forms part of a cash-generating unit and part of the operation within that cash-generating
unit is disposed of, the goodwill associated with the operation disposed of is included in the carrying amount
of the operation when determining the gain or loss on disposal of the operation. Goodwill disposed of in
this circumstance is measured based on the relative fair values of the operations disposed of and the portion
of the cash-generating unit retained.
(d)
Property, plant and equipment and depreciation
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, property, plant and equipment are measured at cost less accumulated depreciation
and accumulated impairment losses. When significant parts of property, plant and equipment are required
to be replaced in intervals, the Group recognises such parts as individual assets with specific useful lives
and depreciation, respectively. Likewise, when a major inspection is performed, its cost is recognised in
the carrying amount of the plant and equipment as a replacement if the recognition criteria are satisfied. All
other repair and maintenance costs are recognised in profit or loss as incurred.
Any revaluation surplus is recognised in other comprehensive income and accumulated in equity under the
asset revaluation reserve, except to the extent that it reverses a revaluation decrease of the same asset
previously recognised in profit or loss, in which case the increase is recognised in profit or loss. A revaluation
deficit is recognised in profit or loss, except to the extent that it offsets an existing surplus on the same asset
carried in the asset revaluation reserve.
Any accumulated depreciation as at the revaluation date is eliminated against the gross carrying amount of
the asset and the net amount is restated to the revalued amount of the asset. The revaluation surplus
included in the asset revaluation reserve in respect of an asset is transferred directly to retained profits on
retirement or disposal of the asset.
Freehold and leasehold quarry land are amortised over a 10 year period upon commencement of its quarrying
activities. Other freehold land has an unlimited useful life and therefore is not depreciated. Other long term
leasehold land are depreciated over the lease period. Capital work-in-progress is not depreciated until the
asset has been completed and is ready for commercial production. Cost of capital work-in-progress includes
purchase price, related borrowing cost and directly attributable cost.
Annual Report 2012
63
31 December 2012
2.
2.4
(d)
Property, plant and equipment and depreciation (cont’d)
Depreciation of other property, plant and equipment is provided for on a straight-line basis to write off the
cost of each asset to its residual value over its estimated useful life at the following annual rates:
Long term leasehold land
Buildings
Electrical installations and renovations
Furniture, fittings and office equipment
Motor vehicles
Pipes, plant and machinery
89 - 99 years
2% - 10%
10%
10% - 33%
10% - 20%
10% - 33%
The carrying values of property, plant and equipment are reviewed for impairment when events or changes
in circumstances indicate that the carrying value may not be recoverable.
The residual values, useful life and depreciation method are reviewed at each financial year-end, and
adjusted prospectively, if appropriate.
An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits
are expected from its use or disposal. Any gain or loss on derecognition of the asset is included in profit or
loss in the year that the asset is derecognised.
(e)
Investment properties are initially measured at cost, including transaction costs. Subsequent to initial
recognition, investment properties are measured at fair value which reflects market conditions at the reporting
date. Fair value is arrived at by reference to market evidence of transaction prices for similar properties
and is performed by registered independent valuers having an appropriate recognised professional
qualification and recent experience in the location and category of the properties being valued.
Gains or losses arising from changes in the fair values of investment properties are recognised in profit or
loss in the year in which they arise.
A property interest under an operating lease is classified and accounted for as an investment property on
a property-by-property basis when the Group holds it to earn rentals or for capital appreciation or both. Any
such property interest under an operating lease classified as an investment property is carried at fair value.
Investment properties are derecognised when either they have been disposed of or when the investment
property is permanently withdrawn from use and no future economic benefit is expected from its disposal.
Any gains or losses on the retirement or disposal of an investment property is recognised in profit or loss in
the year of retirement or disposal.
Transfers are made to or from investment property only when there is a change in use. For a transfer
from investment property to owner-occupied property, the deemed cost for subsequent accounting is the
fair value at the date of change in use. For a transfer from owner-occupied property to investment property,
the property is accounted for in accordance with the accounting policy for property, plant and equipment set
out in Note 2.4(d) up to the date of change in use.
64
Annual Report 2012
31 December 2012
2.
2.4
(f)
Land held for property development and property development costs
(i)
Land held for property development consists of land where no development activities have been
carried out or where development activities are not expected to be completed within the normal
operating cycle. Such land is classified within non-current assets and is stated at cost less any
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 normal operating cycle.
(ii)
Property development costs comprise 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, and 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 are recognised as an asset, which is
measured at the lower of cost and net realisable value.
The excess of revenue recognised in profit or loss over billings to purchasers is classified as accrued
billings within other current assets and the excess of billings to purchasers over revenue recognised in
profit or loss is classified as progress billings within other current liabilities.
Annual Report 2012
65
31 December 2012
2.
2.4
(g)
Construction contracts
Where the outcome of a construction contract can be reliably estimated, contract revenue and contract costs
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 work performed to
date to the estimated total contract costs.
Where the outcome of a construction contract cannot be reliably estimated, contract revenue is recognised
to the extent of contract costs incurred that it is probable will be recoverable. Contract costs are recognised
as expenses 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.
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.
When the total of costs incurred on construction contracts, plus recognised profits (less recognised losses),
exceeds progress billings, the balance is classified as amount due from customers on contracts. When
progress billings exceed costs incurred, plus recognised profits (less recognised losses), the balance is
classified as amount due to customers on contracts.
(h)
Inventories
Inventories are stated at lower of cost and net realisable value.
Cost is determined using the first in, first out method for raw materials and consumables. The cost of raw
materials and consumables comprise costs of purchase. The cost for work-in-progress and finished goods
are determined using the weighted average basis. The cost of work-in-progress includes all direct expenses
and attributable overheads incurred in the blasting and crushing of quarry rocks. The cost of finished goods
comprises costs of raw materials, direct labour, other direct costs and appropriate production overheads.
The cost of unsold properties comprises costs of land, construction and appropriate development
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.
66
Annual Report 2012
31 December 2012
2.
2.4
(i)
Leases
(i)
As lessee
Finance leases or hire purchase liabilities, which transfer to the Group substantially all the risks and
rewards incidental to ownership of the leased or hire purchase item, are capitalised at the inception
of the lease at the fair value of the leased or hire purchase asset or, if lower, at the present value of the
minimum lease payments. Any initial direct costs are also added to the amount capitalised. Lease or
hire purchase payments are apportioned between the finance charges and reduction of the lease or
hire purchase liability so as to achieve a constant rate of interest on the remaining balance of the
liability. Finance charges are charged to profit or loss. Contingent rents, if any, are charged as expenses
in the periods in which they are incurred.
Leased or hire purchase assets are depreciated over the estimated useful life of the asset. However, if
there is no reasonable certainty that the Group will obtain ownership by the end of the lease term, the
assets are depreciated over the shorter of the estimated useful life and the lease term.
(ii)
As lessor
Leases where the Group retains substantially all the risks and rewards of ownership of the asset are
classified as operating leases. Initial direct costs incurred in negotiating an operating lease are added
to the carrying amount of the leased asset and recognised over the lease term on the same bases as
rental income. The accounting policy for rental income is set out in Note 2.4(n)(ix).
(j)
Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which
are assets that necessarily take a substantial period of time to get ready for their intended use or sale,
are added to the cost of those assets, until such time as the assets are substantially ready for their intended
use or sale. 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.
All other borrowing costs are recognised in profit or loss in the period in which they are incurred.
(k)
Impairment of non-financial assets
The carrying amounts of non-financial assets, other than investment properties, construction contract assets,
property development costs, inventories and deferred tax assets, are reviewed at each reporting date to
determine whether there is any indication of impairment. If any such indication exists, the asset’s recoverable
amount is estimated to determine the amount of impairment loss.
For the purpose of impairment testing of these assets, recoverable amount is determined on an individual
asset basis unless the asset does not generate cash flows that are largely independent of those from other
assets. If this is the case, recoverable amount is determined for the cash-generating unit (“CGU”) to which
the asset belongs to. Goodwill acquired in a business combination is, from the acquisition date, allocated to
each of the Group’s CGUs, or groups of CGUs, that are expected to benefit from the synergies of the
combination, irrespective of whether other assets or liabilities of the Group are assigned to those units or
groups of units.
Annual Report 2012
67
31 December 2012
2.
2.4
(k)
Impairment of non-financial assets (cont’d)
An asset’s recoverable amount is the higher of an asset’s or CGU’s fair value less costs to sell and its
value in use. In assessing value in use, the estimated future cash flows are discounted to their present value
using a pre-tax discount rate that reflects current market assessments of the time value of money and the
risks specific to the asset. Where the carrying amount of an asset exceeds its recoverable amount, the asset
is considered impaired and is written down to its recoverable amount. Impairment losses recognised in
respect of a CGU or groups of CGUs are allocated first to reduce the carrying amount of any goodwill
allocated to those units or groups of units and then, to reduce the carrying amount of the other assets in the
unit or groups of units on a pro-rata basis.
Impairment losses are recognised in profit or loss except for assets that are previously revalued where the
revaluation was taken to other comprehensive income. In this case the impairment is also recognised in
other comprehensive income up to the amount of any previous revaluation. An assessment is made at each
reporting date as to whether there is any indication that previously recognised impairment losses may no
longer exist or may have decreased. A previously recognised impairment loss is reversed only if there
has been a change in the estimates used to determine the asset’s recoverable amount since the last
impairment loss was recognised. If that is the case, the carrying amount of the asset is increased to its
recoverable amount. That increase cannot exceed the carrying amount that would have been determined,
net of depreciation, had no impairment loss been recognised previously. Such reversal is recognised in profit
or loss unless the asset is measured at revalued amount, in which case the reversal is treated as a revaluation
increase. Impairment loss on goodwill is not reversed in a subsequent period.
(l)
Income tax
(i)
Current tax
Current tax assets and liabilities are measured at the amount expected to be recovered from or paid to
the taxation authorities. The tax rates and tax laws used to compute the amount are those that are
enacted or substantively enacted by the reporting date.
Current taxes are recognised in profit or loss except to the extent that the tax relates to items recognised
outside profit or loss, either in other comprehensive income or directly in equity.
(ii)
Deferred tax
Deferred tax is provided using the liability method on temporary differences at the reporting date
between the tax bases of assets and liabilities and their carrying amounts for financial reporting
purposes.
Deferred tax liabilities are recognised for all temporary differences, except:
68
-
where the deferred tax liability arises from the initial recognition of goodwill or of an asset or liability
in a transaction that is not a business combination and, at the time of the transaction, affects
neither the accounting profit nor taxable profit or loss; and
-
in respect of taxable temporary differences associated with investments in subsidiaries, associates
and interests in joint ventures, where the timing of the reversal of the temporary differences can
be controlled and it is probable that the temporary differences will not reverse in the foreseeable
future.
Annual Report 2012
31 December 2012
2.
2.4
(l)
Income tax (cont’d)
(ii)
Deferred tax (cont’d)
Deferred tax assets are recognised for all deductible temporary differences, carry forward of unused
tax credits and unused tax losses, to the extent that it is probable that taxable profit will be available
against which the deductible temporary differences, and the carry forward of unused tax credits and
unused tax losses can be utilised except:
-
where the deferred tax asset relating to the deductible temporary difference arises from the initial
recognition of an asset or liability in a transaction that is not a business combination and, at the
time of the transaction, affects neither the accounting profit nor taxable profit or loss; and
-
in respect of deductible temporary differences associated with investments in subsidiaries,
associates and interests in joint ventures, deferred tax assets are recognised only to the extent
that it is probable that the temporary differences will reverse in the foreseeable future and taxable
profit will be available against which the temporary differences can be utilised.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the
extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the
deferred tax asset to be utilised. Unrecognised deferred tax assets are reassessed at each reporting
date and are recognised to the extent that it has become probable that future taxable profit will allow
the deferred tax assets to be utilised.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the year
when the asset is realised or the liability is settled, based on tax rates and tax laws that have been
enacted or substantively enacted at the reporting date.
Deferred tax relating to items recognised outside profit or loss is recognised outside profit or loss.
Deferred tax items are recognised in correlation to the underlying transaction either in other
comprehensive income or directly in equity.
Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set off
current tax assets against current tax liabilities and the deferred taxes relate to the same taxable entity
and same taxation authority.
(m) Employee benefits
(i)
Short term benefits
Wages, salaries, bonuses and social security contributions are recognised as an expense in the year
in which the associated services are rendered by employees. Short term non-accumulating compensated
absences such as sick leave are recognised when the absences occur.
Annual Report 2012
69
31 December 2012
2.
2.4
(m) Employee benefits (cont’d)
(ii)
Defined contribution plans
Defined contribution plans are post-employment benefit plans under which the Group and the
Company pay fixed contributions into separate entities or funds and will have no legal or constructive
obligation to pay further contributions if any of the funds do not hold sufficient assets to pay all employee
benefits relating to employee services in the current and preceding financial years. Such contributions
are recognised as an expense in the profit or loss as incurred. As required by law, companies in
Malaysia make such contributions to the Employees Provident Fund (“EPF”). Some of the Group’s
foreign subsidiaries also make contributions to their respective country’s statutory pension schemes.
(n)
Revenue recognition
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and
the Company and the revenue can be reliably measured. Revenue is measured at the fair value of
consideration received or receivable.
(i)
Sales of development properties
Revenue from sale of development properties net of discounts is accounted for by the stage of
completion method as described in Note 2.4(f)(ii).
(ii)
Revenue from construction contracts is accounted for by the stage of completion method as described
in Note 2.4(g).
(iii)
Sale of goods
Revenue is recognised net of sales taxes and upon transfer of significant risks and rewards of
ownership to the buyer. Revenue is not recognised to the extent where there are significant uncertainties
regarding recovery of the consideration due, associated costs or the possible return of goods.
(iv)
Income from treated water sold
Revenue is recognised on a receivable basis and based on the quantity of treated water sold to the
final consumers according to an agreed fixed price schedule.
(v)
Sale of land/completed properties
Revenue from sale of land/completed properties is recognised when the risks and rewards associated
with ownership passes to the purchaser without any significant contractual acts to complete.
(vi)
Dividend income
Dividend income is recognised when the right to receive payment is established.
70
Annual Report 2012
31 December 2012
2.
2.4
(n)
Revenue recognition (cont’d)
(vii) Interest income
Interest income is recognised on an accrual basis using the effective interest method.
(viii) Management fees
Management fees are recognised when services are rendered.
(ix)
Rental income
Rental income from investment properties is recognised on a straight-line basis over the term of the lease.
Other rental income is recognised over the period of the tenancy.
(o)
Foreign currencies
(i)
Functional and presentation currency
The individual financial statements of each entity in the Group are measured using the currency of the
primary economic environment in which the entity operates (“the functional currency”). The consolidated
financial statements are presented in Ringgit Malaysia (“RM”), which is also the Company’s functional
currency.
(ii)
Foreign currency transactions
In preparing the financial statements of the individual entities, transactions in currencies other than the
entity’s functional currency (“foreign currencies”) are recorded in the functional currency using the
exchange rates prevailing at the dates of the transactions. At each reporting date, monetary items
denominated in foreign currencies are translated at the rates prevailing on the reporting date. Nonmonetary items carried at fair value that are denominated in foreign currencies are translated at the
rates prevailing on the date when the fair value was determined. Non-monetary items that are measured
in terms of historical cost in a foreign currency are not translated.
Exchange differences arising on the settlement of monetary items, and on the translation of monetary
items, are included in profit or loss for the period except for exchange differences arising on monetary
items that form part of the Group’s net investment in a foreign operation.
Exchange differences arising on monetary items that form part of the Company’s net investment
in a foreign operation, regardless of the currency of the monetary item, are recognised in profit or loss
for the period in the Company’s separate financial statements and in the foreign operation’s individual
financial statements, as appropriate. Such exchange differences are reclassified to foreign currency
translation reserve within equity in the consolidated financial statements until the disposal of the foreign
operations, at which time they are recognised in profit or loss.
Exchange differences arising on the translation of non-monetary items carried at fair value are included
in profit or loss for the period except for the differences arising on the translation of non-monetary items
in respect of which gains and losses are recognised directly in equity. Exchange differences arising
from such non-monetary items are also recognised directly in equity.
Annual Report 2012
71
31 December 2012
2.
2.4
(o)
Foreign currencies (cont’d)
(iii)
Foreign operations
The assets and liabilities of foreign operations are translated into RM at the rate of exchange ruling at
the reporting date and income and expenses are translated at exchange rates at the dates of the
transactions. The exchange differences arising on the translation are taken directly to other
comprehensive income. On disposal of a foreign operation, the cumulative amount recognised in other
comprehensive income and accumulated in equity under foreign currency translation reserve relating
to that particular foreign operation is recognised in profit or loss.
Goodwill and fair value adjustments arising on the acquisition of foreign operations are treated as
assets and liabilities of the foreign operations and are recorded in the functional currency of the foreign
operations and translated at closing rate at the reporting date.
(p)
Land use rights
Land use rights are initially measured at cost. Following initial recognition, land use rights are measured at
cost less accumulated amortisation and accumulated impairment losses. The land use rights are amortised
over their lease terms.
(q)
Cash and cash equivalents
Cash and cash equivalents comprise cash at bank and on hand, demand deposits, and short-term, highly
liquid investments that are readily convertible to known amount of cash and which are subject to an
insignificant risk of changes in value. These also include bank overdrafts that form an integral part of the
Group’s cash management.
(r)
Financial assets
Financial assets are recognised in the statements of financial position when, and only when, the Group and
the Company become a party to the contractual provisions of the financial instrument.
When financial assets are recognised initially, they are measured at fair value, plus, in the case of financial
assets not at fair value through profit or loss, directly attributable transaction costs.
The Group and the Company determine the classification of their financial assets at initial recognition, and
the categories include financial assets at fair value through profit or loss, loans and receivables, held-tomaturity investments and available-for-sale financial assets.
72
Annual Report 2012
31 December 2012
2.
2.4
(r)
Financial assets (cont’d)
(i)
Financial assets at fair value through profit or loss
Financial assets are classified as financial assets at fair value through profit or loss if they are held
for trading or are designated as such upon initial recognition. Financial assets held for trading are
derivatives (including separated embedded derivatives) or financial assets acquired principally for the
purpose of selling in the near term.
Subsequent to initial recognition, financial assets at fair value through profit or loss are measured
at fair value. Any gains or losses arising from changes in fair value are recognised in profit or loss. Net
gains or net losses on financial assets at fair value through profit or loss do not include exchange
differences, interest and dividend income. Exchange differences, interest and dividend income on
financial assets at fair value through profit or loss are recognised separately in profit or loss as part of
other losses or other income.
Financial assets at fair value through profit or loss could be presented as current or non-current.
Financial assets that is held primarily for trading purposes are presented as current whereas financial
assets that is not held primarily for trading purposes are presented as current or non-current based on
the settlement date.
(ii)
Loans and receivables
Financial assets with fixed or determinable payments that are not quoted in an active market are
classified as loans and receivables.
Subsequent to initial recognition, loans and receivables are measured at amortised cost using the
effective interest method. Gains and losses are recognised in profit or loss when the loans and
receivables are derecognised or impaired, and through the amortisation process.
Loans and receivables are classified as current assets, except for those having maturity dates later
than 12 months after the reporting date which are classified as non-current.
(iii)
Held-to-maturity investments
Financial assets with fixed or determinable payments and fixed maturity are classified as held-tomaturity when the Group has the intention and ability to hold the investment to maturity.
Subsequent to initial recognition, held-to-maturity investments are measured at amortised cost using
the effective interest method. Gains and losses are recognised in profit or loss when the held-tomaturity investments are derecognised or impaired, and through the amortisation process.
Held-to-maturity investments are classified as non-current assets, except for those having maturity
within 12 months after the reporting date which are classified as current.
Annual Report 2012
73
31 December 2012
2.
2.4
(r)
Financial assets (cont’d)
(iv)
Available-for-sale financial assets
Available-for-sale financial assets are financial assets that are designated as available for sale or are
not classified in any of the three preceding categories.
After initial recognition, available-for-sale financial assets are measured at fair value. Any gains
or losses from changes in fair value of the financial assets are recognised in other comprehensive
income, except that impairment losses, foreign exchange gains and losses on monetary instruments
and interest calculated using the effective interest method are recognised in profit or loss. The
cumulative gain or loss previously recognised in other comprehensive income is reclassified from
equity to profit or loss as a reclassification adjustment when the financial asset is derecognised. Interest
income calculated using the effective interest method is recognised in profit or loss. Dividends on an
available-for-sale equity instrument are recognised in profit or loss when the Group’s and the Company’s
right to receive payment is established.
Investments in equity instruments whose fair value cannot be reliably measured are measured at cost
less impairment loss.
Available-for-sale financial assets are classified as non-current assets unless they are expected to be
realised within 12 months after the reporting date.
A financial asset is derecognised when the contractual right to receive cash flows from the asset has
expired. On the derecognition of a financial asset in its entirety, the difference between the carrying amount
and the sum of the consideration received and any cumulative gain or loss that had been recognised in other
comprehensive income is recognised in profit or loss.
Regular way purchases or sales are purchases or sales of financial assets that require delivery of assets
within the period generally established by regulation or convention in the marketplace concerned. All regular
way purchases and sales of financial assets are recognised or derecognised on the trade date i.e., the date
that the Group and the Company commit to purchase or sell the asset.
(s)
Impairment of financial assets
The Group and the Company assess at each reporting date whether there is any objective evidence that a
financial asset is impaired.
(i)
Trade and other receivables and other financial assets carried at amortised cost
To determine whether there is objective evidence that an impairment loss on financial assets has been
incurred, the Group and the Company consider factors such as the probability of insolvency or
significant financial difficulties of the debtor and default or significant delay in payments. For certain
categories of financial assets, such as trade receivables, assets that are assessed not to be impaired
individually are subsequently assessed for impairment on a collective basis based on similar risk
characteristics. Objective evidence of impairment for a portfolio of receivables could include the
Group’s and the Company’s past experience of collecting payments, an increase in the number of
delayed payments in the portfolio past the average credit period and observable changes in national
or local economic conditions that correlate with default on receivables.
74
Annual Report 2012
31 December 2012
2.
2.4
(s)
Impairment of financial assets (cont’d)
(i)
Trade and other receivables and other financial assets carried at amortised cost (cont’d)
If any such evidence exists, the amount of impairment loss is measured as the difference between
the asset’s carrying amount and the present value of estimated future cash flows discounted at the
financial asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
The carrying amount of the financial asset is reduced by the impairment loss either directly or indirectly
through the use of an allowance account. When a trade receivable becomes uncollectible, it is written
off against the allowance account.
If in a subsequent period, the amount of the impairment loss decreases and the decrease can be
related objectively to an event occurring after the impairment was recognised, the previously recognised
impairment loss is reversed to the extent that the carrying amount of the asset does not exceed its
amortised cost at the reversal date. The amount of reversal is recognised in profit or loss.
(ii)
Available-for-sale financial assets
Significant or prolonged decline in fair value below cost, significant financial difficulties of the issuer
or obligor, and the disappearance of an active trading market are considerations to determine whether
there is objective evidence that investment securities classified as available-for-sale financial assets
are impaired.
If an available-for-sale financial asset is impaired, an amount comprising the difference between its
cost (net of any principal payment and amortisation) and its current fair value, less any impairment loss
previously recognised in profit or loss, is transferred from equity to profit or loss.
Impairment losses on available-for-sale equity investments are not reversed in profit or loss in the
subsequent periods. Increase in fair value, if any, subsequent to impairment loss is recognised in other
comprehensive income.
(iii)
Unquoted equity securities carried at cost
If there is objective evidence (such as significant adverse changes in the business environment where
the issuer operates, probability of insolvency or significant financial difficulties of the issuer) that an
impairment loss on financial assets carried at cost has been incurred, the amount of the loss is measured
as the difference between the asset’s carrying amount and the present value of estimated future cash
flows discounted at the current market rate of return for a similar financial asset. Such impairment
losses are not reversed in subsequent periods.
Annual Report 2012
75
31 December 2012
2.
2.4
(t)
Financial liabilities
Financial liabilities are classified according to the substance of the contractual arrangements entered into
and the definitions of a financial liability.
Financial liabilities, within the scope of FRS 139, are recognised in the statement of financial position when,
and only when, the Group and the Company become a party to the contractual provisions of the financial
instrument. Financial liabilities are classified as either financial liabilities at fair value through profit or loss or
other financial liabilities.
(i)
Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss include financial liabilities held for trading and
financial liabilities designated upon initial recognition as at fair value through profit or loss.
Financial liabilities held for trading include derivatives entered into by the Group and the Company that
do not meet the hedge accounting criteria. Derivative liabilities are initially measured at fair value
and subsequently stated at fair value, with any resultant gains or losses recognised in profit or loss. Net
gains or losses on derivatives include exchange differences.
The Group and the Company have not designated any financial liabilities as at fair value through profit
or loss.
(ii)
Other financial liabilities
The Group’s and the Company’s other financial liabilities include trade payables, other payables and
loans and borrowings.
Trade and other payables are recognised initially at fair value plus directly attributable transaction
costs and subsequently measured at amortised cost using the effective interest method.
Loans and borrowings are recognised initially at fair value, net of transaction costs incurred, and
subsequently measured at amortised cost using effective interest method. Borrowings are classified
as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at
least 12 months after the reporting date.
For other financial liabilities, gains and losses are recognised in profit or loss when the liabilities are
derecognised, and through the amortisation process.
A financial liability is derecognised when the obligation under the liability is extinguished. When an existing
financial liability is replaced by another from the same lender on substantially different terms, or the terms of
an existing liability are substantially modified, such an exchange or modification is treated as a derecognition
of the original liability and the recognition of a new liability, and the difference in the respective carrying
amounts is recognised in profit or loss.
76
Annual Report 2012
31 December 2012
2.
2.4
(u)
Share capital and share issuance expenses
An equity instrument is any contract that evidences a residual interest in the assets of the Group and the
Company after deducting all of its liabilities. Ordinary shares are equity instruments.
Ordinary shares are recorded at the proceeds received, net of directly attributable incremental transaction
costs. Ordinary shares are classified as equity. Dividends on ordinary shares are recognised in equity in the
period in which they are declared.
(v)
Non-cumulative redeemable preference shares (“NCRPS”)
The NCRPS are regarded as compound instruments, consisting of a liability component and an equity
component. The component of NCRPS that exhibits characteristics of a liability is recognised as a financial
liability in the statements of financial position, net of transaction costs. The dividends on those shares are
recognised as interest expense in profit or loss using the effective interest rate method. On issuance of the
NCRPS, the fair value of the liability component is determined using a market rate for an equivalent nonconvertible debt and this amount is carried as a financial liability in accordance with the accounting policy for
other payables set out in Note 2.4(t).
The residual amount, after deducting the fair value of the liability component, is recognised and included in
shareholders’ equity, net of transaction costs.
Transaction costs are apportioned between the liability and equity components of the NCRPS based on the
allocation of proceeds to the liability and equity components when the instruments were first recognised.
(w)
Segment reporting
For management purposes, the Group is organised into operating segments based on their products and
services which are independently managed by the respective segment managers responsible for the
performance of the respective segments under their charge. The segment managers report directly to the
management of the Company who regularly review the segment results in order to allocate resources to the
segments and to assess the segment performance. Additional disclosures on each of these segments are
shown in Note 44, including the factors used to identify the reportable segments and the measurement basis
of segment information.
(x)
Contingencies
A contingent liability or asset is a possible obligation or asset that arises from past events and whose
existence will be confirmed only by the occurrence or non-occurrence of uncertain future event(s) not wholly
within the control of the Group.
Contingent liabilities and assets are not recognised in the statements of financial position of the Group and
of the Company.
Annual Report 2012
77
31 December 2012
2.
2.4
(y)
Financial guarantee contracts
A financial guarantee contract is a contract that requires the issuer to make specified payments to reimburse
the holder for a loss it incurs because a specified debtor fails to make payment when due.
Financial guarantee contracts are recognised initially as a liability at fair value, net of transaction costs.
Subsequent to initial recognition, financial guarantee contracts are recognised as income in profit or loss
over the period of the guarantee. If the debtor fails to make payment relating to financial guarantee contract
when it is due and the Group, as the issuer, is required to reimburse the holder for the associated loss,
the liability is measured at the higher of the best estimate of the expenditure required to settle the present
obligation at the reporting date and the amount initially recognised less cumulative amortisation.
(z)
Non-current assets (or disposal groups) held for sale and discontinued operations
Non-current assets (or disposal groups) are classified as held for sale if their carrying amount will recovered
principally through a sale transaction rather than through continuing use. This condition is regarded as met
only when the sale is highly probable and the asset (or disposal group) is available for immediate sale in its
present condition subject only to terms that are usual and customary.
Immediately before classification as held for sale, the measurement of the non-current assets (or all
the assets and liabilities in a disposal group) is brought up-to-date in accordance with applicable FRSs.
Then, on initial classification as held for sale, non-current assets or disposal groups (other than investment
properties, property development costs, inventories, deferred tax assets, employee benefits assets and
financial assets) are measured in accordance with FRS 5 : Non-current assets held for sale and discontinued
operations that is at the lower of carrying amount and fair value less costs to sell. Any differences are
included in profit or loss.
A component of the Group is classified as a discontinued operation when the criteria to be classified as held
for sale have been met or it has been disposed of and such a component represents a separate major line
of business or geographical area of operations, is part of a single co-ordinated major line of business or
geographical area of operations or is a subsidiary acquired exclusively with a view to resell.
78
Annual Report 2012
31 December 2012
2.
2.5
Significant accounting estimates and judgements
The preparation of the Group’s and the Company’s financial statements requires management to make judgements,
estimates and assumptions that affect the reported amounts of revenue, expenses, assets and liabilities at the
reporting date. However, uncertainty about these assumptions and estimates could result in outcomes that could
require a material adjustment to the carrying amount of the asset or liability affected in the future.
(a)
Critical judgements made in applying accounting policies
In the process of applying the Group’s and the Company’s accounting policies, management has made
the following judgements, apart from those involving estimations, which have the most significant effect on
the amounts recognised in the financial statements:
(i)
Assessment of impairment of freehold land and buildings
At each reporting date, the Group and the Company carry out a review of recoverable amounts of
its freehold land and buildings against the carrying amounts and the differences between the recoverable
amounts and the carrying amounts are provided as impairment loss. For the purpose of impairment
testing of these assets, the recoverable amount is determined based on prevailing market value
determined by professional valuers or last transacted sale of surrounding property.
Based on the Group’s review, an additional impairment loss of RM93,383 (2011 : impairment loss
written back of RM14,001) was provided for the current financial year of the Group.
Based on the Company’s review, an impairment loss was written back of RM14,001 (2011 : RM14,001)
for the current financial year of the Company.
The carrying amounts of the affected freehold land and buildings after impairment as at 31 December
2012 of the Group and of the Company were RM1,513,118 (2011 : RM1,626,075) and RM1,600,000
(2011 : RM1,600,000) respectively. Further details are disclosed in Note 13(d).
(b)
Key sources of estimation uncertainty
The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting
date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and
liabilities within the next financial year are discussed below.
(i)
Impairment of investments in subsidiaries and associates
The Company assesses whether there are any indicators of impairment for its investments in
subsidiaries and associates at each reporting date.
The Company carried out the impairment test based on net tangible assets and estimated future
performance of its subsidiaries and associates.
The carrying amounts of the investments in subsidiaries and associates of the Company as at
31 December 2012 were RM58,717,497 (2011 : RM60,254,128) and RM450,000 (2011 : RM450,000)
respectively.
Annual Report 2012
79
31 December 2012
2.
2.5
Significant accounting estimates and judgements (cont’d)
(b)
Key sources of estimation uncertainty (cont’d)
(i)
Impairment of investments in subsidiaries and associates (cont’d)
Based on the Company’s impairment review, additional impairment loss provided for the current
financial year for investments in subsidiaries amounted to RM1,650,580 (2011 : RM118,199) and
no additional impairment is required for investment in associates (2011 : RMNil). A 10% difference in
the management’s estimation would result in the investments in subsidiaries being further impaired by
RM165,000 (2011 : RM11,820).
(ii)
Depreciation of property, plant and equipment
The cost of property, plant and equipment is depreciated on a straight-line basis over the assets’
useful lives. Management estimates that the property, plant and equipment will have useful lives ranging
from 3 years to 50 years based on the level of expected usage and expected speed at which the
related technology evolves. Management also estimates that the plant and machinery and motor
vehicles will have residual values ranging from 0% to 30% and have resale values respectively at the
end of 10 years. Changes in the expected level of usage and technological developments could impact
the economic useful lives and the residual values of these assets, therefore future depreciation charges
could be revised.
The carrying amount of these assets at reporting date is disclosed in Note 13. A 5% difference in the
expected useful lives of these assets from management’s estimates would result in an approximately
2.42% (2011 : 1.50%) variance in the Group’s profit for the year.
(iii)
Property development
The Group recognises property development revenue and expenses in the statement of comprehensive
income 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.
Significant judgement is required in determining the stage of completion, the extent of the property
development costs incurred, the estimated total property development revenue and costs, as well as
the recoverability of the development costs. In making the judgement, the Group evaluates based on
past experience and by relying on the work of specialists.
The carrying amounts of assets and liabilities of the Group arising from property development activities
are disclosed in Note 14. A 5% difference in the estimated total property development revenue or costs
would result in an approximately 1.2% (2011 : 0.7%) variance in the Group’s revenue and 0.4%
(2011 : 0.7%) variance in the Group’s cost of sales.
80
Annual Report 2012
31 December 2012
2.
2.5
Significant accounting estimates and judgements (cont’d)
(b)
Key sources of estimation uncertainty (cont’d)
(iv)
The Group recognises contract revenue to the extent of contract costs incurred where it is probable
that those costs will be recoverable or based on the stage of completion method. The stage of
completion is measured by reference to surveys of work performed.
Significant judgement is required in determining the stage of completion, the extent of the contract
costs incurred, the estimated total contract costs, as well as the recoverability of the contracts. In
making the judgement, the Group evaluates by relying on past experience and/or the work of
specialists.
If the estimated total contract costs increase/decrease by 10% from management’s estimates, the
Group’s profit before taxation will decrease/increase by approximately RM9.5 million (2011 : RM7 million)
and RM11.6 million (2011 : RM9 million) respectively.
(v)
Impairment of loans and receivables
The Group assesses at each reporting date whether there is any objective evidence that a financial
asset is impaired. To determine whether there is objective evidence of impairment, the Group considers
factors such as the probability of insolvency or significant financial difficulties of the debtor and default
or significant delay in payments.
Where there is objective evidence of impairment, the amount and timing of future cash flows are
estimated based on historical loss experience for assets with similar credit risk characteristic. The
carrying amount of the Group’s loans and receivables at the reporting date is disclosed in Note 22.
If the present value of estimated future cash flows varies by 10% from management’s estimates, the
Group’s allowance for impairment will vary by RM924,115 (2011 : RM1,136,236).
(vi)
Impairment loss for inventories
The Group reviews the inventory listing on a periodic basis. This review involves comparison of the
carrying value of inventory items with the respective net realisable value. The purpose is to ascertain
that proper action had been taken in relation to the writing off of obsolete items and the provision of
impairment for slow moving items. In the previous financial years, the Group has written down the
carrying value of inventory items to its net realisable value due to the volatile steel prices. During the
financial year, the Group has write back of inventories written down in previous year amounting to
RM113,930 due to sale.
The carrying amount of affected items after impairment at the reporting date is disclosed in Note 24.
If the steel prices vary by 3%, the Group’s carrying value of inventories have to be further written down
by RM571 (2011 : RM20,766).
Annual Report 2012
81
31 December 2012
3.
REVENUE
Group
Administrative charges
Dividend income
Rental income from investment properties
Sale of development properties
Sale of completed properties
Sale of goods and services
4.
Company
2012
RM
2011
RM
2012
RM
2011
RM
66,312,112
743,698
56,083,502
3,618,915
87,054,807
213,813,034
63,013,035
246,800
42,235,847
1,829,000
76,540,748
183,865,430
865,926
35,500,000
597,410
36,963,336
876,212
8,000,000
366,800
9,243,012
OTHER INCOME
Group
Company
2012
RM
2011
RM
2012
RM
2011
RM
463,847
-
-
-
172,196
248,700
11,157
83,861
2,095,061
-
595,000
-
2,170,866
-
68,507
43,971
506,162
3,951
-
-
1,299
1,068
107,302
330,142
30,664
1,036,159
-
46,663
-
151,015
105,570
-
-
300,596
678,649
229,420
33,620
261,534
207,375
1,852,815
107,616
10,335
564,681
744,188
106,194
227,906
3,044
-
716,271
29,782
1,308,982
-
Included in other income are:
Bad debts recovered
Dividend income from available-for-sale
investments
Fair value adjustment of investment properties
Gain on disposal of:
- available-for-sale investments (Note 31)
- investment in subsidiary (partial)
Gain on foreign exchange:
- realised
- unrealised
Hire of motor vehicles
Hire of plant and machinery
Interest income from:
- loan and receivables
- non-cumulative redeemable preference shares
(Note 19)
- short-term money market funds
- short-term deposits
- others
Rental income from investment properties
Write back of impairment loss on trade receivables
82
Annual Report 2012
31 December 2012
5.
COST OF SALES IN RESPECT OF PROPERTY DEVELOPMENT
Group
Property development costs (Note 14(b))
Cost of completed properties sold
6.
2012
RM
2011
RM
43,775,637
5,503,459
49,279,096
30,467,845
1,378,565
31,846,410
CHANGES IN WORK-IN-PROGRESS AND FINISHED GOODS
Included in changes in work-in-progress and finished goods of the Group are write back of inventories written down
amounting to RM113,930 (2011 : inventories written down amounting to RM349,373).
7.
OTHER EXPENSES
Group
2012
RM
2011
RM
89,259
2,611
68,167
16,217
103,050
-
89,258
78,833
111,704
124,350
2,000
Included in other expenses are:
Amortisation of quarry extraction exclusive right (Note 21)
Hire of labour
Hire of motor vehicles
Rental of land
Rental of permit
8.
EMPLOYEE BENEFITS EXPENSE
Group
(a)
Company
2012
RM
2011
RM
2012
RM
2011
RM
7,630,584
838,774
94,845
22,750
8,586,953
7,805,746
807,582
90,656
8,703,984
446,422
47,934
1,682
496,038
1,066,360
106,347
2,719
1,175,426
Staff costs
Salaries, wages, allowances and overtime
Contributions to defined contribution plan
Social security contributions
Other emoluments
Total staff costs
Employee benefits expense for the year of RM2,998,308 (2011 : RM2,177,372) have been capitalised in
construction contract costs as disclosed in Note 23.
Annual Report 2012
83
31 December 2012
8.
EMPLOYEE BENEFITS EXPENSE (CONT’D)
(b)
Directors’ remuneration
Group
Company
2012
RM
2011
RM
2012
RM
2011
RM
1,312,500
249,375
1,240
10,600
1,573,715
1,245,000
122,064
2,670
16,100
1,385,834
1,312,500
249,375
1,240
1,563,115
1,140,000
111,600
1,240
1,252,840
161,000
17,700
178,700
161,000
16,800
177,800
161,000
17,700
178,700
161,000
16,800
177,800
Total directors’ remuneration
1,752,415
1,563,634
1,741,815
1,430,640
Total excluding benefits-in-kind
1,741,815
1,547,534
1,741,815
1,430,640
10,328,768
10,251,518
2,237,853
2,606,066
Directors of the Company:*
Executive:
Salaries and other emoluments
Social security contribution
Estimated money value of benefits-in-kind
Non-executive:
Fees
Other emoluments
Total employee benefits expense,
excluding benefits-in-kind
*
The number of directors of the Company whose total remuneration during the year fall within the following
bands are as follows:
Number of Directors
2012
2011
Executive directors:
RM400,001 to RM450,000
Non-executive directors:
RM50,000 and below
RM50,001 to RM100,000
84
Annual Report 2012
3
3
3
1
4
3
1
4
31 December 2012
9.
ADMINISTRATIVE EXPENSES
Group
Company
2012
RM
2011
RM
2012
RM
2011
RM
4,443
4,556
-
-
137,060
3,000
135,617
-
32,000
-
43,000
-
5,227
28,540
462
4,000
24,198
-
4,000
4,500
-
4,000
3,000
-
3,365
2,189
1,928
6,962
-
-
2,067,811
200
2,500
394,752
7,931
1,591,326
-
-
617
2,126
111,252
-
-
369,552
1,252,537
56
66,000
20,820
3,780
123,263
73,638
66,730
3,760
2,490
65
281,961
-
68,014
1,320
-
Included in administrative expenses are:
Amortisation of land use rights (Note 16)
Auditors’ remuneration
- statutory audit
- current year
- prior year
- non-audit fees
- assurance related
- tax and other non-audit services
Direct operating expenses of investment properties
- revenue generating during the year
- non-revenue generating during the year
Fair value adjustment of investment
properties (Note 15)
Incorporation expenses written off
Impairment loss on trade receivables
Loss on disposal of:
- available-for-sale investments (Note 31)
Loss on foreign exchange:
- realised
- unrealised
Rental of buildings
Rental of house
Rental of office equipment
Annual Report 2012
85
31 December 2012
10.
INTEREST EXPENSE
Group
Interest expense on:
- bankers’ acceptances
- bank overdrafts
- hire purchase
- term loan interest
- non-cumulative redeemable
preference shares (Note 32)
- revolving credits
- others
Less: Interest expense capitalised in
qualifying assets:
Costs of construction contracts (Note 23)
Property development costs (Note 14(b))
11.
Company
2012
RM
2011
RM
2012
RM
2011
RM
140,504
89,391
43,066
1,366,233
128,464
19,939
114,859
64,678
121,802
64,678
793,310
91,398
2,523,902
615,321
89,479
30
1,032,770
121,802
64,678
(33,226)
(313,529)
2,177,147
(9,071)
1,023,699
121,802
64,678
INCOME TAX EXPENSE
Group
2012
RM
Current income tax:
Malaysian income tax
Foreign tax
Real property gains tax
(Over)/Under provision in prior years
Deferred income tax (Note 34):
Relating to origination and reversal of
temporary differences
(Over)/Under provision in prior years
Income tax expense recognised in profit or loss
86
Annual Report 2012
Company
2011
RM
2012
RM
2011
RM
9,496,962
1,795
1,277
(34,271)
9,465,763
8,003,443
2,201
92,291
8,097,935
8,656,989
(9,132)
8,647,857
1,881,657
3,171
1,884,828
(1,375,527)
(6,695)
(1,382,222)
8,083,541
(951,287)
(4,885)
(956,172)
7,141,763
(9,784)
(1,343)
(11,127)
8,636,730
(10,684)
2,290
(8,394)
1,876,434
31 December 2012
11.
INCOME TAX EXPENSE (cont’d)
Current income tax is calculated at the Malaysian corporate statutory tax rate of 25% of the estimated assessable profit
for the year.
Taxation for other jurisdictions is calculated at the rates prevailing in the respective jurisdictions.
A reconciliation of income tax expense applicable to profit before taxation at the statutory income tax rate to income tax
expense at the effective income tax rate of the Group and of the Company is as follows:
Group
2012
RM
2011
RM
24,320,157
24,686,188
Taxation at applicable tax rates
Income not subject to tax
Real property gains tax
Expenses not deductible for tax purposes
Difference in tax rate
Deferred tax assets not recognised
Effect of reversal of real property gains tax
Utilisation of previously unrecognised deferred tax assets
(Over)/Under provision of current tax in prior years
Over provision of deferred tax in prior years
6,080,039
(1,467,923)
1,277
3,719,030
(124,849)
(2,510)
(80,557)
(34,271)
(6,695)
8,083,541
6,171,547
(885,520)
1,687,695
78
80,557
92,291
(4,885)
7,141,763
Company
Taxation at applicable tax rates
Income not subject to tax
Expenses not deductible for tax purposes
(Over)/Under provision of current tax in prior years
(Over)/Under provision of deferred tax in prior years
2012
RM
2011
RM
25,561,296
9,752,427
6,390,324
(338,593)
2,595,474
(9,132)
(1,343)
8,636,730
2,438,107
(759,230)
192,096
3,171
2,290
1,876,434
Annual Report 2012
87
31 December 2012
12.
EARNINGS PER SHARE
(a)
Basic
Basic earnings per share amounts are calculated by dividing profit for the year attributable to ordinary equity
holders of the parent by the weighted number of ordinary shares in issue during the financial year:
2012
RM
2011
RM
Profit for the year attributable to ordinary equity holders of the parent
20,304,164
19,246,798
Weighted average number of ordinary shares in issue
92,699,600
92,699,600
Sen
Sen
21.90
20.76
Basic earnings per share for the year
(b)
Diluted
There is no dilutive effect on earnings per share as the Company has no potential issues of ordinary shares.
13.
PROPERTY, PLANT AND EQUIPMENT
Land and
buildings*
RM
Pipes, plant
and
machinery
and capital
work-inprogress**
RM
Furniture,
fittings
and office
equipment,
electrical
installations
and
renovations
***
RM
Motor
vehicles
RM
Total
RM
Group
At 31 December 2012
Cost
At 1 January 2012
Additions
Disposals
Written off
Transfers
Reclassified as non-current
assets held-for-sale
(Note 27)
Exchange adjustments
At 31 December 2012
88
Annual Report 2012
31,628,766
1,350,390
209,091
52,425,951
1,983,000
(1,530,821)
(209,091)
3,964,707
270,161
(195,854)
-
9,851,017
767,068
(834,665)
(60,003)
-
97,870,441
4,370,619
(2,365,486)
(255,857)
-
(10,671)
33,177,576
(1,599,290)
(66,845)
51,002,904
(351)
4,038,663
(1,571)
9,721,846
(1,599,290)
(79,438)
97,940,989
31 December 2012
13.
PROPERTY, PLANT AND EQUIPMENT (CONT’D)
Land and
buildings*
RM
Pipes, plant
and
machinery
and capital
work-inprogress**
RM
Furniture,
fittings
and office
equipment,
electrical
installations
and
renovations
***
RM
Motor
vehicles
RM
Total
RM
3,347,517
27,033,796
1,689,204
4,467,502
36,538,019
657,662
4,005,179
1,990,636
29,024,432
1,689,204
4,467,502
2,648,298
39,186,317
250,368
1,972,959
397,590
263,617
2,884,534
250,368
93,383
813,786
2,786,745
-
397,590
-
422,693
686,310
-
1,236,479
4,121,013
93,383
(59,297)
(724,332)
-
(195,802)
(453,120)
(59,999)
(59,297)
(1,177,452)
(255,801)
(1,808)
4,347,122
(790,213)
(17,965)
30,219,370
(195)
1,890,797
(989)
4,639,704
(790,213)
(20,957)
41,096,993
3,919,343
28,478,964
1,890,797
4,639,704
38,928,808
427,779
4,347,122
1,740,406
30,219,370
1,890,797
4,639,704
2,168,185
41,096,993
28,830,454
20,783,534
2,147,866
5,082,142
56,843,996
Group (cont’d)
At 31 December 2012 (cont’d)
Accumulated depreciation
and impairment losses
At 1 January 2012
Accumulated impairment
losses
Charge for the year:
Recognised in profit or loss
Capitalised in construction
costs (Note 23)
Impairment loss for the year
Write back of provision for
impairment loss
Disposals
Written off
Reclassified as non-current
assets held-for-sale (Note 27)
At 31 December 2012
Analysed as:
losses
Net carrying amount
-
Annual Report 2012
89
31 December 2012
13.
Land and
buildings*
RM
Pipes, plant
and
machinery
and capital
work-inprogress**
RM
Furniture,
fittings
and office
equipment,
electrical
installations
and
renovations
***
RM
Motor
vehicles
RM
Total
RM
Group (cont’d)
At 31 December 2011
Cost
At 1 January 2011
Additions
Disposals
Written off
At 31 December 2011
24,097,817
7,499,204
31,745
31,628,766
56,322,651
1,788,926
(3,193,705)
(2,688,000)
196,079
52,425,951
3,884,998
140,734
(62,000)
975
3,964,707
9,517,896
662,762
(307,313)
(27,001)
4,673
9,851,017
93,823,362
10,091,626
(3,501,018)
(2,777,001)
233,472
97,870,441
3,095,190
28,495,208
1,337,728
4,063,912
36,992,038
671,663
3,766,853
1,990,636
30,485,844
1,337,728
4,063,912
2,662,299
39,654,337
248,385
1,909,790
411,016
239,997
2,809,188
248,385
962,021
2,871,811
411,016
405,586
645,583
1,367,607
4,176,795
(14,001)
3,942
4,005,179
(1,752,971)
(2,618,109)
37,857
29,024,432
(59,945)
405
1,689,204
(219,044)
(25,309)
2,360
4,467,502
(14,001)
(1,972,015)
(2,703,363)
44,564
39,186,317
3,347,517
27,033,796
1,689,204
4,467,502
36,538,019
657,662
4,005,179
1,990,636
29,024,432
1,689,204
4,467,502
2,648,298
39,186,317
27,623,587
23,401,519
2,275,503
5,383,515
58,684,124
and impairment losses
At 1 January 2011
losses
Capitalised in construction
costs (Note 23)
Write back of provision for
impairment loss
Disposals
Written off
At 31 December 2011
Analysed as:
losses
Net carrying amount
90
Annual Report 2012
31 December 2012
13.
*Land and buildings of the Group
Freehold
land
RM
Long term
leasehold
land
RM
Buildings
RM
21,144,608
21,144,608
5,189,570
1,350,390
209,091
6,749,051
5,294,588
(10,671)
5,283,917
31,628,766
1,350,390
209,091
(10,671)
33,177,576
2,103,599
224,130
2,327,729
81,256
136,882
2,545,867
289,529
313,184
602,713
59,029
661,742
954,389
120,348
1,074,737
110,083
93,383
(136,882)
(1,808)
1,139,513
3,347,517
657,662
4,005,179
250,368
93,383
(1,808)
4,347,122
2,510,654
35,213
2,545,867
348,558
313,184
661,742
1,060,131
79,382
1,139,513
3,919,343
427,779
4,347,122
18,598,741
6,087,309
4,144,404
28,830,454
Total
RM
At 31 December 2012
Cost
At 1 January 2012
Additions
Transfers
At 31 December 2012
Accumulated depreciation and
impairment losses
At 1 January 2012
Accumulated impairment losses
Charge for the year
Impairment loss for the year
Reclassification
At 31 December 2012
Analysed as:
Net carrying amount
Annual Report 2012
91
31 December 2012
13.
* Land and buildings of the Group (cont’d)
Freehold
land
RM
Long term
leasehold
land
RM
Buildings
RM
Total
RM
13,645,404
7,499,204
21,144,608
5,189,570
5,189,570
5,262,843
31,745
5,294,588
24,097,817
7,499,204
31,745
31,628,766
2,022,343
224,130
2,246,473
81,256
2,327,729
233,559
313,184
546,743
55,970
602,713
839,288
134,349
973,637
111,159
(14,001)
3,942
1,074,737
3,095,190
671,663
3,766,853
248,385
(14,001)
3,942
4,005,179
2,103,599
224,130
2,327,729
289,529
313,184
602,713
954,389
120,348
1,074,737
3,347,517
657,662
4,005,179
18,816,879
4,586,857
4,219,851
27,623,587
At 31 December 2011
Cost
At 1 January 2011
Additions
At 31 December 2011
Accumulated depreciation and
impairment losses
At 1 January 2011
Charge for the year
Write back of provision for impairment loss
At 31 December 2011
Analysed as:
Net carrying amount
The title deeds to certain of the Group’s and the Company’s land and building with carrying amount of RM7,756,742
(2011 : RM7,882,514) and RM657,413 (2011 : RM671,414) have yet to be transferred to the subsidiaries concerned and
to the Company respectively.
92
Annual Report 2012
31 December 2012
13.
**Pipes, plant and machinery and capital work-in-progress of the Group
Pipes,
plant and
machinery
RM
Capital
work-inprogress
RM
Total
RM
At 31 December 2012
Cost
At 1 January 2012
Additions
Disposals
Transfers
Reclassified as assets held-for-sale
At 31 December 2012
52,216,860
1,983,000
(1,530,821)
(1,599,290)
(66,845)
51,002,904
209,091
(209,091)
-
52,425,951
1,983,000
(1,530,821)
(209,091)
(1,599,290)
(66,845)
51,002,904
Accumulated depreciation and impairment losses
At 1 January 2012
Capitalised in construction costs
Disposals
Reclassified as assets held-for-sale
At 31 December 2012
Analysed as:
Net carrying amount
27,033,796
1,990,636
29,024,432
-
27,033,796
1,990,636
29,024,432
1,972,959
813,786
2,786,745
(59,297)
(724,332)
(790,213)
(17,965)
30,219,370
-
1,972,959
813,786
2,786,745
(59,297)
(724,332)
(790,213)
(17,965)
30,219,370
28,478,964
1,740,406
30,219,370
-
28,478,964
1,740,406
30,219,370
20,783,534
-
20,783,534
Annual Report 2012
93
31 December 2012
13.
** Pipes, plant and machinery and capital work-in-progress of the Group (cont’d)
Pipes,
plant and
machinery
RM
Capital
work-inprogress
RM
Total
RM
At 31 December 2011
Cost
At 1 January 2011
Additions
Disposals
Written off
Transfers
At 31 December 2011
56,120,678
1,725,375
(3,193,705)
(2,688,000)
56,433
196,079
52,216,860
201,973
63,551
(56,433)
209,091
56,322,651
1,788,926
(3,193,705)
(2,688,000)
196,079
52,425,951
At 1 January 2011
Capitalised in construction costs
Disposals
Written off
At 31 December 2011
Analysed as:
Net carrying amount
94
Annual Report 2012
28,495,208
1,990,636
30,485,844
-
28,495,208
1,990,636
30,485,844
1,909,790
962,021
2,871,811
(1,752,971)
(2,618,109)
37,857
29,024,432
-
1,909,790
962,021
2,871,811
(1,752,971)
(2,618,109)
37,857
29,024,432
27,033,796
1,990,636
29,024,432
-
27,033,796
1,990,636
29,024,432
23,192,428
209,091
23,401,519
31 December 2012
13.
*** Furniture, fittings and office equipment, electrical installations and renovations of the Group
Furniture,
fittings and
office
equipment
RM
Electrical
installations
and
renovations
RM
Total
RM
At 31 December 2012
Cost
At 1 January 2012
Additions
Written off
At 31 December 2012
2,504,685
250,959
(194,724)
(351)
2,560,569
1,460,022
19,202
(1,130)
1,478,094
3,964,707
270,161
(195,854)
(351)
4,038,663
At 1 January 2012
Charge for the year
Written off
At 31 December 2012
1,192,871
261,529
(194,673)
(195)
1,259,532
496,333
136,061
(1,129)
631,265
1,689,204
397,590
(195,802)
(195)
1,890,797
Net carrying amount
1,301,037
846,829
2,147,866
2,456,256
109,114
(61,660)
975
2,504,685
1,428,742
31,620
(340)
1,460,022
3,884,998
140,734
(62,000)
975
3,964,707
At 1 January 2011
Charge for the year
Written off
At 31 December 2011
984,659
267,412
(59,605)
405
1,192,871
353,069
143,604
(340)
496,333
1,337,728
411,016
(59,945)
405
1,689,204
Net carrying amount
1,311,814
963,689
2,275,503
At 31 December 2011
Cost
At 1 January 2011
Additions
Written off
At 31 December 2011
Annual Report 2012
95
31 December 2012
13.
Land and
building *
RM
Furniture,
fittings
and office
equipment
and electrical
installations
and
renovations **
RM
Total
RM
9,999,204
9,999,204
1,414,196
22,254
1,436,450
11,413,400
22,254
11,435,654
Company
At 31 December 2012
Cost
At 1 January 2012
Additions
At 31 December 2012
At 1 January 2012
Charge for the year
At 31 December 2012
Analysed as:
Net carrying amount
96
Annual Report 2012
68,254
160,331
228,585
28,002
(14,001)
242,586
547,581
547,581
126,292
673,873
615,835
160,331
776,166
154,294
(14,001)
916,459
96,256
146,330
242,586
673,873
673,873
770,129
146,330
916,459
9,756,618
762,577
10,519,195
31 December 2012
13.
Land and
building *
RM
Furniture,
fittings
and office
equipment
and electrical
installations
and
renovations **
RM
Total
RM
Company (cont’d)
At 31 December 2011
Cost
At 1 January 2011
Additions
Written off
At 31 December 2011
2,500,000
7,499,204
9,999,204
1,363,618
52,778
(2,200)
1,414,196
3,863,618
7,551,982
(2,200)
11,413,400
40,252
174,332
214,584
28,002
(14,001)
228,585
407,271
407,271
141,190
(880)
547,581
447,523
174,332
621,855
169,192
(880)
(14,001)
776,166
68,254
160,331
228,585
547,581
547,581
615,835
160,331
776,166
9,770,619
866,615
10,637,234
At 1 January 2011
Charge for the year
Written off
At 31 December 2011
Analysed as:
Net carrying amount
Annual Report 2012
97
31 December 2012
13.
* Land and building of the Company
Freehold land
RM
Building
RM
Total
RM
8,599,204
1,400,000
9,999,204
At 31 December 2012
Cost
At 1 January 2012 and 31 December 2012
At 1 January 2012
Charge for the year
At 31 December 2012
Analysed as:
Net carrying amount
-
68,254
160,331
228,585
28,002
(14,001)
242,586
68,254
160,331
228,585
28,002
(14,001)
242,586
-
96,256
146,330
242,586
96,256
146,330
242,586
8,599,204
1,157,414
9,756,618
1,100,000
7,499,204
8,599,204
1,400,000
1,400,000
2,500,000
7,499,204
9,999,204
At 31 December 2011
Cost
At 1 January 2011
Additions
At 31 December 2011
At 1 January 2011
Charge for the year
At 31 December 2011
Analysed as:
Net carrying amount
98
Annual Report 2012
-
40,252
174,332
214,584
28,002
(14,001)
228,585
40,252
174,332
214,584
28,002
(14,001)
228,585
-
68,254
160,331
228,585
68,254
160,331
228,585
8,599,204
1,171,415
9,770,619
31 December 2012
13.
** Furniture, fittings and office equipment and electrical installations and renovations of the Company
Furniture,
fittings and
office
equipment
RM
Electrical
installations
and
renovations
RM
Total
RM
597,922
22,254
620,176
816,274
816,274
1,414,196
22,254
1,436,450
At 1 January 2012
Charge for the year
At 31 December 2012
249,429
55,172
304,601
298,152
71,120
369,272
547,581
126,292
673,873
Net carrying amount
315,575
447,002
762,577
578,964
21,158
(2,200)
597,922
784,654
31,620
816,274
1,363,618
52,778
(2,200)
1,414,196
At 1 January 2011
Charge for the year
Written off
At 31 December 2011
188,328
61,981
(880)
249,429
218,943
79,209
298,152
407,271
141,190
(880)
547,581
Net carrying amount
348,493
518,122
866,615
At 31 December 2012
Cost
At 1 January 2012
Additions
At 31 December 2012
At 31 December 2011
Cost
At 1 January 2011
Additions
Written off
At 31 December 2011
Annual Report 2012
99
31 December 2012
13.
(a)
Property, plant and equipment of the Group and of the Company were acquired during the year by means of:
Group
Cash payments
Hire purchase financing
(b)
Company
2012
RM
2011
RM
2012
RM
2011
RM
3,491,619
879,000
4,370,619
8,043,626
2,048,000
10,091,626
22,254
22,254
7,551,982
7,551,982
Included in the property, plant and equipment of the Group are assets held under hire purchase arrangements as
follows:
At cost
RM
Accumulated
depreciation
RM
Net carrying
amount
RM
Depreciation
charge
RM
985,000
579,360
1,564,360
43,371
69,765
113,136
941,629
509,595
1,451,224
43,371
49,426
92,797
2,074,000
954,038
3,028,038
243,720
81,561
325,281
1,830,280
872,477
2,702,757
180,298
52,367
232,665
Group
2012
Plant and machinery
Motor vehicles
2011
Plant and machinery
Motor vehicles
Details of terms and conditions of the hire purchase arrangements are disclosed in Note 32.
(c)
Included in the property, plant and equipment of the Group and of the Company are the following cost of fully
depreciated assets which are still in use:
Group
Land and buildings
Plant and machinery
Motor vehicles
Furniture, fittings and office equipment
100
Annual Report 2012
Company
2012
RM
2011
RM
2012
RM
2011
RM
2,001,431
7,748,559
1,645,867
352,359
11,748,216
2,001,431
6,927,583
1,531,453
447,401
10,907,868
224,976
224,976
218,777
218,777
31 December 2012
13.
(d)
During the current financial year, the Group carried out a comparison of recoverable amounts of its freehold land
and buildings against the carrying amounts. For the purpose of impairment testing of these assets, the recoverable
amount is determined based on prevailing market value determined by professional valuers or last transacted sale
of surrounding property.
Based on the Group’s review, an additional impairment loss of RM93,383 (2011 : impairment loss written back of
RM14,001) was provided for the current financial year of the Group.
Based on the Company’s review, an impairment loss was written back amounting to RM14,001 (2011 : RM14,001)
for the current financial year of the Company.
The carrying amount of the affected freehold land and buildings after impairment as at 31 December 2012 of the
Group and of the Company were RM1,513,118 (2011 : RM1,626,075) and RM1,600,000 (2011 : RM1,600,000)
respectively.
14.
LAND HELD FOR PROPERTY DEVELOPMENT AND PROPERTY DEVELOPMENT COSTS
(a)
Leasehold
land
RM
Development
costs
RM
Total
RM
Group
At 31 December 2012
Cost
At 1 January 2012
Costs incurred during the year
Transferred to property development costs (Note 14(b))
At 31 December 2012
20,568,674
29,828,610
(6,418,947)
43,978,337
193,623
2,416
(17,548)
178,491
20,762,297
29,831,026
(6,436,495)
44,156,828
19,257,129
1,311,545
20,568,674
185,126
8,497
193,623
19,442,255
1,320,042
20,762,297
At 31 December 2011
Cost
At 1 January 2011
At 31 December 2011
Annual Report 2012
101
31 December 2012
14.
LAND HELD FOR PROPERTY DEVELOPMENT AND PROPERTY DEVELOPMENT COSTS (CONT’D)
(b)
Leasehold
land
RM
Development
costs
RM
Total
RM
13,001,762
45,418,128
18,073,308
32,583,930
31,075,070
78,002,058
6,418,947
(1,584,947)
(10,545,268)
52,708,622
17,548
(4,935,433)
(17,513,788)
28,225,565
6,436,495
(6,520,380)
(28,059,056)
80,934,187
(3,313,690)
(16,948,475)
10,545,268
(9,716,897)
(12,388,815)
(26,827,162)
17,513,788
(21,702,189)
(15,702,505)
(43,775,637)
28,059,056
(31,419,086)
42,991,725
6,523,376
49,515,101
22,081,104
5,979,616
(460,725)
(14,598,233)
13,001,762
2,790,135
24,050,720
(980,137)
(7,787,410)
18,073,308
24,871,239
30,030,336
(1,440,862)
(22,385,643)
31,075,070
(7,066,656)
(10,845,267)
14,598,233
(3,313,690)
(553,647)
(19,622,578)
7,787,410
(12,388,815)
(7,620,303)
(30,467,845)
22,385,643
(15,702,505)
9,688,072
5,684,493
15,372,565
Group
At 31 December 2012
Cumulative property development costs
At 1 January 2012
Transferred from land held for
property development (Note 14(a))
Transferred to inventories
Reversal of completed phases
At 31 December 2012
Cumulative costs recognised in profit or loss
At 1 January 2012
Recognised during the year (Note 5)
At 31 December 2012
Property development costs at 31 December 2012
At 31 December 2011
Cumulative property development costs
At 1 January 2011
Transferred to inventories
At 31 December 2011
Cumulative costs recognised in profit or loss
At 1 January 2011
At 31 December 2011
Property development costs at 31 December 2011
102
Annual Report 2012
31 December 2012
14.
LAND HELD FOR PROPERTY DEVELOPMENT AND PROPERTY DEVELOPMENT COSTS (CONT’D)
(b)
Property development costs (cont’d)
The title deeds to certain of the Group’s leasehold land with carrying amounts totalling RM2,519,430 (2011 :
RM2,513,852) have yet to be transferred to its subsidiaries pending the approval from the relevant authorities.
Certain land held for property development of the Group with carrying amounts of RM53,272,091 (2011 : RMNil)
are mortgaged to secure the term loan of a subsidiary of the Company.
Included in property development costs incurred during the financial year is:
Group
Interest expense (Note 10)
15.
2012
RM
2011
RM
313,529
-
INVESTMENT PROPERTIES
Group
2012
RM
At 1 January
Fair value adjustments
Additions
Disposals
At 31 December
23,320,000
(1,819,111)
40,582,441
(230,000)
61,853,330
Company
2011
RM
2012
RM
2011
RM
13,329,160
2,095,061
7,895,779
23,320,000
24,490,000
595,000
25,085,000
14,423,355
2,170,866
7,895,779
24,490,000
Investment properties are stated at fair value, which has been determined based on valuations at the reporting date. Valuations
are performed by accredited independent valuers with recent experience in the location and category of properties being
valued. The valuations are based on the comparison method that makes reference to recent transaction value.
Certain investment properties of the Group and of the Company with carrying amounts of RM41,873,330 (2011 :
RM3,500,000) and RM3,470,000 (2011 : RM3,500,000) are mortgaged to secure the Group’s and the Company’s term
loans (Note 32) respectively.
The following investment properties are held under lease terms:
Group
Leasehold land
Buildings
Company
2012
RM
2011
RM
2012
RM
2011
RM
7,320,000
6,235,000
13,555,000
7,390,000
5,770,000
13,160,000
7,270,000
9,345,000
16,615,000
7,270,000
8,839,195
16,109,195
The title deeds to certain of the Company’s leasehold land and building with carrying amounts totalling RM7,265,000
(2011 : RM6,670,000) have yet to be transferred to the Company pending the approval from the relevant authorities.
Included in investment properties of the Group is an investment property with carrying amounts of RM38,403,330
(2011 : RMNil) held through DKLS Aust Trust, a trust company established in Australia.
Annual Report 2012
103
31 December 2012
16.
LAND USE RIGHTS
Group
2012
RM
2011
RM
Cost
At 1 January
At 31 December
227,788
(5,658)
222,130
210,956
16,832
227,788
24,678
4,443
(407)
28,714
19,249
4,556
873
24,678
Accumulated amortisation
At 1 January
Amortisation for the year (Note 9)
At 31 December
Net carrying amount
193,416
203,110
Amount to be amortised
- Not later than one year
- Later than one year but not later than five years
- Later than five years
4,443
17,772
171,201
4,556
18,224
180,330
The Group has land use rights over a plot of state-owned land in the People’s Republic of China (“PRC”) where the
Group’s PRC water treatment plant reside. The land use rights are not transferable and have a remaining tenure of
41 years (2011 : 42 years).
17.
INVESTMENTS IN SUBSIDIARIES
Company
2012
RM
Unquoted shares, at cost
Less: Accumulated impairment losses
104
Annual Report 2012
60,967,527
(2,250,030)
58,717,497
2011
RM
60,853,578
(599,450)
60,254,128
31 December 2012
17.
INVESTMENTS IN SUBSIDIARIES (CONT’D)
Details of the subsidiaries are as follows:
Name of company
Country of
incorporation
Equity interest
held (%)
2012
2011
Principal activities
DKLS Construction Sdn Bhd
Malaysia
100
100
Building and general
contractors and sale of
materials and property development
DKLS Quarry & Premix
Sdn Bhd
Malaysia
100
100
Quarry master and sale of
related products
DKLS Precast System
Sdn Bhd
Malaysia
100
100
Manufacturing and sales of
pre-cast concrete products
(ceased manufacturing
activities during the year)
DKLS Development Sdn Bhd
Malaysia
100
100
Construction and development
of properties
DKLS Management Sdn Bhd
Malaysia
100
100
Real property development
and investment holding
DKLS Energy Sdn Bhd
(Note 45(e))
Malaysia
51
51
Investment holding
DKLS Marketing Sdn Bhd
(Note 45(i))
Malaysia
70
100
Trading of construction
materials, hardware, kitchen
and sanitary wares and
overseas merchandise trade
in minerals
DKLS Oil & Gas Sdn Bhd
(Note 46(a) and 46(b))
Malaysia
100
100
Investment holding
DKLS-PJI Venture Capital
Sdn Bhd
Malaysia
60
60
Investment holding
Syabas Awansari Sdn Bhd
Malaysia
100
100
Investment holding, provision
of management, consultancy
services and real property
development
Annual Report 2012
105
31 December 2012
17.
INVESTMENTS IN SUBSIDIARIES (CONT’D)
Details of the subsidiaries are as follows (cont’d):
Equity interest
held (%)
2012
2011
Name of company
Country of
incorporation
Ratus Vista Sdn Bhd
Malaysia
100
100
Dormant
Gerbang Prisma Sdn Bhd
Malaysia
60
60
Dormant
DKLS Homebuilders Sdn Bhd
Malaysia
60
60
Felling, removal, extraction
and sale of merchantable timbers
DKLS Premierhome Sdn Bhd
(Note 45(k))
Malaysia
100
100
Construction and development
of properties
DKLS Lakeview Sdn Bhd
(Note 46(a))
Malaysia
100
100
Investment holding
DKLS Aust Trust**
(Note 46(c))
Australia
80.2
80.2
Trust company
- Investment holding
Swenston Pte Ltd*
Singapore
80.2
80.2
Investment holding
Malaysia
100
-
Investment holding
People’s
Republic of China
100
100
DKLS Equity Sdn Bhd
(Note 45(f))
Held by DKLS-PJI Venture
Capital Sdn Bhd
Zhangpu Baohu Running
Water Co Ltd*
(Note 45(h))
Supply, operation and maintenance
of water treatment plant
*
Audited by firms of auditors other than Ernst & Young.
**
Consolidated based on management financial statements which are reviewed by Ernst & Young for the purpose
of consolidation.
All the above subsidiaries were consolidated using purchase method except for DKLS Construction Sdn Bhd and DKLS
Quarry & Premix Sdn Bhd which were accounted for using the merger method (Note 2.4(a)(ii)).
106
Annual Report 2012
31 December 2012
18.
INTERESTS IN ASSOCIATES
Group
2012
RM
Unquoted shares, at cost
Group’s share of post-acquisition losses
Equity contribution in associate
Less : Accumulated impairment losses
Less : Reclassified as assets held-for-sale
(Note 27)
Company
2011
RM
2012
RM
2011
RM
58,445,739
(14,365,540)
44,080,199
13,632,708
57,712,907
57,712,907
58,445,739
(9,036,190)
49,409,549
3,712,752
53,122,301
53,122,301
548,000
548,000
548,000
(98,000)
450,000
548,000
548,000
548,000
(98,000)
450,000
(5,759,538)
51,953,369
53,122,301
450,000
450,000
The Group has not recognised losses in full relating to an associate where its share of losses exceeds the Group’s
interest in this associate. The Group’s cumulative share of unrecognised losses at the reporting date was RM1,449,744
(2011 : RM759,546). The Group has no obligation in respect of these losses.
The equity contribution in associate represent advances which are unsecured, interest free and are not repayable or due
within the next twelve months.
Details of the associates are as follows:
Name of company
Country of
incorporation
Equity interest
held (%)
2012
2011
Held by the Company
Altidex Construction Sdn Bhd
Malaysia
49
49
General contractor
DKLS Clearwater Sdn Bhd
Malaysia
45
45
Investment holding
People’s
Republic of China
30
30
Development and operation
of hydropower resources
Held by DKLS Energy
Sdn Bhd
Yong Yu Hydro Electric
Development Co Ltd
Annual Report 2012
107
31 December 2012
18.
INTERESTS IN ASSOCIATES (CONT’D)
Details of the associates are as follows (cont’d):
Country of
incorporation
Name of company
Equity interest
held (%)
2012
2011
Held by DKLS Oil & Gas
Sdn Bhd
UMW Fabritech Sdn Bhd
(Note 46(a))
Malaysia
30
30
Undertake the business of
fabrication of oil and gas
structures and sandblasting,
priming, coating, testing,
repair maintenance and
services of equipment and tubes
Lao People’s
Democratic
Republic
63
100
Supply, operation and
maintenance of water
treatment plant
Jinbaolong (Fujian)
Electronic Co Ltd
(Note 27 & 45(j))
People’
Republic of China
40
40
Manufacturing electronic
components, electronic
vaccum devices, and other
related electronic equipment
Fujian Zhongguan
Construction Materials
Co Ltd (Note 27 & 45(j))
People’s
Republic of China
40
40
Sale of new construction
materials and steel furniture
Held by DKLS Clearwater
Sdn Bhd
Savan-DKLS Water Supply
Co Ltd (Note 45(c))
Held by DKLS
Management Sdn Bhd
The financial year end of the above associates are coterminous with those of the Group.
108
Annual Report 2012
31 December 2012
18.
INTERESTS IN ASSOCIATES (CONT’D)
The summarised financial information of the associates are as follows:
Group
2012
RM
2011
RM
Current assets
Non-current assets
Total assets
69,379,348
613,921,248
683,300,596
40,805,251
613,564,911
654,370,162
Current liabilities
Non-current liabilities
Total liabilities
224,978,813
314,780,816
539,759,629
151,777,212
334,976,089
486,753,301
43,716,608
(20,060,251)
25,893,364
(10,223,171)
Assets and liabilities
Results
Revenue
Loss for the year
19.
OTHER INVESTMENTS
Company
2012
RM
2011
RM
70,000,000
27,900,000
1,415,041
744,188
2,159,229
698,770
716,271
1,415,041
(8,047,838)
64,111,391
29,315,041
issued by a certain subsidiaries
Face value of NCRPS
Interest income recognised in profit or loss:
At 1 January
At 31 December
Balance at 31 December
Annual Report 2012
109
31 December 2012
20.
AVAILABLE-FOR-SALE INVESTMENTS
Group
2012
RM
Company
2011
RM
2012
RM
2011
RM
Non-current
Equity instruments (unquoted in Malaysia):
At cost
At carrying amount
1,000,000
(1,000,000)
-
1,000,000
(1,000,000)
-
1,000,000
(1,000,000)
-
1,000,000
(1,000,000)
-
Equity instruments (quoted in Malaysia):
- at carrying amount
19,380
17,765
-
-
- at market value
19,380
17,765
-
-
- at carrying amount
9,148,470
5,063,680
-
-
- at market value
9,148,470
5,063,680
-
-
Current
Equity instruments (quoted in Malaysia):
21.
QUARRY EXTRACTION EXCLUSIVE RIGHT
Group
2012
RM
2011
RM
At 1 January
Amortisation for the year (Note 7)
714,067
(89,259)
803,325
(89,258)
At 31 December
624,808
714,067
Quarry extraction exclusive right represents a trade deposit which is refundable upon depletion of the quarry and rock
materials on lands or termination of the agreement to purchase quarry and rock materials.
110
Annual Report 2012
31 December 2012
22.
TRADE AND OTHER RECEIVABLES
Group
Company
2012
RM
2011
RM
2012
RM
2011
RM
1,271,186
1,188,024
-
-
30,842,133
438,185
30,968,837
62,249,155
50,894,358
18,007
189,305
30,234,217
3,800,029
85,135,916
-
-
Less: Allowance for impairment
Third parties
Trade receivables, net
(9,241,150)
53,008,005
(11,362,360)
73,773,556
-
-
Other receivables
Third parties
Subsidiaries
Associates
Related parties
Deposits
Others
Other receivables, net
31,834
3,070,048
2,239,120
19,594,121
37,624
24,972,747
236,550
2,928,488
3,611,620
4,472,957
1,026,510
12,276,125
28,240,751
2,678,488
12,498
1,184
30,932,921
14,701,530
2,928,488
12,498
27,399
17,669,915
Trade and other receivables (current)
77,980,752
86,049,681
30,932,921
17,669,915
79,251,938
51,664,802
130,916,740
87,237,705
77,171,276
164,408,981
30,932,921
4,035,233
34,968,154
17,669,915
37,765,246
55,435,161
Non-current
Trade receivable
Third party
Current
Trade receivables
Third parties
Associates
Related parties
Progress billings receivables
Retention sum on contracts
Total trade and other receivables
(current and non-current)
Add : Cash and bank balances (Note 26)
Total loans and receivables
Trade and other receivables at the reporting date are denominated in the following currencies:
Group
Australian Dollars
Ringgit Malaysia
Renminbi Yuan
Singapore Dollars
United States Dollars
Company
2012
RM
2011
RM
2012
RM
2011
RM
19,143
76,387,386
279
12,515
2,832,615
79,251,938
3,887,288
74,405,645
8,944,772
87,237,705
30,932,921
30,932,921
17,669,915
17,669,915
Annual Report 2012
111
31 December 2012
22.
TRADE AND OTHER RECEIVABLES (CONT’D)
(a)
Trade receivables
Trade receivables are generally non-interest bearing and on 14 to 90 days (2011 : 30 to 90 days) terms. They are
recognised at their original invoice amounts which represent their fair values on initial recognition.
Trade receivables are to be settled in cash on due dates except for progress billings receivables amounting to
RM2,170,956 (2011 : RM8,944,772) and amount due from third party amounting to RMNil (2011 : RM16,820,900)
which are to be settled via in-kind payment.
Ageing analysis of trade receivables
The ageing analysis of the Group’s trade receivables is as follows:
Group
Neither past due nor impaired
1 to 30 days past due not impaired
More than 120 days past due not impaired
Past due but not impaired
Impaired
2012
RM
2011
RM
20,545,758
11,603,264
8,928,394
731,507
8,509,296
2,689,786
32,462,247
9,241,150
62,249,155
26,940,776
8,603,939
3,883,024
1,573,662
4,698,919
28,073,236
46,832,780
11,362,360
85,135,916
Receivables that are neither past due nor impaired
Trade receivables that are neither past due nor impaired are creditworthy debtors with good payment records with
the Group.
None of the Group’s trade receivables that are neither past due nor impaired have been renegotiated during the
financial year.
Receivables that are past due but not impaired
Receivables that are past due but not impaired are unsecured in nature.
These are creditworthy debtors with the Group which normally make payments to the Group beyond the credit
period given.
Included in the previous year was a stakeholder’s sum of RM9,035 in which this amount was received at the end
of the retention period during the financial year.
112
Annual Report 2012
31 December 2012
22.
(a)
Trade receivables (cont’d)
Receivables that are impaired
Group
Individually impaired
2012
2011
RM
RM
Trade receivable-nominal amounts
Less: Allowance for impairment
9,241,150
(9,241,150)
-
11,362,360
(11,362,360)
-
11,362,360
675,606
(542,388)
(2,254,428)
9,241,150
18,892,617
1,837,530
(810,885)
(8,556,902)
11,362,360
Movement in allowance accounts:
At 1 January
Charge for the year
Reversal of impairment losses
Written off
At 31 December
Trade receivables that are individually determined to be impaired at the reporting date relate to debtors that are in
significant financial difficulties and have defaulted on payments. These receivables are not secured by any
collateral or credit enhancements.
Trade receivable (non-current)
The trade receivable (non-current) represents a trade deposit which is refundable upon depletion of the quarry and
rock materials on lands or termination of the agreement to purchase quarry and rock materials. The management
estimates the depletion of the quarry and rock materials on lands by year 2019, thus the trade receivable is carried
at amortised cost. The effective interest rate used is 7% per annum.
Amounts due from third parties (current)
Included in the amounts due from third parties are advances given on contracts of RM6,363,026 (2011 :
RM8,130,000). These amounts are non-interest bearing, and have no fixed terms of repayment. These amounts
are unsecured and to be settled in cash.
Also included in the amount due from third parties is an amount of RM153,665 (2011 : RM16,974,565) being the
balance of proceeds receivable from the sale of inventories as disclosed in Note 45(b). The amount is to be settled
in cash of RM153,665 (2011 : RM153,665) and in-kind payment of RMNil (2011 : RM16,820,900).
Amounts due from related parties (current)
The amounts due from related parties in the previous year were trade in nature with credit periods ranging from
30 days to 60 days and non-interest bearing. These amounts have been fully settled during the year.
Included in the amount due from related party in the previous year was an amount of retention sum of
RM137,672.
Annual Report 2012
113
31 December 2012
22.
(a)
Trade receivables (cont’d)
Amount due from associates (current)
The amounts due from associates are trade in nature with credit periods ranging from 30 days to 60 days and
non-interest bearing. These amounts are unsecured and are to be settled in cash on due date.
(b)
Other receivables
Amounts due from subsidiaries and associates (current)
The amounts due from subsidiaries and associates, which are mainly provided for the daily operations, are
unsecured, non-interest bearing and repayable on demand. These amounts are to be settled in cash.
Amounts due from related parties (current)
The amounts due from related parties comprise of advances for purchase of standing timbers as disclosed in Note
45(a) and for sub contract works. The amounts are unsecured, non-interest bearing and are repayable progressively
against the purchasing of standing timbers and sub contract works.
23.
DUE FROM/(TO) CUSTOMERS ON CONTRACTS
Group
2012
RM
Construction contract costs incurred to date
Attributable profits
Less: Progress billings
2011
RM
95,669,191
9,249,673
104,918,864
(118,643,626)
(13,724,762)
66,881,098
9,905,539
76,786,637
(80,029,639)
(3,243,002)
3,824,672
(17,549,434)
(13,724,762)
2,233,920
(5,476,922)
(3,243,002)
(9,272,604)
3,937,701
(5,640,226)
Represented by:
Amount due from customers on contracts (Note 25)
Amount due to customers on contracts (Note 36)
Retention sum on contracts, included within trade receivables
Advances received on contracts, included within trade payables (Note 35)
114
Annual Report 2012
31 December 2012
23.
DUE FROM/(TO) CUSTOMERS ON CONTRACTS (CONT’D)
The costs incurred to date on construction contracts include the following charges made during the financial year:
Group
Depreciation (Note 13)
Hire purchase interest (Note 10)
Provision for liquidated ascertained damages
Rental of buildings
Rental of motor vehicles
Realised loss on foreign exchange
Employee benefits expense (Note 8)
2012
RM
2011
RM
1,236,479
918,023
33,226
76,147
35,645
25,626
2,998,308
1,367,607
523,222
9,071
2,708,218
66,766
2,177,372
2,778,752
194,172
25,384
2,998,308
2,036,025
123,797
17,550
2,177,372
Employee benefits expense comprise:
Salaries, wages, allowances and overtime
Social security contributions
24.
INVENTORIES
Group
At cost:
Consumables
Finished goods
Properties held for sale
Raw materials
Spare parts
Work-in-progress - quarry products
At net realisable value:
Finished goods
Raw materials
2012
RM
2011
RM
166,497
1,290,541
28,658,656
1,491,739
1,600,524
1,349,172
34,557,129
243,139
2,504,357
748,334
2,039,064
1,692,095
2,664,935
9,891,924
47,654
47,654
116,058
12,664
128,722
34,604,783
10,020,646
Included in properties held for sale of the Group are amounts of RM6,159,991 (2011 : RMNil) representing industrial
lots located outside Malaysia received by a subsidiary of the Company arising from in-kind payments for construction
project undertaken by the subsidiary as disclosed in Note 22(a). As at reporting date, the land titles have yet to be issued
to the subsidiary concerned.
Also included in properties held for sale is an amount of RM17,380,177 (2011 : RMNil) representing vacant land received
by a subsidiary of the Company being the balance of proceeds receivable from the sale of completed properties as
disclosed in Note 45(b).
Annual Report 2012
115
31 December 2012
25.
OTHER CURRENT ASSETS
Group
Accrued billings in respect of property
development costs
Amount due from customers on contracts
(Note 23)
Deposits
Prepayments
26.
Company
2012
RM
2011
RM
2012
RM
2011
RM
2,930,368
2,298,949
-
-
3,824,672
202,704
6,957,744
2,233,920
1,273,586
448,557
6,255,012
69,045
69,045
8,582
8,582
CASH AND BANK BALANCES
Group
Deposits with licensed banks
Deposits with licensed financial institution
Company
2012
RM
2011
RM
2012
RM
2011
RM
23,015,719
28,501,982
147,101
51,664,802
16,912,229
58,536,513
1,722,534
77,171,276
705,941
3,329,292
4,035,233
2,631,242
35,134,004
37,765,246
Cash and bank balances at the reporting date are denominated in the following currencies:
Group
Australian Dollars
Lao Kip
Hong Kong Dollars
Ringgit Malaysia
Renminbi Yuan
Singapore Dollars
Thai Baht
United States Dollars
116
Annual Report 2012
Company
2012
RM
2011
RM
2012
RM
2011
RM
2,177,244
49,359
268,863
46,255,094
894,071
68,309
208,185
1,743,677
51,664,802
4,628,983
2,638
70,559,283
678,633
203,930
1,097,809
77,171,276
13,644
4,019,234
2,355
4,035,233
1,527,119
36,235,680
2,447
37,765,246
31 December 2012
26.
CASH AND BANK BALANCES (CONT’D)
Included in the Group’s cash and bank balances are:
(i)
amounts totalling RM813,628 (2011 : RM3,166,579) in current accounts which earn interest at floating rates based
on daily bank deposit rates.
(ii)
amounts totalling RM27,795 (2011 : RM1,673,652) in foreign currency current accounts which earn interest at
floating rates based on daily bank deposit rates.
(iii)
amounts totalling RM105,719 (2011 : RM1,031,018) placed in a short-term money market fund with an asset
management company in Malaysia, which yield a daily rate of 2.20% (2011 : 2.22%) per annum.
(iv)
amounts totalling RM14,422,067 (2011 : RM6,015,174) held in Housing Development Accounts pursuant to
Section 7A of the Housing Development (Control and Licensing) Act 1966 and are restricted from use in other
operations.
Included in the Company’s cash and bank balances are amounts totalling RM15,999 (2011 : RM1,529,566) in foreign
currency accounts which earn interest at floating rates based on daily bank deposits rates.
The deposits with licensed banks and licensed financial institution of the Group and of the Company represent shortterm deposits with maturity period of 2 to 365 days (2011 : 4 to 365 days) and 4 to 365 days (2011 : 4 to 365 days)
respectively and earn interests at the rate of 0.5% - 3.60% (2011 : 0.5% - 3.30%) and 2.5% - 3.15% (2011 : 2.4% 3.25%) per annum respectively.
Included in the deposits with licensed banks of the Group and the Company are amounts totalling RM1,500,110
(2011 : RM125,456) and RM129,292 (2011 : RM125,456) respectively which have been pledged as securities for
banking facilities granted to two of the subsidiaries.
27.
NON-CURRENT ASSETS CLASSIFIED AS HELD-FOR-SALE
Group
Interest in associates (Note 18 and Note 45(j))
Plant and equipment* (Note 13)
*
2012
RM
2011
RM
5,759,538
809,077
6,568,615
-
Subsequent to the end of the financial year, a subsidiary disposed of plant and equipment for a total cash
consideration of RM800,000.
Annual Report 2012
117
31 December 2012
28.
SHARE CAPITAL
Number of ordinary
shares of RM1 each
2012
2011
Authorised
Issued and fully paid
Amount
2012
RM
2011
RM
200,000,000
200,000,000
200,000,000
200,000,000
92,699,600
92,699,600
92,699,600
92,699,600
The holders of ordinary shares are entitled to receive dividends as and when declared by the Company. All ordinary
shares carry one vote per share without restrictions and rank equally with regard to the Company’s residual assets.
29.
SHARE PREMIUM
The share premium account may be applied in paying up unissued shares as fully paid bonus shares.
30.
RETAINED PROFITS
The Company is able to distribute dividends out of its entire retained profits as at 31 December 2012 and 2011 under
the single tier system.
31.
RESERVES
Foreign
currency
translation
reserve
RM
Asset
revaluation
reserve
RM
Fair value
adjustment
reserve
RM
Total
RM
Group
At 31 December 2012
At 1 January 2012
Other comprehensive income:
Available-for-sale investments:
Gain on fair value changes
Transfer to profit or loss upon disposal (Note 4)
Less : Non-controlling interest
At 31 December 2012
118
Annual Report 2012
(57,389)
1,567,909
(213,184)
-
-
90,374
-
-
30,180
(150,019)
1,567,909
(11,017)
119,287
(68,507)
(832)
38,931
1,499,503
(213,184)
90,374
119,287
(68,507)
29,348
1,456,821
31 December 2012
31.
RESERVES (CONT’D)
Foreign
currency
translation
reserve
RM
Asset
revaluation
reserve
RM
Fair value
adjustment
reserve
RM
Total
RM
Group (cont’d)
At 31 December 2011
At 1 January 2011
Other comprehensive income:
Avaliable-for-sale investments:
Loss on fair value changes
Transfer to profit or loss upon disposal (Note 9)
Less : Non-controlling interest
At 31 December 2011
(a)
(303,215)
347,254
1,567,909
(461)
-
-
(276)
-
-
(101,152)
(57,389)
1,567,909
(12,682)
2,126
(11,017)
1,264,233
347,254
(276)
(12,682)
2,126
(101,152)
1,499,503
Foreign currency translation reserve
The foreign currency translation reserve is used to record exchange differences arising from the translation of
the financial statements of foreign operations whose functional currencies are different from that of the Group’s
presentation currency. It is also used to record the exchange differences arising from monetary items which form
part of the Group’s net investment in a foreign operation.
(b)
Asset revaluation reserve
The asset revaluation reserve represents the difference between the carrying amount of a property previously held
as ‘property, plant and equipment’ and its fair value at the date of transfer to ‘investment properties’.
(c)
Fair value adjustment reserve
Fair value adjustment reserve represents the cumulative fair value changes, net of tax, of available-for-sale
financial assets until they are disposed or impaired.
Annual Report 2012
119
31 December 2012
32.
LOANS AND BORROWINGS
Group
Company
2012
RM
2011
RM
2012
RM
2011
RM
266,642
56,123,494
56,390,136
171,880
2,048,000
2,219,880
1,484,000
1,484,000
2,048,000
2,048,000
2029 & 2032 12,614,479
10,009,534
-
-
69,004,615
12,229,414
1,484,000
2,048,000
2013
2013
609,319
2,235,558
2,844,877
820,931
564,000
1,384,931
564,000
564,000
564,000
564,000
On demand
2013
2013
2,191,243
1,800,000
5,061,000
9,052,243
6,366,560
1,800,000
3,720,225
11,886,785
-
-
Total loans and borrowings (current)
11,897,120
13,271,716
564,000
564,000
Total loans and borrowings
80,901,735
25,501,130
2,048,000
2,612,000
Maturity
Non-current
Secured:
Hire purchase liabilities (Note 33)
Term loans
Unsecured:
Non-cumulative redeemable
preference shares (“NCRPS”)
Total loans and borrowings
(non-current)
2014
2014 - 2020
Current
Secured:
Hire purchase liabilities (Note 33)
Term loans
Unsecured:
Bank overdrafts
Revolving credits
Bankers’ acceptances
120
Annual Report 2012
31 December 2012
32.
LOANS AND BORROWINGS (CONT’D)
The remaining maturities of the loans and borrowings as at 31 December 2012 are as follows:
Group
On demand or within one year
More than 1 year and less than 2 years
More than 2 years and less than 5 years
5 years or more
Company
2012
RM
2011
RM
2012
RM
2011
RM
11,897,120
4,014,700
24,084,675
40,905,240
80,901,735
13,271,716
735,880
1,484,000
10,009,534
25,501,130
564,000
564,000
920,000
2,048,000
564,000
564,000
1,484,000
2,612,000
Loan and borrowings at the reporting date are denominated in the following currencies:
Group
Hong Kong Dollar
Ringgit Malaysia
Singapore Dollar
Company
2012
RM
2011
RM
2012
RM
2011
RM
9,846,870
60,890,683
10,164,182
80,901,735
25,501,130
25,501,130
2,048,000
2,048,000
2,612,000
2,612,000
Hire purchase liabilities
These obligations are secured by a charge over the hire purchase assets (Note 13). The discount rates implicit in the
hire purchase is 2.45% (2011 : 2.45% to 2.80%) per annum.
Bank overdrafts
Bank overdrafts bear interest at 6.60% to 7.85% (2011 : 7.55% to 7.85%) per annum and are unsecured but supported by
way of negative pledge and corporate guarantees given by the Company.
Revolving credits
The unsecured revolving credits are subject to interest rate of 5.10% (2011 : 5.10%) per annum and are re-priced at
intervals of 3 months. The facility is supported by way of negative pledge and corporate guarantees given by the
Company.
Bankers’ acceptances
The unsecured bankers’ acceptances are subject to floating interest rates contracted at the inception date of the
respective contracts and are supported by way of negative pledge and corporate guarantees given by the Company.
Term loans
Term loans are secured by a charge over certain land held for property development (Note 14) and investment properties
(Note 15) of the Group and an assignment of rights, title to and interest in the rental proceeds to be derived from the said
investment properties. The term loans bear interest at 2.43% to 4.66% (2011 : 5.14%) per annum.
Annual Report 2012
121
31 December 2012
32.
Number of NCRPS
of RM1 each
2012
2011
Amount
2012
RM
2011
RM
20,100,000
57,900,000
78,000,000
20,100,000
20,100,000
Authorised
At 1 January
Created during the year
At 31 December
20,100,000
57,900,000
78,000,000
20,110,000
20,100,000
The amount recognised in the statements of financial position of the Group as at 31 December is analysed as follows:
Number of NCRPS
of RM1 each
2012
2011
Amount
2012
RM
2011
RM
19,600,000
4,900,000
24,500,000
19,600,000
19,600,000
10,628,353
13,871,647
24,500,000
8,816,718
10,783,282
19,600,000
Nominal value - issued and fully paid
At 1 January
Issued and fully paid during year
19,600,000
4,900,000
24,500,000
19,600,000
19,600,000
Analysed as:
Liability component
Equity component
The main features of the NCRPS issued by a subsidiary of the Company are as follows:
122
(a)
The NCRPS are unsecured.
(b)
The tenure of the NCRPS is 20 years from the date of issuance of the NCRPS, or such other shorter periods as
the directors of the subsidiary shall determine at any time after the allotment of the NCRPS (provided they are fully
paid).
(c)
The NCRPS holders shall be entitled to receive a non-cumulative preference dividend at 3% on each NCRPS
declared by the directors of the subsidiary at its absolute discretion from time to time as they think expedient
provided always that such dividends shall only be payable out of the distributable profits of the subsidiary after
taking into account the provisions for any reserves.
(d)
No dividends shall be declared and/or paid on ordinary shares of the subsidiary in any year or period unless the
non-cumulative preference dividend payable to NCRPS holders shall have been fully paid prior to any proposed
payment of the dividends on the ordinary shares of the subsidiary.
(e)
The NCRPS holders shall be entitled to require the subsidiary to redeem the NCRPS on the expiry of the tenure
of 20 years at a premium of RM0.60 per share.
Annual Report 2012
31 December 2012
32.
Non-cumulative redeemable preference shares (“NCRPS”) (cont’d)
(f)
The directors of the subsidiary shall have the absolute discretion from time to time to redeem such shares at any
time after the allotment of the NCRPS in the following manner:(i)
To redeem in whole or in part of the NCRPS in any period not later than the 5th years of the date of issuance
of the NCRPS at a premium of RM0.20 per share; or
(ii)
To redeem in whole or in part of the NCRPS in any period falling within the 6th up to the 10th years of the
date of issuance of the NCRPS at a premium of RM0.30 per share; or
(iii)
date of issuance of the NCRPS at a premium of RM0.45 per share; or
(iv)
date of issuance of the NCRPS at a premium of RM0.60 per share.
(g)
The NCRPS holders shall be entitled to transfer in whole or in part of the NCRPS to any person with the prior consent of
the directors of the subsidiary who shall have the absolute discretion in refusing the transfer of the same.
(h)
The NCRPS holders shall not be entitled to the same rights as the existing ordinary shareholders with respect to
any issue of shares, such as bonus and rights issue, by the subsidiary by way of capitalisation of profits or
reserves including the share premium account and capital redemption fund.
(i)
The NCRPS holders shall not carry any voting rights except where the rights and privileges of NCRPS are affected.
(j)
In case of any liquidation, dissolution and winding up of the subsidiary, the NCRPS holders shall rank in priority in respect
with the ordinary shareholders in any distribution of assets, up to the par value of the NCRPS of RM1 each.
The proceeds received from the issue of NCRPS have been split between the liability component and equity component,
representing the fair value of the redemption option. The carrying amount of the liability component of NCRPS of the
Group at the reporting date is arrived at as follows:
Face value of NCRPS
Equity component
- Equity component, net of deferred tax
- Deferred tax liability
Liability component of NCRPS at initial recognition
Interest expense recognised in profit or loss:
At 1 January
At 31 December
Liability component as at 31 December
2012
RM
2011
RM
24,500,000
19,600,000
(6,728,736)
(7,142,911)
(13,871,647)
10,628,353
(5,147,462)
(5,635,820)
(10,783,282)
8,816,718
1,192,816
793,310
1,986,126
577,495
615,321
1,192,816
12,614,479
10,009,534
The NCRPS of the Group are repayable to certain directors and a person deemed to be connected with a director of the
Company pursuant to Section 122A of the Companies Act 1965.
Annual Report 2012
123
31 December 2012
33.
HIRE PURCHASE LIABILITIES
Group
2012
RM
Future minimum payments:
Payable within 1 year
Payable between 1 and 2 years
Less: Finance charges
Representing hire purchase liabilities:
Due within 12 months (Note 32)
Due after 12 months (Note 32)
34.
2011
RM
640,264
271,482
911,746
(35,785)
875,961
844,981
174,820
1,019,801
(26,990)
992,811
609,319
266,642
875,961
820,931
171,880
992,811
DEFERRED TAX LIABILITIES
Group
2012
RM
At 1 January
Recognised in profit or loss (Note 11)
Recognised in equity (NCRPS)
At 31 December
Company
2011
RM
7,440,122
(1,382,222)
1,507,091
7,564,991
8,396,294
(956,172)
7,440,122
(2,785,095)
1,031,860
(1,753,235)
(1,624,531)
1,045,645
(578,886)
9,318,226
9,318,226
8,019,008
8,019,008
2012
RM
90,760
(11,127)
79,633
2011
RM
99,154
(8,394)
90,760
Presented after appropriate offsetting as follows:
Subject to income tax:
Deferred tax assets
Subject to income tax:
Deferred tax assets
124
Annual Report 2012
-
-
79,633
79,633
90,760
90,760
31 December 2012
34.
DEFERRED TAX LIABILITIES (CONT’D)
The components and movements of deferred tax assets and liabilities during the current financial year prior to offsetting
are as follows:
Deferred tax assets of the Group:
Unutilised
tax losses
RM
At 1 January 2012
At 31 December 2012
(583)
(583)
At 1 January 2011
At 31 December 2011
-
Others
RM
Total
RM
(1,624,531)
(1,159,981)
(2,784,512)
(1,624,531)
(1,160,564)
(2,785,095)
(549,045)
(1,075,486)
(1,624,531)
(549,045)
(1,075,486)
(1,624,531)
Deferred tax liabilities of the Group:
NCRPS
RM
Property,
plant and
equipment
RM
Investment
properties
RM
Total
RM
At 1 January 2012
Recognised in equity
At 31 December 2012
5,337,617
(198,327)
1,507,091
6,646,381
3,691,532
(33,256)
3,658,276
35,504
9,925
45,429
9,064,653
(221,658)
1,507,091
10,350,086
At 1 January 2011
At 31 December 2011
5,491,447
(153,830)
5,337,617
3,433,138
258,394
3,691,532
20,754
14,750
35,504
8,945,339
119,314
9,064,653
Property,
plant and
equipment
RM
Investment
property
RM
Total
RM
Deferred tax liabilities of the Company:
At 1 January 2012
At 31 December 2012
85,652
(11,127)
74,525
5,108
5,108
90,760
(11,127)
79,633
At 1 January 2011
At 31 December 2011
94,046
(8,394)
85,652
5,108
5,108
99,154
(8,394)
90,760
Annual Report 2012
125
31 December 2012
34.
DEFERRED TAX LIABILITIES (CONT’D)
Deferred tax assets have not been recognised in respect of the following items:
Group
2012
RM
(Taxable)/Deductible temporary differences:
Unused tax losses
Unabsorbed capital allowances
Potential deferred tax benefit at 25%
35.
2011
RM
-
(71,226)
377,457
15,998
322,229
-
80,557
TRADE AND OTHER PAYABLES
Group
Company
2012
RM
2011
RM
2012
RM
2011
RM
18,857,805
25,764
9,272,604
28,156,173
20,900,178
6,370
5,640,226
26,546,774
-
-
8,794,415
15,977,738
1,692,451
248,245
26,712,849
728,499
11,459,093
815,250
4,100,014
17,102,856
1,881
139,405
76,500
217,786
4,716
140,290
76,500
7,452
228,958
54,869,022
80,901,735
135,770,757
43,649,630
25,501,130
69,150,760
217,786
2,048,000
2,265,786
228,958
2,612,000
2,840,958
Current
Trade payables
Third parties
Related parties
Advances received on contracts (Note 23)
Other payables
Third parties
Accruals
Deposits
Other payables
Total trade and other payables
Add: Loans and borrowings (Note 32)
Total financial liabilities carried at amortised cost
(a)
Trade payables
These amounts are non-interest bearing. Trade payables are normally settled on 14 to 90 days (2011 : 14 to 90
days) terms.
(b)
Amounts due to related parties
The amounts due to related parties are non-interest bearing and with credit terms ranging from 30 to 60 days
(2011 : 30 to 60 days). These amounts are unsecured and are to be settled in cash on due date.
Further details on related party transactions are disclosed in Note 40.
126
Annual Report 2012
31 December 2012
36.
OTHER CURRENT LIABILITIES
Group
Progress billings in respect of property development costs
Amount due to customers on contracts (Note 23)
Deposits
37.
2012
RM
2011
RM
613,545
17,549,434
18,162,979
303,225
5,476,922
916,452
6,696,599
DIVIDEND
Dividend
in respect of year
2012
2011
RM
RM
Dividend
recognised in year
2012
2011
RM
RM
Company
Recognised during the year:
First and final single tier dividend for 2011
at 3 sen (2010 at 2.25 sen) per share on
92,699,600 ordinary shares
Proposed for approval at AGM
(not recognised as at 31 December 2012):
First and final single tier dividend for 2012
at 3 sen per share on
92,699,600 ordinary shares
-
2,780,988
2,780,988
2,085,741
2,780,988
-
-
-
At the forthcoming Annual General Meeting, a first and final single tier dividend in respect of the financial year ended
31 December 2012, of 3 sen per share on 92,699,600 ordinary shares, amounting to a total dividend payable of
RM2,780,988 will be proposed for shareholders’ approval. The financial statements for the current financial year do
not reflect this proposed dividend. Such dividend, if approved by the shareholders, will be accounted for in equity as an
appropriation of retained profits in the financial year ending 31 December 2013.
Annual Report 2012
127
31 December 2012
38.
COMMITMENTS
(a)
Capital commitments
Approved capital expenditure as at the reporting date is as follows:
Group
Company
2012
RM
2011
RM
2012
RM
2011
RM
610,000
75,040,000
-
851,230
38,984,570
50,551,694
-
-
3,255,198
78,905,198
3,423,440
93,810,934
-
-
Capital expenditure
Approved and contracted for:
Development properties
Approved but not contracted for:
(b)
Operating lease commitments - as lessor
The Group and the Company have entered into commercial property leases on their investment properties. These
non-cancellable leases have remaining lease terms of between one and four years.
Future minimum rentals receivables under non-cancellable operating leases at the balance sheet date are as
follows:
Group
Not later than 1 year
Later than 1 year but not later than 5 years
128
Annual Report 2012
Company
2012
RM
2011
RM
2012
RM
2011
RM
1,067,797
938,616
2,006,413
601,180
1,030,750
1,631,930
612,720
418,030
1,030,750
597,410
1,030,750
1,628,160
31 December 2012
39.
CONTINGENT LIABILITIES (UNSECURED)
The Company has provided the following corporate guarantees at the reporting date:
Company
2012
RM
2011
RM
98,101,260
46,015,238
1,385,917
1,192,746
2,300,000
11,850,000
75,040,000
176,827,177
59,057,984
Unsecured:
Corporate guarantees given to banks for facilities granted to subsidiaries
Corporate guarantees given to third parties for credit facilities
granted to subsidiaries
Corporate guarantees given to a bank for facilities granted to third
parties in connection with projects to be performed by a subsidiary
Guarantee given to third parties for payment of balance of purchase
price in connection with the purchase of investment property by a subsidiary
As at reporting date, no values are ascribed on the corporate guarantees provided by the Company to secure banking
facilities granted whereby the Company monitors the performance of the subsidiaries and third parties concerned closely
to ensure they meet all their financial obligations. In view that there is minimal risk of default, the directors regard the
value of the credit enhancement provided by the corporate guarantees as minimal.
40.
RELATED PARTY DISCLOSURES
(a)
Sale and purchase of goods and services
In addition to the transactions detailed elsewhere in the financial statements, the Group and the Company had the
following transactions with related parties during the financial year:
Name of
company/
person/firm
Group
Nature
Company
2012
RM
2011
RM
2012
RM
2011
RM
Transactions with subsidiaries:
DKLS
Construction
Sdn Bhd
Adminstrative charges
Dividend income
Rental income
-
-
367,943
31,000,000
288,410
503,863
2,000,000
120,000
DKLS
Development
Sdn Bhd
Dividend income
-
-
235,167
4,500,000
138,948
4,000,000
DKLS Quarry
& Premix
Sdn Bhd
Dividend income
Purchase of materials
-
-
215,076
-
186,310
2,000,000
(1,332)
Annual Report 2012
129
31 December 2012
40.
RELATED PARTY DISCLOSURES (CONT’D)
(a)
Sale and purchase of goods and services (cont’d)
Name of
company/
person/firm
Group
Nature
Company
2012
RM
2011
RM
2012
RM
2011
RM
Transactions with subsidiaries (cont’d):
DKLS Precast
System
Sdn Bhd
-
-
17,174
17,962
DKLS
Homebuilders
Sdn Bhd
-
-
9,934
13,796
DKLS Marketing
Sdn Bhd
-
-
20,632
15,333
Transactions with associates:
Altidex
Construction
Sdn Bhd
Progress billings
642,853
718,007
-
-
DKLS
Clearwater
Sdn Bhd
Supply of labour
391,560
-
-
-
Savan-DKLS
Water Supply
Co Ltd
Sale of materials
Hire of plant
and machinery
406,185
506,921
-
-
50,663
11,623
-
-
Transactions with related parties:
Company in which Mr Ding Poi Bor and Mr Sam Tuck Wah have substantial interests:
Ipoh Tower
Sdn Bhd
Purchase of office suites
and penthouse
Supply of electricity
(48,798)
(3,500,000)
(46,411)
-
(3,500,000)
-
Major shareholders of a subsidiary:
JD Merawan
Enterprise
130
Annual Report 2012
Purchase of
materials
Sub-contract
works
(1,265,000)
(300,000)
(721,600)
-
-
-
-
31 December 2012
40.
(a)
Sale and purchase of goods and services (cont’d)
Name of
company/
person/firm
Group
Nature
Company
2012
RM
2011
RM
2012
RM
2011
RM
(2,640)
(2,520)
Transactions with related parties (cont’d):
Firm/company in which Mr Ding Poi Bor has substantial interest:
DKLS Service
Station
Purchase of
consumables
Juta Mahsuri
Sdn Bhd
Sale of materials
(109,701)
(123,342)
26,184
84,839
-
-
(60,000)
-
-
-
Mr Ding Poi Bor is personally interested in the following transaction:
Ding Poi Bor
Rental of building
Sale of land
(60,000)
513,068
Person/firm with which Mr Ding Poi Bor, Dato’ Ding Pei Chai, DPTJ, PMP and Ms Ding Soo King are deemed to be
connected pursuant to Section 122A of the Companies Act 1965:
Arkitek Ding
Poi Kooi
Rental income
Architect fees
9,000
(296,808)
9,000
-
9,000
-
9,000
-
-
-
Company in which Dato’ Ding Pei Chai, DPTJ, PMP has substantial interest:
Isyoda (M)
Sdn Bhd
Rental of permit
-
(2,000)
Company in which Ms Hoo Hai Hai (a person deemed to be connected with Mr Ding Poi Bor pursuant to Section
122A of the Companies Act 1965), has substantial interest:
Yu Marketing
Sdn Bhd
Sale of materials
Transport charges
2,580
-
601,647
300
-
-
Information regarding outstanding balances arising from related party transactions as at 31 December 2012 are
disclosed in Notes 22 and 35.
Annual Report 2012
131
31 December 2012
40.
(b)
Compensation of key management personnel
The remuneration of directors and other members of key management during the year were as follows:
Group
Short term employee benefits
Post-employment benefits:
Defined contribution plan
Company
2012
RM
2011
RM
2012
RM
2011
RM
3,581,247
3,432,235
1,937,622
2,384,160
496,080
4,077,327
328,484
3,760,719
297,309
2,234,931
217,947
2,602,107
Included in the remuneration of key management personnel are:
Group
Directors’ remuneration
41.
Company
2012
RM
2011
RM
2012
RM
2011
RM
1,561,875
1,367,064
1,561,875
1,251,600
FAIR VALUE OF FINANCIAL INSTRUMENTS
(i)
Fair value of financial instruments that are carried at fair value
An analysis of financial instruments carried at fair value by level of fair value hierarchy:
Quoted prices
in active
markets for
identical
instruments
Level 1
RM
Significant
other
observable
inputs
Level 2
RM
Significant
unobservable
inputs
Level 3
RM
Total
RM
9,167,850
-
-
9,167,850
-
12,614,479
-
12,614,479
At 31 December 2012
Financial assets:
(Note 20)
- Equity instruments (quoted)
Financial liabilities:
132
Annual Report 2012
31 December 2012
41.
FAIR VALUE OF FINANCIAL INSTRUMENTS (CONT’D)
(i)
Fair value of financial instruments that are carried at fair value (cont’d)
Quoted prices
in active
markets for
identical
instruments
Level 1
RM
Significant
other
observable
inputs
Level 2
RM
Significant
unobservable
inputs
Level 3
RM
Total
RM
5,081,445
-
-
5,081,445
-
10,009,534
-
10,009,534
At 31 December 2011
Financial assets:
(Note 20)
- Equity instruments (quoted)
Fair value hierarchy
The Group classifies fair value measurement using a fair value hierarchy that reflects the significance of the inputs
used in making the measurements. The fair value hierarchy has the following levels:
Level 1 -
Quoted prices (unadjusted) in active markets for identical assets.
Level 2 -
Inputs other than quoted prices included within Level 1 that are observable for the asset, either directly
(i.e., as prices) or indirectly (i.e., derived from prices), and
Level 3 -
Inputs for the asset that are not based on observable market data (unobservable inputs)
There have been no transfers between Level 1 and Level 2 fair value measurements during the financial years
ended 2012 and 2011.
Determination of fair value
Quoted equity instruments
Fair value is determined directly by reference to their published market bid price at reporting date.
Non-cumulative redeemable preference shares (“NCRPS”) (non-current)
The fair value of NCRPS is estimated by discounting expected future cash flows at market incremental lending
rate for similar types of borrowing at the reporting date.
Annual Report 2012
133
31 December 2012
41.
FAIR VALUE OF FINANCIAL INSTRUMENTS (CONT’D)
(ii)
Financial instruments that are not carried at fair value and whose carrying amounts are reasonable
approximation of fair value
The following are classes of financial instruments that are not carried at fair value and whose carrying amounts
are reasonable approximation of fair value:
Note
Trade and other receivables (current and non-current)
Loans and borrowings (current and non-current)
Trade and other payables (current)
22
32
35
The carrying amounts of these financial assets and liabilities are reasonable approximation of fair values, either
due to their short-term nature or that they are floating rate instruments that are re-priced to market interest rates
on or near the reporting date.
The carrying amounts of the non-current portion of loans and borrowings are reasonable approximation of fair
values due to the insignificant impact of discounting.
42.
FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
The Group and the Company are exposed to the financial risks arising from their operations and the use of financial
instruments. The key financial risks include interest rate risk, credit risk, liquidity risk, foreign currency risk and market
risk. The Board reviews and agrees policies for managing each of these risks and they are summarised below.
The Group operates within clearly defined guidelines that are approved by the Board of Directors and the Group’s policy
is not to engage in speculative transactions.
(a)
Interest 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. As the Group has no significant interestbearing financial assets, the Group’s income and operating cash flows are substantially independent of changes
in market interest rates. The Group’s and the Company’s interest-bearing financial assets are mainly short term in
nature and have been occasionally placed in short term money markets deposits.
The Group’s interest rate risk arises primarily from interest-bearing loans and borrowings which are outstanding
as at reporting date.
Sensitivity analysis for interest rate risk
At the reporting date, if interest rates had been 10 basis points lower/higher, with all other variables held constant,
the Group’s profit net of tax would have been RM1,334 lower (2011 : RM60,259 higher), arising mainly as a result
of lower/higher interest income from short term money markets deposits and higher/lower interest expense from
borrowings. The assumed movement in basis points for interest rate sensitivity analysis is based on short term
deposits and loans and borrowings in the currently observable market environment.
134
Annual Report 2012
31 December 2012
42.
FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONT’D)
(b)
Credit risk
Credit risk is the risk of loss that may arise on outstanding financial instruments should a counterparty default on
its obligations. The Group’s exposure to credit risk arises primarily from trade receivables. For other financial
assets which comprise cash and bank balances, the Group and the Company minimise credit risk by dealing
exclusively with high credit rating counterparties.
The Group’s objective is to seek continual revenue growth while minimising losses incurred due to increased
credit risk exposure. The Group transacts only with recognised, creditworthy and appropriate credit history third
parties. It is the Group’s policy that all customers who wish to trade on credit terms are subject to credit verification
procedures. New customers will be assessed and approved on case-by-case basis. Each customer has a maximum
credit limit. The Group seeks to maintain strict control over its outstanding receivables and has a credit control
department to monitor outstanding and overdue balances on an ongoing basis.
Exposure to credit risk
At the reporting date, the Group’s and the Company’s maximum exposure to credit risk is represented by the
carrying amount of each class of financial assets recognised in the statements of financial position.
Credit risk concentration profile
The Group’s trade receivables comprise of individual customers, thus does not have any major concentration of
credit risk except as disclosed in Note 22.
Financial assets that are neither past due nor impaired
Information regarding trade receivables that are neither past due nor impaired is disclosed in Note 22. Deposits
with banks that are neither past due nor impaired are placed with or entered into with reputable financial
institutions.
Financial assets that are either past due or impaired
Information regarding financial assets that are either past due or impaired is disclosed in Note 22.
(c)
Liquidity risk
Liquidity risk is the risk that the Group or the Company will encounter difficulty in meeting financial obligations
due to shortage of funds. The Group’s exposure to liquidity risk arises primarily from mismatches of the maturities
of financial assets and liabilities. The Group’s objectives are to maintain sufficient level of cash and adequate
amounts of credit facilities to meet its financial obligations. In addition, the Group strives to maintain flexibility in
funding by keeping its credit lines available at a reasonable level.
Annual Report 2012
135
31 December 2012
42.
(c)
Liquidity risk (cont’d)
Analysis of financial instruments by remaining contractual maturities
The table below summarises the maturity profile of the Group’s and the Company’s liabilities at the reporting date
based on contractual undiscounted repayment obligations.
On demand
or within
one year
RM
One to
five years
RM
Over five
years
RM
Total
RM
54,869,022
11,928,065
66,797,087
28,104,215
28,104,215
67,490,761
67,490,761
54,869,022
107,523,041
162,392,063
43,649,630
13,295,766
56,945,396
2,222,820
2,222,820
31,360,000
31,360,000
43,649,630
46,878,586
90,528,216
217,786
564,000
781,786
1,484,000
1,484,000
-
217,786
2,048,000
2,265,786
228,958
564,000
792,958
2,048,000
2,048,000
-
228,958
2,612,000
2,840,958
Group
At 31 December 2012
Total undiscounted financial liabilities
At 31 December 2011
Company
At 31 December 2012
At 31 December 2011
136
Annual Report 2012
31 December 2012
42.
(d)
Foreign currency risk
Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate
because of changes in foreign exchange rates. The Group’s business operations are exposed to foreign currency
risks denominated in currencies other than the respective functional currencies of the Group’s entities.The
Group does not hedge its exposure to foreign currency risk and does not trade or speculate in foreign currencies.
Balances denominated in foreign currencies are disclosed in Notes 22, 26 and 32.
In addition, the Group is also exposed to currency translation risk arising from its net investments in foreign
operations, including People’s Republic of China (“PRC”), Lao People’s Democratic Republic (“ Lao PDR”),
Australia and Singapore. The Group’s net investments in PRC, Lao PDR, Australia and Singapore are not hedged
as currency positions in PRC, Lao PDR, Australia and Singapore are considered to be long-term in nature.
Sensitivity analysis for foreign currency risk
The following table demonstrates the sensitivity of the Group’s and the Company’s profit net of tax to a reasonable
possible change in the exchange rates of the following foreign currencies against functional currency of the Group
entities, with all other variables held constant.
Increase/(Decrease)
Profit net of tax
2012
2011
RM
RM
Group
USD/RM
USD/RMB
AUD/RM
AUD/SGD
HKD/SGD
THB/RM
LAK/RM
RMB/RM
- strengthened 3%
- weakened 3%
- strengthened 3%
- weakened 3%
- strengthened 3%
- weakened 3%
- strengthened 3%
- weakened 3%
- strengthened 3%
- weakened 3%
- strengthened 3%
- weakened 3%
- strengthened 3%
- weakened 3%
- strengthened 3%
- weakened 3%
120,608
(120,608)
163,226
(163,226)
42,000
(42,000)
(287,340)
287,340
6,206
(6,206)
2,593
(2,593)
137,704
(137,704)
296,955
(296,955)
115,706
(115,706)
45,813
(45,813)
131,149
(131,149)
- strengthened 3%
- weakened 3%
- strengthened 3%
- weakened 3%
71
(71)
409
(409)
73
(73)
148,194
(148,194)
Company
USD/RM
AUD/RM
Annual Report 2012
137
31 December 2012
42.
(e)
Market risk
Market price risk is the risk that the fair value or future cash flows of the Group’s financial instruments will fluctuate
because of changes in market price. The Group’s principal exposure to market risk arises mainly from its
investments in quoted trust funds, classified as available-for-sale investments.
The Group manages its exposure to market risk by establishing strict investment policy that is only invests in trust
funds which maintain an investment portfolio in fixed deposits and bond funds with steady dividend yield and
insignificant risk of changes in value.
43.
CAPITAL MANAGEMENT
The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern in
order to provide returns for shareholders and to maintain an optimal capital structure to reduce the cost of capital.
During the year, the Group’s strategy, which was unchanged from 2011, was to maintain sufficient cash and cash
equivalents and standby bank facilities to cover its short term debts. The Group includes within net debt, available-forsale investments and cash and bank balances less loans and borrowings and trade and other payables. The cash
position net of debts at 31 December 2012 and 2011 were as follows:Group
Note
Less: Loans and borrowings (current)
Less: Trade and other payables (current)
Cash position net of debts
20
26
32
35
2012
RM
9,167,850
51,664,802
11,897,120
54,869,022
(5,933,490)
2011
RM
5,081,445
77,171,276
13,271,716
43,649,630
25,331,375
The Company and its subsidiaries have unutilised bank facilities of RM31,058,757 (2011 : RM51,663,216) as at
31 December 2012.
The Company and its subsidiaries are not subject to any externally imposed capital requirements.
138
Annual Report 2012
31 December 2012
44.
SEGMENTAL INFORMATION
(a)
Reporting format
The primary segment reporting format is determined to be business segments as the Group’s risks and rates
of return are affected predominantly by differences in the products and services produced. No secondary
information by geographical area is being presented as the Group operates predominantly in Malaysia. The
operating businesses are organised and managed separately according to the nature of the products and services
provided, with each segment representing a strategic business unit that offers different products.
(b)
Business segments
The Group comprises the following main business segments:
(i)
(ii)
(iii)
(iv)
Investment holding
Construction - building and general contractors
Manufacturing - quarrying and manufacturing and sales of pre-cast piles
Property development
Other operations of the Group mainly comprise trading of construction materials and overseas merchandise trade
in minerals, development and operation of hydropower resources and sale of treated water, logging and sale of
merchantable timbers, none of which constitutes a separate reportable segment.
(c)
Allocation basis and transfer pricing
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.
Transfer prices between business segments are set out on an arm’s length basis in a manner similar to transactions
with third parties. Segment revenue, expenses and results include transfers between business segments. These
transfers are eliminated on consolidation.
Annual Report 2012
139
44.
140
Annual Report 2012
Segment assets
Unallocated corporate assets
Total assets
Results
Segment results
Interest expense
Group’s share of results of associates
Income tax expense
Profit for the year
Revenue
External sales
Inter-segment sales
Total revenue
31 December 2012
101,276,988
51,953,369
30,778,985
(1,442,414)
(5,430,881)
23,905,690
(8,439,606)
743,698
36,706,083
37,449,781
81,429,080
-
16,858,585
(114,522)
16,744,063
(3,624,012)
70,607,114
35,233,166
105,840,280
70,297,147
-
10,527,407
(41,312)
10,486,095
(2,533,951)
79,030,652
3,643,362
82,674,014
122,919,990
-
8,086,677
(577,031)
7,509,646
(2,080,923)
55,915,840
55,915,840
Property
Investment Construction Manufacturing development
RM
RM
RM
RM
(93,126,933)
(93,126,933)
Elimination
RM
9,743,541
-
-
1,176,531 (35,500,000)
(1,868)
1,174,663 (35,500,000)
(280,049)
8,875,000
7,515,730
17,544,322
25,060,052
Others
RM
The following table provides an analysis of the Group’s revenue, results, assets, liabilities and other information by business segment.
Business Segments
SEGMENTAL INFORMATION (CONT’D)
385,666,746
51,953,369
18,671,326
456,291,441
31,928,185
(2,177,147)
(5,430,881)
24,320,157
(8,083,541)
16,236,616
213,813,034
213,813,034
Total
RM
31 December 2012
44.
Non-cash expenses
Fair value adjustment of investment properties, net
(Gain)/Loss on disposal of property, plant and equipment
Gain on disposal of available-for-sale investments
Provision for (Write back of) impairment loss on property, plant and equipment
Unrealised loss on foreign exchange
(Write back of)/Provision for impairment loss on trade and other receivables
Write back of inventories written down
Other information
Capital expenditure
Depreciation
Assets and liabilities (cont’d)
Segment liabilities
Unallocated corporate liabilities
Total liabilities
31 December 2012 (cont’d)
Business Segments (cont’d)
2,067,811
(11,157)
(2,948)
93,383
1,151,042
-
40,463,395
215,853
40,055,479
(15,480)
(59,801)
27
(59,297)
98,838
(261,534)
-
1,649,607
1,520,999
45,928,672
89,259
462
(248,700)
(28,491)
29
394,752
(113,930)
2,603,027
2,097,840
7,636,406
Investment Construction Manufacturing
RM
RM
RM
-
151,924
29,056
58,496,456
Property
development
RM
4,443
617
(5,758)
2,657
-
85,107
257,265
1,816,723
Others
RM
4,443
89,259
462
1,819,111
(11,157)
(43,354)
(68,507)
56
34,086
1,252,537
133,218
(113,930)
44,953,060
4,121,013
153,933,736
12,106,933
166,040,669
Total
RM
31 December 2012
Annual Report 2012
141
44.
142
Annual Report 2012
Segment assets
Unallocated corporate assets
Total assets
Results
Segment results
Interest expense
Group’s share of results of associates
Income tax expense
Profit for the year
Revenue
External sales
Inter-segment sales
Total revenue
31 December 2011
83,355,518
54,010,491
8,425,325
(679,999)
7,745,326
(1,722,936)
246,800
8,996,212
9,243,012
84,026,239
10,366
5,609,685
(64,571)
10,366
5,555,480
(1,517,329)
63,622,832
29,237,426
92,860,258
69,167,070
-
11,176,398
(181,945)
10,994,453
(2,936,921)
67,356,439
4,484,993
71,841,432
53,077,456
-
11,210,433
(95,150)
11,115,283
(2,891,985)
44,064,847
44,064,847
Property
Investment Construction Manufacturing development
RM
RM
RM
RM
(48,920,546)
(48,920,546)
Elimination
RM
10,114,519
(898,556)
-
(449,881) (8,000,000)
(2,034)
(2,272,439)
(2,724,354) (8,000,000)
(72,592)
2,000,000
8,574,512
6,201,915
14,776,427
Others
RM
299,740,802
53,122,301
7,582,224
360,445,327
27,971,960
(1,023,699)
(2,262,073)
24,686,188
(7,141,763)
17,544,425
183,865,430
183,865,430
Total
RM
31 December 2012
44.
Non-cash expenses
Fair value adjustment of investment properties, net
Loss/(Gain) on disposal of property, plant and equipment
Loss on disposal of available-for-sale investments
Provision for/(Write back of) impairment loss on trade and other receivables
Unrealised gain on foreign exchange
Write back of provision for impairment losses on property, plant and equipment
Write-down of inventories
Other information
Capital expenditure
Depreciation
Assets and liabilities (cont’d)
Segment liabilities
Unallocated corporate liabilities
Total liabilities
31 December 2011 (cont’d)
(1,800,061)
1,320
(47,048)
(14,001)
-
15,447,761
228,217
16,753,351
108,381
2,126
26,839
1,591,326
(280,663)
-
223,358
1,652,802
38,630,591
89,258
(295,000)
(506,162)
43,788
(564,681)
349,373
2,271,221
2,015,715
12,182,298
Investment Construction Manufacturing
RM
RM
RM
1,690
-
26,698
7,677,900
Property
development
RM
4,556
2,871
1
(2,431)
-
45,065
253,363
603,219
Others
RM
4,556
89,258
(2,095,061)
(394,910)
2,126
73,638
1,026,645
(330,142)
(14,001)
349,373
17,987,405
4,176,795
75,847,359
9,402,068
85,249,427
Total
RM
31 December 2012
Annual Report 2012
143
31 December 2012
44.
There are no major customers with revenue equal or more than 10% (2011 : 10%) of the Group’s total revenue.
45.
SIGNIFICANT EVENTS
(a)
On 13 October 2011, DKLS Homebuilders Sdn Bhd (“DHSB”), a 60% owned subsidiary entered into an agreement
with CT Thai Trading (“CT”), a firm in which a director of DHSB has financial interests, to purchase all standing
timbers for a total consideration of RM1,045,000 from an area at Hutan Simpan Rimba Teloi, Kedah. Pursuant to
the agreement, DHSB shall at its own costs and expenses, fell, remove and extract the said timber logs from the
said area. As at todate, DHSB had paid a total sum of RM1,004,120 pursuant to the agreement. At the reporting
date, DHSB has yet to commence the logging activity.
On 31 October 2011, DHSB entered into two separate Purchase Agreements with JD Merawan Enterprise (“JDE”),
a firm in which certain directors of DHSB have financial interests, to purchase all standing timbers for a total
consideration of RM1,035,000 and RM1,265,000 from the timber concession areas at Hutan Simpan Rimba Teloi
and Hutan Simpan Gunung Inas respectively. Pursuant to the agreements, DHSB shall at its own costs and
expenses, fell, remove and extract the said timber logs from the said areas.
During the year, DHSB had completed the felling, removing, extraction and selling of timbers from the said timber
concession area at Hutan Simpan Gunung Inas. At the reporting date, DHSB has yet to commence the logging
activity on timber concession area at Hutan Simpan Rimba Teloi.
(b)
On 9 September 2009, DKLS Construction Sdn Bhd (“DKLSC”), a wholly-owned subsidiary entered into a
Triparte Agreement (“Agreement”) with State Government of Perak and Persatuan Nelayan Kawasan Pulau
Pangkor for the settlement and sale of completed properties in Taman Pangkor Indah, Teluk Gedung, Pulau
Pangkor for a total consideration of RM23,890,900. The total consideration are to be settled via RM7,070,000 in
cash and in-kind payment for the remaining balance sum.
On 5 December 2012, the title for a piece of leasehold land measuring 101,881 meter square in connection with
the in-kind payment was issued and registered under the name of DKLSC.
As at 31 December 2012, DKLSC has handed over vacant possession of all the completed properties except for 2
lots. DKLSC has received cash consideration of RM6,916,334 (2011 : RM6,916,334) whilst the remaining sum of
RM153,665 (2011 : RM153,665) will be received as follows:
(i)
RM140,000 - upon handing over of the remaining 2 lots
(ii)
RM13,665 - 12 months from the date of handing over of the remaining 2 lots
On 7 January 2013, DKLSC had handed over the vacant possession of the remaining 2 lots.
144
Annual Report 2012
31 December 2012
45.
SIGNIFICANT EVENTS (CONT’D)
(c)
On 13 July 2009, the Company and the Savannakhet Provincial Government of Lao People’s Democratic Republic
which is represented by Nam Pa Pa Savannakhet [Savannakhet Water Supply - State Owned Enterprise] (“NPPS”)
signed a Memorandum of Understanding to conduct a feasibility study on the upgrading of the existing water
supply facility for Kaysone Phomvihane District in Savannakhet Province, Lao People’s Democratic Republic.
On 31 October 2009, DKLS Clearwater Sdn Bhd (“DCSB”), an associated company, entered into an agreement on
Upgrading Existing Water Supply Facility for Kaysone Phomvihane District in Savannakhet Province with NPPS
(“Agreement”) to participate in a joint venture to upgrade the water supply facility of the existing Nake Water
Treatment Plant and its network system for Kaysone Phomvihane District in Savannakhet Province (“Project”) and
to operate the Project thereon.
On 4 December 2009, DCSB entered into a shareholders’ agreement with NPPS to formalise and regularise the
respective parties’ rights and commitments in Savan-DKLS Water Supply Co Ltd (“Savan-DKLS”) which was
incorporated in Lao People’s Democratic Republic on 12 January 2010.
On 1 March 2012, Savan-DKLS has effectively taken over the operations and management of existing Nake Water
Treatment Plant. It has been agreed in principle that for the time being while pending for DCSB to complete the
remaining Project works, the profit or loss shall be shared by DCSB and NPPS in the ratio of 63% : 37%
respectively.
(d)
On 22 July 2011, DKLS Development Sdn Bhd (“DDSB”), a wholly-owned subsidiary entered into a Development
Agreement with an individual (“Land Owner”) to jointly develop a piece of land into a housing project. The Land
Owner is entitled to 28% of the completed units comprised in the housing project. Upon execution of the
Development Agreement, DDSB has paid a deposit of RM75,000 which is refundable or shall be set off against
the payment due to be paid by DDSB to the Land Owner for the odd lots.
At the reporting date, DDSB has yet to commence the development as it is at the planning stage and pending for
approval of building plan.
(e)
On 9 January 2012, the Company subscribed for 5,100,000 units of 3% non-cumulative redeemable preference
shares of RM1 each in DKLS Energy Sdn Bhd for a total consideration of RM5,100,000.
(f)
On 20 April 2012, the Company accepted an offer from Nasib Unggul Sdn Bhd (“Vendor”) to purchase an
investment property comprising of a 14-storey boutique office building situated within the precinct known as
Bangsar South, Kuala Lumpur (“Property”) for a total purchase consideration of RM93,800,000.
On 30 April 2012, the Company acquired 2 ordinary shares of RM1 each in DKLS Equity Sdn Bhd (“DESB”)
representing the entire issued and paid up share capital of DESB for a total cash consideration of RM2, making
DESB a wholly-owned subsidiary of the Company.
On 14 May 2012, the Company subscribed for an additional 99,998 ordinary shares of RM1 each at par in DESB
for a cash consideration of RM99,998.
On 23 May 2012, DESB entered into a Sale and Purchase Agreement (“SPA”) with the Vendor and Paramount
Properties Sdn Bhd (“Proprietor”) to acquire the Property for a total purchase consideration of RM93,800,000
(“Purchase Consideration”).
Annual Report 2012
145
31 December 2012
45.
(f)
Subject to the provisions of the SPA, the total Purchase Consideration for the Property shall be paid in the following
manner:(i)
Initial deposits and a further 10% of the Purchase Consideration totalling RM18,760,000 have been paid
upon the fulfilment of the conditions precedent, and
(ii)
The balance of the Purchase Consideration of RM75,040,000 is to be paid within eighteen months from the
date of the SPA.
As at reporting date, the acquisition has yet to be completed.
On 31 December 2012, the Company subscribed for 19,000,000 units of 3% non-cumulative redeemable
preference shares of RM1 each in DESB for a total consideration of RM19,000,000.
(g)
On 4 May 2012, the Company entered into a Heads of Agreement with Selangor State Development Corporation
(“PKNS”) to jointly participate and collaborate in the redevelopment of a parcel of land, all previously held under
Lot 878-895, Lot 953-956 including Green Reserve and the Simpang Jalan, Sekysen 17, Petaling Jaya Selangor
measuring approximately 15.9 acres in area (“Land”) into a mixed development comprising commercial, retail and
residential units (“Proposed Redevelopment”).
The purpose of the Heads of Agreement is to regulate the relationship of the contracting parties in relation to
the collaboration and preliminary matter in the implementation of the Proposed Redevelopment. The contracting
parties shall collaborate and work together to secure all interests, encumbrances, mortagages, liens and/or rights
of whatsoever to be removed, resolved and/or settled as to enable the interests, title, ownership and vacant
possession of the Land to be completely and fully acquired or procured by PKNS or to an incorporated special
purpose vehicle (“Obligations”).
The Company will enter into a Collaboration Agreement with PKNS upon securing the Obligations under the
Heads of Agreement so as to enable the contracting parties to pursue and to undertake the Proposed Redevelopment
for mutual benefit.
As at reporting date, the Collaboration Agreement has yet to be signed.
(h)
On 30 May 2012, DKLS-PJI Venture Capital Sdn Bhd (“DPVC”), a 60% owned subsidiary subscribed for additional
shares in Zhangpu Baohu Running Water Co Ltd (“ZBRW”) for a total cash consideration of RMB657,620
(equivalent to RM323,232).
On 10 December 2012, DPVC further subscribed for additional shares in ZBRW for a total cash consideration of
RMB1,108,625 (equivalent to RM537,451).
(i)
146
On 15 June 2012, the Company disposed off 90,000 ordinary shares, representing 30% equity interest in DKLS
Marketing Sdn Bhd (“DMSB”) for a total cash consideration of RM90,000. Upon completion, DMSB became a 70%
owned subsidiary of the Company.
Annual Report 2012
31 December 2012
45.
(j)
On 27 July 2012, DKLS Management Sdn Bhd (“DMGTSB”), a wholly-owned subsidiary entered into two Conditional
Share Sale Agreements with two individuals to dispose of its entire investment of 40% equity interest in Jinbaolong
(Fujian) Electronic Co Ltd for a total cash consideration of RMB5,185,200 (equivalent to approximately
RM2,566,674), subject to the approval of the relevant authorities (“the Proposed Disposal”).
On 31 August 2012, DMGTSB entered into a Conditional Share Sale Agreement with two individuals to dispose of
its entire investment of 40% equity interest in Fujian Zhongguan Construction Materials Co Ltd for a total cash
consideration of RMB7,200,000 (equivalent to approximately RM3,564,000), subject to the approval of the relevant
authorities (“the Proposed Disposal”).
The Proposed Disposals are to release the cash flows for better investment opportunities.
As at 31 December 2012, the relevant approvals are still pending.
(k)
46.
On 31 December 2012, the Company subscribed for 18,000,000 units of 3% non-cumulative redeemable
preference shares of RM1 each in DKLS Premierhome Sdn Bhd for a total consideration of RM18,000,000.
SUBSEQUENT EVENTS
(a)
On 5 March 2013, DKLS Oil & Gas Sdn Bhd (“DKLSOG”), a wholly-owned subsidiary, disposed of its entire
investment in UMW Fabritech Sdn Bhd (“UMW Fabritech”), representing 30% equity interest in UMW Fabritech,
to DKLS Lakeview Sdn Bhd, a wholly-owned subsidiary, for a total cash consideration of RM1.
(b)
On 7 March 2013, the Company disposed of its entire investment in DKLSOG, comprising 1,000,000 ordinary
shares of RM1.00 each and 7,500,000 Non-cumulative Redeemable Preference Shares of RM1.00 each, for a
total cash consideration of RM489,000 (“Disposal”). Upon the completion of the Disposal, DKLSOG ceases to be
a wholly-owned subsidiary of the Company. The disposal is expected to result in a gain on disposal of approximately
RM6,169 and RMNil to the Group and the Company respectively.
(c)
On 18 March 2013, DKLS Aust Pty Ltd, as the trustee of DKLS Aust Trust, a 80.2% owned subsidiary, entered
into a Heads of Agreement (“HOA”) with Equiset Services Pty Ltd (“Equiset Services”) to dispose of an investment
property located at Melbourne, Australia (“the Property”) for a total consideration of AUD14,950,000 (equivalent
to approximately RM48,526,000) (“Proposed Disposal”). The Proposed Disposal is expected to result in a gain on
disposal of approximately RM3,900,000 and a reversal of impairment loss amounting to RM1,600,000 to the
Group.
(d)
On 16 March 2013, DKLS Development Sdn Bhd (“DDSB”), a wholly-owned subsidiary, entered into a Joint
Venture Agreement with West Malaysia Holdings Sdn Bhd (“Land Owner”) to develop a piece of land into a mixed
development project.
The Land Owner is entitled to an initial sum of RM1,400,000 and an additional sum calculated at 27% of the total
sale proceeds of the residential units and 35% of the proceeds of the commercial units comprised in the mixed
development project or RM60,000,000 only, whichever is higher.
Upon execution of the Joint Venture Agreement, DDSB has paid an initial sum of RM1,400,000 to the Land
Owner.
Annual Report 2012
147
31 December 2012
47.
SUPPLEMENTARY INFORMATION - BREAKDOWN OF RETAINED PROFITS INTO REALISED AND UNREALISED
PROFITS
The breakdown of the retained profits of the Group and of the Company as at 31 December 2012 into realised and
unrealised profits is presented in accordance with the directive issued by Bursa Malaysia Securities Berhad dated 25
March 2010 and prepared in accordance with Guidance on Special Matter No. 1, Determination of Realised and
Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing
Requirements, as issued by the Malaysian Institute of Accountants.
2012
RM
2011
RM
Group
Total retained profits of the Company and its subsidiaries
- Realised profits
- Unrealised losses
240,262,720
(29,577,236)
210,685,484
214,371,190
(14,006,113)
200,365,077
(14,273,859)
(91,681)
(14,365,540)
(8,944,509)
(91,681)
(9,036,190)
Less: Consolidated adjustments
(16,395,359)
(28,302,902)
Retained profits as per financial statements
179,924,585
163,025,985
2012
RM
2011
RM
Total share of accumulated losses from associated companies
- Realised losses
- Unrealised losses
Company
Total retained profits of the Company
- Realised profits
- Unrealised profit/(losses)
Retained profits as per financial statements
148
Annual Report 2012
90,315,255
543,886
90,859,141
76,759,660
(44,097)
76,715,563
PROPERTIES OWNED BY THE GROUP
Location
Description
Date of
acquisition
Area
Tenure
Approximate
age of
properties
(years)
Freehold
19
1,513,118
Carrying
amount
(RM)
DKLS INDUSTRIES BERHAD
Land held under title
H.S.(D) 85226, PT 402,
Section 79, Town of
Kuala Lumpur, District of
Federal Territory
4 storey shop/
office building
as branch
office
15.01.1997
143 sq.metres
(land)
560 sq.metres
(built-up)
Lots 6675N & 6676N,
Town of Ipoh,
District of Kinta
(Bandar Ipoh Raya,
Perak Darul Ridzuan)
2 adjoining
3-storey shop/
office
20.10.1994
286 sq.metres
(land)
862.9 sq.metres
(built-up)
Leasehold
(99 years
expiring on
30/3/2081)
18
870,000
Geran 1873
Lot No. 12742,
Mukim of Sitiawan
District of Manjung
Perak Darul Ridzuan
Agricultural
land (vacant)
02.09.2009
9.2698 hectares
Freehold
104
4,350,000
15FO-15, 15th Floor
16FO-1, 16th Floor
17FPBS-1, 17th Floor
Ipoh Tower,
Jalan Dato’ Seri Ahmad
Said, 30450 Ipoh,
Perak Darul Ridzuan
Office unit
(Corporate
office)
28.02.2009
1,044 sq. ft.
13,300 sq. ft.
2,883 sq. ft.
*Leasehold
4
183,921
2,400,670
657,413
PN 296074, Lot 15517,
Mukim Lumut (Lot F-2
Lumut Port Industrial
Park)
Industrial land
and factory
15.05.1997
52,770 sq.
metres
Leasehold
(99 years
expiring on
9/7/2105)
6
8,480,000
Geran 40432, Lot 2793
Geran 40433, Lot 668
Mukim Lumut
Agricultural
land
17.01.2011
6.781 hectares
0.4704 hectares
Freehold
14
4,120,000
Lot 172,
Lot 173,
Lot 175,
Lot 176
Seksyen 87,
Bandar Kuala Lumpur,
Kuala Lumpur
Vacant land
09.03.2011
562 sq.metres
589 sq.metres
642 sq.metres
701 sq.metres
Freehold
4
7,499,204
Annual Report 2012
149
Properties Owned By The Group (contd)
Location
Description
Date of
acquisition
Area
Tenure
Approximate
age of
properties
(years)
Carrying
amount
(RM)
DKLS INDUSTRIES BERHAD (CONT’D)
17F-PBS-2,
17F-PBS-3,
17F-PBS-3A,
17F-PBS-5,
17F-PBS-6,
17F-PBS-7,
17F-PBS-8,
17F-PBS-9, 17th Floor,
Ipoh Tower, Jalan Dato’
Seri Ahmad Said, 30450
Ipoh, Perak Darul Ridzuan
Office unit
(rented out)
01.04.2011
1,242 sq. ft.
822 sq. ft.
822 sq. ft.
1,242 sq. ft.
1,061 sq. ft.
1,028 sq. ft.
1,367 sq. ft.
1,558 sq. ft.
*Leasehold
4
3,470,000
DKLS CONSTRUCTION SDN BHD
Title No. PM 2446,
Lot No. 9125,
Mukim of Kurong Anai,
Ulu Pauh
Agricultural
land (vacant)
28.05.2004
1.8034 hectares
Leasehold
(99 years
expiring on
9/8/2098)
13
765,684
Lot No. 9132,
FELCRA Hulu Pauh,
Ulu Pauh
Vacant land
(storage)
28.05.2004
184,942 sq.ft.
*Leasehold
Not
applicable
687,478
Title No. PM 2390,
Lot No. 8433,
Mukim of Padang Siding,
Ulu Pauh
Agricultural
land (vacant)
28.05.2004
1.7604 hectares
Leasehold
(99 years
expiring on
8/7/2098)
13
998,405
Title No. PM 2391,
Lot No. 8322,
Mukim of Padang Siding,
Ulu Pauh
Agricultural
land (vacant)
28.05.2004
3.6150 acres
Leasehold
(99 years
expiring on
8/7/2098)
13
769,770
Title No. 1219,
Lot No. 3016,
Ulu Pauh
Agricultural
land (vacant)
11.06.2010
1.8135 hectares
Leasehold
(99 years
expiring on
20/7/2098)
13
338,470
Title No. 1220,
Lot No. 3017,
Ulu Pauh
Agricultural
land (vacant)
11.06.2010
1.7477 hectares
Leasehold
(99 years
expiring on
20/7/2098)
13
477,800
150
Annual Report 2012
Location
Description
Date of
acquisition
Approximate
age of
properties
(years)
Carrying
amount
(RM)
Area
Tenure
1.7452 hectares
Leasehold
(99 years
expiring on
9/8/2098)
13
477,130
DKLS CONSTRUCTION SDN BHD (CONT’D)
Title No. PM 1196,
Lot No. 3021,
Ulu Pauh
*
Agricultural
land (vacant)
11.06.2010
Title/strata titles have yet to be issued for these properties.
DKLS QUARRY & PREMIX SDN BHD
Lot 4821,
Lot 5023,
Lot 5470,
Lot 5782, 5783,
Lot 1553,
Lot 4892+, Mukim
of Lumut, District of
Manjung located off the
4th mile stone Sitiawan/
Lumut road, in the vicinity
of Kampong Tersusun
Pundut, Lumut, Perak
Darul Ridzuan
Quarry land
and
administrative
and ancillary
buildings
constructed
thereon
13.03.1996
19.01.1991
25.01.1991
12.02.1993
24.10.1992
12.06.1992
33 hectares
(land)
2,552.7
sq.metres
(built-up)
Freehold
72
48
39
75
72
75
2,348,923
Lots 2105, 2106, 2554,
Mukim of Lumut, District
of Manjung, located
off the 4th mile stone
Sitiawan/Lumut road, in
the vicinity of Kampong
Tersusun Pundut, Lumut,
Perak Darul Ridzuan
Quarry land
06.01.1995
5.7 hectares
2 rods
35 poles
(land)
Freehold
74
1
Lots 2462, 2102, 2104,
2478, 2110, 2109,
2477 and 2101, Mukim
of Lumut, District of
Manjung, located off the
4th mile stone Sitiawan/
Lumut road, in the vicinity
of Kampong Tersusun
Pundut, Lumut, Perak
Darul Ridzuan
Quarry land
13.01.1996
14.6 hectares
12 poles
(land)
Freehold
75
150,209
Annual Report 2012
151
Location
Description
Area
Tenure
Approximate
age of
properties
(years)
0.9105 hectares
(2a.1r.00p)
Freehold
93
270,000
Date of
acquisition
Carrying
amount
(RM)
DKLS QUARRY & PREMIX SDN BHD (CONT’D)
E.M.R. No 789 S.G 24407
Lot 1550, Pundut
Mukim of Lumut
Perak Darul Ridzuan
Land (storage) 29.02.2003
Lot 3932
Tempat Pdg Lembu
Mukim of Gurun
Daerah Kuala Muda,
Kedah Darul Aman
Agricultural
land (vacant)
29.12.2003
2.21541
hectares
Freehold
51
835,000
Lot 1937, 1939, 1940,
1953, 1954, 3863,
1959 (3860), 2099 &
4819 (6675)
Mukim of Lumut
Perak Darul Ridzuan
Quarry land
02.11.2007
51.045 hectares
Freehold
15
15
11
18
6,282,142
Lot 5018,
Mukim of Lumut,
Perak Darul Ridzuan
Quarry land
02.11.2007
2.1004 hectares
Leasehold
(99 years
expiring on
28/9/2088)
22
240,518
Lot 9876,
Mukim of Lumut,
Perak Darul Ridzuan
Quarry land
02.11.2007
0.4833 hectares
Leasehold
(60 years
expiring on
27/1/2054)
17
129,432
Lot 6489,
Mukim of Lumut,
Perak Darul Ridzuan
Quarry land
02.11.2007
1.0672 hectares
Leasehold
(60 years
expiring on
7/2/2052)
17
115,197
Agricultural
land (Vacant)
02.01.2004
0.9105 hectares
(2a.1r.00p)
Freehold
11
450,000
02.02.2005
Agricultural
land (storage
& premix plant)
4.6079 hectares
Freehold
8
550,000
Lot 3979, GM No 2256
Mukim of Lumut
Perak Darul Ridzuan
Lot 4060-4062 GM No
6748-6749 & 10396,
Mukim Daerah SIK,
Kedah Darul Aman
152
Annual Report 2012
Location
Description
Date of
acquisition
Area
Tenure
Approximate
age of
properties
(years)
Carrying
amount
(RM)
DKLS QUARRY & PREMIX SDN BHD (CONT’D)
Desa Bistari Block B on
Lot 147 Mk. 13, N.E.S
Penang,
Unit No. B-13-04
Apartment
(rented out)
05.07.1999
65.03 sq. metres
(built-up)
Freehold
14
160,000
Desa Bistari Block B on
Lot 147 Mk. 13, N.E.S
Penang,
Unit No. B-22-05
Apartment
(vacant)
05.07.1999
65.03 sq. metres
(built-up)
Freehold
14
160,000
Lot No. 221853,
Hulu Kinta, Kinta,
Perak Darul Ridzuan
1½ single
storey terrace
factory
(rented out)
05.11.1999
158 sq. metres
(land)
158 sq. metres
(built-up)
Leasehold
(99 years
expiring on
18/8/2094)
16
110,000
PN 44060 Lot No. 12688
Mukim of Sungai Siput,
Daerah Kuala Kangsar,
Perak Darul Ridzuan
2 storey shop
office (vacant)
31.08.2006
130 sq. metres
(land)
130 sq. metres
(built-up)
Leasehold
(99 years
expiring on
9/4/2083)
28
245,000
Apartment
(rented out)
01.11.2012
89 sq. metres
(built-up)
Freehold
1
200,000
Industrial land
01.11.2012
9,288 sq. metres Leasehold
(99 years
expiring on
25/10/2097)
15
1,556,423
M-16, Block Daisi
Mutiara Perdana
Lengkok Kelicap
11900 Bayan Lepas
Pulau Pinang
Plot 6, PN 342193,
Lot 33227
Plot 7, PN 342194,
Lot 33226
Mukim Durian Sebatang
Hilir Perak
+
Lot 4892 is a parcel of public burial ground which is not held under a land title.
Annual Report 2012
153
Location
Description
Date of
acquisition
Area
Tenure
Approximate
age of
properties
(years)
Carrying
amount
(RM)
DKLS DEVELOPMENT SDN BHD
H.S.(D) 17977, PT 4929,
Mukim Lumut, Manjung,
Perak Darul Ridzuan
2½ storey
detached
residential
house
01.06.2009
195.1 sq. metres Leasehold
(99 years
(land)
expiring on
10.07.2101)
10
89,541
ZHANGPU BAOHU RUNING WATER CO LTD
Land located at Chilu,
Zhangpu District
Fujian Province
People’s Republic of
China
Industrial
land and
administrative
and ancillary
building
constructed
thereon
05.08.2004
11,108.58
sq. metres
Leasehold
(47 years
expiring on
19/12/2056)
4
329,005
Commercial
land office
building
29.01.2012
4,392
sq. metres
Freehold
97
38,403,330
DKLS AUST TRUST
472 – 478 Bourke Street
Melbourne
Victoria 3000
154
Annual Report 2012
ANALYSIS OF SHAREHOLDINGS
As At 29 March 2012
Authorised Capital
:
Issued and Fully Paid-Up Capital :
Class of Shares
:
Voting Rights
:
RM200,000,000
RM92,699,600
Ordinary shares of RM1.00 each fully paid
One vote per shareholder on a show of hands
One vote per ordinary share on a poll
DISTRIBUTION OF SHAREHOLDERS
(Based on the Record of Depositors)
No. of Holders
48
918
1,266
162
35
2
2,431
Holdings
Less than 100
100 to 1,000
1,001 to 10,000
10,001 to 100,000
100,001 to 4,634,979
4,634,980* and above
Total Holdings
%
426
909,874
4,451,800
4,307,454
43,420,213
39,609,833
92,699,600
**
0.98
4.80
4.65
46.84
42.73
100.00
NOTES :
*
Denotes 5% of the issued capital.
**
Negligible.
SUBSTANTIAL SHAREHOLDERS (EXCLUDING BARE TRUSTEES)
(Based on the Company’s Register of Substantial Shareholders)
Direct
1.
2.
3.
4.
Ding Poi Bor
Ir Sam Tuck Wah
Ding Soo King
28,614,362
12,361,163*¹
12,482,171
2,372,663
No. of Shares Held
%
Deemed
30.87
13.33
13.47
2.56
3,327,841*²
2,372,663*³
12,482,171*³
%
3.59
2.56
13.47
NOTES :
*¹
Including 7,910,000 shares held through nominee companies.
*²
Deemed interested through his spouse and his shareholding in a corporation by virtue of Section 6A of the Companies Act, 1965.
*³
DIRECTORS’ SHAREHOLDINGS
(Based on the Company’s Register of Directors’ Shareholdings)
Direct
1.
2.
3.
4.
5.
6.
7.
Ding Poi Bor
Ir Sam Tuck Wah
Ding Soo King
Soh Yoke Yan
28,614,362
12,361,163*¹
12,482,171
2,372,663
-
No. of Shares Held
%
Deemed
30.87
13.33
13.47
2.56
-
3,327,841*²
2,372,663*³
12,482,171*³
-
%
3.59
2.56
13.47
-
NOTES :
*¹
Including 7,910,000 shares held through nominee companies
*²
Deemed interested through his spouse and his shareholding in a corporation by virtue of Section 6A of the Companies Act, 1965.
*³
Annual Report 2012
155
Analysis Of Shareholdings (contd)
As At 29 March 2012
THIRTY LARGEST SHAREHOLDERS
(Based on the Record of Depositors)
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
22.
23.
24.
25.
26.
27.
28.
29.
30.
156
Ding Poi Bor
Ir Sam Tuck Wah
Cheah Ngeok Chai
Hong Poh Poh
Pembinaan Bumiasia Sdn Bhd
Ding Pei Chai
HSBC Nominees (Asing) Sdn Bhd
Exempt an for HSBC Private Bank (Suisse) S.A. (Spore TST AC CL)
A.A. Anthony Nominees (Tempatan) Sdn Bhd
Pledged Securities Account for Ding Pei Chai
Ding Soo King
Alliancegroup Nominees (Tempatan) Sdn Bhd
Isyoda (M) Sdn Bhd
Ir Sam Tuck Wah
Soh Yoke Moi
Cimsec Nominees (Tempatan) Sdn Bhd
CIMB Bank for Ding Pei Chai (SFD)
Soh Joon Hui
Ding Poi Kooi
Citigroup Nominees (Tempatan) Sdn Bhd
Tan Kok An
Arab-Malaysian Credit Berhad
Pledged Securities Account for Zahidi bin Omar
Bertam Indah (M) Sdn Bhd
Maybank Nominees (Tempatan) Sdn Bhd
Pledged Securities Account for Lai Weng Chee @ Lai Kok Chye
Wong Peng Hang
TA Nominees (Tempatan) Sdn Bhd
Pledged Securities Account for Heng Yong Lai
Ismail bin Yeop Dahari
Sam Tuck Heng
Tee Jin Gee Enterprise Sdn Bhd
Asia Selatan (M) Sdn Bhd
Ng Tee Hian
Wong Shak On
AIBB Nominees (Tempatan) Sdn Bhd
Pledged Securities Account for Batu Bara Resources Corporation Sdn Bhd
Annual Report 2012
No. of Shares
%
28,614,362
10,995,471
4,597,963
4,500,000
4,496,300
4,451,163
4,448,000
30.87
11.86
4.96
4.85
4.85
4.80
4.80
4,260,000
4.60
2,372,663
2,000,000
2.56
2.16
1,910,000
1,486,700
1,297,841
1,000,000
2.06
1.60
1.40
1.08
855,000
688,452
650,000
0.92
0.74
0.70
606,000
561,000
0.65
0.61
500,000
400,100
0.54
0.43
326,731
312,000
0.35
0.34
141,000
140,000
129,000
128,000
125,000
125,000
120,000
0.15
0.15
0.14
0.14
0.13
0.13
0.13
82,237,746
88.70
FORM OF PROXY
(Before completing the form please refer to the notes below)
No. of ordinary shares held
I/We
(FULL NAME IN BLOCK LETTERS)
of
(FULL ADDRESS)
being a member of DKLS INDUSTRIES BERHAD, hereby appoint
(FULL NAME)
of
(FULL ADDRESS)
or failing him/her, the Chairman of the Meeting, as my/our proxy to vote for me/us and on my/our behalf at the Seventeenth
Annual General Meeting of the Company to be held at 11th Floor, Ipoh Tower, Jalan Dato’ Seri Ahmad Said, 30450 Ipoh,
Perak Darul Ridzuan on Wednesday, 22 May 2013 at 9.30 a.m. or at any adjournment thereof. My/our proxy is to vote as
indicated below:
Resolutions relating to:
For
1.
Adoption of Financial Statements and Reports
2.
Approval of Payment of First and Final Dividend
3.
Approval of Payment of Directors’ Fees
4.
Re-election of Ir Sam Tuck Wah
5.
Re-election of Ms Soh Yoke Yan
6.
Re-appointment of Dato’ Ir Lim Choo Boon, DPMP, JSM, PCM, KMN, PKT, AMN
7.
Re-appointment of Auditors
8.
Authority for Ms Soh Yoke Yan to continue to act as an Independent
Non-executive Director
9.
Authority for Dato’ Ir Lim Choo Boon, DPMP, JSM, PCM, KMN, PKT, AMN to continue
to act as an Independent Non-executive Director
Against
(Please indicate with an “X” in the space provided how you wish your vote to be cast on the resolutions specified in the
Notice of the Seventeenth Annual General Meeting. If you do not do so, the proxy will vote or abstain from voting at his/
her discretion).
Dated this
day of
2013
Signature/Seal of Shareholder
Notes:
a.
A member of the Company entitled to attend and vote at the Meeting is entitled to appoint a proxy to attend and vote in his/her stead. A proxy may but
need not be a member of the Company and a member may appoint any person to be his/her proxy without limitation and the provisions of Section 149(1)
(b) of the Companies Act, 1965 shall not apply to the Company. There shall be no restriction as to the qualification of the proxy. A proxy appointed to attend
and vote at a meeting of the Company shall have the same rights as the member to speak at the meeting.
b.
This instrument appointing a proxy shall be in writing under the hand of the appointor or of his/her attorney duly authorised in writing or, if the appointor
is a corporation, either under the corporation’s seal or under the hand of an officer or attorney duly authorised.
c.
This instrument appointing a proxy must be deposited at the Registered Office of the Company at D-3-7, Greentown Square, Jalan Dato’ Seri Ahmad Said,
30450 Ipoh, Perak Darul Ridzuan not less than forty eight (48) hours before the time appointed for holding the meeting or any adjournment thereof.
d.
Where a member of the Company is an Exempt Authorised Nominee which holds ordinary shares in the Company for multiple beneficial owners in one
securities account (“omnibus account”), there is no limit to the number of proxies which the Exempt Authorised Nominee may appoint in respect of each
omnibus account it holds.
e.
Only members whose names appear in the Record of Depositors as at 15 May 2013 will be entitled to attend and vote at the meeting.
1st fold here
2nd fold here
AFFIX
STAMP
HERE
The Company Secretary
30450 Ipoh
Perak Darul Ridzuan
Fold this flap for sealing