2008 - Insage

Transcription

2008 - Insage

2008 was a
SUCCESSFUL year
A year
of great
achievement!
a historical
RECORD PERFORMANCE
5-years financial summary
years ended 31 December
2008
2007
2006
2005
2004
892,508
910,080
910,698
829,429
799,811
Operating profit/(loss)
48,715
(73,738)
(30,031)
(15,480)
5,284
Profit/(loss) before tax
46,500
(83,341)
(40,178)
(26,447)
(9,979)
Profit/(loss) after tax
36,907
(88,800)
(52,323)
(38,400)
(16,663)
Profit/(loss) after minority interests
32,044
(86,130)
(44,916)
(39,558)
(18,050)
5.8
(15.6)
(8.3)
(7.4)
(3.5)
2008
2007
2006
2005
2004
Non-current assets
252,306
220,730
225,260
468,824
530,360
Current assets
434,333
281,048
334,493
481,382
442,678
Current liabilities
326,030
257,363
309,903
405,077
411,714
Non-current liabilities
42,207
43,004
46,222
109,156
98,670
Shareholders’ equity
317,549
291,212
363,246
405,168
433,007
IN RM’000
Revenue
Earnings/(loss) per share (sen)
5-years record
as at 31 December
IN RM’000
ANNUAL REPORT 2008
cover
RATIONALE
NON-CURRENT
ASSETS
CURRENT
ASSETS
in RM’000
CURRENT
LIABILITIES
in RM’000
334,493
281,048
06
07
in RM’000
405,168
363,246
291,212
05
06
07
08
433,007
43,004
07
04
46,222
06
42,207
109,156
05
08
98,670
257,363
07
04
309,903
06
326,030
405,077
05
08
411,714
04
08
481,382
05
220,730
07
SHAREHOLDERS’
EQUITY
317,549
in RM’000
442,678
225,260
06
NON-CURRENT
LIABILITIES
04
468,824
05
08
530,360
04
252,306
The Annual Report 2008 records our
OUTSTANDING achievements and
inspiring SUCCESS story. Our hard work
and efforts culminated in unprecedented
growth in revenue and earnings.
in RM’000
434,333
2008 stands out as a memorable year in
the history of KUB Malaysia Berhad.
(16,663)
(38,400)
(52,323)
(88,800)
(18,050)
(39,558)
(44,916)
(86,130)
(3.5)
(7.4)
(8.3)
(15.6)
08
(83,341)
(40,178)
(26,447)
(9,979)
(73,738)
07
in Sen
EARNINGS/(LOSS)
PER SHARE
06
5.8
in RM’000
(30,031)
07
06
05
04
07
06
05
08
08
04
48,715
46,500
5,284
892,508
in RM’000
05
08
PROFIT/(LOSS) AFTER
MINORITY INTERESTS
32,044
(15,480)
910,080
07
910,698
06
OPERATING PROFIT/(LOSS)
04
07
06
in RM’000
08
829,429
05
in RM’000
05
08
PROFIT/(LOSS)
ATER TAX
36,907
799,811
04
REVENUE
04
07
06
05
04
5-year
FINANCIAL
SUMMARY
Review of performance charts
PROFIT/(LOSS)
BEFORE TAX
in RM’000
KUB regains profit
for the first time since 1999.
KUB proposes
6% DIVIDEND
after almost 12 years.
all-in-all 2008 was
truly a dynamic
year
for us
CONTENTS
002 Notice of 44th Annual General Meeting
006 Statement Accompanying Notice of 44th Annual General Meeting
007 Corporate Information
008 Corporate Structure
009 Organisation Structure
010 Board of Directors
011 Directors’ Profile
015 Senior Management Team
016 Message from the Chairman
026 Message from the Group Managing Director
032 Calendar of Events
034 KUB in the News
035 Statement on Corporate Governance
041 Statement on Internal Controls
044 Board Audit Committee Report
048 Financial Statements
122 List of Properties
126 Analysis of Shareholdings
Proxy Form
NOTICE OF 44TH ANNUAL GENERAL MEETING
NOTICE IS HEREBY GIVEN THAT the 44th Annual General Meeting of KUB Malaysia Berhad will be held at Dewan Tun Hussein Onn,
Pusat Dagangan Dunia Putra (PWTC), 50480 Kuala Lumpur on Thursday, 18 June 2009 at 10.00 a.m. for the following purposes:AGENDA
ORDINARY BUSINESS
1
2
3
To receive the Audited Financial Statements for the financial year ended 31 December 2008 together with the
Reports of the Directors and Auditors thereon.
Ordinary Resolution 1
To approve a First and Final Gross Dividend of 2.4 sen per ordinary share less 25 per cent (25%) taxation for
the financial year ended 31 December 2008.
To re-elect the following Directors who retire in accordance with Article 95 (i) of the Company’s Articles of
Association, and being eligible have offered themselves for re-election:
(i)
(ii)
(iii)
Mohamed Ezzuddeen Mohd Effendi
Raja Ali Raja Othman
Omar Haji Ahmad
4
To approve the Directors’ fees for the financial year ended 31 December 2008.
5
To re-appoint Messrs. Ernst & Young as Auditors of the Company and to authorise the Directors to fix their
remuneration.
SPECIAL BUSINESS
To consider and if thought fit to pass the following Resolutions:6
Authority to Allot Shares
“THAT pursuant to Section 132D of the Companies Act,1965 (“Act”) and subject always to the approval of
the relevant authorities, the Directors be and are hereby empowered to issue the shares in the Company
from time to time and upon such terms and conditions and for such purpose as the Directors may deem fit
provided that the aggregate number of shares issued pursuant to this resolution does not exceed ten per
cent (10%) of the issued share capital of the Company for the time being and that the Directors be and are
also empowered to obtain the approval for the listing of and quotation for the additional shares so issued on
the Bursa Malaysia Securities Berhad (“Bursa Securities”) and that such authority shall continue in force until
the conclusion of the next Annual General Meeting of the Company.”
7
Proposed Purchase by the Company of its Own Shares of up to 10% of the Issued and Paid Up
Share Capital of the Company
“THAT subject always to compliance with the Companies Act, 1965 (“Act”), the Articles of Association of the
Company, the Listing Requirements of Bursa Malaysia Securities Berhad (“Bursa Securities”) or any other
regulatory authorities and all other applicable rules, regulations, guidelines or approval for the time being in
force or as may be amended from time to time, the Directors of the Company be and are hereby authorised
to make purchases of ordinary shares of RM0.40 each in the Company’s issued and paid-up ordinary share
capital (“Shares”) as may be determined by the Directors of the Company from time to time through Bursa
Securities upon such terms and conditions as the Directors may deem fit, necessary and expedient in the
interest of the Company, provided that:
(i) the aggregate number of Shares which may be purchased and/or held by the Company as treasury
shares shall not exceed ten per centum (10%) of the total issued and paid-up ordinary share capital of
the Company at any point in time of the said purchase(s) subject to the restriction that the issued and
paid-up ordinary share capital of the Company does not fall below the applicable minimum share capital
requirement in accordance with the Listing Requirements;
(ii) the maximum funds to be allocated by the Company for the purpose of purchasing its shares shall
not exceed the total retained earnings and/or share premium of the Company at the time of the said
purchase(s); and
002
KUB MALAYSIA BERHAD
(iii) the authority conferred by this resolution shall commence immediately upon the passing of this ordinary
resolution and shall continue to be in force until:
(a) the conclusion of the next Annual General Meeting (“AGM”) of the Company following the general
meeting at which such resolution was passed at which time it shall lapse unless by ordinary resolution
passed at that meeting, the authority is renewed, either unconditionally or subject to conditions;
(b) the expiration of the period within which the next AGM after that date is required to be held in
accordance with the provisions of the Act; or
(c) revoked or varied by ordinary resolution passed by the shareholders of the Company in a general
meeting,
whichever is earlier;
AND THAT upon completion of the purchase by the Company of its own Shares, the Directors of the
Company be and are hereby authorised to deal with the Shares so purchased in their absolute discretion in
the following manner:
(i) cancel all the Shares so purchased; and/or
(ii) retain the Shares so purchased as treasury shares and/or distribute the treasury shares as share
dividends to the shareholders and/or resell on the Bursa Securities and/or cancel all or part of them;
and/or
(iii) retain part thereof as treasury shares and cancel the remainder;
and in any other manner as prescribed by the Act, rules and regulations made pursuant to the Act and the
Listing Requirements and rules and regulations of any other relevant authorities for the time being in force;
AND FURTHER THAT authority be and is hereby given to the Directors of the Company and/or anyone
of them to complete and do all such acts and things as they may consider necessary or expedient in the
best interest of the Company, including but not limited to executing all such documents as may be required
or necessary and with full powers to assent to any modifications, variations and/or amendments as the
Directors in their discretion deem fit and expedient to implement and give full effect to the Proposed Share
Buy-back contemplated and/or authorised by this ordinary resolution.”
8
Proposed Shareholders’ Mandate for Recurrent Related Party Transactions of a Revenue and/or
Trading Nature.
“THAT, subject always to the provisions of the Listing Requirements of Bursa Malaysia Securities Berhad,
approval be and is hereby given to the Company and/or its subsidiaries to enter into recurrent related party
transactions of a revenue and/or trading nature with related parties particulars of which are set out in the
Circular to Shareholders dated 26 May 2009 which are necessary for day-to-day operations of the Company
and/or its subsidiaries, provided that:
(i) the transactions are in the ordinary course of business, at arms length basis and on normal commercial
terms which are not more favourable to the related parties than those generally available to the public and
are not detrimental to the interests of the minority shareholders of the Company; and
(ii) the disclosure of the aggregate value of the transactions conducted during a financial year will be made
in the Annual Report of the Company for the said financial year;
AND THAT such approval granted shall commence immediately upon the passing of this Resolution until:
(a) the conclusion of the next Annual General Meeting (“AGM”) of the Company following the AGM at which
such Ordinary Resolution is passed, at which time it will lapse, unless by a resolution passed at the next
AGM, the mandate is again renewed; or
ANNUAL REPORT 2008
003
NOTICE OF 44TH ANNUAL GENERAL MEETING (CONT’D)
(b) the expiration of the period within which the next AGM of the Company after the forthcoming AGM is
required to be held pursuant to Section 143(1) of the Companies Act, 1965 (“the Act”) (but shall not
extend to such extension as may be allowed pursuant to Section 143(2) of the Act) ; or
(c) revoked or varied by a resolution passed by the Company’s shareholders in a general meeting before the
next AGM,
whichever is earlier.
AND FURTHER THAT the Directors of the Company and/or its subsidiaries be and are hereby authorised
to do all such acts and things as they may consider expedient or necessary to give effect to the transactions
as authorised by this Resolution.”
ANY OTHER ORDINARY BUSINESS
9
To transact any other ordinary business of which due notice shall have been given in accordance with the
Companies Act, 1965 and/or the Articles of Association.
NOTICE OF DIVIDEND ENTITLEMENT AND BOOK CLOSURE
NOTICE IS HEREBY GIVEN THAT subject to the approval of the shareholders at the 44th Annual General Meeting of the Company, a First and
Final Gross Dividend of 2.4 sen per ordinary share less 25 per cent (25%) taxation for the financial year ended 31 December 2008 will be paid on
3 July 2009 to shareholders whose names appear in the Record of Depositors at the close of business on 24 June 2009.
A Depositor shall qualify for entitlement to the Dividend only in respect of:
i. Shares deposited into the Depositor’s Securities Account before 12.30 p.m. on 22 June 2009 (in respect of shares which are exempted from
Mandatory Deposit);
ii. Shares transferred into the Depositor’s Securities Account before 4.00 p.m. on 24 June 2009 (in respect of Ordinary Transfers); and
iii. Shares bought on Bursa Malaysia Securities Berhad on a cum entitlement basis according to the Rules of Bursa Malaysia Securities Berhad.
Shareholders are reminded that pursuant to Securities Industry (Central Depositories) (Amendment)(No.2), 1998 (SICDA), which came into force
on 1 November 1998, all shares not deposited with Bursa Malaysia Depository Sdn Bhd by 12.30 p.m. on 1 December 1998 and not exempted
from Mandatory Deposit, have been transferred to the Minister of Finance (MOF). Accordingly, the payment for such undeposited shares will be
paid to MOF.
By Order of the Board
EULIS RACHMATIAH ISKANDAR SASTRAWIDJAJA (LS008774)
TUNKU ALIZAN RAJA MUHAMMAD ALIAS (BC/T/342)
HARNITA HARMAIN (LS008063)
Secretaries
Petaling Jaya
26 May 2009
004
KUB MALAYSIA BERHAD
Notes:1. A member of the Company entitled to attend and vote at the abovementioned Meeting is entitled to appoint a maximum of two (2) proxies
whether a member or not as his/her proxy/proxies to attend and vote in his/her stead. Where a member appoints two proxies, the member
shall specify the proportion of the member’s shareholding to be represented by each proxy, failing which the appointment shall be invalid.
2. The instrument appointing a proxy shall be in writing under the hand of the appointer or his/her attorney duly authorized or if the appointer
is a corporation, either under its common seal or signed under the hand of its attorney or by an officer given the authority on behalf of the
corporation.
3. The Proxy Forms must be deposited at the office of the Company’s Share Registrar, Symphony Share Registrars Sdn Bhd, Level 26,
Menara Multi-Purpose, Capital Square, No 8 Jalan Munshi Abdullah, 50100 Kuala Lumpur by hand or faxed to 03-27212530/31 not less than
forty eight (48) hours before the time for holding the Meeting or an adjournment thereof.
4. Explanatory Notes:
Ordinary Resolution 8, if passed, will give the Directors of the Company, from the date of the above Meeting, authority to issue and allot
ordinary shares from the unissued capital of the Company being for such purposes as the Directors consider would be in the interest of the
Company. This authority will, unless revoked or varied by the Company in a general meeting, expire at the next Annual General Meeting.
Ordinary Resolution 9 - Proposed Share Buy Back
The detailed Circular to Shareholders dated 26 May 2009 is enclosed together with the Annual Report.
Ordinary Resolution 10 - Shareholders’ Mandate for Recurrent Related Party Transactions
The detailed Circular to Shareholders dated 26 May 2009 is enclosed together with the Annual Report.
ANNUAL REPORT 2008
005
STATEMENT ACCOMPANYING NOTICE
OF 44TH ANNUAL GENERAL MEETING
1 THE DIRECTORS WHO ARE STANDING FOR RE-ELECTION AT THE 44TH ANNUAL GENERAL MEETING OF THE COMPANY
Directors retiring pursuant to Article 95(i) of the Company’s Article of Association:(a) Mohamed Ezzuddeen Mohd Effendi
(b) Raja Ali Raja Othman
(c) Omar Haji Ahmad
Further details of the above Directors seeking for re-election are set out in the Directors’ profiles, which appear from pages 013 and 014 of this
Annual Report.
2 GENERAL MEETINGS HELD IN THE FINANCIAL YEAR ENDED 31 DECEMBER 2008
The 43rd Annual General Meeting was held on 26 June 2008 at 10.00 a.m. at Laman Puteri, Hotel Singgahsana Petaling Jaya, Persiaran Barat
off Jalan Sultan, 46760 Petaling Jaya, Selangor.
Two Extraordinary General Meetings were held on 26 June 2008 at 2.00 and 2.30 p.m. at Laman Puteri, Hotel Singgahsana Petaling Jaya,
Persiaran Barat off Jalan Sultan, 46760 Petaling Jaya, Selangor.
3 BOARD MEETINGS HELD IN THE FINANCIAL YEAR ENDED 31 DECEMBER 2008
(a) A total of seven (7) Board Meetings were held during the financial year ended 31 December 2008 as follows:-
NO.
DATE OF BOARD MEETINGS
TIME
1
27 February 2008
3.00 PM
2
25 April 2008
9.00 AM
3
28 May 2008
9.00 AM
4
24 June 2008
10.00 AM
5
28 August 2008
10.00 AM
6
26 November 2008
3.00 PM
7
24 December 2008
10.00 AM
(b) Details of Attendance of the Directors at the Board Meetings for the financial year ended 31 December 2008 are as follows:NO.
NAME OF DIRECTORS
NO. OF MEETINGS ATTENDED
1
Dato’ Nordin Baharuddin
7/7
2
Datuk Mohd Nazar Samad
7/7
3
Datuk Hj. Faisyal Datuk Yusof Hamdain Diego
6/7
4
Dato’ Kamilia Ibrahim
6/7
5
Rosman Abdullah
7/7
6
7/7
7
6/7
8
Omar Haji Ahmad
7/7
All Board Meetings were held at the Board Room, Level 8, Block D, Kompleks Kelana Centre Point, Jalan SS7/19, 47301 Petaling Jaya,
Selangor.
There is no Director being appointed or resigned during the financial year ended 31 December 2008.
006
KUB MALAYSIA BERHAD
CORPORATE INFORMATION
BOARD OF DIRECTORS
Non-Independent Non-Executive Director
Chairman
Group Managing Director
Senior Independent Non-Executive Director
Deputy Chairman
REGISTERED OFFICE
Level 8, Block D
Kompleks Kelana Centre Point
Jalan SS7/19
Kelana Jaya, 47301 Petaling Jaya
Selangor
Tel : 603-7680 9666
Fax : 603-7680 9669
www.kub.com
SHARE REGISTRAR
Rosman Abdullah
Independent Non-Executive Director
Omar Haji Ahmad
SECRETARIES
Eulis Rachmatiah Iskandar Sastrawidjaja (LS008774)
Tunku Alizan Raja Muhammad Alias (BC/T/342)
Harnita Harmain (LS008063)
Symphony Share Registrars Sdn Bhd (378993-D)
Level 26, Menara Multi-Purpose
Capital Square, No. 8, Jalan Munshi Abdullah
50100 Kuala Lumpur
Tel : 603-2721 2222
Fax : 603-2721 2530
AUDITORS
Messrs. Ernst & Young
(Firm No. AF 0039)
Level 23A, Menara Milenium
Jalan Damanlela
Pusat Bandar Damansara
50490 Kuala Lumpur
Tel : 603-7495 8000
Fax : 603-2095 5332
PRINCIPAL BANKERS
CIMB Bank Berhad
Malayan Banking Berhad
Affin Bank Berhad
STOCK EXCHANGE LISTING
Main Board,
Bursa Malaysia Securities Berhad
STOCK CODE
KUB 6874
ANNUAL REPORT 2008
007
CORPORATE STRUCTURE
INFORMATION & COMMUNICATIONS TECHNOLOGY (ICT)
KUB Telekomunikasi Sdn Bhd
KUB-Fujitsu Telecommunications (Malaysia) Sdn Bhd
Empirical Systems (M) Sdn Bhd
Credensoft Solutions Sdn Bhd
100%
70%
70%
70%
PROPERTIES, ENGINEERING & CONSTRUCTION (PEC)
KUB Power Sdn Bhd
KUB Realty Sdn Bhd
KUB Realty (PJ) Sdn Bhd
Peraharta Sdn Bhd
KUB Development Berhad
Ibuzawa Corporation Sdn Bhd
Precast Products Sdn Bhd
Binazawa Corporation Sdn Bhd
Bina Alam Bersatu Sdn Bhd
100%
100%
100%
100%
100%
60%
70%
70%
55%
FOOD RELATED
A&W (Malaysia) Sdn Bhd
A&W Restaurants (Thailand) Co. Ltd.
KUB Singgahsana (PJ) Sdn Bhd
KUB Agrotech Sdn Bhd
KUB Sepadu Sdn Bhd
100%
100%
100%
100%
60%
OTHERS
Summit Petroleum (Malaysia) Sdn Bhd
KUB-Berjaya Enviro Sdn Bhd
008
KUB MALAYSIA BERHAD
100%
40%
ORGANISATION STRUCTURE
GROUP MANAGING DIRECTOR
GROUP OPERATION SERVICES
Group General Manager
GROUP BUSINESS DEVELOPMENT
General Manager
GROUP FINANCE
Group Financial Controller
GROUP LEGAL & SECRETARIAL
General Manager
GROUP HUMAN CAPITAL DEVELOPMENT
Head
GROUP INTERNAL AUDIT
Head
ANNUAL REPORT 2008
009
BOARD OF DIRECTORS
sitting from left to right:
standing from left to right:
DATO’ KAMILIA IBRAHIM
OMAR HAJI AHMAD
DATO’ NORDIN BAHARUDDIN
Non-Independent Non-Executive Director / Chairman
ROSMAN ABDULLAH
MOHAMED EZZUDDEEN MOHD EFFENDI
DATUK MOHD NAZAR SAMAD
DATUK HJ. FAISYAL DATUK YUSOF HAMDAIN DIEGO
Senior Independent Non-Executive Director / Deputy Chairman
RAJA ALI RAJA OTHMAN
010
KUB MALAYSIA BERHAD
DIRECTORS’ PROFILE
Dato’ Nordin Baharuddin, aged 60, a Malaysian,
was appointed to the Board of KUB Malaysia
Berhad on 19 May 2005.
Non-Independent
Non-Executive Director
CHAIRMAN
Chairman of Board
Investment Committee
Member of EXCO
Dato’ Nordin holds a Bachelor of Science in
Economics with Honours from The London
School of Economics and Political Science. He
is a Chartered Accountant of The Malaysian
Institute of Accountant (“MIA”) and a Fellow of
the Institute of Chartered Accountants in England
and Wales. He is active in local professional
accounting bodies through his membership of the
Malaysian Institute of Certified Public Accountants
where he is President and a Council Member. He
is Chairman of the Audit Committee of Council,
Chairman of the Disciplinary Committee and a
member of the Financial Reporting Standards
Implementation Committee of MIA. He has served
for two terms on the Malaysian Financial Reporting
Foundation and was a member of the Working
Group on Corporate Governance for the Islamic
Financial Services Board.
Datuk Mohd Nazar Samad, aged 53, a Malaysian,
was appointed to the Board of KUB Malaysia
Berhad on 1 March 2007 as Executive Director &
Chief Executive and on 24 December 2008, his
position was redesignated as Group Managing
Director.
He holds a Diploma in Accountancy from Mara
Institute of Technology and Bachelor of Science
Degree in Business Administration from Oklahoma
City University, USA.
Chairman of EXCO
He began his career with Bank Pertanian Malaysia
and Rakyat First Merchant Bankers Berhad
from 1978 to 1991. In 1992, he joined Cold Storage
Malaysia Berhad as Head of Corporate Affairs
and rose subsequently to the position of Group
Chief Executive. In 1996, he joined Krystar
Management Sdn Bhd, a management consulting
firm, which established the Eraman duty free
outlets for Malaysia Airports Bhd.
Dato’ Nordin retired as Chairman of Ernst &
Young Malaysia in 2004 after 35 years in the
accounting and auditing profession in Malaysia
and overseas. He has also retired as Chairman
of Syarikat Prasarana Negara Berhad on 31
December 2006 and as Senior Advisor to
Citibank Berhad on 9 January 2008. He has been
appointed Adjunct Professor of University Putra
Malaysia and is a Member of the Industry Advisory
Panel of University Technology Petronas.
Currently, Dato’ Nordin is an Independent NonExecutive Director of Sarawak Energy Berhad,
Scomi Engineering Berhad, Visdynamics Holding
Berhad and Malaysian Rating Corporation Berhad
(MARC). With the exception of MARC all the
abovementioned companies are listed on Bursa
Malaysia.
He does not have any family relationship with
any Director and/or major shareholder of KUB
Malaysia Berhad. He has never been convicted
of any offence over the past 10 years and has
no conflict of interest with KUB Malaysia Berhad.
From 1998 to 2002, he was Executive Director
and Chief Executive Officer of Buildmax Ltd, a
building materials manufacturing business listed
on the Johannesburg Stock Exchange in South
Africa, and he returned to Malaysia in 2003 as
Chairman and Advisor to Diversatech (M) Sdn
Bhd, a company engaged in the manufacture
and sale of specialised agricultural fertilisers.
of any offence over the past 10 years and has no
conflict of interest with KUB Malaysia Berhad.
ANNUAL REPORT 2008
011
DIRECTORS’ PROFILE (CONT’D)
Datuk Hj. Faisyal Datuk Yusof Hamdain Diego,
aged 47, a Malaysian, was appointed to the Board
of KUB Malaysia Berhad on 18 August 2005.
He currently sits on the Board of Bursa Malaysia
Berhad and the Boards of several subsidiary
companies of KUB Malaysia Berhad.
He holds a Bachelor of Arts (Honours) degree in
Economics from York University, Toronto, Canada.
Datuk Hj. Faisyal has been the Executive
Chairman of Arus Sutera Sdn Bhd since 1997,
Director of Perkasa Trading Sdn Bhd (a SEDCO
subsidiary) since 1996 and Treasurer of the Dewan
Perniagaan Melayu Malaysia (Sabah) from 1997 till
April 2007.
DATUK HJ. FAISYAL DATUK
YUSOF HAMDAIN DIEGO
Senior Independent
DEPUTY CHAIRMAN
Member of Board
Remuneration Committee
Member of EXCO
Dato’ Kamilia Ibrahim, aged 57, a Malaysian, was
appointed to the Board of KUB Malaysia Berhad
on 28 April 1997.
She sits on the Boards of several subsidiary
companies of KUB Malaysia Berhad and is also
the Chairman of Advisory Panel of Amanah Mutual
Berhad (AMB) Unit Trust.
DATO’ KAMILIA IBRAHIM
Non-Independent
DIRECTOR
Chairman of Board
Nomination Committee
012
KUB MALAYSIA BERHAD
Currently, she is the principal partner in her law
firm, which specializes in property, commercial
and banking. Politically active, she has been an
elected member of the Wanita UMNO National
Executive Council since 1987. She is currently
the Deputy Head of Wanita UMNO Malaysia and
has been appointed as UMNO Supreme Council
member for the 2008 - 2011 term. She has served
as a member of the National Islamic Council
Malaysia since 2000. In 2004, she was appointed
as a Commissioner for the Royal Commission
Enhancing the Operation and the Management of
the Royal Malaysian Police.
Dato’ Kamilia obtained her LLB and LLM from
University Malaya and her Diploma In Syariah Law
& Practice from the International Islamic University
of Malaysia (IIUM).
She does not have any family relationship with
Malaysia Berhad. She has never been convicted
ROSMAN ABDULLAH
Non-Independent
DIRECTOR
Member of Board
Audit Committee
Member of Board
MOHAMED EZZUDDEEN
MOHD EFFENDI
Rosman Abdullah, aged 42, a Malaysian, was
on 19 May 2005.
Group Chief Executive Officer of PECD Berhad.
He resigned as Group Chief Executive Officer of
PECD Berhad on 7 April 2009.
Rosman is a chartered member of the Malaysian
Institute of Accountants, and a member of
the Australian Society of Certified Practicing
Accountants. He holds a Bachelor of Commerce
(Accounting) degree from the Australian National
University and had attended the Advanced
Management Programme at the Oxford University.
He is a non-independent & non-executive director
of MESDAQ-listed Cuscapi Berhad and also an
independent director of Kumpulan Fima Berhad
and Narra Industries Berhad, companies listed on
Bursa Malaysia’s Main Board.
He had served as the Executive Director of
Malaysia Airport Holdings Berhad (MAHB) from
1997 to 2003 and Experienced Manager at Arthur
Andersen & Co. from 1989 to 1997. He joined
PECD Berhad, a company listed on the Main
Board of Bursa Malaysia in 2003 as Corporate
Affairs Director and in 2006 he was appointed as
Mohamed Ezzuddeen Mohd Effendi, aged 49, a
Malaysian, was appointed to the Board of KUB
Malaysia Berhad on 18 August 2005.
He was the Managing Director of RenCorp Sdn
Bhd from 1994 to 1998 and E-Form Resources
Sdn Bhd from 1999 to 2000.
He holds a Bachelor of Science in Management
degree from the University of Dublin, Ireland as well
as an Advanced Diploma in Marketing Techniques
from the College of Marketing and Design in
Dublin, Ireland.
Currently he is the Chief Executive Officer of
the National Development Institute of Research
(NADIR).
Mohamed Ezzuddeen gained vast experience in
the corporate restructuring and mergers &
acquisitions (M&A) process during his work
in Corporate Affairs at Renong Berhad’s ICT
Division.
DIRECTOR
Chairman of Board
Member of Board
ANNUAL REPORT 2008
013
DIRECTORS’ PROFILE (CONT’D)
Raja Ali Raja Othman, aged 43, a Malaysian, was
on 18 August 2005.
He is currently attached with Deutsche Bank
(Malaysia) Berhad as Director in Global Markets
Division.
RAJA ALI RAJA OTHMAN
DIRECTOR
Member of Board Audit Committee
Member of Board
Prior to joining Deutsche Bank (Malaysia) Berhad,
he was attached to the global accountancy firms
of Arthur Andersen and Ernst & Young for over
14 years and left as a Partner in their Transaction
Advisory Services practice. He joined ECM Libra
Securities in August, 2004 and left as Deputy Chief
Executive Officer in August, 2007.
Omar Haji Ahmad, aged 43, a Malaysian, was
appointed to the Board of KUB Malaysia on 18
August 2005.
OMAR HAJI AHMAD
DIRECTOR
Chairman of Board
Audit Committee
Member of Board
Member of Board
He gained significant hands-on experience
in strategic management, business planning,
project management and corporate finance at
leading corporations including Kumpulan Utusan
from 1995 until 2001 and ESSO Production (M)
Inc. from 1992 until 1995. A media veteran with
more than 13 years experience, he is currently the
Managing Director of Omnicast (M) Sdn Bhd with
principal activities in media strategic consultancy,
broadcasting and advertising.
In rising to the challenge of the country’s drive
in human capital development, in 2007 Omar
pioneered the set-up of School of Executive and
Entrepreneur Development (S.E.E.D) of which he
He is a Fellow of the Chartered Association of
Certified Accountants (FCCA) and a Chartered
Accountant with the Malaysian Institute of
Accountants.
is currently the Executive Chairman. At the same
time, he is also a co-owner of Max Marine Sdn
Bhd a company providing marine and marinerelated services to various Port Authorities and the
oil and gas industries in general.
Omar obtained his accounting qualifications
from University of Newcastle-upon-Tyne UK and
ICAEW trained in London. He has also attended
numerous courses including INSEAD International
Management Program Hong Kong in year 2000.
COMPANY SECRETARIES
EULIS RACHMATIAH
ISKANDAR SASTRAWIDJAJA
014
KUB MALAYSIA BERHAD
TUNKU ALIZAN RAJA
MUHAMMAD ALIAS
SENIOR MANAGEMENT TEAM
DR WAN AHMAD RUDIRMAN WAN RAZAK
GROUP OPERATION SERVICES
HANIZA ROS NASARUDDIN
General Manager
GROUP BUSINESS DEVELOPMENT
MARZUKI RAFIE
Group Financial Controller
GROUP FINANCE
EULIS RACHMATIAH ISKANDAR SASTRAWIDJAJA
General Manager
GROUP LEGAL AND SECRETARIAL
ROSMADI GHAZALI
Head
GROUP HUMAN CAPITAL DEVELOPMENT
MOHD IMRAN MOHD TAHIR
Head
GROUP INTERNAL AUDIT
ANNUAL REPORT 2008
015
MESSAGE FROM THE CHAIRMAN
CHAIRMAN
016
KUB MALAYSIA BERHAD
DEAR SHAREHOLDER,
SYUKUR ALHAMDULILLAH, ON BEHALF OF THE BOARD OF DIRECTORS, I AM
DELIGHTED TO ANNOUNCE THAT KUB MALAYSIA BERHAD HAS MADE A DRAMATIC
TURNAROUND TO POST ITS FIRST PROFIT AFTER ENDURING EIGHT CONSECUTIVE
YEARS OF LOSSES.
FINANCIAL RESULTS
For the year ended 31 December 2008, the Group recorded
an audited profit before tax of RM46.5 million, clawing its
way back from losses of RM83.3 million in the previous
year. Profits comprised both an operating profit of RM23.4
million and gains on disposal of assets and investments
of RM23.1 million. The improved results were contributed
by the Group’s core businesses of Information and
Communications Technology (ICT), Property, Engineering
and Construction (PEC), and Food-Related activities.
Other measures of financial health also showed
improvement. EPS improved to 5.76 sen per share for
2008 from a loss of 15.58 sen per share for 2007.
PERFORMANCE REVIEW
Our improved results boil down to two key factors: focus
and people.
Prior to 2007, KUB Malaysia was frequently chastised for
being over-diversified and lacking focus. Therefore, finding
our focus was a key tenet of the turnaround plan on which
we embarked in 2007.
In 2008, we continued to reprioritise and refine our core
businesses, which have been delineated into the Tier-1
category of ICT, PEC, Food-Related activities (comprising
A&W Malaysia and Thailand; and plantations) and the Tier-2
category of other businesses comprising LPG. These efforts
paid off as all three core businesses turned in strong results
despite softening economic and business conditions.
Other central strategies included asset disposals and
withdrawing from non-core businesses. In 2008, we
disposed off the KUB.com building in Kuala Lumpur, and
subsidiary companies Adil Perdana Sdn Bhd and Tele
Dynamics Sdn Bhd. KUB.com was sold to Park Residence
Development Sdn Bhd for RM86.5 million. 60% subsidiary
Tele Dynamics Sdn Bhd was sold to Voyage Frontier (M)
Sdn Bhd for RM17.05 million.
We made strategic acquisitions in areas that offered high
potential growth, possibilities of recurring income, and the
opportunity to move up the value chain. A high priority
was to acquire companies through which we could offer
integrated business solutions instead of merely pushing
products.
ANNUAL REPORT 2008
017
MESSAGE FROM THE CHAIRMAN (CONT’D)
To boost growth and secure recurring income in the ICT sector, we
completed the acquisition of 60% equity in Empirical Systems (M)
Sdn Bhd in March 2008 for RM4.86 million. Empirisys specialises
in the provision of managed IT services and solutions.
Over in PEC, we acquired 60% equity in Ibuzawa Corporation
Sdn Bhd, a business leader in Industrial Building Systems (“IBS”)
for RM22 million in April 2008. IBS are modular building solutions
incorporating precast or prefabricated components that can deliver
significant time and cost savings for the construction industry.
We also targeted sustainable organic growth in the core businesses,
particularly Food-Related. By going down to the ground to
familiarise themselves with the individual business conditions
at each entity, management and staff have performed beyond
expectations at the plantation units of KUB Agrotech Sdn Bhd and
KUB Sepadu Sdn Bhd as well as A&W. Plantation yields improved
slightly over the previous year, and performance was boosted by
average fresh fruit bunches (“FFB”) prices that were higher in FY08
compared to FY07. Despite soft economic conditions, A&W’s
ongoing refurbishment exercise enabled us to attract even more
walk-in customers and grow sales by double digits in 2008.
In addition, we continued to strengthen the Balance Sheet, building
on the earlier impairments and write-offs undertaken in FY07. As
part of ongoing restructuring efforts, the Group completed its capital
rationalisation exercise in October 2008. The exercise involves
par value reduction from RM1 par value to RM0.40 per share
by cancelling RM0.60 of existing par value, and share premium
reduction, both of which gave rise to a credit which was applied to
eliminate the accumulated losses of RM645.2 million.
Our results could not have reached fruition without the herculean
efforts and sacrifices by our people. Good investment holding
companies need to have excellent management and staff in order
to succeed, and I am happy to note that the caliber and morale of
our people have grown tremendously over the past two years.
Going forward, we will continue to invest in recruiting, developing
and retaining good people who are equipped with the requisite
knowledge, experience and ethics to help the Group in reaching its
goal of becoming the country’s leading Bumiputera enterprise.
018
KUB MALAYSIA BERHAD
REWARDING SHAREHOLDERS
We owe a massive debt to our shareholders who have
remained steadfast despite the many setbacks throughout
the years. After 11 tumultuous years of underperformance,
KUB Malaysia Berhad finally answers its every shareholders
question - the dividend payment.
Bouquets are also due to the government agencies and
business partners, vendors and suppliers with whom we
share a close working relationship. Thank you for helping
to smooth our path to profitability and we look forward to
building stronger bonds with all of you in future.
As a belated “gift” and in line with its vision to provide
reasonable returns on investment, the company
has proposed to pay dividend of 6% to all ordinary
shareholders.
MESSAGES OF APPRECIATION
Importantly, I wish to extend my appreciation to the very
important people within the Group that played a pivotal
role in its turnaround. Thanks to my fellow directors for
their wise counsel and their generosity in sharing their
expertise to help mould a better enterprise. Kudos to the
management for crafting a focused turnaround plan and
providing the leadership needed to execute the plan with
perseverance and dedication. Last but certainly not least, all
of our people deserve the heartiest thanks for throwing their
weight behind the turnaround plan, despite the challenges
involved. Congratulations to all of you for reinventing KUB
Malaysia Berhad into a relevant and profitable enterprise
that can finally stand tall.
The Group is indebted to several parties for their unwavering
support throughout our long earnings drought and beyond
to our eventual recovery.
I am confident that with the enduring support of our
stakeholders, KUB Malaysia is ready to open up a new and
positive chapter in its history.
In particular, I wish to pay tribute to our patient shareholders
for their loyalty throughout the difficult years as well as their
willingness to endorse the turnaround initiative that was
crafted in early 2007. On behalf of the board, may I say
how thankful I am that our collective efforts bore fruit, and
that we are now able to redeem ourselves in the eyes of
our shareholders.
Thank you.
The proposed dividend marks a significant milestone in
KUB’s volatile journey. It has withstood the Asian financial
crisis of 1997 and the current global economic slowdown;
and for the first time since listing has emerged operationally
profitable to recommend the said dividend.
ANNUAL REPORT 2008
019
information
communications
& technology
Revenue climbed
by more than three fold
to RM250.9 million for FY08
as opposed to RM72.6 million
in the previous corresponding year.
028
KUB MALAYSIA BERHAD
property,
engineering
& construction
Operating profit IMPROVED
by two fold
to RM9.7 million
on the back of revenue growth
in excess of 60%
to RM153.4 million for FY08.
ANNUAL REPORT 2008
029
food related
Revenue
grew 4% in FY08
versus the previous year,
contributed by the Group’s
PLANTATION operations
and the A&W fast food chain
in Malaysia and Thailand.
MESSAGE FROM THE GROUP MANAGING DIRECTOR
026
KUB MALAYSIA BERHAD
DEAR SHAREHOLDER,
THE PROCESS OF CHANGING AND TURNING AROUND KUB SINCE JOINING THE GROUP IN 2007 HAS
BEEN AN EXTREMELY CHALLENGING ONE. DURING THESE TRYING TIMES, I WAS BLESSED WITH
THE SUPPORT OF THE SHAREHOLDERS, THE BOARD OF DIRECTORS, AND THE DEDICATION OF THE
MANAGEMENT AND STAFF OF THE GROUP. ALHAMDULILLAH, I BELIEVE WE ARE MOVING FORWARD.
The buy-in from all our stakeholders empowered us to make
the necessary changes for a turnaround. Alhamdulillah, I am
happy to report that the initiative has borne fruit as scheduled
within two years. Key to our recovery was the successful
realigning and streamlining of our core businesses: ICT,
PEC and Food-Related, which catalysed the subsequent
growth in FY08 revenue and net profit of RM892.5 million
and RM36.9 million respectively.
OVERALL PERFORMANCE
I am proud to present what unity and hard work brings to
the bottom line of our FY08 performance. The Group did
not only achieve profitability but improved its capability in
managing our operating businesses. 98% of the Group’s
revenue comes from the Operating sectors, which gives us
50.3% incremental performance year-on-year. Group’s pretax profit turned-around to be in the black by more than
100%, strengthening the confidence that we are on the right
track.
INFORMATION AND
COMMUNICATIONS TECHNOLOGY (ICT)
ICT revenue climbed by more than threefold to RM250.9
million for FY08 as opposed to RM72.6 million (excluding
RM307.1 million from Tele Dynamics which was later disposed
OVERALL PERFORMANCE (RM‘000)
of in 2008) in the previous corresponding year due to increase
in contracts awarded to subsidiaries KUB Telekommunikasi
Sdn Bhd, KUB-Fujitsu Telecommunications (M) Sdn Bhd
and newly acquired subsidiary Empirical Systems (M) Sdn
Bhd. Operating profit rebounded to RM22.2 million for FY08
from a loss of RM38.7 million for FY07.
Among the main strategies of the ICT subsidiaries was to
diversify sources of contract revenue and build stronger
alliances with business partners.
KUB Telekomunikasi successfully enlarged its market when
it clinched its largest contract for the year from the Ministry
of Education. The end-to-end contract valued at RM166.1
million encompassed the supply, delivery, installation, testing,
commissioning, and post-acceptance maintenance of ICT
equipment under Phase VI of the Teaching and Learning of
Science and Mathematics in English Programme.
KUB Telekomunikasi also worked hard to sustain ongoing
relationships with erstwhile clients, enabling it to secure a
contract valued at RM30.4 million from long-term Telekom
Malaysia (TM) for the supply of a Digital Subscriber Line
Access Multiplexer (DSLAM) System and a contract from
the Ministry of Information valued at RM11.3 million for
a migration exercise for terrestrial networks RTM1 and
RTM2.
2008
2007
Group Revenue
892,508
910,080
Operating sectors
880,219
585,537
Subsidiary companies pending for disposal
12,289
324,543
Group Pre-Tax Profit/(Loss)
46,500
(83,341)
Operating sectors (including associates)
25,852
(78,192)
Subsidiary companies pending for disposal
Gain on disposal of investments/assets
(2,443)
23,091
INCREASE
50.3%
>100%
(4,240)
(909)
ANNUAL REPORT 2008
027
MESSAGE FROM THE GROUP MANAGING DIRECTOR (CONT’D)
Building on its previous track record, 70%-owned
subsidiary KUB-Fujitsu successfully secured further work
for the extension of Telekom Malaysia’s major Metro
Ethernet System (MES). The MES network provides access
connection or networking solutions to users or corporations
up to l0Gbps. The extension will cater to increased demand
for the network’s high bandwidth broadband access and
network services in various areas, particularly in the banking
and financial services industry.
KUB-Fujitsu won two separate end-to-end contracts for
the supply, delivery, installation, testing, commissioning and
post-acceptance maintenance and support services for the
MES contracts for a total contract value of RM62.8 million
in 2008.
In April 2009, KUB-Fujitsu was awarded yet another
RM21.23 million contract from TM for the supply, installation
and commissioning of works as well as maintenance
services for the MES. Altogether, KUB-Fujitsu has been
awarded contracts worth RM160 million for the MES since
November 2006.
New 70%-owned subsidiary Empirical Systems (M) Sdn
Bhd (Empirisys) is a technology services company focusing
on Total Information Technology Lifecycle Management
(ITLM) especially in provision of system integration and
IT managed services. In 2008, Empirisys won a 2-year
RM28.3 million contract from the Ministry of Education
for the supply, delivery, installation and testing of ICT
equipment to computer labs in Selangor schools under the
ministry’s project for the Preparation of Physical and ICT
Infrastructure - Zone 3 - Selangor.
PROPERTY, ENGINEERING AND
CONSTRUCTION (PEC)
PEC’s operating profit improved by two fold to RM9.7 million
on the back of revenue growth in excess of 60 percent to
RM153.4 million for FY08.
PEC’s improved performance was mainly attributed to the
significant progress in the construction of the PERKESO
028
KUB MALAYSIA BERHAD
building, contributions from KUB Power Sdn Bhd
(contractor for power sub-stations) and newly-acquired
precast component manufacturer and contractor, Ibuzawa
Corporation Sdn Bhd Group.
Subsidiary Bina Alam Bersatu Sdn Bhd is on track
to complete the 19-storey PERKESO Kuala Lumpur
headquarters in Kampung Baru.
Subsidiary KUB Power secured contracts valued at a
total of RM70.57 million in 2008 to build and commission
substations and to provide refurbishment and maintenance
services for power assets. Specifically, these include a
contract worth RM18.34 million to build and commission a
main intake station for Freescale Semiconductor, contracts
valued at RM22.55 million and RM19.97 million to build
and commission substations for Tenaga Nasional’s Gelang
Patah and Tanjung Kupang power projects respectively.
KUB Power also won total contracts worth RM9.72
million to replace and refurbish power assets for TNB.
One of PEC’s main strategies for the PEC sector beginning
in 2008 is to market Ibuzawa’s Industrialised Building
Systems (“IBS”) business as an integrated business solution
while positioning KUB as the leader in IBS in the country.
IBS enables substantial savings in costs and time since
the system uses pre-fabricated components. Ibuzawa is
the first Bumiputra contractor to establish its own in-house
precast component manufacturing facilities for buildings
and infrastructure.
In 2008, the Group successfully secured a RM300 million
contract from the Ministry of Education (MoE) to build
schools in Selangor, Kuala Lumpur and Negri Sembilan
using IBS. Under the MoE contract, KUB Malaysia via its
60%-owned subsidiary, Ibuzawa Corporation Sdn Bhd
(Ibuzawa) will build 4 new schools and 32 additional blocks.
The additional blocks are slated for completion this year
while the four new schools are expected to be completed in
FY10. The MoE award is expected to contribute positively
to KUB’s earnings for the financial year ending 2009.
FOOD-RELATED
PEOPLE
Revenue from the Group’s Food-Related division grew
more than 4 percent in FY08 versus the previous year,
contributed by the Group’s plantation operations and the
A&W fast food chain in Malaysia and Thailand.
No turnaround programme can function without the buy-in
of the people involved. On behalf of management, I wish
to express my gratitude to the entire workforce of KUB
Malaysia for working to realize our collective vision.
In the quick service restaurant segment, A&W Malaysia
and Thailand generated revenues of RM55.1 million for
FY08. Performance in 2008 improved due to a rebranding
exercise and makeovers of existing restaurants and menus
to build brand equity and strengthen customer recognition
and satisfaction. A total of RM30 million has been allocated
to upgrade all 31 existing A&W outlets in each country and
the refurbishment is slated for completion by 2010.
We have also devised an innovative employee share
scheme to reward employees based both on merit and
loyalty. During the previous AGM on 26 June 2008, the
shareholders had approved the establishment of an
Employee Share Scheme (“ESS”) incorporating both
options and grants for the eligible employees and directors
of our Group.
Network expansion is vital to grow sales. Recently, the
Group has managed to acquire the rights to establish more
A&W branches in order to expand our market presence.
This year we plan to open six new branches in Malaysia and
four in Thailand, making the total number of outlets 37 and
35 respectively. Our long term plan is to have 100 outlets in
each country by 2015.
The Group aborted plans to exit from the plantations
business in 2007 and began to invest in its plantation
assets in 2008 with a view to improve future performance.
KUB Agrotech Sdn Bhd which is engaged in plantation
management and development of oil palm plantations
currently owns and manages two oil palm plantations in
Johor with a combined area of 2,655 hectares. The Group
also owns 4,680 hectares of oil palm land in Mukah,
Sarawak under KUB Sepadu Sdn Bhd.
In 2008, the plantations unit undertook various exercises
to rehabilitate its landbank and invested in infrastructure
works to mitigate flood damage, resulting in more than
16% revenue growth.
Although our people have achieved stellar results over the
past two years, further improvements are always needed.
I hope that being able to own a piece of the company via
the ESS will motivate our people to work even harder to
improve corporate performance which should translate into
higher share prices. This program is a meaningful financial
reward to reflect the dedication and tremendous effort
demonstrated in turning around the Group.
Business is dynamic, and people too must be dynamic
in order to remain relevant in this fluid global world. As
such, the Group will continue to roll out talent recruitment,
development and retention programmes that will enhance
our people’s capabilities to the fullest. Among others, we
have also introduced leadership training and succession
planning in order to develop a future generation of leaders.
Objective performance measurement is critical in
motivating and monitoring people. In line with corporate
and government best practices, the Group introduces a
key performance indicator (“KPI”) system to facilitate the
rewards and remuneration system.
ANNUAL REPORT 2008
029
MESSAGE FROM THE GROUP MANAGING DIRECTOR (CONT’D)
Children playground at Asrama Penyayang Nur Iman
donated by KUB Malaysia
CORPORATE SOCIAL RESPONSIBILITY (CSR)
THROUGH SPBB
KUB Malaysia believes in going beyond philanthropy to
make a real difference on business and society via its CSR
initiatives. As a company that is indelibly viewed as one of
the leading Bumiputera icons, it therefore makes sense
for KUB Malaysia to respond to the government’s call to
strengthening Bumiputera entrepreneurs in order to build
up the community’s wealth and self-sufficiency.
To achieve this, KUB has initiated the “Skim Penglibatan
Bumiputera Bersepadu Program” (SPBB), whereby
qualified Bumiputera entrepreneurs will be integrated into
KUB’s business value chain with the goal of growing,
nurturing and enhancing their skills and knowledge. KUB
endeavours to mentor them, provide advice and facilitate
access to financing and markets.
KUB introduced SPBB in early 2008 via the implementation
of its Teaching and Learning Science and Mathematics in
English Programme (PPSMI) Phase VI Project awarded
by the Ministry of Education. Under the SPBB initiative,
KUB in its role as main contractor appointed 52 qualified
Bumiputera businesses to implement an end-to-end
service from supplying equipment to provisioning support
services such as training and call centre. This is in line with
our aspiration to develop bumiputera ICT entrepreneurs by
sharing business opportunities.
Eventually, KUB aims to create business and training
opportunities from all its core businesses, valued at
more than RM150 million for more than 100 Bumiputera
entrepreneurs.
030
KUB MALAYSIA BERHAD
Orphans of Asrama Penyayang Nur Iman and employees of
KUB Malaysia during the Ramadhan get-together
PROSPECTS
Thanks to the realisation of our turnaround plan, I believe
that the Group has created a sound foundation on which to
build for the future.
Going forward, it is imperative that we continue to
strengthen and fine-tune the core businesses and expand
our markets. We intend to diversify our earnings base while
working to increase both the share of earnings derived from
projects as well as earnings from the marketplace.
Thankfully, we are blessed to retain the confidence of our
clients from the government agencies and the private
sectors, both of whom have consistently awarded us
contracts based on our track record and capabilities. At
the same time, we will be investing in our brands to improve
customer recall and satisfaction, and become a more
competitive force in the marketplace.
Our decision to retreat from certain foreign markets in favour
of strengthening domestic-oriented businesses is proving
to be correct in hindsight. The International Monetary Fund
has projected that world growth will fall to ½ percent in
2009, its lowest rate since World War II. Nevertheless, the
Malaysian Government’s two stimulus packages totaling
RM67 billion and its ongoing measures to sustain the
domestic economy should bolster consumer confidence
and cushion economic weakness. Bank Negara Malaysia
has projected that GDP growth for FY09 will be in the range
of -1% to 1% but weakness should be tempered by the
government’s strategies of boosting liquidity, upping public
spending on construction and education and stimulating
domestic demand. Ultimately, KUB’s core businesses of
ICT, PEC and Food-Related should benefit from these fiscal
measures.
Employees of KUB Group of Companies during the employee get-together event
The sub-prime crisis of 2008 taught the global businesses
an expensive lesson: it needs better risk management
standards and enforcement. Taking a leaf from their book,
we have made risk management a high priority for 2009.
We have set up a risk management unit which will improve
our risk assessment and due diligence processes in line
with the best practices of corporate governance.
Words alone are insufficient to express my gratitude to our
shareholders for being patient and graciously granting the
management of KUB many second chances to redeem
the company. I am delighted that the Group is finally in a
position to pay a long overdue dividend and I pledge that
we will work harder and better to deliver improved returns
on your investment in future, Insya’Allah.
MESSAGES OF APPRECIATION
Many thanks are also due to the government agencies and
our business partners, vendors and suppliers with whom we
share a close working relationship. Thank you for choosing
to work and ally with us and I hope we can strengthen our
bonds for our mutual benefit as we move forwards. To our
retail customers, I thank you for choosing to patronise our
A&W restaurants and we are working to make each and
every A&W experience more satisfying and delightful. A&W
is the Group’s special avenue to relate to the consumers at
large and we trust we’d be received well by all stakeholders
in growing this business.
I strongly believe that no man is an island; esprit de corps or
team spirit has been the key to our turnaround.
A leader is only as good as his team. On behalf of senior
management, may I say how grateful I am to all our people
for pulling together to implement the turnaround strategies
that were mapped out in 2007. Change is usually painful,
and I am very proud of all our staff who reengineered their
work processes and work culture to deliver impressive
results throughout the turnaround process. Keep up the
good work. I promise that the Group will continue to invest
in and reward our people to realise their full potential.
Objective criticism is invaluable in assessing and driving
performance. I wish to thank the board of directors for their
support and guidance without which we could not have
delivered a vastly improved set of results.
It is my fervent prayer that you will all continue to support
us as we strive to build KUB Malaysia into a company that
continues to deliver the goods and that we can all be proud
of. Amin.
Thank you.
ANNUAL REPORT 2008
031
CALENDAR OF EVENTS
Datuk Mohd Nazar Samad together
with YB Datuk Shahrir
Samad were at the coloring progr
am organized by
KUB Malaysia Berhad at A&W Panta
i Batu Buruk.
Management of
Datuk Mohd Nazar Samad and the
ue to Utusan Malaysia
KUB Malaysia handed over a cheq
Assembly.
during the recent UMNO General
out - Duit Raya
Dato Nordin, wife & Datin Marina giving
tri 2008.
at KUB Group’s Open House Aidilfi
Religious activities were held occassionally and attended by
the employees and Datuk Mohd Nazar Samad
Datuk Nordi
n handed ov
er the good
guests from
ies bags to
Rumah Tam
the special
an Sinar Har
apan, Chera
s
032
KUB MALAYSIA BERHAD
Datuk Mohd Nazar Samad entertainin
g orphans of
Asrama Penyayang Nur Iman
“Stronger Together” - The picture
says it all
unt by
Flag take-off for KUB D’H
ad
Datuk Mohd Nazar Sam
Datuk Mohd Nazar Samad with the winner
of KUB D’ Hunt 2008
ANNUAL REPORT 2008
033
KUB IN THE NEWS
Oriental Daily News 18 Jun 2008
Kwong Wah Yit Poh 4 Mar 2009
KUB to get T N B
KUB regains PROFIT
job
Utusan Malaysia 15 Okt 2008
The Edge Financial Daily 20 Jun 2008
KUB dapat kontrak bina sekolah
KUB clinches
RM300juta
education ministry job
Utusan Malaysia 28 Nov 2008
Utusan Malaysia 29 Nov 2008
KUB PULIH SEMULA
KUB dapat
Utusan Malaysia 13 Jan 2009
KUB mahu buka
cawangan A&W
100
The Star 4 Feb 2009
BIG plans for A&W
Utusan Malaysia 10 Feb 2009
KUB unjur
Utusan Malaysia 24 Apr 2009
PEROLEHAN RM1B
KUB bayar DIVIDEN
Utusan Malaysia 26 Mac 2009
sejak 12 tahun
DEDIKASI KEJAYAAN KUB
Malaysian Reserve 24 Apr 2009
1
RM38J
KUB labur RM30j ubah wajah A&W
KUB looks for another
fresh START
kontrak
Harian Metro 22 Jan 2009
The Edge 9 Mar 2009
034
RM158M
kepada pemegang-pemegang saham
KUB may declare st dividend since 1999
The Edge Financial Daily 24 Apr 2009
KUB MALAYSIA BERHAD
KUB proposes
6%
FINAL DIVIDEND
STATEMENT ON CORPORATE GOVERNANCE
The Board of Directors of KUB Malaysia Berhad (“the Board”)
recognises the paramount importance of good corporate
governance to the continued growth, success and reputation
of the Group. The Board therefore remains fully committed to
ensure that the highest standards of corporate governance,
based on the Principles and Best Practices set out in the
Revised Malaysian Code on Corporate Governance (“the
Code”), are practiced throughout the Group as a fundamental
part of conducting the affairs of the Group with the ultimate
objective of safeguarding and enhancing shareholders’ value
and the financial performance of the Group.
The Board composition complies with paragraph
15.02 of the Listing Requirements of Bursa Malaysia
Securities Berhad (“Bursa Malaysia”), which requires
a minimum of two (2) Directors, or one third (1/3) of
the Board members, whichever is the higher, to be
independent Directors.
In order to promote a balance of power and authority,
there is a clear and distinct division of responsibility
between the Chairman and the Group Managing
Director. The Board is led by the Chairman, Dato’
Nordin Baharuddin and the executive management is
led by Datuk Mohd Nazar Samad, the Group Managing
Director.
Datuk Hj Faisyal Datuk Yusof Hamdain Diego has been
appointed as the senior independent non-executive
Director who is available to shareholders, if they have
concerns that have not been resolved through the
normal channel of contact with the Chairman or the
Group Managing Director. The appointment reflected
the Board’s commitment to embrace best practices as
set out in the Best Practices Provision AA VII of the
Code.
The roles of Chairman and the Group Managing
Director are clearly defined in their individual position
descriptions. The Chairman provides coherent
leadership and assumes the responsibility for the
effective running of the Board, as well as represents
the Board to the shareholders. The Group Managing
Director, supported by his team of management, is
responsible for the day-to-day management of the
business, organisational effectiveness as well as
implementation of the Board’s policies and decisions.
The Board is pleased to disclose the following report on the
application of the Principles and compliance with the Best
Practices as set out in the Code.
A THE BOARD OF DIRECTORS
The Board is responsible to lead and direct the Group in
an effective manner and discharge its responsibilities in the
manner described below:
1 Board Composition and Balance
As at the date of this statement, the Board consists of
eight (8) members comprising three (3) non-independent
non-executive Directors, and four (4) independent nonexecutive Directors and one (1) executive Director.
The Board is ultimately responsible for the Group’s
corporate governance, strategic direction, overseeing
the investments of the Company, establishing goals
for management and monitoring the achievement
of these goals. The Board’s authority is defined and
communicated through KUB Management Guide.
The Company is led by an experienced Board,
comprising members from diversed professional
backgrounds, with expertise, skills and knowledge
in various fields such as finance, business, legal and
technical. A brief profile of each Director appears on
pages 011 to 014 of this annual report. The profile
indicates the high level and range of business experience
amongst board members which is essential to manage
effectively a business of the size and complexity of the
Group.
ANNUAL REPORT 2008
035
STATEMENT ON CORPORATE GOVERNANCE (CONT’D)
2 Board Meetings & Attendance
The Board is highly dedicated and has exhibited utmost
commitment to the Group, evidenced by its members’
attendance record. During the financial year ended 31
December 2008, seven (7) Board meetings were held.
The record of attendance at Board meetings is as
follows:
DIRECTORS
Chairman, Non-independent
non-executive Director
Datuk Hj. Faisyal Datuk Yusof
Hamdain Diego
Senior independent
Non-independent
Rosman Abdullah
Non-independent
Mohamed Ezzuddeen Mohd
Effendi
Independent non-executive
Director
Director
Omar Haji Ahmad
Director
MEETING
ATTENDANCE
All Directors have unrestricted access to all information
pertaining to the Company’s business and affairs
necessary for the effective discharge of their
responsibilities. The Directors also have direct access
to the advice and services of three (3) Company
Secretaries who are responsible to ensure that Board
meeting procedures are observed, and applicable laws
and regulations, particularly pertaining to the duties and
responsibilities of the Board and individual directors are
complied with.
Board meetings are scheduled in advance at the turn
of the new calendar, allowing the Directors to plan
ahead and enter the calendar year’s meetings into their
individual schedules.
7/7
7/7
6/7
6/7
7/7
7/7
B BOARD STRUCTURE AND EFFECTIVENESS
6/7
1 Board Committees
7/7
All relevant papers, which are comprehensive and
encompass both quantitative and qualitative factors,
for deliberation by the Board are circulated in advance
to its Directors to facilitate focused discussion and
effective decision-making process. Members of the
senior management team and professional advisers are
invited into Board meetings to provide the necessary
information and attend to the Board’s enquiries on
relevant issues, enabling the Board to make informed
decisions premised on in-depth knowledge. The
Board has also approved a procedure for Directors,
whether as a full board or in their individual capacity,
to take independent advice, where necessary, in the
furtherance of their duties and at the Group’s expense.
036
KUB MALAYSIA BERHAD
In executing its responsibilities, the Board delegates
specific responsibilities to the following Committees:
(i)
(ii)
(iii)
(iv)
(v)
(vi)
3 Access to and Supply of Quality Information and
Advice
A balance of financial and non-financial information
is encapsulated in the papers covering the Group’s
strategies, financial results, overall performance of
the Group, budgets, corporate proposals, major
investments, business directions and corporate
governance matters for the Board’s deliberation at the
Board meetings.
Board Audit Committee (“BAC”)
Board Nomination Committee (“BNC”)
Board Remuneration Committee (“BRC”)
Board Investment Committee (“BIC”)
Executive Committee (“EXCO”)
Employee Share Scheme Committee (“ESSC”)
All committees operate within clearly defined terms
of reference which outline their responsibilities and
operating procedures. Reports of proceedings and
outcome of various Committee meetings are submitted
by the Chairman of the various committees to the
Board. These committees were formed to enhance
business and operational efficiency as well as efficacy.
However, the Board retains full responsibilities for the
direction and control of the Company and the Group.
i
Board Audit Committee
Explained on pages 044 to 047 of this annual report.
The policy practiced on Directors’ remuneration
by the Remuneration Committee is to provide the
remuneration package needed to attract, retain and
motivate the Directors of the quality required to manage
the businesses of the Group and to align the interests
of the Directors with those of the shareholders.
The Committee is responsible for recommending to the
Board the remuneration framework for Directors as well
as the remuneration packages of executive Directors.
Nevertheless, it is the ultimate responsibility of the entire
Board to approve the remuneration of the Directors.
None of the executive Directors participated in any way
in determining their individual remuneration.
The executive Directors’ remuneration comprises
of basic salary and the Group’s other customary
benefits made available where appropriate. The nonexecutive Directors’ remuneration comprises of fees
and allowances where the amount is based on their
expected roles and responsibilities.
ii Board Nomination Committee
The Board Nomination Committee consists of the
following members:
NAME OF MEMBERS
Chairman, Non-independent non-executive Director
Independent non-executive Director
Omar Haji Ahmad
During the financial year, the Committee met once (1)
with full attendance.
The Committee is empowered by the Board to bring
to the Board recommendations as to the appointment
of new Directors for KUB Malaysia Berhad and its
subsidiaries.
iv Board Investment Committee
In addition, the Committee will review the required mix
of skills, experience and other core competencies,
which the non-executive Directors should bring to the
Board. The Committee believes that the Board’s current
composition possesses the required mix of skills and
core competencies necessary for the Board’s effective
discharge of its duties.
NAME OF MEMBERS
Rosman Abdullah
Non-independent non-executive Director
iii Board Remuneration Committee
The Board Remuneration Committee consists of the
following members:
NAME OF MEMBERS
Chairman, Independent non-executive Director
Hamdain Diego
Senior independent non-executive Director
The Board Investment Committee consists of the
following members:
The Committee did not meet during the financial year
since there was no new investment to be considered
by the Committee.
The Committee is responsible for making
recommendations to the Board in relation to the
management of the Group’s investment and divestment
activities.
Omar Haji Ahmad
The Committee met once (1) during the financial year.
ANNUAL REPORT 2008
037
v Executive Committee
2 Appointment to the Board
Appointments to the Board are made upon recommendation
by the Board Nomination Committee. In making the
recommendation, the Board Nomination Committee
considers the required blend of skills and experience
which the Directors should be equipped. On a periodic
basis, the Board, through the Board Nomination Committee
shall review the size, structure and effectiveness of the
Board as a whole, the Committees of the Board and the
contribution of individual Directors.
Any new nomination received is put to the full Board for
assessment and endorsement. The appointment of
members is carried out through a proper selection process,
which is consistent with the Articles of Association of the
Company. The Company Secretary will also ensure that
all appointments are properly made, and that legal and
regulatory obligations are met.
The Executive Committee consists of the following
members:
NAME OF MEMBERS
Chairman,
Hamdain Diego
The Committee met five (5) times during the financial
year with full attendance.
The Committee is delegated with such powers to ensure
the smooth and effective running of the Company
and their authority is stated in the KUB Management
Guide.
3 Re-election of Directors
vi Employee Share Scheme Committee
The Employee Share Scheme Committee consists of
the following members:
NAME OF MEMBERS
Hamdain Diego
Dr. Wan Ahmad Rudirman Wan Razak
The Committee met twice (2) during the financial year
with full attendance.
The Committee is responsible to review and finalise the
details of the Employee Share Scheme for the Group.
038
KUB MALAYSIA BERHAD
In accordance with the Company’s Articles of Association,
all of the Directors who are appointed by the Board are
subject to election by shareholders at the first Annual
General Meeting (“AGM”) after their appointment. The
Articles also provide that at least one-third (1/3) of the
Directors shall be subject to retirement by rotation at each
AGM. The retiring Directors are eligible for re-election. In
addition, Directors over seventy years of age are to retire at
every AGM pursuant to Section 129(6) of the Companies
Act, 1965 and may offer themselves for re-appointment.
4 Continuing Professional Development
All Directors are encouraged to have appropriate professional
development training to enhance their business acumen
and professionalism in discharging their fiduciary duties to
the Company.
All members of the Board have attended the Mandatory
Accreditation Programme (“MAP”) prescribed by Bursa
Malaysia for Directors of public-listed companies. In spite
of the repeal of Practice Note No. 15/2003 on Continuing
Education Programme (“CEP”) for Directors of public-listed
companies by Bursa Malaysia effective 1 January 2005,
the Board is mindful of the need for Directors to attend
continuous education programmes to keep them abreast of
changes in legislations and regulations that affect business
operations and compliance matters.
A training on the topic of “Driving Sustainable Competitive
Advantage from the Boardroom of KUB through
Leadership, Governance and Culture” was organised
internally by the Group for the benefit of the members of
the Board. In addition, appropriate continuous training and
education programmes are identified and arranged for
Directors’ participation from time to time to further enhance
their skills and knowledge as well as keep them updated
on new developments in the business and regulatory
environments.
5 Directors’ Remuneration
In line with requirements of the Code which requires that
the level of remuneration for Directors should be sufficient
to attract and retain the Directors needed to guide the
Group successfully, the Board Remuneration Committee
recommends to the Board the remuneration package
for the Group Managing Director, which is benchmarked
to the market and information from independent sources
on the package for similar position in a selected group of
comparable companies.
The Board as a whole determines fees payable to the
non-executive Directors upon recommendation made
by the Board Remuneration Committee after considering
experience, level of responsibilities undertaken as well as
the rates comparable to other relevant companies, and
such fees are tabled to the shareholders of the Company
for approval.
Non-executive
Directors
TOTAL
Below 50,000
50,001 - 100,000
100,001 – 150,000
150,001 – 200,000
200,001 – 250,000
Above 250,000
1
5
1
1
-
5
1
1
1
Total
1
7
8
The Board is of the opinion that, while individual Directors’
remuneration is not disclosed, the information provided
above, which is made in accordance with Bursa
Malaysia’s Listing Requirements, is sufficient to provide an
understanding and basis for evaluation of KUB’s corporate
governance.
The Company communicates with its shareholders and
investors primarily through its AGM, annual report, the
quarterly financial statements and the various disclosures
and announcements made to Bursa Malaysia.
At the AGM, the shareholders are given the opportunity to
ask questions and seek clarifications on the businesses
and performance of the Group.
Additionally, shareholders can also have access to
information by accessing the corporate website at www.
kub.com. This website is maintained by the Group and
provides up-to-date information to its shareholders as well
as stakeholders at large.
Executive
Director
NONEXECUTIVE
DIRECTORS
C CONTINUOUS COMMUNICATION WITH
SHAREHOLDERS
The aggregate remuneration of Directors are categorised
into appropriate components for the financial year ended
31 December 2008, as follows:ALLOWANCES
AND
BENEFITS
SALARY
IN KIND
FEES
RM’000
RM’000
RM’000
EXECUTIVE
DIRECTOR
RANGE OF REMUNERATION
(RM)
D ACCOUNTABILITY AND AUDIT
TOTAL
RM’000
548
36
-
584
-
338
252
590
1 Financial Reporting
The Board aims to provide and present a balanced
and meaningful assessment of the Group’s financial
performance and prospects throughout the financial year,
primarily through the annual financial statements, quarterly
announcement to shareholders as well as Chairman’s
statement and Message to shareholders in the annual
report.
The BAC assists the Board in scrutinising information
for disclosure in the reports and the overall quality of the
financial reporting.
The number of Directors whose remuneration falls into
the following bands during the financial year ended 31
December 2008 are as follows:
ANNUAL REPORT 2008
039
2 Directors’ Responsibility Statement
(Pursuant to Paragraph 15.27(a) of Bursa Malaysia
Listing Requirements)
The Board is accountable for ensuring that the financial
statements present a true and fair view of the state
of affairs of the Group and of the Company as at the
end of the financial year and of their profit or loss and
cash flows for the year then ended. In preparing the
financial statements, the Directors have ensured that
applicable approved accounting standards in Malaysia
and the provisions of the Companies Act, 1965 have
been applied.
a Non-audit fees
The amount of non-audit fees incurred by the Group
for services rendered by the External Auditors for the
financial year ended 31 December 2008 amounted to
RM403,000.
b Imposition of Sanctions/Penalties
During the financial year, no sanctions and/or penalties
were imposed on the Company, its subsidiaries,
Directors or Management by the relevant regulatory
authority.
In preparing the financial statements, the Directors have
selected and applied consistently suitable accounting
policies and made reasonable and prudent judgements
and estimates.
c Material Contracts
During the financial year, there were no financial
contracts entered into by the Company and its
subsidiaries (not being contracts entered into in the
ordinary course of business) involving Directors and
substantial shareholders.
The Directors also have general responsibility for
taking such steps as are reasonably open to them to
safeguard the assets of the Group and to prevent and
detect fraud and other irregularities.
d Variation in Results
There was no variance of 10% or more between the
audited results of the financial year ended 31 December
2008 and the unaudited results previously announced.
3 Relationship with Auditors
Through the BAC, the Board maintains an active,
transparent and professional relationship with the
external auditors, Messrs Ernst & Young. The BAC
meets with the external auditors without the presence
of management at least twice a year in its aim to
establish a transparent and appropriate relationship.
The BAC report is provided on pages 044 to 047.
e Revaluation Policy on Landed Properties
The revaluation policy on landed properties is as set out
in the financial statements.
f
Profit Guarantee
The Company did not give any profit guarantee during
the financial year.
g Share Buyback
There was no share buyback during the financial year.
4 Internal Controls
The Code requires the Board to maintain a sound
system of internal controls to safeguard shareholders’
investment and the Group’s assets. The Group’s
Statement on Internal Controls pursuant to Paragraph
15.27(b) of the Bursa Malaysia Listing Requirements is
set out on pages 041 to 043.
The following information is provided in compliance
with Paragraph 9.25 of the Bursa Malaysia Listing
Requirements:-
040
i
Options, Warrant or Convertible Securities
On 29 February 2008, the Company fully redeemed
the remaining 3,117,298 redeemable convertible
preference shares of RM0.10 each by cash from its
scheme creditors.
During the financial year, no options (including option
pursuant to the employee share scheme), warrant or
convertible securities were issued by the Company.
This statement is made in accordance with a
resolution of the Board of Directors dated 23 April
2009.
E ADDITIONAL COMPLIANCE INFORMATION
h American Depository Receipt (“ADR”) or Global
Depository Receipt (“GDR”)
The Company did not sponsor any ADR or GDR
programme during the financial year.
KUB MALAYSIA BERHAD
STATEMENT ON INTERNAL CONTROLS
INTRODUCTION
This statement is made pursuant to the Listing Requirements
of Bursa Malaysia Securities Berhad with regard to the Group’s
compliance with the Principles and Best Practices provisions
relating to internal controls as stipulated in the Malaysian Code
on Corporate Governance (“the Code”).
The Board of Directors (“the Board”) is pleased to present
hereinafter the annual update on the Group’s state of internal
controls coupled with work done during the year under review.
BOARD RESPONSIBILITY
In accordance with the Code, one of the six (6) principal
responsibilities expected of the Board is to review, amongst
others, the adequacy and integrity of the Group’s internal control
systems, including systems for compliance with applicable
laws, regulations, rules, directives and guidelines.
The Board affirms that it is committed to uphold the spirit of
the Code in addition to compliance with listing requirements
that includes the assurance of its adequacy and integrity at all
times, and its alignment with our business objectives. However,
it should be noted that this system is designed to mitigate the
risks of failure in achieving its business objectives and hence,
can only manage to provide reasonable and not absolute
assurance against material misstatement or loss.
The Board has established a process for identifying, evaluating
and managing significant risks faced by the Group except for
the associated companies. The process has been in place
throughout the year and up to the date of approval of the annual
report and financial statements. It has been reviewed by the
Board and accords with the Statement on Internal Controls:
Guidance for Directors for Public Listed Companies (“Internal
Control Guidance”).
ENTERPRISE WIDE RISK
MANAGEMENT FRAMEWORK
The Board acknowledges that effective risk management is an
essential and indispensable part of corporate management.
The Group strives to embed within the organisational
structure, defined roles and responsibilities for all aspects of
risk management with the appropriate tools to support the
identification, assessment, treatment and reporting of key risks.
The Group endeavours to develop, implement and maintain
sound risk management practices and systems that are
consistent with good corporate governance to address these
objectives:
• Communicate the vision, role, direction and priorities to
Group personnel;
• Identify, assess and manage risks in an effective and
efficient manner;
• Improve decision making, planning and prioritisation based
on comprehensive understanding of the reward to risk
balance; and
• Enable systematic and prompt reporting on any perceived
new risks or failures of existing control measures.
The Board has put in place an Enterprise-Wide Risk Management
Framework within the Group to ensure an ongoing process of
identifying, evaluating, monitoring and managing the significant
risk exposures inherent in its business operation to give effect to
this responsibility. The following initiatives were undertaken:
• Streamlining risk management and business planning
activities to ensure that controls and mitigation plans for
risk management are built into business plans and budgets
of the Group;
• Carrying out the risk assessments through brain-storming
sessions where existing risks are assessed, discussed,
revisited and updated whilst new risks and action plans are
identified and categorised. Risk owners were identified for
the purpose of implementing action plans. Follow-up on the
action plans was closely monitored;
• Implementing a comprehensive and systematic risk
assessment and reporting process across the Group;
• Creating an environment that controls and mitigate risks
within the accepted risk tolerance;
• Promoting risk management awareness in the business
processes;
• Fostering a culture of continuous improvement in risk
management through audit and review processes; and
• Prioritizing risk treatment efforts by producing a risk profile
with a significant rating to each risk.
The Board is also assisted by the Risk Management Committee
whose main responsibility is to review and recommend
appropriate risk management strategies, policies and risk
tolerance for the Board’s approval.
ANNUAL REPORT 2008
041
STATEMENT ON INTERNAL CONTROLS (CONT’D)
KEY INTERNAL CONTROL SYSTEM
Policies, Limits of Authority and Procedures
Control Structure
Specific Board responsibilities have been delegated to
committees established with formalised and specific terms
of reference, to assist the Board in the execution of its
responsibilities.
The delegation of responsibilities to the Board Committees and
the management as well as the delineation of their respective
authority limits have been defined in the KUB Management
Guide and the establishment of similar authority guides for all
the active subsidiaries of the Group, which have since been
reviewed and approved by the Board for implementation by
KUB management as well as the respective Boards of the
subsidiaries. Procedures are established to provide sufficient
guidelines for proper management and operations of the
Group operating units. These policies, limits of authority and
procedures are monitored by the Group Internal Audit Division
(“GIAD”).
The following are the committees established:
MONITORING AND REVIEW
•
•
•
•
•
•
Financial and Operational Review
The Board is fully committed to ensuring that a proper control
environment is maintained at the Group. The key elements of
the Group’s internal control are as follows:
Board Committees
Board Audit Committee
(Please refer to page 044 to 047 for further explanation)
Board Nomination Committee
(Please refer to page 037 for further explanation)
Board Remuneration Committee
Board Investment Committee
Executive Committee
Employee Share Scheme Committee
The Board Committees and respective business sectors review
the quarterly financial statements and performance of the Group
before they are tabled to the Board for their review and approval.
Monthly performance reports produced by business sectors are
compared against the approved performance budget.
The Board through the BAC, reviews reports from internal audit
on internal control, to help ensure the adequacy and integrity of
the internal control system of the Group.
Business Plan and Budget Review
These committees have been established with clear terms of
reference to ensure effective management and monitoring of
the Group’s business operations. In addition, these committees
have the authority to examine all matters and report back to
the Board on a periodic basis with their recommendations for
review or approval by the Board, where appropriate.
Organisational Structure
The Board has put in place a defined organisational structure
with clear lines of responsibility and accountability in the
Group that is directly aligned to the strategic and operational
demands of the business. Each operational unit is headed by
personnel who are fully accountable to ensure that the business
activities are implemented with full compliance with the Group’s
objectives and policies.
042
KUB MALAYSIA BERHAD
The Group undertakes business planning and budgeting each
year, to establish plans and targets against which performances
are compared and monitored as well as to facilitate management
in focusing on areas of concern.
The Executive Committee and senior management play a role
in the stages of strategic review and update, which include,
among others reviewing the plan before its finalisation, and the
budget approval process to ensure that the plan developed
reflects the corporate intent of the Group and that resource
allocation is strategically aligned.
Internal Audit
The GIAD provides independent assurance to the BAC on the
adequacy and integrity of internal control system to manage
risks across the Group. GIAD reports functionally to the BAC and
administratively to the Group Managing Director. The BAC plays
an oversight role in maintaining the system of internal control at
both sectors and divisional level. The BAC and GIAD perform
their duties to uphold a level of integrity and competency in
operational, financial and business functions and to assure that
the applicable laws, regulations, rules, directives and guidelines
are complied with. Details of the work done during the year
under review are as follows:
• GIAD developed an Internal Audit Plan and executed internal
audit projects based on this plan. GIAD adopts a riskbased approach with independent and objective reports on
the state of internal control. The Division also assists the
BAC and Group Managing Director in conducting ad-hoc
assignments.
• GIAD carried out ongoing reviews of the internal control
system of the Group. The audits conducted were in the
areas of finance, operations, management and information
systems in accordance with the approved audit plan; and
• Reports on the reviews carried out by GIAD and status of
actions taken by management on audit recommendation
are submitted on a regular basis to the BAC.
CONCLUSION
After due and careful inquiry on the information and assurance
provided, the Board is satisfied with the process of identifying,
evaluating and managing significant risks that may affect the
achievement of the Group’s business objectives. There was no
material control failure or weakness that has resulted in material
loss that has not been disclosed in the Group’s financial
statements. The Board and the Management will continuously
improve and seek assurance on the efficiency and effectiveness
of the internal control system through independent assessments
by the internal and external auditors.
This Statement is made in accordance with the resolution of the
Board of Directors dated 23 April 2009.
ANNUAL REPORT 2008
043
BOARD AUDIT COMMITTEE REPORT
The Board of Directors is pleased to present the report on the
Board Audit Committee (“BAC”) for the year ended 31 December
2008.
The BAC was established by a resolution of the Board of
Directors (“the Board”) on 7 May 1997 to assist the Board of
Directors in fulfilling its responsibilities in accordance with its
terms of reference.
MEMBERSHIP
The BAC currently consists of the following members:
1
Omar Haji Ahmad
Chairman, Independent non-executive Director
2
Rosman Abdullah
3
The BAC is governed by its terms of reference as set out
on pages 045 to 047 of the annual report. Two (2) of the
BAC members are members of the Malaysian Institute of
Accountants (“MIA”) thus complying with paragraph 15.10(1)(c )
(i) of the Bursa Malaysia Listing Requirements (“BMLR”).
MEETINGS
During the financial year, the BAC met six (6) times, with the
following record of attendance:
NO. OF MEETINGS
HELD
ATTENDED
NAME
Omar Haji Ahmad
Rosman Abdullah
6
6
6
5
6
6
The Company Secretary was present during all the meetings
except for the private session with the external auditors. The
Head of Internal Audit, representatives of the external auditors,
Messrs Ernst & Young, as well as the senior management
personnel also attended the meetings upon invitation.
SUMMARY OF ACTIVITIES OF THE BOARD AUDIT
COMMITTEE
The following activities were carried out by the BAC during the
financial year ended 31 December 2008:
044
KUB MALAYSIA BERHAD
a Financial Results and Corporate Governance
• Reviewed the external auditors’ scope of work and audit
plans for the year. Prior to the audit, representatives
from the external auditors presented their audit strategy
and plan;
• Reviewed the quarterly unaudited financial results
and announcements to Bursa Malaysia before
recommending to the Board for approval;
• Reviewed the Company’s compliance, in particular the
quarterly and year-end financial statements with the
BMLR, Financial Reporting Standards issued by the
Malaysian Accounting Standard Board (“MASB”) and
other legal and regulatory requirements;
• Reviewed the audited financial statements of the Group
with external auditors prior to submission to the Board
for their consideration and approval. The review was to
ensure that the audited financial statements were drawn
up in accordance with the provisions of the Companies
Act, 1965 and the Financial Reporting Standards issued
by MASB;
• Reviewed with the external auditors the results of audit,
audit report and management letter, including the
management’s response;
• Reviewed the minutes of the meetings of the BAC;
• Consideration and recommendation to the Board
for approval of the audit fees payable to the external
auditors as disclosed in the Financial Statements;
• Met with the external auditors twice during the year
without the presence of the management;
• Reviewed the application of corporate governance
principles and the Group’s compliance with the best
practices set out under the Revised Malaysian Code on
Corporate Governance for the purpose of preparing the
Corporate Governance Statement and Statement on
Internal Controls pursuant to the BMLR; and
• Reviewed the Related Party Transactions (“RPT”)
entered by the Group.
b Internal Audit
• Reviewed the internal audit reports presented by
the Group Internal Audit Division on findings and
recommendation with respect to the adequacy and
integrity of the internal control system. Discussed with
management actions taken to improve the system of
internal control based on improvement opportunities
identified in the internal audit reports;
• Reviewed the Internal Audit Plan for year 2009;
• Reviewed the Internal Audit Division’s resource
requirements, programmes and plans for the financial
year under review.
2 COMPOSITION OF THE COMMITTEE
The composition of the committee shall take into
consideration the following:
INTERNAL AUDIT FUNCTION
• The Board shall appoint the Members, who must be
non-executive Directors, with a majority of them being
independent Directors. The Committee shall, at all times,
comply with the relevant provisions of the BMLR;
• The period of appointment shall be concurrent with
their tenure on the Board unless otherwise decided
by the Board and in accordance to the BMLR that a
listed issuer must fill any vacancy within 3 months of the
vacancy;
• The composition of the Committee must not be less
than three (3) Members;
• Where the Members for any reason are reduced to less
than three (3), the Board shall within three (3) months
of the event, appoint such number of new Members as
may be required to make up the minimum number of
three (3) Members and in accordance with the general
requirements of the BMLR;
• The Members shall elect a Chairman from amongst
themselves who is an independent Director;
• All members of the Audit Committee should be financially
literate and at least one member of the BAC must
comply with section 15.10(1)( c ) (i)-(ii) of the BMLR;
and
• Members of the Committee may relinquish their
membership in the Committee with prior written notice
to the Secretary and may continue to serve as Directors
of the Company.
The Group has an Internal Audit Division, which assists the
BAC in discharging its duties and responsibilities throughout
the financial year under review. The principal role of the division
is to undertake independent, regular and systematic reviews
of the internal control systems, so as to provide the BAC with
independent and objective feedbacks and reports that such
systems continue to operate satisfactorily and effectively. The
Group Internal Audit Division adopts a risk-based approach in
preparing its Internal Audit Plan.
During the financial year, a total of nine (9) audits were carried out
according to the Internal Audit Plan which had been approved by
the BAC. The internal audit on plantation was outsourced to an
external service provider. The audit engagements encompassed
scheduled, follow-up and special audit covering the Information
and Communication Technology (ICT), Food Related, Property
Engineering & Construction (PEC) and Energy sectors.
The resulting reports from the internal audits undertaken were
forwarded to the management for attention and necessary
corrective actions as recommended. The management is
responsible for ensuring that corrective actions on reported
weaknesses are taken within the required time frame.
TERMS OF REFERENCE
COMMITTEE
OF
THE
BOARD
AUDIT
3 SECRETARY OF THE COMMITTEE
1 OBJECTIVES OF THE COMMITTEE
The primary function of the Committee is to assist the Board
to implement and support the following oversight objectives
for the KUB Group of Companies:
• Assess the Group’s processes relating to its risks and
control environment;
• Oversee financial reporting;
• Evaluate the internal and external audit processes
including the review of the adequacy of scope, functions
and reporting of internal and external auditors;
• Maintain, through regularly scheduled meetings, a direct
line of communication between the Board, external
auditors, management and internal auditors; and
• Avail to the external and internal auditors a private and
confidential audience at least twice a year, through the
Chairman of the Committee.
The Company Secretary shall be the Secretary of the
Committee.
4 AUTHORITY OF THE COMMITTEE
In carrying out its duties and responsibilities, the Committee
shall have:
• Authority to investigate into any activities within its terms
of reference. It is authorised to seek any information it
requires from any employee and all employees are
directed to cooperate on any request made by the
BAC;
ANNUAL REPORT 2008
045
BOARD AUDIT COMMITTEE REPORT (CONT’D)
• The authority to obtain outside legal or other independent
professional advice and to secure the attendance of
outside parties with relevant experience and expertise, if
it considers this necessary;
• Direct communication channels with both external and
internal auditors; and
• The authority to convene meetings with external
auditors, the internal auditors or both excluding the
attendance of other directors and employees of the
listed issuer, whenever deemed necessary.
5 RESPONSIBILITIES AND DUTIES OF THE
COMMITTEE
In fulfilling its objectives, the Committee shall undertake the
following responsibilities and duties:
a Internal Audit
• Establish an Internal Audit Function and the Head of
Internal Audit should report directly to the BAC;
• Review the adequacy of the scope, functions,
competency and resources of the Internal Audit and
ensure that it has the necessary authority to carry
out its work;
• Review the Internal Audit programme, processes,
the results of the internal audit, processes or
investigation undertaken and whether or not
appropriate action is taken on the recommendations
of the Internal Audit Function;
• Review any appraisal or assessment of the
performance of members of the Internal Audit
Function;
• Approve any appointment / termination of senior
staff members of the Internal Audit Function;
• Take cognizance of resignation of internal audit staff
members and provide the resigning member an
opportunity to submit his reasons for resigning;
• Review the Internal Audit reports, which highlight
the operational risks, recommendation and
management’s response; and
• Discuss with management on actions taken to
improve the system of internal controls, based
on operational risks identified in the Internal Audit
reports.
046
KUB MALAYSIA BERHAD
b External Audit
• Review with the external auditors their audit plan,
scope of their audits, their evaluation of the system
of internal controls and their audit report;
• Evaluate with the external auditors the assistance
given by the employees to the external auditors;
• Evaluate the performance of the external auditors
and make recommendations to the Board of
Directors on their appointment and remuneration;
• Review any letter of resignation from the external
auditors;
• Where there is reason (supported by grounds) to
believe that the external auditors are not suitable for
re-appointment, the Committee is to recommend
the nomination and remuneration of a person or
persons as external auditors; and
• The Chairman of the BAC should engage on a
continuous basis with the Chairman of the Board
and senior management such as the Group
Managing Director, the Head of Finance, the Head
of Internal Audit and external auditors in order to
keep informed of matters affecting the Group.
c Financial Reporting
• Meet with management and the external auditors to
discuss the scope of their audit, to evaluate the audit
report on the financial statements and the results of
the audit before recommending for approval by the
Board;
• Review the quarterly results and year-end financial
statements for recommendation to the Board of
Directors for approval, focusing particularly on:
i) Changes in or implementation of new
accounting policies;
ii) Significant and unusual events;
iii) The going concern assumption; and
iv) Compliance with accounting standards and
other legal requirements.
• Review the nature and resolution of any significant
accounting and auditing problems encountered
during examination, the nature of any significant
adjustments,
reclassifications
or
additional
disclosures proposed by the external auditors that
are currently significant or may become significant
in the future, the adequacy and impact of any
changes in the accounting policies or principles
during the year, reasons for major fluctuations in
financial statement balances for the current year
compared to prior year.
d Related Party Transactions
• The majority of the members present must be
independent non-executive Directors;
• The Chairman of the Committee shall chair the
Committee meetings and in his absence, the members
present shall elect one of their members to be Chairman
of the meeting;
• The Secretary shall draw up an agenda for each meeting,
in consultation with the Chairman of the Committee. The
agenda shall be sent to all Members of the Committee
and any other persons who may be required to attend
the meeting;
• The Secretary shall prepare the minutes of the meeting
and distribute it to each Member. The minutes of the
Committee shall be confirmed and signed by the
Chairman of the Committee or the presiding Chairman
of the next succeeding meeting;
• The minutes of each meeting shall be entered into
the minutes book kept at the registered office of
the Company under the custodian of the Company
Secretary. The minutes book shall be opened for the
inspection of the Board, external auditor, internal auditor,
management and other persons deemed appropriate
by the Company Secretary;
• Subject to the requirement to conduct the required
meetings, in appropriate cirumstances, the Committee
may deal with matters by way of circular reports and
resolution in lieu of convening a formal meeting;
• Appropriate officers of the Company or professional
advisors may be invited to attend the meetings where
the Committee considers their presence necessary;
• All recommendations and findings of the Committee
shall be submitted to the Board for approval; and
• The Head of Finance and Head of Internal Audit should
normally attend meetings. Other board members and
representative of external auditors may attend meetings
upon invitation of the BAC. However, the Committee
should meet with the external auditors without executive
board members and employees present at least twice a
year.
• Review any related party transactions and conflict
of interest situation that may arise within the Group
including any transaction, procedure or course of
conduct that raises the question of management
integrity.
e Others
• Consider and evaluate other matters as judged
appropriate by the Committee or as authorised
by the Board and as required by the general
requirements set up by local authorities or any other
government authorities;
• Act upon the Board of Directors’ request to
investigate and report on any issues or concerns
with regard to the management of the Company;
• To promptly report to Bursa Malaysia matters
reported by the BAC to the Board of Directors of
the Company which have not been satisfactorily
resolved, resulting in a breach of the BMLR;
• Upon the request of the external auditors, the
Chairman of the BAC shall convene a meeting
of the BAC to consider any matter the external
auditors believe should be brought to the attention
of the Directors or shareholders; and
• To verify, on an annual basis, the allocation of options
under a share scheme for employees to ensure
compliance with the allocation criteria determined
by the Company’s Share Scheme Committee and in
accordance with the By-laws of the relevant share
scheme.
6 COMMITTEE MEETINGS
The Committee meetings shall take into consideration the
following:
• The Committee shall convene meetings as and when
required, provided that the Committee shall meet at
least four (4) times a year;
• The Chairman of the Committee, or the Secretary on the
requisition of the Members, shall at any time summon a
meeting of the Members by giving due notice. It shall
not be necessary to give notice of a Committee meeting
to any Members absent from Malaysia;
• No business shall be transacted at any meeting of the
Committee unless a quorum is present. A quorum must
be in accordance to BMLR Section 15.19, where the
majority of the members present must be independent
Directors. Two (2) members of the Committee shall
constitute a quorum;
7 DISCLOSURE
The Committee shall assist the Board in making certain
disclosures concerning the activities of the Committee such
as in the Statement on Corporate Governance, Statement
on Internal Control and Board Audit Committee Report to be
issued in the annual report.
ANNUAL REPORT 2008
047
FINANCIAL STATEMENTS
049 Directors’ Report
052 Statement By Directors
053 Statutory Declaration
054 Independent Auditors’ Report
056 Income Statements
057 Balance Sheets
059 Consolidated Statement Of Changes In Equity
060 Statement Of Changes In Equity
061 Cash Flow Statements
063 Notes To The Financial Statements
DIRECTORS’ REPORT
For the year ended 31 December 2008
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 2008.
Principal Activities
The principal activities of the Company are those of investment holding and provision of management services to its subsidiaries.
The subsidiaries are principally engaged in the business of information and communication technology, energy, food and beverages, and property,
engineering and construction as stated in Note 37 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 equity holders of the Company
Group
RM’000
Company
RM’000
36,907
64,660
32,044
64,660
Attributable to:
Equity holders of the Company
Minority interests
4,863
-
36,907
64,660
There were no material transfers to or from reserves or provisions during the financial year other than as disclosed in the financial statements.
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.
Dividends
No dividend has been paid or declared by the Company since the end of the previous financial year.
The directors have recommended a first and final gross dividend in respect of the financial year ended 31 December 2008 of 2.4 sen less 25
per cent taxation on 556,464,690 ordinary shares for approval by the shareholders at the forthcoming Annual General Meeting. The financial
statements of the current year do not reflect this proposed dividend. If approved, the dividend, amounting to a dividend payable of RM10,016,364
(1.8 sen net per ordinary share), will be accounted for in equity as an appropriation of retained earnings in the financial year ending 31 December
2009.
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:Dato’ Nordin Baharuddin
Rosman Abdullah
Omar Haji Ahmad
ANNUAL REPORT 2008
049
DIRECTORS’ REPORT (CONT’D)
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 the 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 the director is a member, or with a company in which the director has a substantial financial interest except for as disclosed in Note
32(c) 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 the ordinary shares of the
Company during the financial year were as follows:
Number of ordinary shares of RM1.00/RM0.40 each
1.1.2008
Acquired
Sold
31.12.2008
The Company
Direct interest:
Dato' Nordin Baharuddin
Dato' Kamilia Ibrahim
3,000
40,000
-
-
40,000
3,000
Dato’ Nordin Baharuddin and Dato’ Kamilia Ibrahim are deemed to have interest in the shares of all the subsidiary companies to the extent the
Company has an interest by virtue of their interests in the Company as disclosed above.
Except for the above, none of the other directors in office at the end of the financial year had any interest in shares in the Company or its related
corporations during the financial year.
Other statutory information
(a)
(b)
Before the balance sheets and income statements 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.
050
KUB MALAYSIA BERHAD
Other statutory information (cont’d)
(e)
(f)
As at the date of this report, there does not exist:-:
(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 of the Group or of the Company which has arisen since the end of the financial year.
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 year are disclosed in Note 35 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 23 April 2009.
ANNUAL REPORT 2008
051
Statement by directors
Pursuant to Section 169(15) of the Companies Act, 1965
We, Dato’ Nordin Baharuddin and Datuk Mohd Nazar Samad, being two of the directors of KUB Malaysia Berhad, do hereby state that, in the
opinion of the directors, the accompanying financial statements set out on pages 56 to 121 are drawn up in accordance with the provisions of the
Companies Act, 1965 and applicable Financial Reporting Standards 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 2008 and of the results and the cash flows of the Group and of the Company for the year then
ended.
Signed on behalf of the Board in accordance with a resolution of the directors dated 23 April 2009.
052
KUB MALAYSIA BERHAD
Statutory declaration
Pursuant to Section 169(16) of the Companies Act, 1965
I, Marzuki Rafie, being the officer primarily responsible for the financial management of KUB Malaysia Berhad, do solemnly and sincerely declare that
the accompanying financial statements set out on pages 56 to 121 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 Marzuki Rafie at Petaling Jaya in the Selangor Darul Ehsan on 23 April 2009.
Marzuki Rafie
Before me,
21A, Jalan SS 6/12
Taman Kelana Jaya
47301 Petaling Jaya
Selangor Darul Ehsan
ANNUAL REPORT 2008
053
Independent auditors’ report
To the members of KUB Malaysia Berhad (Incorporated in Malaysia)
Report on the financial statements
We have audited the financial statements of KUB Malaysia Berhad, which comprise the balance sheets as at 31 December 2008, and the income
statements, statements of changes in equity and cash flow statements for the year then ended, and a summary of significant accounting policies
and other explanatory notes, as set out on pages 56 to 121.
Directors’ responsibility for the financial statements
The directors of the Company are responsible for the preparation and fair presentation of these financial statements in accordance with Financial
Reporting Standards and the Companies Act, 1965 in Malaysia. This responsibility includes: designing, implementing and maintaining internal
control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or
error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.
Auditors’ responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with approved
standards on auditing in Malaysia. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain
reasonable assurance whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures
selected depend on our 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 Company’s preparation and fair presentation of the financial
statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on
the effectiveness of the Company’s internal control. An audit also includes evaluating the appropriateness of 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 2008 and their
financial performance and cash flows for the year then ended.
Report on other legal and regulatory requirements
In accordance with the requirements of the Companies Act, 1965 (“Act”) 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)
Except for the auditors’ report of the subsidiaries which are not available, as disclosed in Note 37(i) to the financial statements, we have
considered the financial statements and the auditors’ reports of all the subsidiaries of which we have not acted as auditors, which are
indicated in Note 37 to the 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)
Except for as disclosed in Note 37(i) to the financial statements, 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.
054
KUB MALAYSIA BERHAD
Other matters
This report is made solely to the members of the Company, as a body, in accordance with Section 174 of the Companies Act, 1965 in Malaysia
and for no other purpose. We do not assume responsibility to any other person for the content of this report.
Ernst & Young
AF: 0039
Chartered Accountants
Abdul Rauf bin Rashid
No. 2305/05/10(J)
Chartered Accountant
Kuala Lumpur, Malaysia
23 April 2009
ANNUAL REPORT 2008
055
Income statements
Note
Group
2008
RM’000
2007
RM’000
Company
2008
RM’000
2007
RM’000
Revenue
3
892,508
910,080
12,359
838
Cost of sales
4
(801,825)
(791,250)
-
-
90,683
53,824
(1,249)
(82,289)
(12,254)
118,830
36,698
(11,089)
(115,218)
(102,959)
12,359
98,347
(13,358)
(31,757)
838
27,587
(16,505)
(62,358)
Gross profit
Other income
Distribution expenses
Administrative expenses
Other expenses
Finance costs
Share of results of associates
Results from operating activities
5
48,715
(9,103)
6,888
(73,738)
(9,761)
158
65,591
(931)
-
(50,438)
(2,045)
-
6
9
46,500
(9,593)
(83,341)
(5,459)
64,660
-
(52,483)
(20)
Profit/(loss) for the year
36,907
(88,800)
64,660
(52,503)
Attributable to:
Equity holders of the Company
Minority interests
32,044
4,863
(86,130)
(2,670)
64,660
-
(52,503)
-
36,907
(88,800)
64,660
(52,503)
5.76
(15.58)
Income tax expense
Basic and diluted earnings/(loss)
per ordinary share (sen)
11
The accompanying notes form an integral part of the financial statements.
056
KUB MALAYSIA BERHAD
Balance sheets
As at 31 December 2008
Group
2008
RM’000
2007
RM’000
Company
2008
RM’000
2007
RM’000
125,177
9,099
61,876
11,517
25,154
263
17,327
1,893
102,252
9,097
65,324
14,084
27,318
266
2,389
1,726
4,524
211,471
18,000
153
43,071
-
2,040
4,848
196,273
18,000
154
99,806
-
252,306
220,730
278,945
321,121
18
20
21
2,886
46,700
166,464
2,886
8,211
23
3,295
214,988
3,766
17,458
195,589
3,692
60,543
80,682
3,766
660
22,443
434,333
281,048
91,779
26,869
25,877
190,549
1,298
2,748
712,516
692,327
372,022
350,738
Note
Assets
Non-current assets
Property, plant and equipment
Development expenditure
Prepaid lease payments
Investment properties
Investments in subsidiaries
Investments in associates
Other investments
Intangible asset
Trade and other receivables
Deferred tax assets
12
13
14
15
16
17
18
19
21
28
Current assets
Other investments
Inventories
Current tax assets
Cash and bank balances
Assets classified as held for sale
Total assets
10
ANNUAL REPORT 2008
057
Balance sheets (CONT’D)
As at 31 December 2008
Group
2008
RM’000
2007
RM’000
Company
2008
RM’000
2007
RM’000
222,586
55,052
39,911
556,465
371,770
(637,023)
222,586
10,890
64,348
556,465
321,901
(645,202)
Minority interests
317,549
20,492
291,212
17,894
297,824
-
233,164
-
Total equity
338,041
309,106
297,824
233,164
27,456
7,805
6,946
26,845
9,213
6,946
214
34,044
6,946
16,156
34,937
6,946
42,207
43,004
41,204
58,039
219,680
5,206
101,144
196,022
1,251
60,090
32,342
652
43,542
15,993
326,030
257,363
32,994
59,535
6,238
82,854
-
-
Total liabilities
374,475
383,221
74,198
117,574
Total equity and liabilities
712,516
692,327
372,022
350,738
Note
Equity and liabilities
Equity attributable to equity holders
of the Company
Share capital
Reserves
Retained earnings/(accumulated losses)
24
25
26
Borrowings
Deferred tax liabilities
Trade and other payables
Provision for liabilities
27
28
29
Current liabilities
Provision for tax
Borrowings
Liabilities classified as held for sale
29
27
10
058
KUB MALAYSIA BERHAD
543,644
At 1 January 2007
ANNUAL REPORT 2008
059
556,465
317,288
165
-
-
317,123
5,965
(311,323)
38,330
-
-
-
38,330
34,016
(4,314)
-
(4,314)
-
-
-
(4,314)
-
38,330
Capital
reserve
RM’000
(Note 25(a))
At 31 December 2007
12,821
222,586
At 31 December 2008
Total recognised income
and expense for the
year
Issued during the year
(333,879)
Total recognised income
and expense for the
year
Capital rationalisation
-
-
Net (expense)/income
recognised directly in
equity
Profit for the year
Net expense recognised
directly in equity
Loss for the year
-
-
-
-
-
Foreign currency
translation
-
-
Disposal of subsidiary
Acquisition of subsidiaries
Foreign currency
translation
Redemption of
Redeemable
Convertible
Preference Shares
(Note 27(a))
-
317,288
Share
premium
RM’000
556,465
At 1 January 2008
Share
capital
RM’000
(Note 24)
-
-
-
-
-
312
312
-
312
-
312
-
-
-
Capital
redemption
reserve
RM’000
(Note 25(b))
392
1,110
-
1,110
-
1,110
(718)
(1,001)
(1,393)
-
(1,393)
-
-
(1,393)
-
392
Translation
reserve
RM’000
(Note 25(c))
Attributable to equity holders of the Company
Non-distributable
15,760
-
-
-
15,760
15,760
-
-
-
-
-
15,760
Other
reserves
RM’000
(Note 25(d))
(637,023)
(86,130)
-
(86,130)
-
(550,893)
39,911
31,732
645,202
(312)
32,044
(312)
-
-
(637,023)
Distributable
retained
earnings/
(accumulated
losses)
RM’000
(Note 26)
291,212
(85,020)
12,986
1,110
(86,130)
1,110
363,246
317,549
26,337
-
(5,707)
32,044
-
(1,393)
(4,314)
-
291,212
Total
RM’000
17,894
(2,670)
-
(2,670)
-
20,564
20,492
2,598
-
(2,265)
4,863
-
-
(11,245)
8,980
17,894
Minority
interests
RM’000
309,106
(87,690)
12,986
1,110
(88,800)
1,110
383,810
338,041
28,935
-
(7,972)
36,907
-
(1,393)
(15,559)
8,980
309,106
Total
equity
RM’000
Consolidated statement of changes in equity
Statement of changes in equity
Non-distributable
Share
capital
RM’000
(Note 24)
Share
premium
RM’000
Capital
redemption
reserve
RM’000
(Note 25(b))
Other
reserves
RM’000
(Note 25(d))
Distributable
retained
earnings/
(accumulated
losses)
RM’000
(Note 26)
556,465
317,288
-
4,613
(645,202)
233,164
(333,879)
(311,323)
312
-
-
(312)
645,202
-
-
-
-
64,660
64,660
At 31 December 2008
222,586
5,965
312
4,613
64,348
297,824
At 1 January 2007
543,644
12,821
317,123
165
-
4,613
-
(592,699)
-
272,681
12,986
-
-
-
-
(52,503)
(52,503)
556,465
317,288
-
4,613
(645,202)
233,164
Company
At 1 January 2008
Redemption of Redeemable Convertible
Preference Shares (Note 27(a))
Profit for the year, representing total
recognised income and expense for the
year
Issue of ordinary shares
Loss for the year, representing total
recognised income and expense for the
year
At 31 December 2007
060
KUB MALAYSIA BERHAD
Total
RM’000
Cash flow statements
Group
2008
RM’000
2007
RM’000
Company
2008
RM’000
2007
RM’000
Cashflows from operating activities
46,500
(83,341)
64,660
(52,483)
7,552
389
3,365
18,420
712
(796)
(1,794)
7,080
253
84
955
2,527
18,687
11,305
710
1,470
-
18,042
324
897
(1,794)
12,740
253
340
633
-
220
880
(362)
(16,232)
(2,357)
211
9,103
(4,342)
373
5
2,466
6,547
(350)
(699)
(991)
26,395
91
78
397
9,761
(825)
1,812
2,386
12,743
880
(12,196)
(67)
931
(4,479)
44
-
8,508
18,648
6,368
(350)
52
2,045
(2,045)
-
(1,327)
(5,386)
(2,349)
(35)
(6,888)
(103)
-
(203)
909
1,190
(1,061)
(534)
(158)
422
(71)
840
(89,652)
-
(23,535)
-
45,759
8,132
(9,667)
(28,826)
(29,158)
(13,587)
57,900
32,752
(29,815)
32,660
(12,093)
7,324
17,971
16,948
Tax (paid)/refund
60,914
(925)
43,729
(4,638)
(14,436)
-
6,093
75
Net cash generated from/(used in) operating activities
59,989
39,091
(14,436)
6,168
Adjustments for:
Provision for doubtful debts on
- receivable
- amount due from subsidiaries
Amortisation of plantation development expenditure
Amortisation of intangible assets
Amortisation of investment property
Amortisation of prepaid lease payments
Depreciation of property, plant and equipment
Inventories written off
Write down of inventories
Reversal of inventories written off
Provision for slow moving inventories
Reversal of impairment loss of associates
Impairment loss on investments in:
- subsidiaries
- associates
Write down of current investments
Dividend income
Gain on disposal of investment property
Gain on disposal of property, plant and equipment
Impairment loss on intangible assets
Impairment loss on property, plant and equipment
Impairment loss on prepaid lease payments
Impairment loss on investment property
Interest expense
Interest income
Property, plant and equipment written off
Deposits written off
Reversal of provision for doubtful debts on:
- receivables
- due from subsidiaries
(Gain)/loss on disposal of subsidiaries
Intangible assets written off
Government grant income
Unrealised gain on foreign exchange
Land held for development written off
Waiver of debts owing to payables
Loss on disposal of prepaid lease payments
Operating profit/(loss)
before changes in working capital
Changes in working capital:
Inventories
Cash flows generated from/(used in) operations
ANNUAL REPORT 2008
061
Cash flow statements (CONT’D)
Group
2008
RM’000
2007
RM’000
Company
2008
RM’000
2007
RM’000
Cash flows from investing activities
Acquisition of prepaid lease payments
Acquisition of property, plant and equipment
Subsequent expenditure of land held for development
expenditure
Advances to subsidiaries
Dividends received
Government grant received
Interest received
Acquisition of subsidiaries, net of cash acquired
Additional investment in subsidiary
Repayment from subsidiaries
Proceeds from disposal of investment properties
Proceeds from disposal of property, plant and equipment
Disposal of subsidiaries, net of cash disposed
Proceeds from disposal of prepaid lease payments
(996)
(11,741)
(16,700)
(628)
(771)
(2)
362
2,349
4,342
(56,902)
86,500
3,457
7,540
-
350
1,061
825
2,905
12,147
5,976
1,969
(36,588)
10,877
4,479
(26,941)
(1,000)
153,635
68
1,450
(33,434)
350
2,045
59,480
-
Net cash generated from investing activities
34,909
8,533
105,352
27,670
(8,353)
(9,103)
(3,580)
38,592
(199)
(10,312)
793
(9,761)
(37,009)
(1,070)
22,271
(10,040)
217
(931)
(3,580)
(11,500)
(1,216)
(15,450)
(65)
(2,045)
(7,000)
(1,055)
(7,780)
7,045
(34,816)
(32,460)
(17,945)
Net increase in cash and cash equivalents
Effect of exchange rate fluctuations on cash held
Cash and cash equivalents at beginning of year
101,943
(1,393)
37,552
12,808
1,110
23,634
58,456
21,403
15,893
5,510
Cash and cash equivalents at end of year (Note 23)
138,102
37,552
79,859
21,403
Cash flows from financing activities
Deposits pledged with licensed banks
Interest paid
Redemption of Redeemable Convertible Preference Shares
Net drawdown/(repayment) of short term borrowings
Payment of finance lease liabilities
Drawdown of term loans
Repayment of term loans
Net cash used in financing activities
062
KUB MALAYSIA BERHAD
Notes to the financial statements
31 December 2008
1. Corporate information
The Company is a public limited liability company, incorporated and domiciled in Malaysia, and is listed on the Main Board of Bursa Malaysia
Securities. The registered office of the Company is located at Level 8, Block D, Kompleks Kelana Centre Point, Jalan SS7/19, Kelana Jaya,
47301 Petaling Jaya, Selangor.
The principal activities of the Company are those of investment holding and provision of management services to its subsidiaries. The
subsidiaries are principally engaged in the business of information and communication technology, energy, food and beverages, and
property, engineering and construction as stated in Note 37. There have been no significant changes in the nature of the principal activities
during the financial year.
The financial statements were authorised for issue by the Board of Directors in accordance with a resolution of the directors on 23 April
2009.
2.
Significant accounting policies
2.1
Basis of preparation
The financial statements of the Group and of the Company have been prepared under the historical cost convention, unless otherwise
disclosed in the significant accounting policies and comply with the provisions of the Companies Act, 1965 and applicable Financial
Reporting Standards (“FRS”) in Malaysia. The Group and the Company had adopted new and revised FRS and Interpretations that
are applicable and mandatory for financial periods beginning on 1 July 2007 as described fully in Note 2.3.
The financial statements are presented in Ringgit Malaysia (“RM”) and all values are rounded to the nearest thousand (RM’000) except
when otherwise indicated.
2.2
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 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 balance sheet date. The financial statements of the subsidiaries are prepared for the same reporting date as the
Company.
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 ceases. In preparing the consolidated financial statements,
intragroup balances, transactions and unrealised gains or losses are eliminated in full. Uniform accounting policies are
adopted in the consolidated financial statements for like transactions and events in similar circumstances.
Acquisitions of subsidiaries are accounted for using the purchase method. The purchase method of accounting involves
allocating the cost of the acquisition to the fair value of the assets acquired and liabilities and contingent liabilities
assumed at the date of acquisition. The cost of an acquisition is measured as the aggregate of the fair values, at the date
of exchange, of the assets given, liabilities incurred or assumed, and equity instruments issued, plus any costs directly
attributable to the acquisition.
Any excess of the cost of the acquisition over the Group’s interest in the net fair value of the identifiable assets, liabilities
and contingent liabilities represents goodwill. Any excess of the Group’s interest in the net fair value of the identifiable
assets, liabilities and contingent liabilities over the cost of acquisition is recognised immediately in profit or loss.
ANNUAL REPORT 2008
063
Notes to the financial statements (CONT’D)
31 December 2008
2.
Significant accounting policies (cont’d.)
2.2
Summary of significant accounting policies (cont’d.)
(a)
064
Subsidiaries and basis of consolidation (cont’d.)
(ii)
Basis of consolidation (cont’d.)
Minority interests represent the portion of profit or loss and net assets in subsidiaries not held by the Group. It is
measured at the minorities’ share of the fair value of the subsidiaries’ identifiable assets and liabilities at the acquisition
date and the minorities’ share of changes in the subsidiaries’ equity since then.
(b)
Associates
Associates are entities in which the Group has significant influence and that is neither a subsidiary nor an interest in a joint
venture. Significant influence is the power to participate in the financial and operating policy decisions of the investee but not
in control or joint control over those policies.
Investments in associates are accounted for in the consolidated financial statements using the equity method of accounting.
Under the equity method, the investment in associate is carried in the consolidated balance sheet at cost adjusted for postacquisition changes in the Group’s share of net assets of the associate. The Group’s share of the net profit or loss of the
associate is recognised in the consolidated profit or loss. Where there has been a change recognised directly in the equity of
the associate, the Group recognises its share of such changes. In applying the equity method, unrealised gains and losses on
transactions between the Group and the associate are eliminated to the extent of the Group’s interest in the associate. After
application of the equity method, the Group determines whether it is necessary to recognise any additional impairment loss
with respect to the Group’s net investment in the associate. The 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.
Goodwill relating to an associate is included in the carrying amount of the investment and is not amortised. 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.
The most recent available audited financial statements of the associates are used by the Group in applying the equity method,
otherwise their unaudited management financial statements are used. Where the dates of the audited financial statements
used are not coterminous with those of the Group, the share of results is arrived at from the last audited financial statements
available and management financial statements to the end of the accounting period. Uniform accounting policies are adopted
for like transactions and events in similar circumstances.
In the Company’s separate financial statements, investments in associates are stated at cost less impairment losses. On
disposal of such investments, the difference between net disposal proceeds and their carrying amounts is included in profit or
loss.
(c)
Goodwill
Goodwill acquired in a business combination is initially measured at cost being the excess of the cost of business combination
over the Group’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities. Following the initial
recognition, goodwill is measured at cost less any accumulated impairment losses. Goodwill is not amortised but instead, it is
reviewed for impairment, annually or more frequently if events or changes in circumstances indicate that the carrying value may
be impaired. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold.
KUB MALAYSIA BERHAD
2.
2.2
(d)
Property, plant and equipment, and depreciation
All items of property, plant and equipment are initially recorded at cost. Subsequent costs are included in the asset’s carrying
amount or recognised as a separate asset, as appropriate, only when 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. The carrying amount of the replaced part
is derecognised. All other repairs and maintenance are charged to the income statement during the financial period in which
they are incurred.
Subsequent to recognition, property, plant and equipment except for freehold land are stated at cost less accumulated
depreciation and any accumulated impairment losses.
Freehold land has an unlimited useful life and therefore is not depreciated. 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 the estimated useful life, at
the following annual rates:Renovations
Buildings
Plant, machinery and tools
Furniture and fittings
Motor vehicles
Office equipment and computers
Courseware
10%
2%
5% - 20%
5% - 33%
20% - 33%
20% - 33%
12.5%
The residual values, useful life and depreciation method are reviewed at each financial year-end to ensure that the amount,
method and period of depreciation are consistent with previous estimates and the expected pattern of consumption of the
future economic benefits embodied in the items of property, plant and equipment.
An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected
from its use or disposal. The difference between the net disposal proceeds, if any and the net carrying amount is recognised
in profit or loss and the unutilised portion of the revaluation surplus on that item is taken directly to retained earnings.
(e)
Investment properties are investments in land and buildings which are held either to earn rental income or for capital appreciation
or for both. Such properties are measured initially at cost, including transaction costs. Subsequent to initial recognition,
investment properties are stated at cost less accumulated depreciation and any accumulated impairment losses, consistent
with the accounting policy for property, plant and equipment as stated in Note 2.2(d).
The freehold land element of an investment property is not depreciated due to the unlimited useful life and the building element
is depreciated at an annual rate of depreciation of 2%. Buildings which are situated on leasehold land are also depreciated at
annual rate of depreciation of 2%.
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 are recognised in profit or loss in the year in which they arise.
Fair value, for purpose of disclosure in the financial statements, 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.
ANNUAL REPORT 2008
065
31 December 2008
2.
2.2
(f)
066
Land held for property development and property development costs
(i)
Land held for property development
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
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 the income statement 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 the income statement over billings to purchasers is classified as accrued billings
within trade receivables and the excess of billings to purchasers over revenue recognised in the income statement is
classifed as progress billings withing trade payables.
(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.
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.
KUB MALAYSIA BERHAD
2.
2.2
(h)
Impairment of non-financial assets
The carrying amounts of assets, other than construction contract assets, property development costs, inventories, deferred
tax assets and non-current assets (or disposal groups) held for sale, are reviewed at each balance sheet 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 goodwill, intangible assets that have an indefinite useful life and intangible assets that are not yet available for use, the
recoverable amount is estimated at each balance sheet date or more frequently when indicators of impairment are identified.
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.
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.
An impairment loss is recognised in profit or loss in the period in which it arises, unless the asset is carried at a revalued
amount, in which case the impairment loss is accounted for as a revaluation decrease to the extent that the impairment loss
does not exceed the amount held in the asset revaluation reserve for the same asset.
Impairment loss on goodwill is not reversed in a subsequent period. An impairment loss for an asset other than goodwill is
reversed if, and 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. The carrying amount of an asset other than goodwill is increased to its revised
recoverable amount, provided that this amount does not exceed the carrying amount that would have been determined (net
of amortisation or depreciation) had no impairment loss been recognised for the asset in prior years. A reversal of impairment
loss for an asset other than goodwill is recognised in profit or loss, unless the asset is carried at revalued amount, in which
case, such reversal is treated as a revaluation increase.
(i)
Inventories
(i)
Developed properties held for sale
Completed properties held for sale are stated at the lower of cost and net realisable value. Cost consists of cost
associated with acquisition of land, direct costs and appropriate proportions of common costs attributed to developing
the properties to completion.
(ii)
Other inventories
Inventories are measured at the lower of cost and net realisable value. The cost of inventories is based on weighted
average cost and includes expenditure incurred in acquiring the inventories and bringing them to their existing location
and condition. In the case of work-in-progress/manufactured inventories/finished goods, cost includes an appropriate
share of production overheads based on normal operating capacity.
Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and
estimated costs to make the sale.
ANNUAL REPORT 2008
067
31 December 2008
2.
2.2
(j)
068
Leases
(i)
Classification
A lease is recognised as a finance lease if it transfers substantially to the Group all the risks and rewards incidental to
ownership. Leases of land and buildings are classified as operating or finance leases in the same way as leases of other
assets and the land and buildings elements of a lease of land and buildings are considered separately for the purposes
of lease classification. All leases that do not transfer substantially all the risks and rewards are classified as operating
leases.
(ii)
Financial leases - the Group as Lessee
Assets acquired by way of hire purchase or finance leases are stated at an amount equal to the lower of their fair values
and the present value of the minimum lease payments at the inception of the leases, less accumulated depreciation
and impairment losses. The corresponding liability is included in the balance sheet as borrowings. In calculating the
present value of the minimum lease payments, the discount factor used is the interest rate implicit in the lease, when it is
practicable to determine; otherwise, the Company’s incremental borrowing rate is used. Any initial direct costs are also
added to the carrying amount of such assets.
Lease payments are apportioned between the finance costs and the reduction of the outstanding liability. Finance costs,
which represent the difference between the total leasing commitments and the fair value of the assets acquired, are
recognised in the profit or loss over the term of the relevant lease so as to produce a constant periodic rate of charge
on the remaining balance of the obligations for each accounting period.
The depreciation policy for leased assets is in accordance with that for depreciable property, plant and equipment as
described in Note 2.2(d).
(iii)
Operating leases - the Group as Lessee
Operating lease payments are recognised as an expense on a straight-line basis over the term of the relevant lease. The
aggregate benefit of incentives provided by the lessor is recognised as a reduction of rental expense over the lease term
on a straight-line basis.
In the case of a lease of land and buildings, the minimum lease payments or the up-front payments made are allocated,
whenever necessary, between the land and the buildings elements in proportion to the relative fair values for leasehold
interests in the land element and buildings element of the lease at the inception of the lease. The up-front payment
represents prepaid lease payments and are amortised on a straight-line basis over the lease term.
(k)
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.
KUB MALAYSIA BERHAD
2.
2.2
(l)
Income tax
Income tax on the profit or loss for the year comprises current and deferred tax. Current tax is the expected amount of income
taxes payable in respect of the taxable profit for the year and is measured using the tax rates that have been enacted at the
balance sheet date.
Deferred tax is provided for, using the liability method. In principle, deferred tax liabilities are recognised for all taxable temporary
differences and deferred tax assets are recognised for all deductible temporary differences, unused tax losses and unused tax
credits to the extent that it is probable that taxable profit will be available against which the deductible temporary differences,
unused tax losses and unused tax credits can be utilised. Deferred tax is not recognised if the temporary difference arises
from goodwill or negative goodwill or from the initial recognition of an asset or liability in a transaction which is not a business
combination and at the time of the transaction, affects neither accounting profit nor taxable profit.
Deferred tax is measured at the tax rates that are expected to apply in the period when the asset is realised or the liability
is settled, based on tax rates that have been enacted or substantively enacted at the balance sheet date. Deferred tax is
recognised as income or an expense and included in the profit or loss for the period, except when it arises from a transaction
which is recognised directly in equity, in which case the deferred tax is also recognised directly in equity, or when it arises from
a business combination that is an acquisition, in which case the deferred tax is included in the resulting goodwill or the amount
of any excess of the acquirer’s interest is the net fair value of the acquiree’s identifiable assets, liabilities and contingent liabilities
over the cost of the combination.
(m)
Provisions
Provisions are recognised when the Group has a present obligation as a result of a past event and it is probable that an outflow
of resources embodying economic benefits will be required to settle the obligation, and a reliable estimate of the amount
can be made. Provisions are reviewed at each balance sheet date and adjusted to reflect the current best estimate. Where
the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, where
appropriate, the risks specific to the liability. Where discounting is used, the increase in the provision due to the passage of
time is recognised as finance cost.
(n)
(i)
Contingent liabilities
Where it is not probable that an outflow of economic benefits will be required, or the amount cannot be estimated
reliably, the obligation is disclosed as a contingent liability, unless the probability of outflow of economic benefits is
remote. Possible obligations, whose existence will only be confirmed by the occurrence or non-occurrence of one or
more future events are also disclosed as contingent liabilities unless the probability of outflow of economic benefits is
remote.
Where the Company enters into financial guarantee contracts to guarantee the indebtedness of other companies within
its Group, the Company considers these to be insurance arrangements, and accounts for them as such. In this respect,
the Company treats the guarantee contract as a contingent liability until such time as it becomes probable that the
Company will be required to make a payment under the guarantee.
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 accumulating compensated absences such as paid annual
leave are recognised when services are rendered by employees that increase their entitlement to future compensated
absences. Short term non-accumulating compensated absences such as sick leave are recognised when the absences
occur.
ANNUAL REPORT 2008
069
31 December 2008
2.
2.2
(n)
(o)
070
Employee benefits (cont’d.)
(ii)
Defined contribution plans
Defined contribution plans are post-employment benefit plans under which the Group pays 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 countries’ statutory pension schemes.
(iii)
Termination benefits
Termination benefits are payable when employment is terminated before the normal retirement date or whenever an
employee accepts voluntary redundancy in exchange for these benefits. The Group recognises termination benefits as
a liability and an expense when it is demonstrably committed to either terminate the employment of current employees
according to a detailed plan without possibility of withdrawal or providing termination benefits as a result of an offer made
to encourage voluntary redundancy. In the case of an offer made to encourage voluntary redundancy, the measurement
of termination benefits is based on the number of employees expected to accept the offer. Benefits falling due more than
twelve months after balance sheet date are discounted to present value.
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 currencies using the exchange rates prevailing at the dates
of the transactions. At each balance sheet date, monetary items denominated in foreign currencies are translated at
the rates prevailing on the balance sheet date. Non-monetary 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 foreign operation. These are initially taken directly to the foreign currency translation reserve within equity
until the disposal of the foreign operations, at which time they are recognised in profit or loss. Exchange differences
arising on monetary items that form part of the Company’s net investment in foreign operation are recognised in profit
or loss in the Company’s separate financial statements or the individual financial statements of the foreign operation, as
appropriate.
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.
KUB MALAYSIA BERHAD
2.
2.2
(o)
Foreign currencies (cont’d.)
(iii)
Foreign operations
The results and financial position of foreign operations that have a functional currency different from the presentation
currency (RM) of the consolidated financial statements are translated into RM as follows:
-
Assets and liabilities for each balance sheet presented are translated at the closing rate prevailing at the balance
sheet date;
-
Income and expenses for each income statement are translated at average exchange rates for the year, which
approximates the exchange rates at the dates of the transactions; and
-
All resulting exchange differences are taken to the foreign currency translation reserve within equity.
Goodwill and fair value adjustments arising on the acquisition of foreign operations on or after 1 January 2006 are
treated as assets and liabilities of the foreign operations and are recorded in the functional currency of the foreign
operations and translated at the closing rate at the balance sheet date. Goodwill and fair value adjustments which arose
on the acquisition of foreign subsidiaries before 1 January 2006 are deemed to be assets and liabilities of the parent
company and are recorded in RM at the rates prevailing at the date of acquisition.
(p)
Revenue recognition
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can
be reliably measured. The following specific recognition criteria must also be met before revenue is recognised:
(i)
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.
(ii)
Construction contracts
Revenue from construction contracts is accounted for by the stage of completion method as described in Note 2.2(g).
(iii)
Revenue from services
Revenue from services rendered is recognised on accrual basis over the period of the service rendered.
(iv)
Property development
Revenue from property development activities is recognised based on the stage of completion measured by reference
to 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 property 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 the development units 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 immediately in the income statements.
(v)
Rental income
Rental income from investment property is recognised on a straight-line basis over the term of the lease. The aggregate
cost of incentives provided to lessees is recognised as a reduction of rental income over the lease term on a straight-line
basis.
ANNUAL REPORT 2008
071
31 December 2008
2.
2.2
(p)
Revenue recognition (cont’d.)
(vi)
Interest income
Interest income is recognised on an accrual basis using the effective interest method.
(vii) Dividend income
Dividend income is recognised when the Group’s right to receive payment is established.
(viii) Management fees
072
Management fees are recognised when services are rendered.
(q)
Government grants
Government grants are recognised initially at their fair value in the balance sheet as deferred income where there is reasonable
assurance that the grant will be received and all attaching conditions will be complied with. Grants that compensate the Group
for expenses incurred are recognised as income over the periods necessary to match the grant on a systematic basis to the
costs that it is intended to compensate. Grants that compensate the Group for the cost of an asset are recognised as income
on a systematic basis over the useful life of the asset.
(r)
Non-current assets (or disposal groups) held for sale and discontinued operation
Non-current assets (or disposal groups) are classified as held for sale if their carrying amount will be 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, deferred tax assets, employee benefits assets,
financial assets and inventories) 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 resale.
(s)
Financial instruments
Financial instruments are recognised in the balance sheet when the Group has become a party to the contractual provisions
of the instrument.
Financial instruments are classified as liabilities or equity in accordance with the substance of the contractual arrangement.
Interest, dividends and gains and losses relating to a financial instrument classified as a liability, are reported as expense
or income. Distributions to holders of financial instruments classified as equity are recognised directly in equity. Financial
instruments are offset when the Group has a legally enforceable right to offset and intends to settle either on a net basis or to
realise the asset and settle the liability simultaneously.
KUB MALAYSIA BERHAD
2.
2.2
(s)
Financial instruments (cont’d.)
(i)
Cash and cash equivalents
For the purposes of the cash flow statements, cash and cash equivalents include cash on hand and at bank, deposit
at call and short term highly liquid investments which have an insignificant risk of changes in value, net of outstanding
bank overdrafts.
(ii)
Other non-current investments
Non-current investments other than investments in subsidiaries, associates and investment properties are stated at cost
less impairment losses. On disposal of an investment, the difference between net disposal proceeds and its carrying
amount is recognised in profit or loss.
(iii)
Other current investments
Other current investments comprise of quoted shares are carried at the lower of cost and market value determined
on an aggregate basis. Cost is determined on the weighted average basis while market value is determined based on
quoted market values. Increases or decreases in the carrying amount of the other current investment are recognised
in the profit or loss. On disposal of the current investment, the difference between the net disposal proceeds and the
carrying amount is recognised in profit or loss.
(iv)
Trade and other receivables are carried at anticipated realisable values. Bad debts are written off when identified. An
estimate is made for doubtful debts based on a review of all outstanding amounts as at the balance sheet date.
(v)
Trade and other payables are stated at the fair value of the consideration to be paid in the future for goods and services
received.
(vi)
Interest-bearing loans and borrowings
All loans and borrowings are initially recognised at the fair value of the consideration received less directly attributable
transaction costs. After initial recognition, interest bearing loans and borrowings are subsequently measured at amortised
cost using the effective interest method.
(vii) Equity instruments
Ordinary shares are classified as equity. Dividends on ordinary shares are recognised in equity in the period in which they
are declared.
The transaction costs of an equity transaction are accounted for as a deduction from equity, net of tax. Equity transaction
costs comprise only those incremental external costs directly attributable to the equity transaction which would otherwise
have been avoided.
The consideration paid, including attributable transaction costs on repurchased ordinary shares of the Company that
have not been cancelled, are classified as treasury shares and presented as a deduction from equity. No gain or loss is
recognised in profit or loss on the sale, re-issuance or cancellation of treasury shares. When treasury shares are reissued
by resale, the difference between the sales consideration and the carrying amount is recognised in equity.
ANNUAL REPORT 2008
073
31 December 2008
2.
2.2
(s)
(viii) Redeemable Convertible Preference Shares (“RCPS”)
The RCPS are regarded as compound instruments, consisting of a liability component and equity component. At the
date of issue, the fair value of the liability component is estimated using the prevailing market interest rate for a similar
non-convertible bond. The difference between the proceeds of issue of the RCPS and the fair value assigned to the
liability component, representing the conversion option is included in equity. The liability component is subsequently
stated at amortised cost using the effective interest rate method until extinguished on conversion or redemption, whilst
the value of the equity component is not adjusted in subsequent periods. Attributable transaction costs are apportioned
and deducted directly from the liability and equity component based on their carrying amounts at the date of issue.
Under the effective interest rate method, the interest expense on the liability component is calculated by applying
the prevailing market interest for a similar non-convertible bond to the instrument at the date of issue. The difference
between this amount and the interest paid is added to the carrying amount of the RCPS.
2.3
Effects arising from adoption of new and revised FRSs, amendment to FRSs and Interpretations
On 1 January 2008, the Company and Group adopted the following revised FRS, amendment to FRS and Interpretations:
FRS 107
Cash Flow Statements
FRS 111
Construction Contracts
FRS 112
Income Taxes
FRS 118
Revenue
FRS 120
Accounting for Government Grants and Disclosure of Government Assistance
FRS 134
Interim Financial Reporting
FRS 137
Provisions, Contingent Liabilities and Contingent Assets
Amendment to FRS 121
The Effects of Changes in Foreign Exchange Rates
- Net Investment in a Foreign Operation
IC Interpretation 1
Changes in Existing Decommissioning, Restoration and Similar Liabilities
IC Interpretation 2
Members' Shares in Co-operative Entities and Similar Instruments
IC Interpretation 5
Rights to Interests arising from Decommissioning, Restoration and Environmental Rehabilitation Funds
IC Interpretation 6
Liabilities arising from Participating in a Specific Market
- Waste Electrical and Electronic Equipment
IC Interpretation 7
Applying the Restatement Approach under FRS 129
- Financial Reporting in Hyperinflationary Economies
IC Interpretation 8
Scope of FRS 2
The revised FRS, amendment to FRS and Interpretations above do not have any significant impact to the financial statements of the
Group and of the Company for the current financial year.
2.4
Standards and interpretations issued but not yet effective
At the date of authorisation of these financial statements, the following new FRS and Interpretations were issued but not yet effective
and have not been applied by the Group and the Company:
FRS, Amendment to FRS and Interpretations
FRS 7: Financial Instruments: Disclosures
FRS 8: Operating Segments
FRS 139: Financial Instruments: Recognition and Measurement
IC Interpretation 9: Reassessment of Embedded Derivatives
IC Interpretation 10: Interim Financial Reporting and Impairment
074
KUB MALAYSIA BERHAD
Effective for
financial periods
beginning on or
after
1 January 2010
1 July 2009
1 January 2010
1 January 2010
1 January 2010
2.
2.4
Standards and interpretations issued but not yet effective (cont’d.)
The new FRS and Interpretations above are expected to have no significant impact on the financial statements of the Group and of
the Company upon their initial application except for the changes in disclosures arising from the adoption of FRS 7 and FRS 8.
The Group and Company are exempted from disclosing the possible impact, if any, to the financial statements upon the initial
application of FRS 7 and FRS 139.
2.5
Significant accounting judgments and estimates
The preparation of financial statements requires management to make judgments, estimates and assumptions that affect the
application of policies and reported amounts of assets, liabilities, income and expenses. Although these estimates are based on
management’s best knowledge of current events and actions, actual results may differ from those estimates. Critical accounting
estimates and assumptions used that are significant to the financial statements, and areas involving higher degree of judgment and
complexity, are as follows:
(i)
Impairment of goodwill (Note 19)
The Group determines whether goodwill is impaired at least once annually. This requires an estimation of the value-in-use of
the cash generating unit (“CGU”) to which the goodwill is allocated. Estimating a value-in-use amount requires management
to make an estimate of the expected future cash flows from the CGU and also to choose a suitable discount rate in order to
calculate the present value of those cash flows.
(ii)
Income taxes (Note 9)
Significant estimation is involved in determining the provision for income taxes. There are certain transactions and computations
for which the ultimate tax determination is uncertain during the ordinary course of business. The Company recognises liabilities
for expected tax issues based on estimates of whether additional taxes will be due. Where the final tax outcome of these
matters is different from the amounts that were initially recognised, such differences will impact the income tax and deferred
tax provisions in the period in which such determination is made.
(iii)
Deferred taxes (Note 28)
Deferred tax assets are recognised for all unused tax losses and unabsorbed capital allowances to the extent that it is probable
that taxable profit will be available against which the losses and capital allowances can be utilised. Significant management
judgment is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and
level of future taxable profits together with future tax planning strategies.
(iv)
Impairment of investments in subsidiaries (Note 16) and associates (Note 17)
The Group and the Company assess whether there is any indication that investments in subsidiaries and associates may
be impaired at each balance sheet date. If indicators are present, these assets are subject to an impairment review. The
impairment review comprises a comparison of the carrying amount of the assets’ and the assets’ estimated recoverable
amount.
The Group and the Company determine whether investments are impaired following certain indications of impairment such
as, amongst others, significant changes with adverse effects on the investment and deteriorating financial performance of the
investment due to observed changes and fundamentals. Depending on their nature and the industries in which the investments
relate to, judgments are made by management to select suitable methods of valuation such as discounted cash flow.
Once a suitable method of valuation is selected, management makes certain assumptions concerning the future to estimate
the recoverable amount of the investment. These assumptions and other key sources of estimation uncertainty at the balance
sheet date, may have a significant risk of causing a material adjustment to the carrying amounts of the investments within the
next financial year. Depending on the specific individual investment, assumptions made by management may include, amongst
others, assumptions on expected future cash flows, revenue growth, discount rate used for purposes of discounting future
cash flows which incorporates the relevant risks, and expected future outcome of certain past events.
ANNUAL REPORT 2008
075
31 December 2008
2.
2.5
3.
Significant accounting judgments and estimates (cont’d.)
(v)
Provision for doubtful debts (Note 21)
The Group and the Company review the doubtful trade and other receivables at each reporting date to assess whether
provision for doubtful debts should be recorded in the financial statements. In particular, judgment is required in the identification
of doubtful debts, and the estimation of realisable amount from the doubtful debts when determining the level of provision
required.
Revenue
Contract revenue (Note 22)
Sale of goods
Services
Management fee
Dividend income from:
- subsidiary
- associate
- others
4.
Company
2008
RM’000
97,058
722,593
72,495
-
67,064
781,052
61,614
-
163
488
362
350
3,000
8,834
362
350
892,508
910,080
12,359
838
Group
2008
RM’000
2007
RM’000
Company
2008
RM’000
81,112
664,961
55,752
56,783
709,925
24,542
-
-
801,825
791,250
-
-
Group
2008
RM’000
2007
RM’000
Company
2008
RM’000
2007
RM’000
2007
RM’000
Finance costs
Interest expenses:
Bank borrowings
Finance lease liabilities
Others
076
2007
RM’000
Cost of sales
Contract costs (Note 22)
Cost of inventories sold
Cost of services rendered
5.
Group
2008
RM’000
KUB MALAYSIA BERHAD
2007
RM’000
8,441
336
326
8,370
498
893
766
165
-
1,628
417
-
9,103
9,761
931
2,045
6.
The following amounts have been included in arriving at profit/(loss) before tax:
Group
2008
RM’000
Employee benefits expense (Note 7)
Non-executive directors’ remuneration (Note 8)
Auditors’ remuneration:
Statutory audits
- to holding company's auditors and other member
firms of Ernst & Young Global
- to other firms of auditors
Other services
- to holding company's auditors
- to other firms of auditors
Bad debts written off
Write down of inventories
Write down of current investments
Provision for doubtful debts on:
- Receivables
- Due from subsidiaries
Amortisation:
- Intangible asset
- Prepaid lease payments
- Plantation development expenditure
Depreciation of:
- Investment properties
- Property, plant and equipment
Impairment loss on:
- Subsidiaries
- Associates
- Intangible asset
- Prepaid lease payments
Inventories written off
Intangible asset written off
Land held for property development written off
Loss on disposals of prepaid lease payments
Rental expense on:
- Land and buildings
- Premises
- Office equipment
Realised loss on foreign exchange
Government grant
Gain on disposal of:
Gain on settlement of debts
Interest income
2007
RM’000
Company
2008
RM’000
2007
RM’000
35,429
654
53,561
706
6,254
563
6,251
617
375
50
479
65
-
29
5
323
1,193
880
5
343
197
710
6,547
142
323
880
-
53
6,368
-
7,552
-
7,080
-
18,042
12,740
3,365
-
84
2,527
253
324
-
340
253
389
14,468
955
18,687
897
633
220
211
712
203
2,466
26,395
397
78
91
11,305
1,470
1,190
422
840
1,776
12,743
44
8,508
18,648
52
-
475
8,743
1,378
43
(2,349)
6,579
6,783
561
336
(1,061)
739
-
6,579
-
(884)
(4,342)
(699)
(968)
(1,174)
(825)
(67)
(4,479)
(1,174)
(2,045)
ANNUAL REPORT 2008
077
31 December 2008
6.
Profit/(loss) before tax (cont’d)
The following amounts have been included in arriving at profit/(loss) before tax (cont’d.):
Group
2008
RM’000
Realised (gain)/loss on foreign exchange
Rental income
Reversal of provision for doubtful debts on:
- Receivables
- Due from subsidiaries
Reversal of retirement benefit
Reversal of impairment loss on investments in
associates
Reversal of inventories written off
Waiver of debts owing to payables
2007
RM’000
Company
2008
RM’000
2007
RM’000
(1,452)
(35)
(644)
588
(13)
(969)
(480)
(480)
(1,314)
-
(203)
14
(89,652)
-
(23,535)
-
(1,794)
(796)
(103)
(71)
(1,794)
-
-
The above income statement items exclude the items relating to the disposal group held for sale, which have been disclosed separately in
Note 10.
7.
Employee benefits expense
Group
2008
RM’000
Wages and salaries
Social security contributions
Contributions to defined contribution plan
Other benefits
2007
RM’000
Company
2008
RM’000
2007
RM’000
25,233
307
2,889
7,000
42,828
266
4,661
5,806
4,840
84
590
740
4,251
30
615
1,355
35,429
53,561
6,254
6,251
Included in employee benefits expense of the Group and of the Company are Executive directors’ remuneration amounting to RM1,943,000
(2007: RM1,068,000) and RM548,000 (2007: RM435,000) respectively as further disclosed in Note 8.
8.
Directors’ remuneration
Group
2008
RM’000
2007
RM’000
Company
2008
RM’000
2007
RM’000
Executive directors’ remuneration (Note 7):
1,943
1,068
548
435
1,943
1,068
548
435
252
402
270
436
252
311
270
347
654
706
563
617
Total directors’ remuneration (Note 32(b))
Estimated money value of benefits-in-kind
2,597
83
1,774
73
1,111
23
1,052
14
Total directors’ remuneration including benefits-in-kind
2,680
1,847
1,134
1,066
Other emoluments
Non-executive directors’ remuneration (Note 6):
Fees
Other emoluments
078
KUB MALAYSIA BERHAD
8.
Director’s remuneration (cont’d.)
The details of remuneration receivable by directors of the Company during the year are as follows:
Group
2008
RM’000
Executive:
Salaries and other emoluments
Estimated money value of benefits-in-kind
Non-Executive:
Fees
Other emoluments
2007
RM’000
Company
2008
RM’000
2007
RM’000
568
16
435
7
548
16
435
7
584
442
564
442
252
338
270
364
252
318
270
354
590
634
570
624
1,174
1,076
1,134
1,066
The number of directors of the Company whose total remuneration during the financial year fell within the following bands is analysed
below:Number of Directors
2008
2007
9.
Executive director:
RM500,001 - RM550,000
RM550,001 - RM600,000
1
1
-
Non-Executive directors:
Below RM50,000
RM50,001 - RM100,000
RM100,001 - RM150,000
RM150,001 - RM200,000
RM200,001 - RM250,000
5
1
1
4
2
1
1
Income tax expenses
Group
2008
RM’000
Malaysian income tax:
- Current year
- Overprovision in prior years
Deferred tax (Note 28):
- Relating to origination and reversal of temporary
differences
- Relating to changes in tax rates
- Underprovision in prior years
Total income tax expense
2007
RM’000
Company
2008
RM’000
2007
RM’000
8,252
(2,718)
3,518
(693)
-
20
5,534
2,825
-
20
3,223
116
720
2,897
(263)
-
-
-
4,059
2,634
-
-
9,593
5,459
-
20
ANNUAL REPORT 2008
079
31 December 2008
9.
Income tax expenses (cont’d.)
Domestic current income tax is calculated at the statutory tax rate of 26% (2007: 27%) of the estimated assessable profit for the year. The
domestic statutory tax rate will be reduced to 25% from the current year’s rate of 26%, effective year of assessment 2009. The computation
of deferred tax as at 31 December 2008 has reflected these changes.
A reconciliation of income tax expense applicable to profit/(loss) before tax 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
2008
RM’000
Taxation at Malaysian statutory tax rate of
26% (2007: 27%)
Income not subject to tax
Effect of changes in tax rates
Effect of expenses not deductible for tax purposes
Deferred tax assets not recognised during the year
Effect of utilisation of previously unrecognised tax losses
and capital allowances
(Over)/underprovision of tax expense in prior years
Underprovision of deferred tax in prior years
Tax expense for the year
2007
RM’000
Company
2008
RM’000
2007
RM’000
46,500
(83,341)
64,660
(52,483)
12,090
(8,236)
116
6,130
6,773
(22,502)
(358)
(263)
26,321
2,954
16,812
(25,848)
8,754
282
(14,170)
9,525
4,645
(5,282)
(2,718)
720
(693)
-
-
20
-
9,593
5,459
-
20
Tax savings during the financial year arising from utilisation of:
Group
2008
RM’000
Current year tax losses
Tax losses brought forward
4,104
2007
RM’000
4,072
222
Company
2008
RM’000
2007
RM’000
-
-
10.
Disposal group classified as held for sale
During the year, the Group completed the proposed disposals of Tele Dynamics Sdn. Bhd., Adil Perdana Sdn. Bhd. and certain parcels of
shoplots/office space/car parking bays and ramps, as disclosed in Note 35(a), (f) and (g), respectively.
The disposal assets held for sale of the Company as at 31 December 2008 comprises Ladang Espipi, an agricultural land in Perak.
The disposal group classified as held for sale of the Group as at 31 December 2008 includes ITTAR-IPP (PJ) Sdn. Bhd., KUB Singgahsana
(PJ) Sdn. Bhd., 21 parcels of land in Mukim of Belanja, District of Kinta, Perak held by Lembayung Sukma Sdn. Bhd. and hotel and hostel at
District Padang Matsirat, Langkawi held by KUB Realty Sdn. Bhd., for which the Group’s management is committed to dispose in the next
financial year.
080
KUB MALAYSIA BERHAD
10.
Disposal group classified as held for sale (cont’d.)
An analysis of the result of disposal group classified as held for sale is as follows:
Group
2008
RM’000
2007
RM’000
Revenue
Cost of sales
12,289
(8,272)
324,543
(266,227)
Gross profit
Other income
Other expenses
Gain/(loss) on disposal of subsidiaries
Finance costs
4,017
18,421
(237)
(4,342)
(1,989)
5,386
(64)
58,316
5,347
(9,693)
(48,955)
(6,995)
(909)
(2,260)
Profit/(loss) before tax from disposal group classified as held for sale
Income tax expense
21,192
(739)
(5,149)
(1,977)
Profit/(loss) for the year from disposal group classified as held for sale
20,453
(7,126)
The following amounts have been included in arriving at profit/(loss) before tax from disposal group classified as held for sale:
Group
2008
RM’000
Auditors' remuneration
Bad debts written off
Depreciation of property, plant and equipment
Provision for doubtful debts
Rental expense on:
- Land and building
- Premises
- Office equipment
Gain on disposal of:
- property, plant and equipment
- investment property
Employee benefits expense:
- Wages and salaries
- Social security contributions
- Contributions to defined contribution plan
- Other benefits
(Gain)/loss on disposal of subsidiaries classified under disposal group held for sale
Reversal of bad debts written off
Reversal of provision for doubtful debts
Realised gain on foreign exchange
Rental income
2007
RM’000
18
1,952
35
170
72
531
2,244
3,237
1,531
1,470
36
518
314
14
546
3
(1,473)
(16,232)
(23)
-
645
14
82
158
(5,386)
(13)
(12)
-
20,036
11
2,100
173
909
(362)
(1,613)
(209)
(521)
ANNUAL REPORT 2008
081
31 December 2008
10.
Disposal group classified as held for sale (cont’d.)
At 31 December 2008, the assets and liabilities of the disposal group are as follows:
Group
2008
RM’000
2007
RM’000
Company
2008
RM’000
2007
RM’000
Assets
Deferred tax assets
Inventories
Current tax assets
Liabilities
Borrowings
Provision for tax
6,594
260
8,320
9,454
111
450
688
26,070
5,798
7,924
69,470
1,528
21,497
44,992
1,045
12,225
1,298
-
1,298
1,450
-
25,877
190,549
1,298
2,748
5,930
308
64,233
18,531
90
-
-
6,238
82,854
-
-
The cash flows attributable to the disposal group classified as held for sale are as follows:
Group
2008
RM’000
Operating cash flows
Investing cash flows
Financing cash flows
Total cash flows
2007
RM’000
Company
2008
RM’000
2007
RM’000
(340)
(47)
297
11,526
(1,394)
(7,422)
-
-
(90)
2,710
-
-
11.
Earnings/(loss) per ordinary share
Basic and diluted
Basic and diluted earnings/(loss) per ordinary share is calculated by dividing profit/(loss) for the year attributable to ordinary equity holders
of the Company by the weighted average number of ordinary shares in issue during the financial year.
Group
2008
RM’000
32,044
(86,130)
556,465
552,839
2008
Sen
2007
Sen
Basic earnings per share
5.76
(15.58)
Diluted earnings per share
5.76
(15.58)
Profit/(loss) attributable to equity holders of the Company
Weighted average number of ordinary shares in issue (in '000)
082
2007
RM’000
There was no dilution of earnings per share for the financial year since the effect of RCPS was anti-dilutive.
KUB MALAYSIA BERHAD
12.
Freehold
land
RM’000
Factory
and
buildings
RM’000
Plant,
equipment
and vehicles
RM’000
Courseware
RM’000
Total
RM’000
At 1 January 2008
Additions
Disposals
Written off
Transfer to assets held for sale
Exchange difference
3,853
5,903
-
43,467
3,322
25,875
(966)
(3,194)
-
203,919
8,419
25,252
(28,741)
(2,903)
(128)
363
-
251,239
11,741
57,030
(28,741)
(3,869)
(3,322)
363
At 31 December 2008
9,756
68,504
206,181
-
284,441
370
15,573
130,775
-
146,718
527
1,345
397
-
2,269
897
-
16,918
2,446
2,115
(818)
(1,235)
-
131,172
16,350
14,353
(19,886)
(2,848)
(118)
(82)
-
148,987
18,796
16,468
(19,886)
(3,666)
(1,353)
(82)
370
18,081
138,544
-
156,995
527
1,345
397
-
2,269
897
19,426
138,941
-
159,264
8,859
49,078
67,240
-
125,177
Group
At 31 December 2008
Cost
Accumulated depreciation and
impairment losses
At 1 January 2008:
Accumulated depreciation
Accumulated impairment
losses
Depreciation for the year
Disposals
Written off
Exchange difference
At 31 December 2008:
losses
Net carrying amount
ANNUAL REPORT 2008
083
31 December 2008
12.
Property, plant and equipment (cont’d.)
Freehold
land
RM’000
Factory
and
buildings
RM’000
Plant,
equipment
and vehicles
RM’000
Courseware
RM’000
Total
RM’000
At 1 January 2007
Additions
Disposals
Written off
Transfer from assets held for sale
8,099
(4,246)
46,091
710
(631)
(459)
15,874
(18,118)
217,977
15,990
(9,420)
(15,813)
28,355
(33,170)
8,851
(8,851)
-
281,018
16,700
(18,902)
(16,272)
44,229
(55,534)
At 31 December 2007
3,853
43,467
203,919
-
251,239
-
9,262
143,164
8,851
161,277
897
1,345
306
-
2,548
897
-
10,607
2,481
(332)
(383)
8,254
(3,709)
143,470
16,206
91
(9,338)
(14,113)
21,959
(27,103)
8,851
(8,851)
-
163,825
18,687
91
(18,521)
(14,496)
30,213
(30,812)
-
15,573
130,775
-
146,348
897
1,345
397
-
2,639
897
16,918
131,172
-
148,987
2,956
26,549
72,747
-
102,252
Group
At 31 December 2007
Cost
Accumulated depreciation and
impairment losses
At 1 January 2007:
losses
Impairment loss for the year (Note 6)
Disposals
Written off
losses
Net carrying amount
084
KUB MALAYSIA BERHAD
12.
Property, plant and equipment (cont’d.)
Office
renovation and
equipment
RM’000
Motor
vehicles
RM’000
Total
RM’000
At 1 January 2008
Additions
Disposals
Written off
5,361
553
(6)
(2,834)
505
75
(209)
(31)
5,866
628
(215)
(2,865)
At 31 December 2008
3,074
340
3,414
At 1 January 2008
Depreciation charge for the year
Disposals
Written off
3,464
813
(5)
(2,796)
362
84
(209)
(25)
3,826
897
(214)
(2,821)
At 31 December 2008
1,476
212
1,688
Net carrying amount
1,598
128
1,726
At 1 January 2007
Additions
4,665
696
430
75
5,095
771
At 31 December 2007
5,361
505
5,866
At 1 January 2007
Depreciation charge for the year
2,884
580
309
53
3,193
633
At 31 December 2007
3,464
362
3,826
Net carrying amount
1,897
143
2,040
Company
At 31 December 2008
Cost
At 31 December 2007
Cost
At 31 December 2008, freehold land, factory and buildings of the Group with net carrying amounts of RM35,890,000 (2007: RM17,941,000)
are pledged to banks as securities for borrowings (Note 27).
13.
Group
2008
RM’000
Plantation development expenditure (i)
Land held for property development (ii)
2007
RM’000
Company
2008
RM’000
2007
RM’000
9,099
9,097
-
-
9,099
9,097
-
-
ANNUAL REPORT 2008
085
31 December 2008
13.
Development expenditure (cont’d.)
(i)
Plantation development expenditure
Group
2008
RM’000
2007
RM’000
Company
2008
RM’000
2007
RM’000
Cost
At 1 January
Long term leasehold land
Plantation development
-
4,195
-
-
2,312
1,883
-
4,195
(4,195)
-
4,195
(4,195)
At 31 December
-
-
-
-
At 1 January
Amortisation during the year
-
2,644
253
(2,897)
-
2,644
253
(2,897)
At 31 December
-
-
-
-
Net carrying amounts at 31 December
-
-
-
-
Accumulated amortisation
(ii)
Land held for property development
Group
2008
RM’000
2007
RM’000
Cost
At 1 January
Additions
Written off
Transfer to prepaid lease payments
16,398
2
-
27,977
(422)
(10,287)
(870)
At 31 December
16,400
16,398
At 1 January
7,301
-
13,152
(5,787)
(64)
At 31 December
7,301
7,301
Net carrying amounts at 31 December
9,099
9,097
Accumulated impairment losses
086
Land held for property development of the Group with net carrying amount of RM8,888,000 (2007: RM8,888,000) is pledged as
security for borrowings (Note 27).
KUB MALAYSIA BERHAD
14.
Unexpired
period less
than 50 years
RM’000
Unexpired
period more
than 50 years
RM’000
Total
RM’000
At 31 December 2008
Cost
At 1 January 2008
Additions
11,210
(373)
73,772
996
(978)
84,982
996
(1,351)
At 31 December 2008
10,837
73,790
84,627
5,718
7
13,915
18
19,633
25
5,725
351
(144)
13,933
3,014
(128)
19,658
3,365
(272)
5,925
7
16,801
18
22,726
25
5,932
16,819
22,751
4,905
56,971
61,876
Group
Accumulated amortisation and impairment losses
At 1 January 2008
Amortisation for the year
At 31 December 2008
Net carrying amount
ANNUAL REPORT 2008
087
31 December 2008
14.
Prepaid lease payments (cont’d.)
Group
Unexpired
period less
than 50 years
RM’000
Unexpired
period more
than 50 years
RM’000
Total
RM’000
6,579
(3,067)
180
7,518
-
8,530
857
4,015
68,416
(8,916)
870
15,109
857
(3,067)
4,195
75,934
(8,916)
870
11,210
73,772
84,982
851
-
948
-
1,799
-
851
341
7
(258)
105
4,679
-
948
2,186
71
583
11,073
(992)
64
1,799
2,527
78
(258)
688
15,752
(992)
64
5,718
7
13,915
18
19,633
25
5,725
13,933
19,658
5,485
59,839
65,324
At 31 December 2007
Cost
At 1 January 2007
Additions
Disposal
Transfer from investment properties
Transfer from development expenditure
At 31 December 2007
At 1 January 2007
Impairment loss for the year
Disposal
Transfer from investment properties
Transfer from development expenditure
At 31 December 2007
Net carrying amount
088
KUB MALAYSIA BERHAD
14.
Prepaid lease payments (cont’d.)
Unexpired
period less
than 50 years
RM’000
Unexpired
period more
than 50 years
RM’000
Total
RM’000
5,592
-
5,592
478
266
-
478
266
744
324
-
744
324
802
266
-
802
266
1,068
-
1,068
4,524
-
4,524
At 1 January 2007
5,592
-
1,640
(1,640)
7,232
(1,640)
At 31 December 2007
5,592
-
5,592
155
266
105
16
260
282
421
323
-
121
17
52
(190)
542
340
52
(190)
478
266
-
478
266
744
-
744
4,848
-
4,848
Company
At 31 December 2008
Cost
At 1 January 2008/At 31 December 2008
At 1 January 2008
At 31 December 2008
Net carrying amount
At 31 December 2007
Cost
At 1 January 2007
At 31 December 2007
Net carrying amount
Leasehold land of the Group with net carrying amounts of RM15,415,000 (2007: RM17,632,000) are pledged as securities for borrowings
(Note 27).
ANNUAL REPORT 2008
089
31 December 2008
15.
Freehold
land and
buildings
RM’000
Leasehold
land
RM’000
Total
RM’000
At 31 December 2008
Cost
At 1 January 2008
24,099
(4,534)
-
24,099
(4,534)
At 31 December 2008
19,565
-
19,565
10,015
-
-
10,015
-
10,015
389
211
(2,567)
-
10,015
389
211
(2,567)
7,837
211
-
7,837
211
8,048
-
8,048
Net carrying amount
11,517
-
11,517
Fair value
18,850
-
18,850
Group
At 1 January 2008
At 31 December 2008
090
KUB MALAYSIA BERHAD
15.
Investment properties (cont’d.)
Freehold
land and
buildings
RM’000
Leasehold
land
RM’000
Total
RM’000
At 1 January 2007
Disposal
52,253
(3,097)
(2,178)
(22,879)
2,017
(2,017)
-
54,270
(3,097)
(4,195)
(22,879)
At 31 December 2007
24,099
-
24,099
13,074
10,792
255
-
13,329
10,792
23,866
955
397
(891)
(433)
(13,879)
255
(255)
-
24,121
955
397
(891)
(688)
(13,879)
10,015
-
-
10,015
-
10,015
-
10,015
Net carrying amount
14,084
-
14,084
Fair value
18,850
-
18,850
2008
RM’000
2007
RM’000
394
11,123
394
13,690
11,517
14,084
Group
At 31 December 2007
Cost
At 1 January 2007
Disposal
At 31 December 2007
Included in the above are:
Freehold land
Freehold land and buildings
Investment properties comprise a number of commercial properties leased to third parties.
ANNUAL REPORT 2008
091
31 December 2008
16.
Unquoted shares, at cost
Less: Accumulated impairment losses
Company
2008
RM’000
2007
RM’000
258,071
(46,600)
230,130
(33,857)
211,471
196,273
A list of the subsidiaries is shown in Note 37.
(a)
(i)
On 31 March 2008, the Company completed the acquisition of 60% equity interest comprising 1,800,000 ordinary shares of
RM1.00 each in Empirical Systems (M) Sdn. Bhd. (“Empirical”) for a total cash consideration of RM4,860,000. According to
the Share Sale Agreement, an amount of RM1,400,000 has been kept as security for Profit Guarantee.
On 1 July 2008, the Company further subscribed additional 1,000,000 ordinary shares of RM1.00 each for a total cash
consideration of RM1,00,000. Accordingly, the equity interest in Empirical has increased to 70%.
(ii)
On 21 April 2008, the Company completed the acquisition of 60% equity interest comprising 1,080,000 ordinary shares of
RM1.00 each in Ibuzawa Corporation Sdn. Bhd. (“Ibuzawa”) for a total cash consideration of RM22,000,000.
The acquired subsidiaries have contributed the followings results to the Group from the dates of acquisition to 31 December 2008:
Revenue
Profit for the year
092
Ibuzawa
RM’000
Empirical
RM’000
Group
RM’000
40,739
667
39,380
2,471
80,119
3,138
If the acquisition had occurred on 1 January 2008, the Group’s revenue and profit for the year would have been RM88,987,000 and
RM3,410,000 respectively.
KUB MALAYSIA BERHAD
16.
Investments in subsidiaries (cont’d.)
(a)
Acquisition of subsidiaries (cont’d.)
Fair values of the assets and liabilities recognised at the dates of acquisitions are as follows:
Ibuzawa
RM’000
Empirical
RM’000
Total
RM’000
Property, plant and equipment (Note 12)
Receivables
Inventories
Deferred tax assets
Borrowings
Payables
Tax payable
38,236
12,384
3,209
28,486
3,815
(51,303)
(15,892)
(366)
388
11,326
1,566
(5,939)
(6,632)
(684)
38,624
23,710
3,209
30,052
3,815
(57,243)
(22,523)
(1,050)
Fair value of net assets
Minority interests
18,569
(8,904)
25
(76)
18,594
(8,980)
Group's share of fair value of net assets
Goodwill on acquisitions
9,665
12,401
(51)
4,926
9,614
17,327
Total cost of acquisitions
22,066
4,875
26,941
Satisfied by:
Cash consideration
Costs attributable to the acquisition, paid in cash
22,000
66
4,860
15
26,860
81
22,066
4,875
26,941
Total purchase consideration
Less: Cash and bank balances acquired
Add: Pledged deposits
Add: Bank overdrafts
22,066
(28,486)
27,298
31,172
4,875
(1,566)
1,543
-
26,941
(30,052)
28,841
31,172
Net cash outflow on acquisitions, net of cash and
cash equivalents acquired
52,050
4,852
56,902
There were no acquisitions in the financial year ended 31 December 2007 and subsequent to 31 December 2008.
(b)
Disposal of subsidiaries
(i)
On 11 January 2008, KUB Ekuiti Sdn. Bhd. (“KUB Ekuiti”), a wholly-owned subsidiary of the Company, had completed the
proposed disposal of 60% equity interest comprising 7,200,000 ordinary shares of RM1.00 each in Tele Dynamics Sdn. Bhd.
(“Tele Dynamics”) for a cash consideration of RM17,050,000. Upon completion, Tele Dynamics ceased to be a subsidiary of
the Group.
(ii)
On 31 March 2008, KUB Development Berhad (“KUBD”), a wholly-owned subsidiary of the Company, had completed the
disposal of 70% equity interest comprising 630,000 ordinary shares of RM1.00 each in Adil Perdana Sdn. Bhd. (“Adil Perdana”)
for a total cash consideration of RM630,000. Upon completion, Adil Perdana ceased to be a subsidiary of the Group.
(iii)
On 14 November 2008, the Company disposed off four dormant subsidiary companies of the Company to third parties at a
consideration sum of RM2.00 each. The four subsidiary companies disposed off were Perdaris Development Sdn. Bhd., KUB
Sinar Sdn. Bhd., Radiant Orchards Sdn. Bhd. and KUB Sajilera Sdn. Bhd.
ANNUAL REPORT 2008
093
31 December 2008
16.
(b)
Disposal of subsidiaries (cont’d.)
The disposals above had the following effects on the financial position of the Group as at the end of the year:
2008
RM’000
Property, plant and equipment (Note 12)
Deferred tax assets
Receivables
Inventories
Borrowings
Payables
17,632
1,156
4,500
45,524
21,399
11,445
(19,151)
(55,346)
Fair value of net assets
Minority interests
27,159
(12,485)
Group's share of fair value of net assets disposed
Transfer from capital reserve
14,674
(2,456)
Total disposal proceeds, settled by cash
Disposal expense
12,218
(17,680)
76
Gain on disposal recognised in income statement
(5,386)
Cash inflow arising on disposals:
Cash consideration
Cash and bank balances of subsidiaries disposed
Bank overdraft of subsidiaries disposed
17,680
(11,445)
1,305
Net cash inflows of the Group
(iv)
094
7,540
Disposal in prior year
(i)
On 1 March 2007, the Group completed the disposal of its entire shareholding in Universiti Tun Abdul Razak Sdn. Bhd.
(“UNITAR”) for a total cash consideration of RM45 million. The subsidiary contributed a post acquisition loss of RM11.97
million up to the date of the disposal.
(ii)
On 7 September 2007, the Group completed the disposal of its entire shareholding in KUB Tekstil Sdn. Bhd. for a
total consideration of RM3.6 million (net of bank borrowings settlement and intercompany repayment). The subsidiary
contributed a post acquisition loss of RM43.79 million up to the date of the disposal.
KUB MALAYSIA BERHAD
16.
(b)
Disposal of subsidiaries (cont’d.)
The disposals above had the following effects on the Group’s assets and liabilities as at 31 December 2007.
Group
2007
RM’000
Non-current assets
Current assets
Current liabilities
Bank borrowings
45,149
67,745
(36,666)
(26,719)
Net assets disposed
Loss on disposal
49,509
(909)
Total disposal consideration
Consideration classified under other receivables
48,600
(35,000)
Consideration received
Cash and bank balances of subsidiaries disposed
13,600
(7,624)
Net cash inflows of the Group
17.
5,976
Investments in associates
Group
2008
RM’000
Company
2008
RM’000
2007
RM’000
2007
RM’000
Unquoted shares, at cost
Share of post-acquisition reserves
43,247
8,793
53,874
1,904
41,135
-
42,929
-
52,040
(26,886)
55,778
(28,460)
41,135
(23,135)
42,929
(24,929)
25,154
27,318
18,000
18,000
2008
RM’000
2007
RM’000
86,713
17,318
94,235
29,194
104,031
123,429
99,954
36,632
51,147
22,912
136,586
74,059
43,940
18,736
255,892
9,376
A list of the associates is shown in Note 38.
The summarised financial statements are as follows:
Gross assets and liabilities
Current assets
Non-current assets
Total assets
Current liabilities
Total liabilities
Gross results
Revenue
Profit for the year
The summarised financial statements above are based on management accounts as at 31 December.
ANNUAL REPORT 2008
095
31 December 2008
18.
Other investments
Group
2008
RM’000
2007
RM’000
Company
2008
RM’000
2007
RM’000
Non-current
At cost:
Unquoted shares
740
(477)
743
(477)
153
-
154
-
263
266
153
154
At market value:
Quoted shares in Malaysia
2,886
3,766
2,886
3,766
Total other investments
3,149
4,032
3,039
3,920
Goodwill
RM’000
Concession
costs
RM’000
Total
RM’000
86,326
17,327
-
86,326
17,327
103,653
-
103,653
86,326
-
86,326
86,326
-
86,326
17,327
-
17,327
Current
19.
Intangible assets
Group
At 31 December 2008
Cost
At 1 January 2008
Acquisition of subsidiaries (Note 16)
At 31 December 2008
At 1 January 2008/31 December 2008:
Net carrying amounts
096
KUB MALAYSIA BERHAD
19.
Intangible assets (cont’d.)
Goodwill
RM’000
Concession
costs
RM’000
Total
RM’000
At 1 January 2007
Written off
86,326
-
1,946
(1,946)
88,272
(1,946)
At 31 December 2007
86,326
-
86,326
59,931
672
-
672
59,931
59,931
26,395
-
672
84
(756)
60,603
84
26,395
(756)
86,326
-
86,326
86,326
-
86,326
-
-
-
Group
At 31 December 2007
Cost
At 1 January 2007:
Impairment loss
Write off
Net carrying amounts
Concession costs were in respect of the rights to operate Institute Latihan Perindustrian Prai (“Institute”), which have been written off to the
income statement in the previous financial year as the Government of Malaysia took over the Institute.
(a)
Allocation of goodwill
The carrying amount of goodwill at 31 December 2008 is in respect of the acquisition of subsidiaries, Empirical Systems (M) Sdn.
Bhd. and Ibuzawa Corporation Sdn. Bhd., by the Company during the year.
(b)
Key assumptions used in value-in-use calculations
The recoverable amount of the cash generating unit is determined based on value-in-use calculations using cash flow projections
based on financial budgets approved by the management covering a three-year period. The following describes each key assumption
on which the management has based its cash flow projections for the purpose of impairment testing of goodwill:
(i)
Revenue and profit assumptions
Revenue and profit for the financial year ending 2009 is predominantly based on the expected revenue and profit from existing
contracts and contracts expected to be secured in 2009. The weighted average growth rate used is consistent with the long
term average growth rate for the industry where the cash generating unit is in.
(ii)
Discount rate
The discount rate used for both the information and communication technology and property, engineering and construction
segments is 16%. These rates are pre-tax and reflect specific risks relating to the respective industry.
(iii)
Sensitivity to changes in assumptions
There are no reasonable possible changes in key assumptions which could cause the carrying value of goodwill on consolidation
to exceed its recoverable amount.
ANNUAL REPORT 2008
097
31 December 2008
20.
Inventories
Group
2008
RM’000
2007
RM’000
At cost:
Raw materials and consumables
Work-in-progress
Finished goods
Parts and components
Developed properties held for sale
4,480
38,997
2,413
274
480
3,367
8,572
4,892
147
480
46,644
17,458
56
-
46,700
17,458
At net realisable value:
Raw materials, parts and components
21.
Group
2008
RM’000
2007
RM’000
Company
2008
RM’000
2007
RM’000
Non-current
Due from subsidiaries (b)
Less: Provision for doubtful debts
-
-
402,979
(359,908)
531,324
(431,518)
-
-
43,071
99,806
4,183
141,214
(18,050)
100,035
(12,333)
-
-
127,347
87,702
-
-
395
22,116
11,131
8,715
(3,240)
7
53,193
53,146
4,260
(2,719)
8,211
-
660
-
39,117
107,887
8,211
660
166,464
195,589
8,211
660
Current
Due from customers on contract (Note 22)
Trade receivables
Due from associates (c)
Other receivables
Government subsidy receivable
Deposits and prepayments
Total trade and other receivables
098
(a)
Credit risk
The Group’s normal trade credit term ranges from 30 to 120 days (2007: 30 to 120 days). Other credit terms are assessed and
approved on a case-by-case basis.
The Group does not have any significant exposure to any individual customer or counterparty nor does it have any major concentration
of credit risk related to any financial instruments except for the concentration of credit risk arising from exposures to the Government
of Malaysia and Government Linked Corporations (“GLC”s) amounting to RM63,353,710 and RM16,487,484 respectively.
KUB MALAYSIA BERHAD
21.
Trade and other receivables (cont’d.)
(b)
Amount due from subsidiaries
The amount due from subsidiaries is unsecured, interest-free and has no fixed term of repayment, except for:
Company
2008
RM’000
Unsecured, bear interest at 4.50% to 6.00% (2007: 5.37% to 5.39%) per annum
22.
28,829
(c)
Amount due from associates
The amount due from associates is non-trade, unsecured, interest-free and has no fixed term of repayment.
2007
RM’000
11,500
Due from/(to) customers on contracts
Group
2008
RM’000
2007
RM’000
Construction costs incurred to date
Attributable profits
237,931
27,357
156,819
11,411
Less: Progress billings
265,288
(261,928)
168,230
(168,578)
3,360
(348)
4,183
(823)
(348)
3,360
(348)
6,441
950
Analysed as:
Due from customers on contract
Due to customers on contract
Retention sum on contracts included within trade receivables (Note 21)
Construction contracts revenue and costs are disclosed in Notes 3 and 4 respectively.
23.
Group
2008
RM’000
Cash on hand and at banks
Deposits with licensed banks
2007
RM’000
Company
2008
RM’000
2007
RM’000
55,885
159,103
30,683
29,860
356
80,326
12,397
10,046
214,988
60,543
80,682
22,443
Included in cash at banks of the Group is an amount of RM24,000 (2007: RM24,000) held pursuant to Section 7A of the Housing Development
(Control and Licensing) Act, 1966 which is restricted from use in other operations.
Included in deposits with licensed banks of the Group and of the Company are amounts of RM47,914,000 and RM823,000 (2007:
RM10,720,000 and RM1,040,000) respectively, which have been pledged as securities for borrowings (Note 27).
ANNUAL REPORT 2008
099
31 December 2008
23.
Cash and bank balances (cont’d)
For the purpose of the cash flow statements, cash and cash equivalents comprise the following as at the balance sheet date:
Deposits pledged
Bank overdrafts (Note 27)
Group
2008
RM’000
2007
RM’000
214,988
(47,914)
(28,972)
60,543
(10,720)
(12,271)
80,682
(823)
-
22,443
(1,040)
-
138,102
37,552
79,859
21,403
WAIER (%)
Average maturities (days)
3.2
60
2007
RM’000
3.1
30
3.5
30
2007
RM’000
3.1
30
Amount
2008
RM’000
2007
RM’000
Authorised:
At 1 January
1,000,000
-
1,000,000
-
1,000,000
(600,000)
1,000,000
-
At 31 December
1,000,000
1,000,000
400,000
1,000,000
Issued and fully paid:
At 1 January
Issued during the year
556,465
-
543,644
12,821
556,465
(333,879)
-
543,644
12,821
At 31 December
556,465
556,465
222,586
556,465
0.40
1.00
Par value (RM) per share
100
Company
2008
RM’000
Share capital
Number of ordinary shares
2008
2007
‘000
’000
2007
RM’000
The weighted average effective interest rates (“WAIER”) as at the balance sheet date and the remaining maturities of the Group and the
Company’s deposits with licensed banks are as follows:
Group
2008
RM’000
24.
Company
2008
RM’000
During the financial year:
(a)
the authorised share capital of the Company of RM1,000,000,000 comprising 1,000,000,000 ordinary shares of RM1.00 each has
been amended to RM400,000,000 comprising 1,000,000,000 ordinary shares of RM0.40 each; and
(b)
the issued and fully paid-up share capital of the Company was reduced from RM556,465,000 comprising 556,465,000 ordinary
shares of RM1.00 each to RM222,586,000 comprising 556,465,000 ordinary shares of RM0.40 each by way of cancellation of
RM0.60 of the par value of the existing ordinary shares in the Company in issue, pursuant to Section 64(1) of the Companies Act,
1965.
KUB MALAYSIA BERHAD
25.
Reserves
(a)
Capital reserve
The capital reserve arose from the capitalisation of bonus shares issued by certain subsidiaries.
(b)
Capital redemption reserve
The capital redemption reserve arose from the redemption of the Redeemable Convertible Preference Shares (“RCPS”) by the
Company, as disclosed in Note 27(a).
(c)
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 foreign operations, where the
monetary item is denominated in either the functional currency of the reporting entity or the foreign operation.
(d)
Other reserves
Other reserves consist of the following:
(i)
Merger reserve amounting to approximately RM11,147,000 which arose from the acquisition of KUB Ekuiti Sdn. Bhd. in
1997.
(ii)
Revaluation reserve amounting to RM4,613,000 which arose from the revaluation of land held by a subsidiary, which was
performed prior to 1 January 2006. The land is currently classified as prepaid lease payments.
26.
Retained earnings/(accumulated losses)
Prior to the year of assessment 2008, Malaysian companies adopted the full imputation system. In accordance with the Finance Act 2007
which was gazetted on 28 December 2007, companies shall not be entitled to deduct tax on dividend paid, credited or distributed to its
shareholders, and such dividends will be exempted from tax in the hands of the shareholders (“single tier system”). However, there is a
transitional period of six years, expiring on 31 December 2013, to allow companies to pay franked dividends to their shareholders under
limited circumstances. Companies also have an irrevocable option to disregard the Section 108 of the Income Tax Act, 1967 (“Section 108”)
balance and opt to pay dividends under the single tier system. The change in the tax legislation also provides for the Section 108 balance
to be locked-in as at 31 December 2007 in accordance with Section 39 of the Finance Act 2007.
The Company did not elect for the irrevocable option to disregard the Section 108 balance. Accordingly, during the transitional period,
the Company may utilise the credit in the Section 108 balance as at 31 December 2008 to distribute cash dividend payments to ordinary
shareholdings as defined under the Finance Act 2007. As at 31 December 2008, the Company has sufficient credit in the Section 108
balance and tax exempt account to pay franked dividends amounting to approximately RM45,700,000.
ANNUAL REPORT 2008
101
31 December 2008
27.
Borrowings
Group
2008
RM’000
Long term borrowings
Term loans - secured
Redeemable convertible preference shares (a)
Finance lease liabilities (b)
Short term borrowings
Revolving credit - secured
Bankers' acceptances
- secured
- unsecured
Trust receipts - secured
Bank overdrafts
- secured
- unsecured
Total borrowings
Term loans
Redeemable convertible preference shares
Revolving credit
Bankers' acceptances
Trust receipts
Bank overdrafts
2007
RM’000
Company
2008
RM’000
2007
RM’000
26,494
962
22,445
3,117
1,283
214
12,000
3,117
1,039
27,456
26,845
214
16,156
4,764
21,012
19,125
11,500
-
3,450
11,500
18,222
26,913
1,261
2,200
13,855
1,139
652
1,043
28,972
-
11,481
790
-
-
101,144
60,090
652
15,993
31,258
21,012
18,222
26,913
2,223
28,972
41,570
3,117
11,500
16,055
2,422
12,271
866
-
15,450
3,117
11,500
2,082
-
128,600
86,935
866
32,149
101,144
8,066
15,124
4,266
60,090
23,744
3,101
652
210
4
-
15,993
12,156
4,000
-
128,600
86,935
866
32,149
Maturity of borrowings is as follows:Within 1 year
More than 1 year and less than 2 years
More than 2 years and less than 5 years
More than 5 years
102
KUB MALAYSIA BERHAD
27.
Borrowings (cont’d.)
The weighted average effective interest rates (“WAIER”) (% per annum) of the borrowings at the balance sheet date are as follows:Group
2008
WAIER
%
Term loans
Revolving credit
Bankers' acceptance
Trust receipts
Bank overdrafts
4.16 - 9.00
7.45 - 8.30
7.00
7.45
2.50 - 9.87
7.00 - 8.25
2007
WAIER
%
7.50
4.50
4.50 - 6.00
3.5 - 9.87
8.30 - 10.50
Company
2008
WAIER
%
3.5 - 9.87
-
2007
WAIER
%
7.50
4.50
3.5 - 9.87
1.50 - 2.00
The secured term loans, bank overdrafts, bankers’ acceptances, trust receipts and revolving credits of the Group are secured by way of
fixed and floating charges over certain assets of the Group as disclosed in Note 12, Note 13, Note 14 and Note 23.
(a)
Redeemable convertible preference shares (‘RCPS”)
Group and Company
2008
2007
RM’000
RM’000
Authorised:
RCPS of RM0.10 each:
At 1 January/31 December
17,187
17,187
Issued and fully paid:
RCPS of RM0.10 each:
At 1 January
Redemption/conversion of RCPS-B
3,117
(3,117)
15,425
(12,308)
-
3,117
-
312
2,805
-
3,117
At 31 December
Represented by:
Par value of RM0.10 each
Share premium
On 13 June 2005, pursuant to a Scheme of Arrangement under Section 176 of the Companies Act, 1965 between a subsidiary, A&W
(Malaysia) Sdn. Bhd. (“A&W Malaysia”) (“Scheme of Arrangement”) and its Scheme Creditors, the Company issued 1,706,776 new
RCPS-A of RM0.10 each and 15,425,053 new RCPS-B of RM0.10 each at an issue price of RM1.00 each to Scheme A and Scheme
B creditors of A&W Malaysia. The RCPS-A and RCPS-B had a tenure of 5 years commencing from and including date of issue.
During the financial year, the Scheme of Arrangement was completed as the Company redeemed the remaining 3,117,298 RCPS-B
by cash on 29 February 2008.
ANNUAL REPORT 2008
103
31 December 2008
27.
Borrowings (cont’d.)
(b)
Group
2008
RM’000
2007
RM’000
1,391
602
387
83
1,660
803
236
-
725
227
9
-
1,366
753
236
-
Total future minimum lease payments
Less: Future finance charges
2,463
(240)
2,699
(277)
961
(95)
2,355
(273)
2,223
2,422
866
2,082
1,261
546
345
71
1,139
1,066
217
-
652
210
4
-
1,043
821
218
-
2,223
(1,261)
2,422
(1,139)
866
(652)
2,082
(1,043)
962
1,283
214
1,039
Less: Due within 12 months
Due after 12 months
28.
Company
2008
RM’000
Future minimum lease payables
Not later than 1 year
Later than 1 year and not later than 2 years
Later than 2 years and not later than 5 years
Later than 5 years
Analysis of present value of finance lease
liabilities
Not later than 1 year
Later than 1 year and not later than 2 years
Later than 2 years and not later than 5 years
Later than 5 years
2007
RM’000
The Group has finance leases contracts for various items of property, plant and equipment. These leases have terms of renewal but
no purchase options and escalations clauses. Renewals are at the option of the specific entity that holds the lease. There are no
restrictions placed upon the Group by entering into these leases and no arrangements have been entered into for contingent rental
payments.
Deferred tax assets and liabilities
Group
2008
RM’000
2007
RM’000
At 1 January
Recognised in income statement (Note 9)
Acquisition of subsidiary (Note 16)
Reclassified as held for sale (Note 16)
6,824
4,059
(3,815)
(1,156)
5,718
2,634
(1,528)
At 31 December
5,912
6,824
(1,893)
7,805
(2,714)
9,538
5,912
6,824
Presented after appropriate offsetting as follows:
Deferred tax assets
Deferred tax liabilities
104
KUB MALAYSIA BERHAD
28.
Deferred tax assets and liabilities (cont’d.)
The components and movements of deferred tax liabilities and assets during the financial year prior to offsetting are as follows:-
Deferred tax liabilities of the Group:
Property,
plant and
equipment
RM’000
Others
RM’000
Total
RM’000
At 1 January 2007
Recognised in income statement
Included in group assets held for sale
8,327
1,121
143
114
(273)
106
8,441
848
249
At 31 December 2007
9,591
(53)
9,538
(684)
230
-
(123)
(1,156)
(807)
230
(1,156)
9,137
(1,332)
7,805
Unutilised
tax loss/
unabsorbed
capital
allowances
RM’000
Provisions
RM’000
Total
RM’000
At 1 January 2007
(1,413)
(143)
-
(1,310)
1,929
(1,777)
(2,723)
1,786
(1,777)
At 31 December 2007
(1,556)
(1,158)
(2,714)
Acquisition of subsidiary
6,753
(4,045)
(1,887)
-
4,866
(4,045)
At 31 December 2008
1,152
(3,045)
(1,893)
Acquisition of subsidiary
At 31 December 2008
Deferred tax assets of the Group:
Deferred tax assets have not been recognised in respect of the following items:
Group
2008
RM’000
Unabsorbed tax losses
Unutilised capital allowances
Unutilised reinvestment allowance
Other deductible temporary difference
2007
RM’000
Company
2008
RM’000
2007
RM’000
49,519
12,827
888
573
78,032
71,590
-
42,690
5,412
418
33,428
-
63,807
149,622
48,520
33,428
The unutilised tax losses and unabsorbed capital allowances of the Group are available indefinitely for offsetting against future taxable profits
of the respective entities within the Group, subject to no substantial change in shareholdings of those entities under the Income Tax Act,
1967 and guidelines issued by the tax authority.
ANNUAL REPORT 2008
105
31 December 2008
29.
Group
2008
RM’000
Non-current
Due to subsidiaries (b)
Current
Trade:
Trade payables
Due to customers on contract (Note 22)
Due to associates (b)
Non-trade:
Refundable deposits
Deposits for disposals yet to be completed
Other payables
30.
2007
RM’000
-
34,044
34,937
99,622
823
1,732
90,715
348
1,845
-
-
102,177
92,908
-
-
32,128
85,375
33,404
15,332
54,378
32,342
10,805
32,737
117,503
103,114
32,342
43,542
219,680
196,022
32,342
43,542
(a)
The normal trade credit term granted to the Group ranges from 60 to 90 days.
(b)
The amounts due to subsidiaries and associates are unsecured, interest-free and have no fixed terms of repayment.
Capital commitments
Capital expenditure
Approved and contracted for:
Approved but not contracted for:
Lease and repurchase commitments
Less than a year
Between one and five years
More than 5 years
2007
RM’000
Company
2008
RM’000
2007
RM’000
-
2,208
-
443
47,323
1,748
2,522
617
47,323
3,956
2,522
1,060
1,498
9,506
10,512
1,125
3,921
17,595
-
-
21,516
22,641
-
-
2007
RM’000
Company
2008
RM’000
2007
RM’000
Contingent liabilities
Group
2008
RM’000
Corporate guarantees given to banks for credit facilities
granted to subsidiaries
Litigation claims by third parties against the Group, not
provided for
106
Company
2008
RM’000
-
Group
2008
RM’000
31.
2007
RM’000
KUB MALAYSIA BERHAD
-
-
398,976
127,372
-
3,060
-
-
32.
Related party disclosures
(a)
In addition to the transactions detailed elsewhere in the financial statements, the Company had the following transactions with related
parties during the financial year:
Company
2008
RM’000
2007
RM’000
Dividend income from:
- subsidiary
- associate
3,000
8,834
-
Interest income from subsidiaries
2,059
1,600
Related parties refer to:
(i)
(ii)
(iii)
(iv)
subsidiaries and associates of the Company and its subsidiaries;
directors and key management personnel having authority and responsibility for planning, directing and controlling activities of
the Company and their close family members;
enterprises owned by directors; and
enterprises that have a member of key management in common with the Company.
The directors are of the opinion that all the transactions above have been entered into in the normal course of business and have been
established on terms and conditions that are not materially different from those obtainable in transactions with unrelated parties.
Information regarding outstanding balances arising from related party transactions as at 31 December 2008 are disclosed in Note 21
and Note 29.
(b)
Compensation of key management personnel
Group
2008
RM’000
Directors:
- Fees
- Remuneration
Other key management personnel:
- Salaries and wages
- Contributions to defined contribution plan
2007
RM’000
Company
2008
RM’000
2007
RM’000
252
2,345
270
1,504
252
859
270
782
2,597
1,774
1,111
1,052
1,102
146
971
145
765
84
404
48
3,845
2,890
1,960
1,504
Other key management personnel comprises persons other than directors of the Group entities having authority and responsibility for
planning, directing and controlling the activities of the entity either directly or indirectly.
ANNUAL REPORT 2008
107
31 December 2008
32.
Related party disclosures (cont’d.)
(c)
Other related party transactions
The aggregate value of transactions and outstanding balances relating to key management personnel and entities over which they
have control or significant influence were as follows:
2008
2007
Transactions
amount for
year ended 31
December
RM’000
Net balance
outstanding
at
31 December
RM’000
Transactions
amount for
year ended 31
December
RM’000
Net balance
outstanding
at
31 December
RM’000
560
12
460
48
20,847
2,260
200
7,077
-
460
-
48
-
JEKS Engineering Pte. Ltd.
Sales of precast products
338
1,398
-
-
Kamilia & Co.
Legal fees
318
-
16
16
-
-
52
49
Bawamas Sdn. Bhd.
Rental of property
90
-
90
-
Maplevilla Sdn. Bhd.
Rental of property
24
-
24
-
SPS Mutiara Sdn. Bhd.
Project sub-contracting
9,914
3,083
-
-
Suria Sakura Sdn. Bhd.
Project sub-contracting
914
577
-
-
Fujitsu Limited
Maintenance and support services
Purchase of equipment and engineering services
1,085
-
-
1,120
163
38
Fujitsu Telecommunications Asia Sdn. Bhd.
Purchase of equipment and engineering services
2,851
2,561
1,834
1,501
-
-
8,694
2,202
Group
Cuscapi Malaysia Sdn. Bhd.
Rental and maintenance of Point of sales
Systems to A&W outlets
JEKS Engineering Sdn. Bhd.
Sales of precast products
Purchase of raw materials
Marketing fee
Zul Rafique & Partners
Legal fees
Sphairon (Malaysia) Sdn. Bhd.
Purchase of telecommunication equipment
108
KUB MALAYSIA BERHAD
32.
Related party disclosures (cont’d.)
(c)
Other related party transactions (cont’d.)
2008
2007
Transactions
amount for
year ended 31
December
RM’000
Net balance
outstanding
at
31 December
RM’000
Transactions
amount for
year ended 31
December
RM’000
Net balance
outstanding
at
31 December
RM’000
-
-
49
49
Company
Zul Rafique & Partners
Legal fees
33.
The terms and conditions for the above transactions are based on normal trade terms. All the amounts outstanding are unsecured
and expected to be settled with cash.
Financial instruments
(a)
Financial risk management objectives and policies
The Group’s financial risk management policy seeks to ensure that adequate financial resources are available for the development of
the Group’s businesses whilst managing its interest rate risks (both fair value and cash flow), foreign currency risk, liquidity risk and
credit risk. The Board reviews and agrees policies for managing each of these risks and they are summarised below. It is, and has
been throughout the period under review, the Group’s policy that no trading in derivative financial instruments shall be undertaken.
(b)
Interest rate risk
The Group’s primary interest rate risk relates to interest-bearing borrowings. Borrowings at floating rates expose the Group to cash
flow interest risk. Borrowings obtained at fixed rates expose the Group to fair value interest rate risk. The Group has no substantial
long-term interest-bearing financial assets as at 31 December 2008. The investments in other financial assets are mainly short term
in nature and they are not held for speculative purposes but have been mostly placed in fixed deposits which yield better returns than
cash at banks.
The Group manages its interest rate exposure by maintaining a prudent mix of fixed and floating rate borrowings. The Group actively
reviews its debt portfolio, taking into account the investment holding period and nature of its assets. This strategy allows it to
capitalise on cheaper funding in a low interest rate environment and achieve a certain level of protection against rate hikes.
(c)
Foreign currency risk
The Group and the Company are exposed to transactional currency risk primarily through sales and purchases that are denominated
in a currency other than the functional currency of the operations to which they relate. The currencies giving rise to this risk are
primarily United States Dollar, Singapore Dollar and Thailand Baht.
The Group and the Company do not hedge the exposures in foreign currencies as these transactions are funded by the operations
in the countries where they operate. However, the Board is of the opinion that the exposures are minimal and can be efficiently
managed.
(d)
Liquidity risk
The Group actively manages its debt maturity profile, operating cash flows and the availability of funding so as to ensure that all
refinancing, repayment and funding needs are met. As part of its overall prudent liquidity management, the Group maintains sufficient
levels of cash or cash convertible investments to meet its working capital requirements. In addition, the Group strives to maintain
available banking facilities of a reasonable level to its overall debt position. As far as possible, the Group raises committed funding
from both capital markets and financial institutions and prudently balances its portfolio with some short term funding so as to achieve
overall cost effectiveness.
ANNUAL REPORT 2008
109
31 December 2008
33.
(e)
Credit risk
The Group’s credit risk is primarily attributable to trade receivables. The Group trades only with recognised and creditworthy third
parties which are subject to credit verification procedures. Credit risk, or the risk of counterparties defaulting, is controlled by the
application of credit approvals, limits and monitoring procedures. Credit risks are minimised and monitored via strictly limiting the
Group’s associations to business partners with high creditworthiness. Trade receivables are monitored on an ongoing basis via Group
management reporting procedures.
The Group does not have any significant exposure to any individual customer or counterparty nor does it have any major concentration
of credit risk related to any financial instruments except for the concentration of credit risk arising from exposures to the Government
of Malaysia and Government Linked Corporations (“GLC”s) amounting to RM63,353,710 and RM16,487,484 respectively.
(f)
Interest rate risk
Cash flow interest rate risk is the risk that the future cash flows of a financial instrument will fluctuate because of changes in market
interest rates. Fair value interest rate risk is the risk that the value of a financial instrument will fluctuate due to changes in market
interest rates. As the Group has no significant interest-bearing financial assets, the Group’s income and operating cash flows are
substantially independent of changes in market interest rates. The Group’s interest-bearing financial assets are mainly short term in
nature and have been mostly placed in fixed deposits.
The Group’s interest rate risk arises primarily from interest-bearing borrowings. Borrowings at floating rates expose the Group to cash
flow interest rate risk. Borrowings obtained at fixed rates expose the Group to fair value interest rate risk. The Group manages its
interest rate exposure by maintaining a mix of fixed and floating rate borrowings.
The information on the weighted average effective interest rates (“WAEIR”) as at the balance sheet date and the remaining maturities
of the Group’s and the Company’s financial instruments that are exposed to interest rate risk is disclosed in the respective notes to
the financial instruments.
(g)
Fair values
The carrying amounts of financial assets and financial liabilities of the Group and of the Company at the balance sheet date
approximated their fair values, except for the following:
Group
Carrying
amount
RM’000
Fair Value
RM’000
Company
Carrying
amount
Fair Value
RM’000
RM’000
At 31 December 2008
Financial liability:
31,258
25,681
-
-
15,450
11,986
22,230
18,493
At 31 December 2007
Financial liability:
110
The carrying amounts of cash and cash equivalents, trade and other receivables, trade and other payables approximate their fair
values due to the relatively short term nature of these financial instruments.
It is not practicable to determine the fair value of the investment in unquoted shares due to the lack of comparable quoted market
price of the shares and the inability to estimate fair value without incurring excessive costs.
It is not practicable to determine the fair value of amounts due from/(to) holding, subsidiary, related and associated companies
principally due to a lack of fixed repayment term entered by the parties involved and without incurring excessive costs. However, the
Group and the Company do not anticipate the carrying amounts recorded at the balance sheet date to be significantly different from
the values that would eventually be received or settled.
The fair values of all other financial assets and liabilities of the Group and the Company as at 31 December 2007 and 2008 are not
materially different from their carrying values.
KUB MALAYSIA BERHAD
34.
Segment information
(a)
Business Segments
The Group operates mainly in Malaysia and is organised into the following main business segments:
(i)
Information and communication technology (“ICT”)
- Information technologies, telecommunication services and their related infrastructures
(ii)
Energy
- Bottling and trading of liquified petroleum gas
(iii)
Food Related
- Quick-service restaurants, hoteliers and oil palm plantation
(iv)
Properties, engineering and construction (“PEC”)
- Development, construction and management of residential and commercial properties, including engineering and civil works
in the power sector
(v)
Others
- Investment holding and trading of consumer products
The directors are of the opinion that all inter-segment transactions have been entered into in the normal course of business and
have been established on terms and conditions that are not materially different from those obtainable in transactions with unrelated
parties.
Changes in composition of business segments
During the year, based on the revised description of the business segments above:
(a)
KUB Agrotech Sdn. Bhd. and its subsidiaries have been reclassed from others to food related segment.
(b)
KUB Power Sdn. Bhd. has been reclassed from energy segment to PEC segment.
The comparative information on the business segments as at 31 December 2007 have been reclassed accordingly to conform with
the new description of the business segments above.
(b)
Geographical Segments
The Group’s business segments primarily operate in Malaysia except for its food related segments which are also operated in
Thailand and Singapore.
The following table provides an analysis of the Group’s revenue by geographical segment:
Malaysia
Thailand
Singapore
Group
2008
RM’000
2007
RM’000
877,461
15,047
-
894,488
15,592
-
892,508
910,080
ANNUAL REPORT 2008
111
31 December 2008
34.
Segment information (cont’d.)
(b)
Geographical Segments (cont’d.)
The following is an analysis of the carrying amount of segment assets and capital expenditure, analysed by the geographical
segments:
Segment assets
2008
2007
RM’000
RM’000
Malaysia
Thailand
Singapore
Capital expenditure
2008
2007
RM’000
RM’000
708,766
3,330
420
687,525
4,403
399
7,446
4,295
-
16,259
441
-
712,516
692,327
11,741
16,700
(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 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.
ICT
RM’000
Energy
RM’000
Food
RM’000
PEC
RM’000
Revenue
External sales
Inter-segment sales
257,721
31,388
382,202
-
98,696
24
153,395
475
494
11,992
(43,879)
892,508
-
Total revenue
289,109
382,202
98,720
153,870
12,486
(43,879)
892,508
Results
Profit/(loss) from operations
Finance costs
Share of profit of associates
Income tax expense
25,928
(3,602)
(7,337)
(12,480)
(241)
(267)
12,504
(2,049)
(297)
29,391
(3,474)
(1,677)
75,274
(961)
6,888
(15)
(81,902)
1,224
-
48,715
(9,103)
6,888
(9,593)
14,989
(12,988)
10,158
24,240
81,186
(80,678)
36,907
Segment assets
Investment in associates
163,374
-
99,101
-
98,454
-
190,194
-
136,240
25,153
-
687,363
25,153
Total assets
163,374
99,101
98,454
190,194
161,393
-
712,516
96,343
61,079
44,070
109,446
63,537
-
374,475
1,963
899
-
1,266
7,895
3
4,400
4,003
3,443
2,330
3,441
60
1,782
2,182
248
-
11,741
18,420
3,754
31 December 2008
Others Eliminations
RM’000
RM’000
Total
RM’000
Assets
Liabilities
Segment liabilities
Other information
Capital expenditure
Depreciation
Amortisation
112
KUB MALAYSIA BERHAD
34.
Segment information (cont’d.)
ICT
RM’000
Energy
RM’000
Food
RM’000
PEC
RM’000
Revenue
External sales
Inter-segment sales
379,736
260
323,773
-
94,903
-
94,827
502
16,841
488
(1,250)
910,080
-
Total revenue
379,996
323,773
94,903
95,329
17,329
(1,250)
910,080
Results
(Loss)/profit from operations
Finance costs
Share of profit of associates
Income tax expense
(29,481)
(3,127)
(776)
8,317
(316)
(1,007)
18,095
(2,448)
(4,701)
5,835
(1,431)
(317)
(37,528)
(2,743)
158
1,342
(38,976)
304
-
(73,738)
(9,761)
158
(5,459)
(Loss)/profit for the year
(33,384)
6,994
10,946
4,087
(38,771)
(38,672)
(88,800)
Assets
Segment assets
Investment in associates
85,008
1,225
135,059
-
279,721
-
72,664
-
92,557
26,093
-
665,009
27,318
Total assets
86,233
135,059
279,721
72,664
118,650
-
692,327
Liabilities
Segment liabilities
58,767
81,163
122,811
17,572
102,908
-
383,221
1,565
3,650
-
8,727
7,675
3
4,691
2,909
2,493
764
3,077
98
953
1,376
17
-
16,700
18,687
2,611
31 December 2007
Other information
Capital expenditure
Depreciation
Amortisation
35.
Others Eliminations
RM’000
RM’000
Total
RM’000
Significant events
(a)
On 11 January 2008, KUB Ekuiti Sdn. Bhd., a wholly-owned subsidiary of the Company, completed the disposal of 60% equity
interest comprising 7,200,000 ordinary shares of RM1.00 each in Tele Dynamics Sdn. Bhd. (“Tele-Dynamics”) to Voyage Frontier (M)
Sdn. Bhd. for a total cash consideration of RM17,050,000 and Tele Dynamics ceased to be subsidiary of the Group.
(b)
On 24 January 2008, the Company entered into a Share Sale Agreement with Encik Mohd Fadzli Ghazali (“Vendor”) to acquire
1,800,000 ordinary shares of RM1.00 each representing 60% equity interest in Empirical Systems (M) Sdn. Bhd. (“Empirical”), for a
total cash consideration of RM4,860,000.
The Vendor guarantees that the total profits before tax of Empirical for financial years ended 31 December 2008 and ending 31
December 2009 shall cumulatively not be less than RM4,000,000.
The acquisition was completed on 31 March 2008 and Empirical and its subsidiary, namely Credensoft Solutions Sdn. Bhd., became
subsidiaries of the Group.
On 1 July 2008, the Company further subscribed additional 1,000,000 new ordinary shares of RM1.00 each in Empirical for a total
cash consideration of RM1,000,000. Accordingly, the equity interest in Empirical has increased to 70%.
ANNUAL REPORT 2008
113
31 December 2008
35.
114
Significant events (cont’d.)
(c)
On 5 February 2008, the Company entered into a Share Sale Agreement (“SSA”) with Nuriza binti Ahmad Zaharan and Syadida
binti Ahmad Zaharan (“Vendors”) to acquire 1,080,000 ordinary shares of RM1.00 each representing 60% equity interest in Ibuzawa
Corporation Sdn. Bhd. (“Ibuzawa”) for a total cash consideration of RM22,000,000.
The Vendors guarantee to the Company that the audited consolidated profits after tax of Ibuzawa for the financial years ended 31
December 2008 and ending 31 December 2009 shall not be less than RM12,000,000. Simultaneously, upon the completion of the
SSA, the Vendor shall enter into a Shareholders’ Agreement with the Company upon the terms and conditions to be agreed between
the parties.
The acquisition was completed on 21 April 2008 and Ibuzawa and its group of companies namely Precast Products Sdn. Bhd. and
Binazawa Corporation Sdn. Bhd., became subsidiaries of the Group.
(d)
On 20 February 2008, the Company incorporated KUB Ibuzawa Sdn. Bhd. with issued and paid up capital of RM2.00 following the
Collaboration Agreement entered into by the Company with Ibuzawa Corporation Sdn. Bhd. on 3 September 2007. This company is
to be used as a vehicle to pursue various projects to be undertaken under the said Collaboration Agreement.
(e)
On 29 February 2008, A&W (Malaysia) Sdn. Bhd., a wholly-owned subsidiary of the Company, completed the Scheme of Arrangement
Under Section 176 of Companies Act, 1965 upon the full conversion or redemption of the Company’s Redeemable Convertible
Preference Shares - B held under the Scheme, as disclosed in Note 27(a).
(f)
On 31 March 2008, KUB Development Berhad, a wholly-owned subsidiary of the Company, completed the disposal of 70% equity
interest comprising 630,000 ordinary shares of RM1.00 each in Adil Perdana Sdn. Bhd. (“Adil Perdana”) and Adil Perdana ceased to
be a subsidiary of the Group.
(g)
On 28 March 2008, KUB Realty (PJ) Sdn. Bhd., a wholly-owned subsidiary of the Company, entered into a Sale and Purchase
Agreement with Park Residence Development Sdn. Bhd. to dispose the following property for a total consideration price of
RM86,500,000.
(i)
the parcels of shoplots/office space and accessory parcels measuring approximately 198,000 sq ft in net lettable area, located
on Level Ground, Level 1, and Levels 6-23 of the office tower known as Block D of Megan Phileo Avenue; and
(ii)
six (6) levels of car parking bays and ramps, measuring approximately 12,902 square metre in net lettable area, located on
Levels Ground to 5 of the office tower known as Block D and on parts of the Levels Ground to Level 5 of the office tower known
as Block C, of Megan Phileo Avenue.
The disposal was completed on 10 November 2008.
(h)
On 5 June 2008, Kubaki Pte. Ltd. (“Kubaki”), a company incorporated in Singapore and 60% owned by KUB Ekuiti Sdn. Bhd., which
in turn is a wholly-owned subsidiary of the Company, had been struck off from the Accounting and Corporate Regulatory Authority of
Singapore and Kubaki ceased to be a subsidiary of the Group during the current financial year.
(i)
On 31 October 2008, the Company completed the Capital Rationalisation upon the confirmation issued by the High Court of Malaya
which resulted in a credit balance of approximately RM645.202 million which have been utilised to eliminate the accumulated losses
of the Company as at 1 January 2008 and the par value of each ordinary shares of the Company was reduced from RM1.00 to
RM0.40.
(j)
On 14 November 2008, the Company disposed off four dormant subsidiary companies of the Company, namely Perdaris Development
Sdn. Bhd., KUB Sinar Sdn. Bhd., Radiant Orchards Sdn. Bhd. and KUB Sajilera Sdn. Bhd., to third parties at a consideration sum of
RM2.00 each.
(k)
On 22 April 2008, A&W Distribution Company Limited (“A&W Distribution”), a company incorporated in Thailand and is 95% owned
by A&W Restaurants (Thailand) Co. Ltd., which in turn a wholly-owned subsidiary of Restoran Kualiti Sdn. Bhd., which in turn a
wholly-owned subsidiary of the Company, had been struck off from the Bangkok Registration Office of Partnerships and Companies,
Department of Business Development, Ministry of Commerce, Thailand and A&W Distribution ceased to be a subsidiary of the Group
during the current financial year.
KUB MALAYSIA BERHAD
36.
Comparatives
(i)
In prior year, disposal group held for sale was wrongly classified as discontinued operations on the face of the income statement.
Accordingly, in the current year financial statements, the comparative amounts have been reclassified as continuing operations as
follows:
Group
Revenue
Cost of sales
Other income
Other expenses
Finance costs
Income tax expenses
Loss from disposal group held for sale
(ii)
As previously
stated
RM’000
Adjustments
RM’000
As restated
RM’000
585,537
(525,023)
21,970
(1,396)
(68,152)
(84,610)
(7,501)
158
(3,482)
324,543
(266,227)
14,728
(9,693)
(47,066)
(18,349)
(2,260)
(1,977)
910,080
(791,250)
36,698
(11,089)
(115,218)
(102,959)
(9,761)
158
(5,459)
(7,126)
7,126
-
The presentation and classification of items in the current year financial statements have been consistent with the previous financial
year except for the following comparative amounts which have been reclassified to conform with the current year’s presentation.
Group
- Non-current
- Current
Inventories
Company
Trade and other payables - current
Provision for liabilities
(iii)
As previously
stated
RM’000
Adjustments
RM’000
As restated
RM’000
4,715
191,099
17,233
(4,715)
4,490
225
195,589
17,458
As previously
stated
RM’000
Adjustments
RM’000
As restated
RM’000
50,488
-
(6,946)
6,946
43,542
6,946
The following comparatives have been reclassified as a result of prior period’s reclassification error, in respect of capitalisation of
bonus shares issued by certain subsidiaries.
Group
Reserves
Accumulated losses
(iv)
As previously
stated
RM’000
Adjustments
RM’000
As restated
RM’000
333,395
(598,648)
38,375
(38,375)
371,770
(637,023)
The comparative figures have been audited by a firm of chartered accountants other than Ernst & Young.
ANNUAL REPORT 2008
115
31 December 2008
37.
Country of
incorporation
Principal
activities
Equity interest
2008
2007
%
%
KUB Ekuiti Sdn. Bhd. @
Malaysia
Investment holding
100
100
Ibuzawa Corporation Sdn. Bhd. (i)
Malaysia
Property investment and general
contractor and trading
60
-
Empirical Systems (M) Sdn. Bhd.
Malaysia
70
-
Restoran Kualiti Sdn. Bhd.*
Malaysia
Information and communication
technology infrastructure and
consultation
Investment holding
100
100
Summit Petroleum (Malaysia) Sdn. Bhd.
Malaysia
Bottling and trading of liquefied
petroluem gas
100
100
KUB Prasarana Sdn. Bhd.* @
Malaysia
Dormant
100
100
Peraharta Sdn. Bhd.
Malaysia
Property management
100
100
Perbiba Sdn. Bhd.*
Malaysia
Dormant
100
100
Pernida Berhad *
Malaysia
Dormant
86
86
Peramining Sdn. Bhd.*
Malaysia
Investment trading
100
100
Utama Steel Works Sdn. Berhad* @
Malaysia
Dormant
51
51
Pelita Espipi Sendirian Berhad* @
Malaysia
Dormant
100
100
Gerik Timber Industries Sdn. Bhd.* @
Malaysia
Dormant
100
100
Perdaris Development Sdn. Bhd.*
Malaysia
Dormant
-
100
Perinding Plantations Sdn. Bhd.*
Malaysia
Dormant
100
100
Creative Communications & Events Sdn. Bhd.* @
Malaysia
Dormant
100
100
Academy of Knowledge for Accounting and Leadership
Sdn. Bhd.* @
Malaysia
Dormant
100
100
KUB Ibuzawa Sdn. Bhd.*
Malaysia
General contractor and trading
100
-
Bina Alam Bersatu Sdn. Bhd. @
Malaysia
Civil engineering works, building
works and housing development
55
55
KUB Agrotech Sdn. Bhd.
Malaysia
Plantation and estate
management
100
100
Name of subsidiary
Held by the Company:
Held through KUB Ekuiti Sdn. Bhd.:
116
KUB MALAYSIA BERHAD
37.
Equity interest
2008
2007
%
%
Country of
incorporation
Principal
activities
KUB Telekomunikasi Sdn. Bhd.
Malaysia
Assembling and commissioning
of telecommunication equipment
100
100
KUB Power Sdn. Bhd.
Malaysia
Constructions of power
substations
100
100
KUB Realty Sdn. Bhd.
Malaysia
Property management
100
100
Tele Dynamics Sdn. Bhd.*
Malaysia
Providing information
communications technology
systems, solutions and services
-
60
KUB Development Berhad* @
Malaysia
Dormant
100
100
ITTAR Sdn. Bhd.* @
Malaysia
Dormant
100
100
KUB Hotel and Resort Management Sdn. Bhd.* @
Malaysia
Dormant
100
100
KUB Teknologi Sdn. Bhd.* @
Malaysia
Dormant
100
100
KUB-Tis Controls Sdn. Bhd.*
Malaysia
Dormant
100
100
KUBAKI Pte. Ltd.*
Singapore
Dormant
-
60
Affluent Vision Sdn. Bhd.*
Malaysia
Dormant
100
100
KUB Drilling Sdn. Bhd.*
Malaysia
Dormant
100
100
KUB Gas Sdn. Bhd.* @
Malaysia
Dormant
100
100
KUB Microelectronics Sdn. Bhd.* @
Malaysia
Dormant
78.5
78.5
KUB Sistem Sdn. Bhd.*
Malaysia
Dormant
100
100
Maga Textile (M) Sdn. Bhd.* @
Malaysia
Dormant
100
100
Pembinaan Efektif (M) Sdn. Bhd.*
Malaysia
Dormant
60
60
Perumahan KUB Sdn. Bhd.*
Malaysia
Dormant
100
100
Verein Sdn. Bhd.*
Malaysia
Dormant
100
100
Villa-Annexe Sdn. Bhd.*
Malaysia
Dormant
100
100
A&W (Singapore) Pte. Ltd.* x
Singapore
Dormant
100
100
Name of subsidiary
Held through KUB Ekuiti Sdn. Bhd. (cont’d.):
ANNUAL REPORT 2008
117
31 December 2008
37.
Equity interest
2008
2007
%
%
Country of
incorporation
Principal
activities
Precast Products Sdn. Bhd. (i)
Malaysia
Manufacturing and trading of
precasted concrete slabs and
concrete elements
70
-
Binazawa Corporation Sdn. Bhd. (i)
Malaysia
Dormant
70
-
Malaysia
Telco engineering works and
dealer of software products,
information technology advisers
and general trading
70
-
Apsley Sdn. Bhd.
Malaysia
Dormant
100
100
Bina Alam Management Sdn. Bhd.*
Malaysia
Dormant
100
100
Cocoa Valley Sdn. Bhd.
Malaysia
Property development
70
70
Bina Alam Bersatu Development Sdn. Bhd.
Malaysia
Dormant
100
100
Bina Alam - KMK Development Sdn. Bhd.
Malaysia
Dormant
100
100
Malaysia
Dormant
80
80
KUB Sepadu Sdn. Bhd.
Malaysia
Plantation and estate
60
60
Radiant Orchards Sdn. Bhd.*
Malaysia
Dormant
-
100
Cybertrek (Malaysia) Sdn. Bhd.* @
Malaysia
Dormant
100
100
KUB-Fujitsu Telecommunications (Malaysia) Sdn. Bhd.
Malaysia
Assembling and installation of
telecommunication equipment
70
70
KUB Research Sdn. Bhd.* @
Malaysia
Dormant
100
100
ITTAR-IPP (PJ) Sdn. Bhd.
Malaysia
Hospitality education and
training
100
100
ITTAR-ILP (Prai) Sdn. Bhd.* @
Malaysia
Dormant
100
100
Name of subsidiary
Held through Ibuzawa Corporation Sdn. Bhd.:
Held through Empirical Systems (M) Sdn. Bhd.:
Credensoft Solutions Sdn. Bhd.
Held through Bina Alam Bersatu Sdn. Bhd.:
Held through Apsley Sdn. Bhd.:
Lembayung Sukma Sdn. Bhd.
Held through KUB Agrotech Sdn. Bhd.:
Held through KUB Telekomunikasi Sdn. Bhd.:
Held through ITTAR Sdn. Bhd.:
118
KUB MALAYSIA BERHAD
37.
Country of
incorporation
Principal
activities
Equity interest
2008
2007
%
%
KUB Realty (PJ) Sdn. Bhd.
Malaysia
Property management
100
100
KUB Sinar Sdn. Bhd.*
Malaysia
Dormant
-
100
Tele Dynamics Atec. Sdn. Bhd.*
Malaysia
-
100
Tele Dynamics Global Com Sdn. Bhd.*
Malaysia
-
100
Tele Portable System Sdn. Bhd.*
Malaysia
Rental of information
communication
-
100
Tele Dynamics Solutions Sdn. Bhd.*
Malaysia
Provision software research,
development, solutions and
services
-
60
Adil Perdana Sdn. Bhd.*
Malaysia
Dormant
-
70
Kesina Development Sdn. Bhd.* @
Malaysia
Property development and
project management
100
100
KUB-Astana Development Sdn. Bhd.* @
Malaysia
Dormant
51
51
KUB Singgahsana (PJ) Sdn. Bhd. @
Malaysia
Hotel management
100
100
KUB Sajilera Sdn. Bhd.*
Malaysia
Dormant
-
100
KUB Singgahsana (Langkawi) Sdn. Bhd.*
Malaysia
Dormant
100
100
Malaysia
Dormant
100
100
Malaysia
Operating a chain of restaurants
100
100
Name of subsidiary
Held through KUB Realty Sdn. Bhd.:
Held through Tele Dynamics Sdn. Bhd.:
Held through KUB Development Berhad:
Held through KUB Hotel and Resort Management
Sdn. Bhd.:
Held through KUB Microelectronics Sdn. Bhd.:
KUB Microelectronics Sales and Services Sdn. Bhd.* @
Held through Restoran Kualiti Sdn. Bhd.:
A&W (Malaysia) Sdn. Bhd. @
ANNUAL REPORT 2008
119
31 December 2008
37.
Equity interest
2008
2007
%
%
Country of
incorporation
Principal
activities
Thailand
Food and beverage catering
through retail outlets
100
100
A&W Properties Sdn Bhd.*
Malaysia
Dormant
100
100
Prosperous Avenue Sdn. Bhd.* @
Malaysia
Dormant
100
100
Dysec (M) Sdn. Bhd.* @
Malaysia
Dormant
60
60
Limpahan Laksana Sdn. Bhd.* @
Malaysia
Dormant
60
60
Pleasant Harmony Sdn. Bhd.* @
Malaysia
Dormant
60
60
Syarikat Ayam Mutiara Sdn. Bhd.*
Malaysia
Dormant
55
55
Singapore
Dormant
100
100
Thailand
Dormant
-
95
Name of subsidiary
Held through Restoran Kualiti Sdn. Bhd. (cont'd.):
A&W Restaurants (Thailand) Co. Ltd. ^
Held through A&W (Malaysia) Sdn. Bhd.:
Held through A&W (Singapore) Pte. Ltd.:
Harbour Place Development Pte. Ltd.* x
Held through A&W (Thailand) Co. Ltd.:
A&W Distribution Company Limited*
120
*
^
x
@
Audited by firms other than Ernst & Young
Audited by a member firm of Ernst & Young Global
In the process of being deregistered
The auditors’ report on the financial statements includes emphasis of matter on the uncertainty over the ability to continue on. The
financial statements have been prepared on going concern basis as the directors of these companies believe that there would be
continued financial support from the Company. Where necessary, appropriate adjustments have been made to the carrying value of
investments at Company level and to the carrying value of assets at Group level.
(i)
These entities, which form Ibuzawa Corporation Sdn Bhd group, were acquired on 21 April 2008 as disclosed in Notes 16(a)(ii) and
35(c). The audited statutory consolidated financial statements of Ibuzawa Corporation Sdn Bhd are currently not available pending
the signing of these financial statements for the year ended 31 March 2008. The KUB Malaysia Berhad Group has prepared the
consolidated financial statements for the current financial year based on these entities’ management accounts for the period ended
31 December 2008, and has provided the information and explanations to the holding company’s auditors for their purpose of opining
on the consolidated financial statements.
KUB MALAYSIA BERHAD
38.
Associates
Details of associates are as follows:-
Country of
incorporation
Principal
activities
Equity interest
2008
2007
%
%
KUB-Berjaya Enviro Sdn. Bhd.
Malaysia
Sanitary waste management
40.0
40.0
Mambang Di-Awan Sdn Bhd.
Malaysia
Dormant
37.5
37.5
Polyolefins Pipe Berhad
Malaysia
Manufacturing, marketing and
installation of polyethylene and
polypropylene pipes
30.0
30.0
Rimba Raya Sdn. Bhd.
Malaysia
Dormant
20.0
20.0
Progas Holding Limited
Pakistan
Investment holding
38.2
38.2
Malaysia
Manufacturing and distribution of
wireless local loop system
49.0
49.0
Malaysia
Dormant
50.0
50.0
Malaysia
Dormant
40.0
40.0
Success United Corporation Sdn. Bhd.
Malaysia
Dormant
40.0
40.0
Relk Food Services Sdn. Bhd.
Malaysia
Fast food business
49.0
49.0
Matrix Consolidated Sdn Bhd.
Malaysia
Fast food business
20.7
20.7
Malaysia
Dormant
40.0
40.0
Malaysia
Dormant
41.0
41.0
Name of associate
Held by the Company:
Held through KUB Telekomunikasi Sdn. Bhd.:
Sphairon (Malaysia) Sdn. Bhd.
Held through Apsley Sdn. Bhd.:
Lambaian Indah Sdn. Bhd
Held through Lembayung Sukma Sdn. Bhd:
Lembayung Greens Sdn. Bhd.
Held through A&W (Malaysia) Sdn. Bhd.:
Held through Villa-Annexe Sdn. Bhd.:Pembinaan Efektif (M) Sdn. Bhd.
Held through KUB Ekuiti Sdn. Bhd.:
Editry Sdn. Bhd.
ANNUAL REPORT 2008
121
LIST OF PROPERTIES
LOCATION/ADDRESS
TENURE
NET BOOK
VALUE AS
AT 31/12/08
(RM’000)
AGE OF
BUILDING
(YEARS)
DESCRIPTION USAGE
AREA
Lot 10026 & 10027,
Mukim of Bruas,
District of Manjung, Perak
Oil Palm
Plantation
Agricultural
853.9 and 305.7 Leasehold
acres respectively (50 years expiring
2021)
1,297
-
HS (D) 170719, PT No. 9,
Town of Petaling Jaya,
District of Petaling, Selangor
Retail Lot
Commercial
4,623.1
sq. meter
Leasehold
(60 years
expiring 2026)
4,523
4
PT No. 51, Seksyen 16
Town and District of Kota Bharu,
Kelantan
Shoplot Malay
Reserve
Commercial
9,845
sq. feet
Leasehold
(66 years
expiring 2061)
1,467
18
PT No. TLO 184,
Town of Mersing, Johor
Shoplot Malay
Reserve
Commercial
1,470
sq. feet
Leasehold
(99 years
expiring 2088)
240
13
Lot 1402 & 1440,
District of Padang Matsirat,
District of Langkawi, Kedah
Hotel &
Hostel
Commercial
154,667
sq. feet
Freehold
6,285
14
Lot 221, Block No. 7, Oya Dalat Land Oil Palm
District, Sarawak
Plantation
Agricultural
1.053
hectares
Leasehold
(60 years
expiring 2024)
67
-
Lot 252, Block No 7, Oya Dalat Land Oil Palm
District, Sarawak
Plantation
Agricultural
1.4007
hectares
Leasehold
(60 years
expiring 2024)
71
-
District, Sarawak
Plantation
Agricultural
1.1787
hectares
Leasehold
(60 years
expiring 2030)
57
-
Lot 642, Block No. 363, Oya Dalat
Land District, Sarawak
Oil Palm
Plantation
Agricultural
2,431.60
hectares
Leasehold
(60 years
expiring 2050)
5,433
-
Lot 135, Block No. 48, Oya Dalat
Land District, Sarawak
Oil Palm
Plantation
Agricultural
1,101.10
hectares
Leasehold
(60 years
expiring 2050)
1,500
-
District, Sarawak
Plantation
Agricultural
1,139.80
hectares
Leasehold
(60 years
expiring 2052)
1,333
-
PTD No. 3545, Mukim of Paloh, PTD Oil Palm
No. 3796, Mukim of Kahang, Kluang Plantation
District, Johor
Agricultural
956.3
hectares
Leasehold
(99 years
expiring 2086)
1,758
-
PT No. 4901, Mukim of Kahang,
PT No. 26005 & 26006,
Kluang District, Johor
Oil Palm
Plantation
Agricultural
1,700
hectares
Leasehold
(99 years
expiring 2093)
4,768
-
Vacant
Agricultural
Land
Agricultural
46.82
hectares
Freehold
4,388
-
KUB MALAYSIA BERHAD
KUB REALTY SDN BHD
KUB SEPADU SDN BHD
KUB AGROTECH SDN BHD
KUB DEVELOPMENT BERHAD
PT 515, PT 518, PT 524,
PT 520 – PT 523,
PT 528 – PT 543 and
PT 546 – PT 555, Bukit Mawat,
District of Ulu Melaka, District of
Langkawi, Kedah
122
KUB MALAYSIA BERHAD
LOCATION/ADDRESS
NET BOOK
VALUE AS
AT 31/12/08
(RM’000)
AGE OF
BUILDING
(YEARS)
DESCRIPTION USAGE
AREA
TENURE
Lot No. 2198-2199 & 3578- 3581,
District of Tawar, District of Baling,
Kedah
Vacant
Development
Land
Agricultural
144.8 acres
Freehold
4,500
-
PT No. 606,
District of Serting Ulu, District of
Jempol, Negeri Sembilan
Vacant
Industrial
Land
Industrial
16.82 acres
Leasehold
(99 years
expiring 2083)
796
-
No. 4, Jalan Kasih 5,
Taman Kasih, Batu 11,
Cheras, Selangor
Double
Residential
Storey Semi
Detached House
296 sq. meter
Freehold
231
5
PT 27660, Jalan Kasih 5,
Taman Kasih, Batu 11,
Cheras, Selangor
Bungalow
Lot
Residential
625 sq. meter
Freehold
99
-
PM5179 Lot 12202
District of Chukai, District of
Kemaman, Terengganu
Vacant Land
Commercial
56,037 sq. feet
Leasehold
(60 years
expiring 2053)
184
-
Lot No 1897
Township of Johor Bahru
District of Johor Bahru, Johor
Vacant Land
Commercial
13,966 sq. feet
Freehold
473
-
Retail Lot
Commercial
4,605 sq. feet
Leasehold
(99 years
expiring 2088)
1,862
9
Industrial &
Commercial
75,804 sq. feet
Freehold
7,241
9
KUB DEVELOPMENT BERHAD
A&W (MALAYSIA) SDN BHD
A&W PROPERTIES SDN BHD
Unit No. LG-07,
Amcorp Mall Trade Centre,
Jalan Timur, Petaling Jaya, Selangor
KUB TELEKOMUNIKASI SDN BHD
No. 1 Jalan Selukat 33/27,
Factory
Shah Alam Technology Park, Section Building &
33, 40400 Shah Alam, Selangor
3 Storey
Office Annex
PERAHARTA SDN BHD
Lot 4180N, Bangunan Sri Kinta,
Jalan Sultan Idris Shah,
Ipoh, Perak
4-storey Podium Commercial
Block and
9-storey
Tower Block
56,855
sq. feet
Grant in
perpetuity
8,942
25
Lot 534, 535, 539 & 541,
Wisma Gerik,
Jalan Sultan Iskandar,
Gerik, Perak
4 1/2–storey
Building
Commercial
2,050 sq. feet
Leasehold
(60 years
expiring 2035)
827
32
Lot 193003-193005,
No. 26, 28 & 30,
Persiaran Orkid 1, Taman Orkid,
Batu Gajah, Perak
3 Units of
double-storey
Shoplots
Commercial
& Residential
5,120 sq. feet
Leasehold
(99 years
expiring 2090)
342
16
Lot PT 122810-122813,
No. 24, 26, 28 & 30,
Laluan Rokan 15, Pekan Razaki,
Ipoh, Perak
4 Units of
double-storey
Shophouses
Commercial
& Residential
6,337 sq. feet
Leasehold
(99 years
expiring 2090)
479
16
Lot PT 10174 and PT 10175,
Industrial Estate Sri Manjung,
Sitiawan, Perak
Industrial
Vacant Land
Industrial
21,780
sq. feet.
Leasehold
59
-
ANNUAL REPORT 2008
123
LIST OF PROPERTIES (CONT’D)
LOCATION/ADDRESS
DESCRIPTION USAGE
AREA
TENURE
NET BOOK
VALUE AS
AT 31/12/08
(RM’000)
AGE OF
BUILDING
(YEARS)
SUMMIT PETROLEUM (M) SDN BHD
HS (D) 44395 (formerly PT
PTBM/A/146/69) Lot 91 Mukim 1,
Seberang Perai Tengah District,
Pulau Pinang
Land &
office
building
Industrial
3.35 acres
Leasehold
(99 years
expiring 2070)
1,560
19
Lot 941 & 942,
Seksyen 9W, Georgetown,
Pulau Pinang
Open-sided
structure
for storage
purposes
Industrial
15,926 sq. feet
Freehold
2,700
8
PTD 40053 District of Tebrau,
Johor Bahru, Johor
Office & Plant
Industrial
143,609 sq. feet Freehold
331
21
Vacant
land
Industrial
7.77 acres
Leasehold
(99 years
expiring 2097)
4,553
-
Leasehold
1,191 acres
(99 years
(1,178.3
acres agricultural expiring 2095)
status and 12.7
acres commercial
status)
2,500
14
KUB GAS SDN BHD
PT No. 64539,
Pulau Indah Industrial Park,
West Port, Port Klang, Selangor
BINA ALAM BERSATU SDN BHD
PT No. 1101-1121,
District of Belanja,
District of Kinta, Perak
Commercial
23 plots of
& Residential
development
land; 21
under agriculture
& 2 plots of
commercial land
PT No. 9139,
District of Setapak,
District of Gombak, Selangor
End terrace
shoplot
rectangular
in shape
with 3-storey
shopoffice
Commercial
1,920
sq. feet
Freehold
214
25
Lot 806,
District of Batu Berendam,
Melaka
Development
Commercial
354,246
sq. feet
Freehold
46
-
Lot 8713U,
Title No. H.S.(D) KA 30729
Ipoh, Kinta District, Perak
A parcel
of limited
commercial
(free standing
development
land)
Commercial
2,149
sq. metres
Leasehold
(99 years
expiring 2092)
175
-
Lot 30713, 30701,
30803, 30908
Taman Batu Permai,
Kuala Lumpur
4 apartments
Residential
266.36
sq. metres
Leasehold
(95 years
expiring 2086)
156
17
PT No. 0050357,
District of Batu Selangor,
Gombak, Selangor
Agricultural
Land
Agricultural
1.654 acres
Freehold
347
-
2-8-5, Menara Bukit Ceylon,
Jalan Ceylon, Kuala Lumpur
Condominium
Residential
1,410
sq. feet
Strata title
291
10
C-4-5, Kondo Idaman Putera,
7 Jalan 6/21D,
Medan Idaman, Kuala Lumpur
Condominium
Residential
120.10
sq. meters
Strata title
152
10
124
KUB MALAYSIA BERHAD
LOCATION/ADDRESS
NET BOOK
VALUE AS
AT 31/12/08
(RM’000)
AGE OF
BUILDING
(YEARS)
DESCRIPTION USAGE
AREA
TENURE
Factory
Industrial
71,095
sq. feet
Freehold
677
17
3 Storey
Shoplot
Building
148.64
sq. meter
Leasehold
(60 years
expiring 2029)
177
39
337 sq. meter
Freehold
151
5
MAGA TEXTILE (M) SDN BHD
Lot No. 876, 5773 & 5774,
District of 15,
Seberang Perai Tengah District,
Penang
PERNIDA BERHAD
PN 2801, Lot 315,
Bandar Kuala Kangsar,
District Kuala Kangsar,
Negeri Perak
KESINA DEVELOPMENT SDN BHD
Lot 1740,
Jalan KUB Cendana 5/57,
Taman KUB Cendana,
Kubang Kerian,
16150 Kota Bharu, Kelantan
Single
Residential
Storey Semi
Detached House
IBUZAWA CORPORATION SDN BHD
Level 3 Wisma Chinese Chamber
258 Jalan Ampang
50450 Kuala Lumpur
Office
space
Office
15,507 sq. feet
Freehold
4,513
15
Unit 6.14, 6th Floor Wisma Central
Jalan Ampang
50450 Kuala Lumpur
Office
space
Commercial
3,132 sq. feet
Freehold
560
17
Jalan Ampang
50450 Kuala Lumpur
Office
space
Commercial
3,358 sq. feet
Freehold
601
17
Jalan Ampang
50450 Kuala Lumpur
Office
space
Commercial
3,358 sq. feet
Freehold
601
17
Land and
Lot 6704/Lot 30002
Kawasan Perindustrian Tuanku Jaafar building
Mukim Rantau, Daerah Seremban
71400 Negeri Sembilan Darul Khusus
Industrial
44,632 square
metres
Grant in perpetuity
24,000
14
Land for
Lot 664, Mukim Ampangan
storage
Daerah Seremban
71400 Negeri Sembilan Darul Khusus purposes
Multi usage
20,870 square
metres
Grant in perpetuity
3,000
-
Commercial
143 sq.metres
Leasehold
(99 years
expiring 2102)
550
7
PRECAST PRODUCTS SDN BHD
EMPIRICAL SYSTEMS (M) SDN BHD
HS (D) 181336, PT932
Town of Shah Alam
District of Petaling
State of Selangor
2 storey
shop office
ANNUAL REPORT 2008
125
ANALYSIS OF SHAREHOLDINGS
as at 24 April 2009
Analysis by Size of Shareholdings as at 24 April 2009
Size of
Shareholdings
No of
Shareholders
% of
Shareholders
No of
Shares Held
% of
Shareholdings
7,044
11.23
310,641
0.06
100 - 1,000
28,886
46.04
19,475,745
3.50
1,001 - 10,000
23,552
37.53
69,877,083
12.56
3,042
4.85
89,616,518
16.10
219
0.35
86,873,233
15.61
2
0.00
290,311,470
52.17
62,745
100.00
556,464,690
100.00
Shareholdings
%
Less than 100
10,001 - 100,000
100,001 to less than 5%
5% and above
Total
List of Substantial Shareholders (5% and above) as at 24 April 2009
No
Names
1
Gaya Edisi Sdn Bhd
164,844,520
29.62
2
Minister of Finance
125,466,950
22.55
Direct
Shareholdings
%
40,000
0.01
List of Directors’ Shareholdings as at 24 April 2009
No
Names
1
2
-
-
3
-
-
4
3,000
0.00
5
Rosman Abdullah
-
-
6
-
-
7
-
-
8
Omar Haji Ahmad
-
-
126
KUB MALAYSIA BERHAD
List of Thirty (30) Largest Account Holders as at 24 April 2009
(Without aggregating the securities from different securities accounts belonging to the same depositor)
No
Names
Shareholdings
%
1
Gaya Edisi Sdn Bhd
164,844,520
29.62
2
Minister of Finance
125,466,950
22.55
3
Tasec Nominees (Tempatan) Sdn Bhd
A/C Puncak Kinta Sdn Bhd
10,000,000
1.80
4
Citigroup Nominees (Asing) Sdn Bhd
A/C DFA Emerging Markets Fund
5,214,000
0.94
5
Minister of Finance
5,099,537
0.92
6
CIMB Group Nominees (Tempatan) Sdn Bhd
A/C Pacific Dana Aman (3717 TR01)
3,155,500
0.57
7
Gan Lai Tian
2,180,900
0.39
8
Bank Pertanian Malaysia Berhad
2,030,000
0.36
9
RHB Capital Nominees (Tempatan) Sdn Bhd
A/C Noor Azman @ Noor Hizam B Mohd Nurdin (CEB)
2,030,000
0.36
10
CIMB Group Nominees (Tempatan) Sdn Bhd
A/C Perbadanan Kemajuan Negeri Perak (49999 KLMN)
2,000,000
0.36
11
A/C DFA Emerging Markets Small Cap Series
1,353,500
0.24
12
Hwang Yang Mee
1,220,000
0.22
13
A/C Dimensional Funds II PLC
1,035,300
0.19
14
HSBC Nominees (Asing) Sdn Bhd
A/C HSBC Private Bank (Suisse) S.A. (Spore TST ACCL)
1,000,000
0.18
15
Affin Nominees (Tempatan) Sdn Bhd
A/C Lai Sang Shion (Lai0468C)
1,000,000
0.18
16
Leok Mui Ling
1,000,000
0.18
17
Sor Ah Kee
800,000
0.14
18
Mayban Securities Nominees (Tempatan) Sdn Bhd
A/C Ong Yew Beng (REM 188)
800,000
0.14
ANNUAL REPORT 2008
127
ANALYSIS OF SHAREHOLDINGS (CONT’D)
as at 24 April 2009
List of Thirty (30) Largest Account Holders as at 24 April 2009 (cont’d.)
(Without aggregating the securities from different securities accounts belonging to the same depositor)
No
Names
Shareholdings
%
19
Many Plus Holdings Sdn Bhd
705,000
0.13
20
Chan Weng Sing
671,100
0.12
21
Chuah Ah Lam
650,000
0.12
22
Lim Khuan Eng
600,018
0.11
23
Rabisah Bt Saidin
600,000
0.11
24
Cartaban Nominees (Asing) Sdn Bhd
A/C Emerging Markets Value Fund (John Hnck FDSII)
592,900
0.11
25
A/C Dimensional Funds PLC
560,800
0.10
26
Cartaban Nominees (Asing) Sdn Bhd
A/C Emerging Markets Value Trust (John Hnck Trust)
534,400
0.10
27
Koh Hock Seng
516,000
0.09
28
United Overseas Nominees (Tempatan) Sdn Bhd
A/C Ho Hock Cheng (MJK)
501,000
0.09
29
A/C Emerging Market Core Equity Portfolio DFA Investment Dimensions Group Inc
500,900
0.09
30
Blue Ribbon International Limited
500,000
0.09
128
KUB MALAYSIA BERHAD
proxy form
Number of Shares Held
I/We of
(block letters)
NRIC
(full address)
being a member/members of KUB Malaysia Berhad (“Company”), hereby appoint Chairman of the Meeting* or
(block letters)
of
(full address)
and/or failing him (block letters)
of
(full address)
NRIC
NRIC
as my/our proxy(ies) to vote for me/us on my/our behalf at the 44th Annual General Meeting of the Company to be held on Thursday, 18 June 2009 at
10.00 a.m. or at any adjournment thereof.
*If you wish to appoint other person(s) as your proxy/proxies, kindly delete the words “Chairman of the Meeting” and insert name(s) of the desired
person(s).
My/our proxy(ies) is/are to vote as indicated by an “X” in the appropriate spaces below:
ORDINARY RESOLUTIONS
FOR
AGAINST
To receive the Audited Financial Statements for the ﬁnancial year ended 31 December 2008 together with the Reports of the
Directors and Auditors.
To approve a First and Final Gross Dividend of 2.4 sen per ordinary share less 25 per cent (25%) taxation for the financial year
ended 31 December 2008.
To re-elect Mohamed Ezzuddeen Mohd Effendi who retires pursuant to Article 95 (i) of the Company’s Articles of Association.
To re-elect Raja Ali Raja Othman who retires pursuant to Article 95 (i) of the Company’s Articles of Association.
To re-elect Omar Haji Ahmad who retires pursuant to Article 95 (i) of the Company’s Articles of Association.
To approve the Directors’ fees for the ﬁnancial year ended 31 December 2008.
To re-appoint Messrs Ernst & Young as Auditors of the Company.
To give authority to the Directors to issue shares under Section 132D of the Companies Act, 1965.
To approve the Proposed Purchase by the Company of its Own Shares of up to 10% of the Issued and Paid Up Share Capital
of the Company.
To give authority to the Company and/or its subsidiaries to enter into Recurrent Related Party Transactions of a Revenue and
/or Trading Nature.
The proportion of my/our holding to be represented by my/our proxy/proxies is as follows:
First proxy
Second proxy
Total
%
%
100%
In the case of vote by a show of hands, **First Proxy/Second Proxy shall vote on my/our behalf.
Dated this
day of
2009
Signature of Member/Common Seal/Attorney/Authorised Officer
** Strike out whichever is not desired. (Unless otherwise instructed, the proxy may vote as he/she thinks fit)
NOTES:
1. A member of the Company entitled to attend and vote at the abovementioned Meeting is entitled to appoint a maximum of two (2) proxies whether a member or
not as his/her proxy/proxies to attend and vote in his/her stead. Where a member appoints two proxies, the member shall specify the proportion of the member’s
shareholding to be represented by each proxy, failing which the appointment shall be invalid.
2. The instrument appointing a proxy shall be in writing under the hand of the appointer or his/her attorney duly authorized or if the appointer is a corporation, either
under its common seal or signed under the hand of its attorney or by an officer given the authority on behalf of the corporation.
3.The Proxy Forms must be deposited at the office of the Company’s Share Registrar, Symphony Share Registrars Sdn Bhd, Level 26, Menara Multi-Purpose,
Capital Square, No 8 Jalan Munshi Abdullah, 50100 Kuala Lumpur by hand or faxed to 03-27212530/31 not less than forty eight (48) hours before the time for
holding the Meeting or an adjournment thereof.
fold here
AFFIX
STAMP
KUB MALAYSIA BERHAD (6022-D)
c/o THE REGISTRAR
Symphony Share Registrars Sdn Bhd (378993-D)
Level 26, Menara Multi-Purpose
Capital Square
No 8 Jalan Munshi Abdullah
50100 Kuala Lumpur
fold here
www.kub.com
STRONGER
TOGETHER
KUB MALAYSIA BERHAD 6022-D
Level 8 Block D
Kompleks Kelana Centre Point
Jalan SS7/19 Kelana Jaya
47301 Petaling Jaya
Selangor Darul Ehsan
Malaysia
Tel: +60 3 7680 9666
Fax: +60 3 7680 9669

2008 - Insage

Transcription

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