Year ended 31 December

Transcription

HALIM MAZMIN BERHAD (330820-P)
ANNUAL REPORT 2006
Contents
Halim & Mazmin:
Seeds
of Success
The
3
Five-Year Financial Highlights
4
Group Corporate Structure
5
Corporate Information
6
Profile of Board of Directors
12
Senior Management
13
Chairman’s Statement
20
Network of Office And Main Ports Of Call
22
List of Vessels/Investment Property
23
Terms of Reference of The Audit Committee
26
Statement on Internal Control
28
Corporate Governance Statement
34
Directors’ Responsibility Statement
35
Directors’ Report And Financial Statements
88
Analysis of Shareholdings
91
Notice of Annual General Meeting and Notice
of Dividend Entitlement
customers.
95
Statement Accompanying Notice of Annual
General Meeting
Right on course, the path to progress of HMB
96
Appendix A
Halim Mazmin Berhad (“HMB”) traces its roots back
to 26 years ago when the dawn of the nation’s
offshore oil and gas industries opened opportunities
for local companies to engage in ship agency and
husbanding services.
Swiftly emerging as the country’s largest ship
agency for tankers of world’s oil majors calling at
local ports, soon the foundation for shipowning for
HMB was laid.
HMB, which started off as a joint endeavour
between Tan Sri Dato’ Seri Halim Mohammad,
and his wife, Puan Sri Datin Seri Mazmin Noordin,
is now a leading player in the Malaysian shipping
industry, offering excellent and quality service to its
received a further boost with its transfer to the
Main Board of Bursa Malaysia Securities Berhad
Proxy Form
(“Bursa Securities”) on 17 January 2002, signaling
its expanding role in the nation’s international trade.
1
ANNUAL REPORT 2006
mission
statement
To own, operate ships and engage
in shipping and related synergistic
activities consistent with our
aspiration to be a reputable,
profitable and a Company excelling
to international standards and
upholding universal values in
business practice
corporate
goals
s
To ensure financial sustainability and stability
in the performance of the Company.
s
To ensure good shareholders’ value and stable
returns on investment.
s
To constantly seek to enhance staff skill,
expertise, professionalism and motivation.
2
corporate
values
s
To uphold the principle that the needs and interests
of the clients always come first.
s
To maintain a strong tradition and culture of
excellence in our work by adopting standards and
services that are hallmarks of professionalism.
s
To adopt a strategic patnership approach with our
clients and business associates that rewards all in an
open, equitable and forthright manner.
s
To ensure sustainability of the Company by
constantly looking for opportunities and business
activities that are viable and synergistic with our core
competencies.
s
To promote good corporate citizenry and contribute
towards fulfillment of national objectives and
aspirations in the making of a maritime Malaysia.
ANNUAL REPORT 2006
Five-Year Financial Highlights
Year ended 31 December
2006
2005
(Restated)
2004
(Restated)
2003
(Restated)
2002
(Restated)
39,306,476
54,661,684
127,093,338
131,201,239
132,763,463
PROFIT BEFORE TAX (RM)
5,390,684
79,044,559
67,613,788
32,116,126
39,638,669
PROFIT FOR THE YEAR
5,379,077
48,338,494
65,467,366
28,582,306
33,044,953
PAID UP CAPITAL (RM)
159,000,000
160,675,360
160,675,360
69,927,000
68,690,000
SHAREHOLDERS’ EQUITY (RM)
284,591,829
310,472,931
285,892,216
189,437,750
156,867,713
2.00
15.00
23.00
41.00
48.00
RETURN ON EQUITY
1.9%
15.6%
22.9%
15.1%
21.1%
RETURN ON ASSETS
1.2%
11.5%
11.1%
5.1%
5.6%
NET ASSETS PER SHARE (RM)
0.91
0.97
0.93
2.85
2.48
DIVIDEND RATE
10%
12%
14%
7%
7%
15,681,011
18,905,389
22,494,550
5,664,743
4,810,190
REVENUE (RM)
ATTRIBUTABLE TO EQUITY
HOLDERS OF THE COMPANY (RM)
BASIC EARNINGS PER SHARE (SEN)
DIVIDEND PAYOUT (RM)
3
ANNUAL REPORT 2006
Group Corporate Structure
HALIM MAZMIN BERHAD
(330820-P)
Ship Management
100%
Prima
Shipmanagement
Sendirian Berhad
Ship-owning
100%
AHS Marine
Sdn. Bhd. (236935-D)
100%
Colorado Shipping
Sdn. Bhd. (617807-X)
Ship broking and
Ship chartering
100%
Prima Shipbrokers
Sdn. Bhd. (154466-H)
Dormant/Ceased
Operation
100%
Emerald Equity
Sdn. Bhd. (382912-K)
100%
Jubilee Shipping
Sdn. Bhd. (432623-H)
100%
Meridian Tankers
Sdn. Bhd. (205509-P)
100%
OHM Bulk Services
Sdn. Bhd. (137049-M)
100%
Patriot Shipping
Sdn. Bhd. (432630-K)
100%
Prima Delima
Sdn. Bhd. (369369-D)
100%
Splendid Shipping
Sdn. Bhd. (519789-M)
100%
Sterling Shipping
Sdn. Bhd. (519847-K)
100%
Meridian Shipping
Sdn. Bhd. (183163-W)
(228397-A)
100%
100%
Colville Shipping
Sdn. Bhd. (617813-U)
OHM Tankers
Sdn. Bhd. (205507-D)
Subsidiary
Associate
4
48.15% Kemaman Heavy
Industries Sdn. Bhd.
(386026-D)
ANNUAL REPORT 2006
Corporate Information
Board of Directors
Tan Sri Dato’ Seri Halim Bin Mohammad
Executive Chairman and Managing Director
Puan Sri Datin Seri Mazmin Binti Noordin
Executive Director
Dato’ Seri Sulaiman Bin Mohd Amin
Deputy Chairman
Independent Non-Executive Director
Senior Management
Mr. Panchacharam Ramasamy
Director, Business Development
Mr. Patrick Lim Keng Lee
Senior Independent Non-Executive Director
En. Hisham Bin Halim
Dato’ Edris @ Idris Bin Haji Wahed
Cik Mariana Binti Halim
Mr. Ee Beng Wat
Dato’ Abdul Kadir Bin Mohd Deen
Tuan Haji Mazlan Bin Nordin
Non-Independent Non-Executive Director
General (R) Dato’ Seri Mohd Azumi
Bin Mohamed
General Manager, Group Operations
General Manager, Corporate Affairs &
Business Development
Mr. Chung Kin Mun
General Manager, Finance
En. Othman Bin Samat
Assistant General Manager,
Chairman
Senior Manager, Shipping Operations
Senior Manager, Shipping Agency
Ms. Tan Chon Huey
Manager, Finance
Ms. Low Peck Chen
En. Abdul Rashid Bin Abu Bakar
Mr. Ee Beng Wat
Place and date of Incorporation and Domicile
Incorporated in Malaysia on 16 January 1995
Registrar
Mega Corporate Services Sdn. Bhd.
15-2, Faber Imperial Court
Jalan Sultan Ismail
50250 Kuala Lumpur
Tel No: 603-26924271
Fax No: 603-27325399
Captain Arshad Mahmood Bhatti
En. Che Khamsah Bin Che Othman
Audit Committee
Stock Exchange Listing
Main Board of Bursa Malaysia Securities Berhad
Transferred to Main Board on 17 January 2002
Listed on Second Board on 28 February 1996
Stock Code
: 7102
Stock Name
: Halim
Sector
: Trading/Services
Registered Office
49, The Boulevard
Mid Valley City
Lingkaran Syed Putra
59200 Kuala Lumpur
Tel No: 603-27305000
Fax No: 603-27305050
Website: www.halimazmin.com
Manager, Finance
Assistant Manager,
Special Events & Functions
Auditors
Ong & Wong
Chartered Accountants
Solicitors
Messrs Joseph & Partners
Company Secretaries
Ms. Coral Hong Kim Heong
Ms. Lim Seck Wah
Principal Bankers
Affin Bank Berhad
CIMB Bank Berhad
Malayan Banking Berhad
Public Bank Berhad
5
ANNUAL REPORT 2006
Profile of Board of Directors
In 2003, he was made a Fellow of Malay Chamber
of Commerce, City of Kuala Lumpur and received
the award from His Majesty the Yang Di-Pertuan
Agong.
In 2003, he was appointed to head the Maritime
Committee of the Malaysian Industry-Government
Group for High Technology (MIGHT). He also
has been appointed as Chairman of the Malaysia
External Trade Development Corporation
(MATRADE) and sits as a Board Member of the
Universiti Teknologi Malaysia.
In 2004, he was appointed as Chairman of the
Technical Resource Group Logistics to draw up the
Industrial Master Plan 3 (2006 - 2020). In 2007,
he was appointed as Board member of Malaysian
Logistics Council.
Tan Sri Dato’ Seri Halim Bin Mohammad, a
Malaysian, aged 56, is the Founding Director of
the companies in Halim Mazmin Berhad (“HMB”)
Group. After completing his GCE “O” level in
1968, he pursued a sea-going career as a Cadet
Navigating Officer with MISC Berhad and served
as a Deck Officer on several types of ships.
In 1975, he joined Harisson & Crossfield and later,
in 1978, left for Esso Production where he served
on board a storage tanker, off Terengganu shore.
In 1982 he left Esso to pursue his own business.
His success in forging the growth of HMB as
an important player in the national maritime
industry saw him being appointed, in 1994, by
the Honorable Minister of Transport, as a Board
Member of the Port of Kemaman, Terengganu.
In the international arena, he was acknowledged
for his experience and vast knowledge when he
was elected by the Paris-based Bureau Veritas
– one of the largest international ship classification
societies – as a member of its Sub-Committee for
Asia-Australia. He also sits as a Board Member of
the UK-based North of England P&I Club.
In 2001, he was elected as a Fellow of the
Chartered Institute of Logistics & Transport (UK).
6
For his services to the nation and contributions to
the industry, he was, in 1995, conferred the Darjah
Kebesaran Dato’ Paduka Mahkota Terengganu
(D.P.M.T) by DYMM Sultan of Terengganu and
later, in 1999, he was conferred the Darjah
Kebesaran Mahkota Selangor (D.P.M.S) by DYMM
Sultan of Selangor. These two awards carry the
title of “Dato”.
In 2000, His Majesty the Yang Di-Pertuan Agong
(the King of Malaysia) conferred on him the Darjah
Kebesaran Panglima Setia Mahkota (P.S.M.) which
carries the title of “Tan Sri”. In July 2005, he was
conferred the Darjah Seri Setia Sultan Mizan Zainal
Abidin by DYMM Sultan of Terengganu, which
carries the title of “Dato’ Seri”.
In April 2005, he was commissioned as a Honorary
Captain of RMNRV of Royal Malaysian Navy. In
August 2005, University of Malaya conferred him
a Honorary Degree of Doctor of Business honoris
causa (HonsDBus). He is also an Adjunct Professor
at the same University.
He is currently the Executive Chairman and
Managing Director of HMB. He holds directorships
in various subsidiaries of HMB and other private
companies. He is also a member of the Audit
Committee of HMB.
YBhg. Tan Sri Dato’ Seri Halim Bin Mohammad is
related to two (2) of the Directors of HMB, namely
YBhg. Puan Sri Datin Seri Mazmin Binti Noordin
(his spouse) who serves as Executive Director of
HMB and Tuan Haji Mazlan Bin Nordin (his brotherin-law) who serves as HMB’s Non-Independent/
Non-Executive Director.
ANNUAL REPORT 2006
Executive Director
Puan Sri Datin Seri Mazmin Binti Noordin, a
Malaysian, aged 56. She is also the Founding
Director of the companies in Halim Mazmin
Berhad (“HMB”) Group. She completed her
early education at Sekolah Menengah Convent,
Klang, Selangor.
Upon completion of her secondary education
in 1970, she left for New Zealand to pursue a
course in Business Studies at Auckland Technical
Institute.
In 1973, she returned home to join Boustead
Shipping Agencies Sdn Bhd (“Boustead”) at
their Port Klang Branch.
She left Boustead in 1982 to team up with her
husband, Tan Sri Dato’ Seri Halim Bin Mohammad,
to set up their own business. Puan Sri Datin Seri
Mazmin is actively involved in management and
is a director of most of the companies in HMB
Group. She also sits on the Board of several other
private companies.
YBhg. Puan Sri Datin Seri Mazmin Binti Noordin is
related to two (2) of the Directors of HMB, YBhg.
Tan Sri Dato’ Seri Halim Bin Mohammad (her
spouse) who serves as HMB’s Executive Chairman
and Managing Director and Tuan Haji Mazlan Bin
Nordin (her brother) who serves as HMB's Nonindependent/Non-executive Director.
7
ANNUAL REPORT 2006
Dato’ Seri Sulaiman Bin Mohd Amin
Deputy Chairman
Dato’ Seri Sulaiman Bin Mohd Amin, a Malaysian, aged 77,
was appointed to the Board on 26 February 1999. He began
his career in the civil service and held several appointments in
the public sector since 1950 before being promoted into the
Administrative and Diplomatic Service, then known as Malayan
Civil Service (MCS), and held various positions in the Malaysian
Government Services.
In the late quarter of 1969 after the May 13 incident, he
was picked to head the Ministry of Youth, Culture and Sports
as its permanent Secretary. In late 1970, he was appointed
as the first head of the Department of Public Complaints
Bureau in the Prime Minister’s Department. In late 1972, he
was seconded to Keretapi Tanah Melayu where he served as
its Deputy General Manager for two (2) years. He was then
appointed as Deputy Secretary General of the Ministry of
Energy, Science & Technology, and subsequently in the same
capacity in the Ministry of Public Works & Utilities. After that
he was promoted as Secretary General to the Ministry of
Culture, Youth and Sports for the second times from 1977.
He was made the State Secretary of Selangor in 1981 and upon
his retirement in early 1984, he was invited by Permodalan
Nasional Berhad (“PNB”) to serve as its nominee on the Board
of several companies owned by PNB.
He is presently the Chairman of Berjaya Capital Berhad, a public
company listed on the Main Board of Bursa Malaysia Securities
Berhad. He also holds directorships in various subsidiaries of the
Berjaya Group of Companies and other private companies.
YBhg. Dato’ Seri Sulaiman does not have any family relationship
with any other Directors and/or a major shareholder of the
Company and has no conflict of interest with the Company.
8
Mr. Patrick Lim Keng Lee, a Malaysian, aged 54, was appointed
to the Board on 20 November 1995. He was appointed as
the Senior Independent Non-Executive Director of HMB on 19
November 2003. He received his education from St. Xavier’s
Institution, Penang.
He was formerly the Managing Director of P&O Nedlloyd for
Malaysia and Brunei from 1991 till 2006. He has over 33
years container shipping experience and has held various senior
management positions.
Mr. Lim is a Fellow of the Chartered Institute of Logistics
& Transport, London as well as a Fellow of the Institute of
Chartered Shipbrokers, London and holds a Masters of Business
Administration from Heriot-Watt University, United Kingdom.
Mr. Lim is a member of the Audit Committee of HMB.
Mr. Lim does not have any family relationship with any other
Directors and/or major shareholder of the Company and has
no conflict of interest with the Company.
ANNUAL REPORT 2006
Non Independent Non-Executive Director
Dato’ Edris @ Idris Bin Haji Wahed, a Malaysian, aged 65, was
appointed to the Board on 22 May 1997. He obtained his
Diploma in Police Science from University Kebangsaan Malaysia
and the p.s.c. of Maktab Turus Angkatan Tentera Malaysia.
Tuan Haji Mazlan Bin Nordin, a Malaysian, aged
54, was appointed to the Board on 20 November
1995. He completed his education at Anderson
School in Ipoh in 1972 after obtaining Higher
School Certificate. He then joined Din’s Trading
Sendirian Berhad (“DTSB”), a forwarding, trading,
warehousing company, as a Manager in its Freight
Forwarding Division. In 1980, he was promoted
to the position of General Manager in the same
division and was given the task of developing the
company’s trucking and heavylift division.
He has had a long tenure of service with the Royal Malaysian
Police where among others, has served as the Chief of IGP’s
Secretariat, Assistant Director of Management and the Chief
Police of Terengganu Darul Iman. He was conferred with
Federal and States awards and among others, the Darjah Sultan
Mahmud Terengganu, Darjah Indera Mahkota Pahang, Darjah
Kepahlawan Pasukan Polis, Johan Setia Mangku Negara and
Ahli Mangku Negara. YBhg. Dato’ Edris is also the Chairman
of the Audit Committee of HMB.
YBhg. Dato’ Edris does not have any family relationship with
any other Directors and/or a major shareholder of the Company
and has no conflict of interest with the Company.
In 1983, he left DTSB to further his studies and
obtained a Certificate in Business Administration
from Arizona International Business Institute in
the United States of America. Upon his return, he
rejoined DTSB as Managing Director and held the
responsibility to oversee the warehousing, freight
forwarding and trucking divisions. In this position,
he was responsible to the Board on contract
management and supervision of international
freight forwarding for various projects to clients
within Malaysia and the Asean region. Currently,
he is still attached to DTSB as Managing Director
and has served the company for 32 years since
1973.
Tuan Haji Mazlan is related to two (2) of the
Directors of Halim Mazmin Berhad (“HMB”),
Puan Sri Datin Seri Mazmin Binti Noordin (his
sister) who serves as HMB’s Executive Director
and Tan Sri Dato’ Seri Halim Bin Mohammad (his
brother-in-law) who is the Executive Chairman and
Managing Director of HMB.
9
ANNUAL REPORT 2006
Mr. Ee Beng Wat
Mr. Ee Beng Wat, a Malaysian, aged 58, was
appointed to the Board on 21 January 2002 and is a
member of the Audit Committee of Halim Mazmin
Berhad (“HMB”).
Dato’ Abdul Kadir Bin Mohd Deen, a Malaysian, aged 63, was
appointed to the Board on 20 August 2004. He holds B.A.
(HONS) from University of Lancaster, United Kingdom.
He is a fellow of the Institute of Chartered Accountants
in England and Wales (ICAEW) and is also a member
of the Malaysian Institute of Accountants (MIA). He
holds a Dealer’s Representative License under the
Securities Industry Act 1983.
He began his career as Group Internal Auditor with
Harper Gilfillan (M) Bhd from 1977 to 1980. In
1980, he joined Malaysia Container Bhd as Chief
Financial Officer cum Company Secretary and left
in 1981. He was appointed a Partner in K.K. San
& Liew from 1982 to 1984. He left the partnership
and joined Rashid Hussain Securities Sdn Bhd as
General Manager from 1985 to 1988. Subsequently
in 1989 he was appointed Company Secretary and
Senior Vice President for Corporate Affairs in Rashid
Hussain Berhad. In 1991, he joined Botly Securities
Sdn. Bhd. as General Manger and was later promoted
as Chief Executive Officer and Executive Director until
his retirement in 2004.
He is currently with TA Securities Holdings Bhd (Ipoh
Branch) as President of Dealings. Mr. Ee does not
have any family relationship with any other Directors,
and/or a major shareholder of the Company and has
no conflict of interest with the Company.
10
He had held various positions at Ministry of Foreign Affairs,
Malaysia for 34 years, among others were Assistant Secretary;
Principal Assistant Secretary (SEA I); and, Under Secretary (East
and South Asia). YBhg. Dato’ Abdul Kadir had also served at
the Embassy of Malaysia in Manila, Kuwait, the United Nation
in New York, Beijing and Tokyo. In 1992, he was appointed
High Commissioner of Malaysia to Sri Lanka and Maldives; and
was later transferred as High Commissioner to South Africa
in 1997. In 1999, he was appointed Ambassador of Malaysia
to the Federal Republic of Germany; concurrently accredited
to Switzerland and Greece. He is presently the Chairman of
MMC Metrail Sdn. Bhd.
In 1997, YBhg. Dato’ Abdul Kadir was conferred the Darjah
Dato’ Paduka Mahkota Perak (DPMP) and Kesatria Mangku
Negara (KMN).
YBhg. Dato’ Abdul Kadir does not have any family relationship
with any other Directors and/or a major shareholder of the
Company and has no conflict of interest with the Company.
ANNUAL REPORT 2006
General (R) Dato’ Seri Mohd Azumi Bin Mohamed
General (R) Dato’ Seri Mohd Azumi Bin Mohamed, a Malaysian,
aged 59, was appointed to the Board on 18 April 2007. He
received his early military training at the Officer Cadet School
Portsea Australia and the United States Army Infantry School.
He attended the Joint Services Staff College Australia and the
National Defense University Washington DC graduating with
a Master of Science in Natural Resources and Strategy and a
Graduate Diploma in Strategy to prepare himself for Higher
Command.
General (R) Dato’ Seri Mohd Azumi Bin Mohamed is presently
an Independent Non-Executive Director, Member of the Audit
Committee and Remuneration Committee of both Atlan
Holdings Berhad and RC Group (Holdings) Limited (a company
incorporated in Hong Kong and listed on the Alternative
Investment Market (AIM) of London Stock Exchange); a director
in Idris Hydraulic (Malaysia) Berhad; he also sits on the Board
of Advisor of Natural Resources Indonesia, a company that
specializes in promoting investments in Indonesia.
General (R) Dato’ Seri Mohd Azumi Bin Mohamed rose through
the ranks to become General and was promoted to Chief of
the Army in the year 2003. Highlights of his military career
include command of the;
General (R) Dato’ Seri Mohd Azumi Bin Mohamed does not
have any family relationship with any other Directors and/or
any major shareholders of the Company but he is deemed
as a related party to YBhg. Tan Sri Dato’ Seri Halim Bin
Mohammad by virtue of the consultancy services provided by
him to a company controlled by Tan Sri Dato’ Seri Halim Bin
Mohammad.
• 10 Parachute Brigade, the Army’s response to the Malaysian
Armed Forces (“MAF”) Rapid Deployment Force.
• First Infantry Division in Sabah/Sarawak with the rank of
Leftenant General.
• Service with the United Nation Military Observation
Mission in Iraq/Kuwait following the First Gulf War, where
he assisted the Foran Commission in the return of war
property and drew the policing plan of the Demilitarized
Zone.
• Colonel Operations in the Department of Army where
he had responsibility in the deployment of the MAF in
United Nation peacekeeping duties in Bosnia Herzegovina,
Somalia, and Cambodia.
• Represented Malaysia at the United Nation Troop
Contributing Meeting in Zagreb.
• Military Assistant and Principal Staff Officer to the Chief of
Defense Forces.
Other Information
None of the Directors have been convicted for any
offence in the past ten years. Details of the Directors’
attendance at Board meetings are set out in the
Corporate Governance Statement of this Annual
Report 2006.
11
ANNUAL REPORT 2006
Senior Management
Hisham Bin Halim
General Manager, Group Operations
Mariana Binti Halim
General Manager, Corporate Affairs &
Chung Kin Mun
General Manager, Finance
Panchacharam Ramasamy
Director, Business Development
Othman Bin Samat
Assistant General Manager,
Capt Arshad Mahmood Bhatti
Senior Manager, Shipping Operations
Coral Hong Kim Heong
Company Secretary
Che Khamsah Bin Che Othman
Senior Manager, Shipping Agency
Tan Chon Huey
Manager, Finance
Low Peck Chen
Manager, Finance
Abdul Rashid Bin Abu Bakar
Assistant Manager,
Special Events & Functions
12
ANNUAL REPORT 2006
Chairman’s
Statement
We have
maintained a
prudent approach
to investment
in ships
13
ANNUAL REPORT 2006
Courtesy, Northport, Malaysia
On behalf of the Board of Directors, I am pleased
we had disposed off when ship prices soared to
to present the Annual Report of Halim Mazmin
record levels, we refrained from new investments
Berhad (“HMB”) for the financial year ended 31
because ship prices continued to remain high.
December 2006.
We have maintained a prudent approach to
For the year under review we managed to
investment in ships in the last 11 years since our
record a profit, albeit at a lower level than the
Company was listed on Bursa Malaysia and we
past years. The sustainability of the profitability
continued to exercise the same restrain in not
of the Company was notwithstanding that during
willing to venture into this market.
the year the scale of our shipping operation, and
therefore the volume of our total business, was
For the financial year 2006, total revenue
reduced considerably on account of the fact that
generated by HMB was RM39.31 million,
we operated with fewer ships than we did in the
declining from RM54.66 million. Profits before tax
previous years. Despite our desire to acquire
totaled RM5.39 million compared with RM79.04
additional ships, or replace some of the ships that
million (restated) in the previous year.
14
ANNUAL REPORT 2006
The world merchant fleet expanded to 960 million
DWT at the beginning of 2006, up 7.2 per cent,
one of the highest increases in recent years.
(Source:UNCTAD Review of Maritime Transport
2006). The fleet of oil tankers and dry bulk
carriers, which together made up 72.9 per cent
of the total world fleet, increased by 5.4 per cent,
and 7.9 per cent respectively. There was 13.3 per
cent increase from 98.1 to 111.1 million DWT in
the container ship fleet and a 7.5 per cent rise to
24.2 million DWT from 22.5 million DWT in the
liquefied gas carrier fleet.
OVERVIEW OF THE MALAYSIAN
ECONOMY
Courtesy, Westport, Malaysia
Overview
The year also marked the launching of two major
national development plans, namely the Ninth
Malaysia Plan (2006-2010) and the Third Industrial
Master Plan (2006-2020).
Malaysia’s economy chalked up a growth rate of
5.9 per cent in 2006 (Source: Bank Negara). The
OVERVIEW OF GLOBAL TRADE
trade value breached the magic trillion Ringgit
AND SHIPPING
barrier for the first time with exports totaling
The world economy was on course for another
RM589 billion and imports totaling RM434
good year after four years of robust growth. The
billion.
International Monetary Fund reported the global
economy expanded by 5.4 per cent in 2006.
In line with the performance of the trade, cargo
According to the World Trade Organisation
volumes at local ports registered satisfactory
(WTO) preliminary report, the expansion of about
increase. Total throughput handled by principal
5 per cent in 2006 marked four straight years
ports in the country was 320 million tones,
of solid global growth, the most “balanced and
compared with 273 million tones. Container
consistent” growth period in decades.
throughput in 2006 increased to 13.6 million
TEUs compared with 12.0 million TEUs in 2005.
15
ANNUAL REPORT 2006
Shipping traffic at principal ports rose to 64,028
ship calls in 2006 compared with 62,508 ship calls
the previous year.
During the year Malaysian merchant fleet
expanded largely on account of deliveries of
several LNG carriers, Ultra Large Crude Carriers,
Aframax tankers and offshore supply vessels.
Total Malaysian fleet at the end of 2006 was
12 million dwt (Source: Malaysian Shipowners’
Association).
COMPANY OVERVIEW
A Very Large Crude Oil Carrier
We continued to operate with 4 ships during the
year, the same number of ships we had at the
world, continued with the charters with reputable
end of 2005. The fleet during the year consisted
charterers and continued to perform well.
of 2 clean product tankers and 2 container ships.
The financial performance was thus based on
The clean product tankers were deployed in the
the operation and performance of these ships
carriage of petroleum products in domestic and
in the charter as well as carrying cargoes on the
regional waters.
spot market. The container ships, which trade
globally calling several major ports around the
We positioned ourselves well with view to
expanding our fleet during the year. Our position
was favoured by the substantial capital gains the
Company made from the disposal of some of our
ships the previous years. Our cash reserves during
the year stood at RM281.07 million at the end
of the financial year under review. However, we
were cautiously optimistic on the performance
of the ship and freight markets that continued
to show signs of instability. Our fears were not
unfounded.
16
ANNUAL REPORT 2006
A Capesize Bulkcarrier
During the year under review, freight rates in
During the year under review, the Company
container shipping fell by 8 per cent as supply
signed a five-year facility agreement for an
rose and demand slacked by 13 per cent (Source:
unsecured fixed rate term loan facility of up to
Containerisation International). The market
maximum aggregate principal amount of RM46
further slacked by 11 per cent in the first quarter
million. The purpose of the Facility was for
of 2007, confirming our doubts that the cyclical
working capital and general corporate purposes
market had yet to settle down.
of the Company.
In the tanker market, ship prices prevailed at
FINANCIAL PERFORMANCE
high levels as did the freight rates but offered
During the year under review, HMB Group
no comfort on long-term concerns on returns on
achieved a turnover of RM39.31 million compared
investment. As a Company committed to long-
to RM54.66 million in the previous year. The sale
term view of investments rather than being given
of 2 vessels in 2005 resulted in the lower turnover
in to speculative spree, HMB adopted a policy to
in the current year.
“wait-it-out” and seize window of opportunity
when the clouds of uncertainty clears.
17
ANNUAL REPORT 2006
REVENUE ANALYSIS
Reflecting the scope of our shipping operation,
the share of contributions by container ships to
the total revenue went up to 82 per cent, from
62 per cent in 2005 while the share revenue
contributions from the operations of our tankers
fell to 18 per cent from 29 per cent the previous
year.
2006
2005
RM’000
%
RM’000
%
6,996
18
16,023
29
Containers
32,310
82
33,704
62
Bulk carrier
-
-
4,867
9
Non-shipping
-
-
67
-
Tankers
S.Y. Lili Marleen
to reward loyal shareholders with satisfactory
dividend notwithstanding the lower turnover that
A profit after tax of RM5.38 million was recorded
we recorded during the year under review.
for the year in review compared with RM79.03
million (restated) posted in the previous year.
The proposed dividend payout for the current
However, after adjusting for one-off gain on
year is estimated at RM15.68 million compared
disposal of vessels in 2005 amounting to RM72.77
with RM18.91 million paid out for year ended 31
million, the profit after tax from normal operations
December 2005.
was approximately RM6.26 million (restated) in
the previous year.
PROSPECTS AND CHALLENGES
Bank Negara is confident the economic strength
HMB Group has a cash reserve of RM281.07
seen through last year will be sustained in 2007
million (2006) compared to RM250.68 million
as the more diversified Malaysian economy will
(2005). Net assets per share was RM0.91 (2006)
provide a strong foundation for further growth.
compared to RM0.97 (2005 restated).
The outlook for 2007 remains favourable
and because of the economy’s flexibility,
A First and Final Tax Exempt Dividend of 5 sen
the country has a greater resilience to
per share of RM0.50 each was proposed by the
withstand external shocks.
Board of Directors in respect of the financial year
ended 31 December 2006. We have endeavoured
18
ANNUAL REPORT 2006
The global economic outlook for 2007
remains broadly positive, in particular
with the explosive growth of
economies in the Asian region. On
account of the sustained expansion
of the global trade and economy,
demand for shipping services is
expected to be maintained at a high
level. Thus although supply of shipping
capacity has been forecast at high levels, the
demand for shipping will absorb the capacity with
continued stability in ship prices, freight market
and charter hire market. The rates in the dry bulk
cargo market are expected to remain firm.
STS Puteri Mahsuri
It will be prudent on our part to keep a close
I would like to express my deepest gratitude to
watch on the development in the shipping market
the Board of Directors for their valued advice,
and remain on the sideline for the moment while
support and cooperation during the year. On this
waiting for window of opportunity to emerge for
note, I would like to thank our non-independent
us to take advantage of attractive ship prices for
non-executive Director, YBhg. General (R) Dato’
acquisition presenting with a more stable freight
Sri Abdullah Bin Ahmad who has resigned from
market condition.
the Board, for his services rendered to the Board
and Company.
APPRECIATION
On behalf of the Board, I wish to place on record
On behalf of the Board, I would also like to
my appreciation to all management and staff of
welcome the appointment of YBhg. General
HMB Group, including our committed ship masters
(R) Dato’ Seri Mohd Azumi Bin Mohamed as
and crew members of our fleet of ships.
non-independent non-executive Director to the
Board of HMB.
I would also like to thank our valued clients,
shareholders, relevant Government agencies,
Thank you.
business associates and bankers for their
continued support and assistance.
Executive Chairman and
Managing Director
19
20
20
Long
Beach
International
Ports of Call
ANNUAL REPORT 2006
Norfolk
Savannah
Valparaiso
Sepetiba
Iquique
San Vicente
Buenaventura
New York
Valencia
Fos Sur Mer
Newcastle
Saldana Bay
Khorfakkan
Jeddah
Gioia Tauro
La Spezia
Port Klang
Singapore
Hong Kong
Port Hedland
Pusan Chiba
Qingdao
Shanghai
Yokohama
ANNUAL REPORT 2006
21
Singapore
Pasir Gudang
Kuantan
Kemaman
Kuala Terengganu
Kota Bahru
Pelabuhan
Tanjung Pelepas
Melaka
Port Dickson
Port Klang
Lumut
Penang
Langkawi
Branch Offices and
Ports of Call in Malaysia
ANNUAL REPORT 2006
Kuching
Sibu
Bintulu
Miri
Brunei
Labuan
Kota Kinabalu
Terumbu
Layang Layang
Tawau
Sandakan
Sipadan
ANNUAL REPORT 2006
21
ANNUAL REPORT 2006
List of Vessels and Investment Property
List of Vessels
Name of Vessel
Type
Year Built
GRT
DWT
Meridian Vega
Product Tanker
1991
3,885
6,979
Meridian Mira
Product Tanker
1994
3,581
6,012
Cap Colville
Containership
(1,510 TEU)
1997
17,613
24,066
Cap Colorado
Containership
(1,510 TEU)
1997
17,613
24,066
Investment Property
Location
Description
Tenure
Land area
Precinct 5.3 Seksyen 14
Vacant land for development
Leasehold
5,814 sq.metres
Pusat Bandar, Shah Alam,
of office and commercial
(99 years expiring
Selangor Darul Ehsan.
complex
on 11.5.2100)
22
Net book value
RM 5.38mil
ANNUAL REPORT 2006
Terms of Reference of the Audit Committee
Audit
Committee
Chairman
YBhg. Dato’ Edris @ Idris Bin Haji Wahed
Members
YBhg. Tan Sri Dato’ Seri Halim Bin Mohammad
Mr. Ee Beng Wat
A. Terms of Reference
i.
Composition
The Board of Directors shall elect an Audit Committee from
amongst themselves (pursuant to a resolution of the Board
of Directors) comprising not less than three (3) members
where majority of them shall be independent/non-executive
members of the Board.
At least one member of the Audit Committee must be a
member of the Malaysian Institute of Accountants or if he
is not a member of the Malaysian Institute of Accountants,
he must have at least three (3) years working experience
and:
a. he must have passed the examinations specified in Part 1
of the 1st Schedule of the Accountants Act 1967; or
b. he must be a member of one of the associations of
accountants specified in Part II of the 1st Schedule of
the Accountants Act 1967.
No alternate director can be a member of the Audit
Committee. The member of an Audit Committee shall
elect a chairman from amongst their members who shall
be an independent director.
All members of the Audit Committee including the Chairman
will hold office only as long as they serve as Directors of
the Company. Should any member of the Audit Committee
cease to be a Director of the Company, his membership in
the Audit Committee would cease forthwith.
The Board shall review the term of office and performance
of the Audit Committee and each of its members at least
once every three (3) years to determine whether the Audit
Committee and members have carried out their duties in
accordance with their terms of reference.
ii. Objectives
The primary objectives of the Audit Committee are:
a. To provide assistance to the Board in fulfilling its
fiduciary responsibilities particularly relating to business
ethics, policies and practices, financial reporting and
auditing;
b. To provide greater emphasis on the audit functions by
increasing the objectivity and the independence of the
external and internal auditors and providing a forum for
discussion that is independent of the management.
iii Authority of the Audit Committee
The Committee is authorized by the Board to investigate
any activity within its terms of reference. It is authorized to
seek any information it requires from any sources or any
employee and all employees are directed to co-operate
with any request made by the Committee so as to ensure
that the Committee has full and unrestricted access to any
information pertaining to the Group.
The Audit Committee shall be empowered to convene
meetings with the external auditors without the presence
of the executive members of the Audit Committee,
whenever deemed necessary. The Committee shall have
direct communication channels with the external auditors
and person(s) carrying out the internal audit functions or
activity, if any.
The Committee is empowered by the Board to engage
persons having special competence as necessary to assist
the Committee in fulfilling its responsibilities.
In the event of any vacancy in the Audit Committee resulting
in the non-compliance of the composition as detailed above,
the Board shall fill the vacancy within three (3) months.
23
ANNUAL REPORT 2006
iv Duties and responsibilities
a. To meet with management and the external auditors
to discuss the scope of their audit plan, to evaluate the
audit report on the financial statements and the results
of the audit before recommending for approval by the
Board;
b. To meet with the internal and external auditors
concerning any comments they may have with respect
to improving the internal control system;
c. To review the adequacy of the scope, functions and
resources of the internal audit function and that it has
the necessary authority to carry out its work;
d. To review the internal audit plan and results of the
internal audit process and where necessary ensure that
appropriate action is taken on the recommendations
of the internal audit function;
e. To review the quarterly and year-end financial
statements of the Company, focusing particularly on:
•
•
•
changes in or implementation of major accounting
policy changes;
significant and unusual events; and
compliance with accounting standards and other
legal requirements.
f. To assist the Board on the appointment and resignation
of the external auditors, to recommend the nomination
of persons as external auditors, the audit fees and to
evaluate the basis of billings, if necessary;
g. To review any related party transaction and conflict
of interest situation that may arise within the Group
including any transaction, procedure or course
of conduct that raises questions of management
integrity;
h. To promptly report to Bursa Securities of matters
reported by the Audit Committee to the Board
of Directors of the Company which has not been
satisfactorily resolved resulting in a breach of the Bursa
Securities Listing Requirements;
i.
Any other functions, which may be agreed by the Audit
Committee and the Board of Directors.
v. Meetings
No other directors or employees shall attend the Audit
Committee meeting except by invitation. The Audit
Committee shall not hold less than three (3) meetings a
year and the quorum for each meeting shall be two (2) and
the majority of the members present must be independent
directors.
24
Attendance of a meeting may be by being present in
person or through participating by means of tele-video
conferencing.
Minutes of each meeting shall be kept and distributed to
each member of the Committee and also to the other
members of the Board. The Committee Chairman shall
report on each meeting to the Board.
The Company Secretary shall act as the Secretary to the
Audit Committee.
vi. Procedures of Audit Committee
Notice of a meeting of the Audit Committee shall be given
to all members in writing via facsimile or by hand delivered
or by courier.
The Committee may deal with matters by way of a circular
resolution in lieu of convening a formal meeting.
The Chairman of the Audit Committee shall be the
Chairman of the meeting. If at any meeting the Chairman
is not present, the members present may choose one of
their members who is an independent director to be the
Chairman of the meeting. Upon request of the external
auditor, the Chairman of the Audit Committee shall
convene a meeting of the Committee to consider any
matter the external auditor believes should be brought to
the attention of the directors and shareholders.
The decision of the Audit Committee shall be by a majority
of votes. In case of an equality of votes, the Chairman of
the meeting shall have a second or casting vote.
Minutes of each meeting shall be kept by the Secretary and
distributed to each member of the Audit Committee. The
Chairman shall as soon as reasonably practicable report
on each meeting to the Board. All minutes of meetings
shall be open to inspection by the Audit Committee and
the Board of Directors.
ANNUAL REPORT 2006
B. Activities of the Audit Committee for the Financial
C. Internal Audit Function
Year ended 31 December 2006
For the financial year under review, the Audit Committee
met four (4) times. The details of the attendance of each
member of the Audit Committee are as per table below:
Audit Committee Members
Number of
Meetings
Attended
4/4
4/4
4/4
Mr. Ee Beng Wat
4/4
The Committee acknowledges the need for an effective
system of internal controls covering all aspects of activities
including the mapping and management of risk in which
the Group may be exposed to.
The Group’s Internal Audit function is independent of the
activities or operations of other operating units, its principle
role is to undertake independent, regular and systematic
reviews of the system of internal control so as to provide
reasonable assurance that such system continues to operate
satisfactorily and effectively. The Internal Audit function
reports directly to the Audit Committee and assists the
Board in monitoring the internal controls to mitigate the
risks.
In discharging their duties, the Audit Committee had
undertaken the following activities:
i.
reviewed the unaudited quarterly financial results of
the Group prior to the Board’s approval;
ii.
reviewed the Company’s compliance with the prevailing
laws, regulations and accounting standards;
iii.
reviewed the internal audit plans, which included
the Capital Asset Management, Treasury Cycle, Cash
Management and Wrap up of findings for quarter one
2006;
iv.
reviewed the internal audit reports, which highlighted
the audit issues recommendations with regards to
system and controls weaknesses noted in the course
of audit and the management’s responses thereto;
and
v.
reviewed the recurrent related party transactions to
ascertain that the transactions are conducted at arm’s
length and on normal commercial terms.
25
ANNUAL REPORT 2006
Statement on Internal Control
INTRODUCTION
Paragraph 15.27 (b) of the Bursa Malaysia Securities Berhad Listing Requirements
requires a listed entity to include a statement of internal control in the Annual Report.
The Malaysian Code on Corporate Governance provides that listed companies should
maintain a sound system of internal controls to safeguard shareholders’ investments
and the Group’s assets.
The Board of Directors (“the Board”) recognizes the vital role internal controls play in
creating transparency, accountability and in safeguarding the assets of the Company,
acknowledges its responsibility for ensuring the presence of sound and effective internal
control and risk management practices. However, it should be noted that any system of
internal control can only provide reasonable and not absolute assurance against material
misstatement or loss.
In striving for continuous improvement, the Board will put in place appropriate action
plans, when necessary, to further enhance the Group’s systems of internal control.
SYSTEMS OF INTERNAL CONTROL
undertaken annually, to establish plans and targets against
which performance is monitored on an ongoing basis.
The following key processes have been established in reviewing
the adequacy and integrity of the Group’s system of internal
controls:
Formalized and Documented Policies and Procedures
Clear Lines of Accountability and Reporting Within the
Organization
Internal policies and procedures which are set out in a series
of clearly documented standard operating manuals covering a
majority of areas within the Group are maintained and subject
to review as and when necessary.
Key responsibilities and accountability in the organizational
structure is clearly defined, with clear reporting lines up to the
Board and its Committees. Established delegation of authority
sets out the appropriate authority levels for decision-making,
including matters requiring Board approval.
Strategic Business Planning Processes
Appropriate business plans have been established within
which the Group’s business objectives, strategies and
targets are articulated. Business planning and budgeting is
26
Financial Performance
The preparation of periodic and annual results and the state of
affairs, as published to shareholders, are reviewed and approved
by the Board. The full year financial statements are also audited
by the external auditors.
ANNUAL REPORT 2006
Ship Management
CONCLUSION
The Ship Management Division, which reports regularly to
the Management conducts regular audits on the Group
vessels’ physical and operational conditions, as well as
matters pertaining to the manning of the vessels. The audits
are designed to ensure vessel integrity and that regular
maintenance are being performed to enhance safety and
reliability of the vessels at all times. The audit also assesses the
crews’ discipline and competency.
The Board is of the view that there is no significant breakdown
or weaknesses in the system of internal control of the Group
for the financial year ended 31 December 2006. The Group
continues to take the necessary measures to ensure that
the system of internal control is in place and functions
effectively.
In addition, HMB’s vessels are subjected to stringent audits
and vetting to meet the various regulatory and commercial
requirements. These include vetting by oil majors and audits
by the Malaysian Maritime Authority and ship classification
societies to qualify for the international safety management
certification under the relevant Codes.
INTERNAL AUDIT FUNCTION
The periodic reviews carried out by the Internal Audit
function on processes and state of internal controls as part of
its internal audit plan are reported to the Board through the
Audit Committee.
The systems of internal control described in this statement
are considered by the Board to be adequate and the risks are
considered by the Board to be at an acceptable level within the
context of the business environment throughout the Group’s
business. However, such systems do not eliminate the possibility
of human error, collusion or deliberate circumvention of control
procedures by employees and others, nor the occurrence of
unforeseeable circumstances due to poor judgment in decision
making. Nevertheless, the systems of internal control that exist
throughout the financial year provide a level of confidence on
which the Board relies for assurance.
27
ANNUAL REPORT 2006
Corporate Governance Statement
The Board of Directors is committed to ensuring that the highest standards of corporate governance are practiced throughout
the Group as a fundamental part of discharging its responsibilities to protect and enhance shareholders’ value and the financial
performance of Halim Mazmin Berhad.
The following statement explains the manner in which the Group has applied the principles, and the state of compliance with
the Best Practice provisions of the Malaysian Code of Corporate Governance (“Code”) throughout the financial year ended 31
December 2006.
A. THE BOARD OF DIRECTORS
i. Duties of Board of Directors
The Group is headed by an effective Board which leads
and controls the activities of the Group. The Board
of Directors has overall responsibility for corporate
governance, strategic planning, formulation of policies
and overseeing the investments and business of the
Company.
ii. Board Meetings
The Board meets at least four (4) times a year, with
additional meetings convened as necessary. During the
financial year, the Board met four (4) times. Details of
each Director’s attendance are as follows:
Directors
Number of
meetings
attended
4/4
4/4
Dato’ Seri Haji Sulaiman Bin Mohd Amin
4/4
4/4
4/4
4/4
Mr. Ee Beng Wat
4/4
4/4
General (R) Dato’ Sri Abdullah Bin
Ahmad @ Dollah Bin Amad
3/4
(resigned on 30 April 2007)
iii. Supply of Information to the Board
All Directors are provided with an agenda and a set
of Board papers prior to each Board meeting which
comprises the quarterly financial results and other
relevant information to enable the Board to discharge
their duties and responsibilities. The agenda and
28
Board papers are issued in sufficient time to enable the
Directors to obtain further explanation or clarification,
where necessary, in order to be properly briefed before
the meeting. All Directors have access to the advice and
services of the Company Secretaries and all information
within the Company. Where necessary, the Directors
may engage independent professionals for advice on
specialized issues at the Company’s expense to enable
them to discharge their duties with full knowledge of
the cause and effect.
iv. Board Composition and Balance
The Board currently has nine (9) members
comprising:(a) Executive Chairman who is also the Managing
Director
(b) Deputy Chairman who is an Independent
Non-Executive Director
(c) Executive Director
(d) Four (4) Independent Non-Executive Directors
(e) Two (2) Non-Independent Non-Executive Directors
The Board has appointed Mr. Patrick Lim Keng Lee as the
Senior Independent Non-Executive Director, to whom
any concerns may be conveyed.
The brief profile on each and every Director is set out
in the Profile of the Board of Directors.
The presence of five (5) Independent Non-Executive
Directors out of nine (9) Directors comply with Bursa
Securities Listing Requirements and fulfill a pivotal role
in corporate accountability by providing a broader view,
independent and balanced assessment of proposals
from Executive Directors and the management team of
the Company. The Executive Chairman’s responsibility
is to ensure the effectiveness of the Board and to
provide general strategic business directions for the
organization.
ANNUAL REPORT 2006
Although all the Directors have an equal responsibility
for the Company’s operations, the role of these
Independent Non-Executive Directors is particularly
important as they provide unbiased and independent
views, advice and judgment.
v. Appointment and Re-election of Directors
In accordance with the Company’s Articles of
Association, all Directors who are appointed by the
Board are subject to re-election by the shareholders at
the Annual General Meeting (“AGM”) subsequent to
their appointment.
The Articles of Association of the Company also provides
that at least one third of the remaining Directors are
subject to re-election by rotation at each AGM. All
Directors to retire from office at least once in every three
(3) years on a rotation basis and are eligible to offer
themselves for re-election at the Company’s AGM.
vi. Directors’ Training
In view of the changing laws, regulations and business
environment, the Directors are encouraged to attend
continuous training to further their knowledge and to
equip themselves to effectively discharge their duties
as directors.
All members of the Board have attended the Mandatory
Accreditation Programme (“MAP”) as prescribed by
Bursa Securities Listing Requirements.
The Board attends the Continuing Education Programme
(“CEP”) from time to time, where necessary, to equip
themselves with the knowledge to discharge their duties
more effectively. The Directors attended the following
courses:
Course Attended
•
Take Over and Mergers: Issues
Challenges
and
•
Preparation and Presentation of Quarterly
Interim Financial Reporting Under the New
FRS Regime
Mr. Ee Beng Wat
General (R) Dato’ Sri Abdullah Bin Ahmad @
Dollah Bin Amad
YBhg. Dato’ Abdul Kadir Bin Mohd Deen was registered
for a CEP course scheduled in November 2006.
However, the course was cancelled by the organizer.
Due to his tight schedule, another course could not be
arranged prior to the year end.
B. BOARD COMMITTEES
i. Audit Committee
The Audit Committee consists of four (4) members,
out of which three (3) are Independent Non-Executive
Directors. One of the three (3) Independent NonExecutive Directors is a member of the Malaysian
Institute of Accountants. This is in compliance with
Bursa Securities Listing Requirements.
The main objectives of the Audit Committee and its
terms of reference are as detailed in the Terms of
Reference of the Audit Committee of the Annual
Report.
ii. Nomination Committee
The Board is regularly reviewing the structure, size and
composition of the Directors and is involved in the
process of assessing existing Directors and identifying,
nominating, recruiting, appointing and orientating new
Directors.
The Board itself currently functions as a nomination
committee until such time that the size of the
Board justifies the establishment of an independent
nomination committee.
iii. Remuneration Committee
The Board presently determines the policy on executive
remuneration and fixing the remuneration packages of
individual directors. The Board itself currently functions
as a remuneration committee. As described above,
the Board shall establish an independent remuneration
committee at such time that it views as suitable.
29
ANNUAL REPORT 2006
Also, the shareholders, investors and members of
the public may access the Company’s website at
www.halimazmin.com to obtain the latest information
of the Group.
C. DIRECTORS’ REMUNERATION
The Company pays annual fees to the Directors. The
Directors’ fees are approved by shareholders at the AGM
based on the recommendation from the Board. The
Board as a whole determines the remuneration of each
Director.
E. ACCOUNTABILITY AND AUDIT
i.
The aggregate remuneration of the Directors categorized
into appropriate components is as follows:
(RM’000)
Category
Fees Salaries
616
Other
Allowances
Executive Directors
40
Non-Executive Directors
144
-
-
Total
184
616
410
410
The remuneration paid to the Directors, analyzed into the
following bands, is as follows:
Range of remuneration
Number of Directors
Executive Non-Executive
Less than RM50,000
-
7
RM150,001 to RM200,000
1
-
RM850,001 to RM900,000
1
-
D. SHAREHOLDERS
i.
Investors’ Relations and Shareholders’
Communication
The Board recognizes the value of dialogue with investors
and shareholders and the importance of accountability
to them. As such, the Board is disseminating proper,
timely and adequate information to the investors and
shareholders through annual report, announcements,
circulars to shareholders and press releases.
ii. AGM
At the Company’s AGM, shareholders have direct access
to the Board and are given the opportunity to enquire
about the Company’s activities and performance.
Members of the Board as well as the external auditors
of the Company are present to answer questions raised
at the meeting. A press conference is normally held
immediately after the meeting where the Executive
Chairman answers questions on the Group’s activities
and performance.
30
Financial Reporting
The Board is responsible to ensure the financial
statements represent a true, clear and fair assessment
of the Company and Group’s financial positions and
prospects in all its quarterly results, announcements and
annual reports. A statement on Directors’ Responsibility
is set out in the Annual Report.
ii. Internal Controls
The Directors are mindful of their responsibilities in
relation to the maintenance of a sound system of
internal controls which provides reasonable assessment
and review of the Company’s effectiveness to safeguard
shareholders’ investment and Group’s assets. The Board
is continuously reviewing the adequacy and integrity of
its system of internal controls.
A Statement on Internal Control is set out in the Annual
Report.
iii. Relationship with External Auditors
The Board through its Audit Committee maintains a
transparent relationship with the external auditors in
seeking their professional advice and towards ensuring
compliance with the accounting standards.
The role of the Audit Committee in relation with the
external auditors is set out in the Terms of Reference
of the Audit Committee of the Annual Report.
F. ADDITIONAL COMPLIANCE INFORMATION
i.
Utilization of Proceeds
The utilization of proceeds from the private placement
of 14,606,800 new ordinary shares of RM1.00 each at
an issue price of RM1.58 each and the disposal of two
(2) container vessels, namely MSC Tasmania and MSC
America for the financial year ended 31 December 2006
are set out in item G of this Statement.
ANNUAL REPORT 2006
ii. Share Buy-Back
During the financial year ended 31 December 2006, the Company bought back the following shares:
Month
January
February
March
April
May
June
July
August
September
October
November
December
Sub total for year 2006
Balance b/f from 2005
Total
Shares cancelled *
Consideration
(RM)
Highest Price
(RM)
Lowest Price
(RM)
Average Price
(RM)
241,253
1,159,418
124,032
684,516
1,402,424
351,514
5,937
188,540
126,827
305,438
4,589,899
1,263,228
5,853,127
0.740
0.755
0.755
0.825
0.825
0.725
0.710
0.675
0.710
0.705
0.825
0.745
-
0.715
0.735
0.740
0.780
0.725
0.700
0.710
0.640
0.670
0.650
0.640
0.680
-
0.744
0.746
0.748
0.810
0.817
0.716
0.715
0.674
0.684
0.682
0.763
0.738
-
Total Number Of Shares Retained In Treasury
*
No. of Shares
Bought Back
324,400
1,554,600
165,800
845,400
1,717,600
490,800
8,300
279,600
185,300
447,600
6,019,400
1,711,100
7,730,500
(3,350,720)
4,379,780
On 24 November 2006, the Company cancelled 3,350,720 shares out of the Treasury Shares Account of 7,730,500 shares, resulting in the issued
shares of the Company adjusted to 318,000,000 shares of RM0.50 each.
iii. Options, Warrants or Convertible Securities
The Company has not issued any options, warrants or
convertible securities during the financial year.
viii.Profit Guarantees
During the year, there were no profit guarantees given
by the Company.
iv. American Depository Receipt (“ADR”) or Global
Depository Receipt (“GDR”) Programme
The Company did not sponsor any ADR or GDR
programme during the financial year.
ix. Material Contracts
During the year, there were no material contracts
outside the ordinary course of business entered into
by the Company and its subsidiaries which involved
Directors’ and major shareholders’ interests.
v. Imposition of Sanctions/Penalties
There were no sanctions and/or penalties imposed
on the Company and its subsidiaries, Directors or
management by the relevant regulatory bodies.
vi. Non-audit Fees
The amount of non-audit fees paid to external auditors
for the financial year ended 31 December 2006 is
RM1,000.
vii. Variation in Results
There are no material variation between the audited
results for the financial year ended 31 December 2006
and the unaudited results for the financial year ended
31 December 2006 of the Group.
x. Revaluation of Landed Properties
The Company does not have a revaluation policy on
landed properties.
xi. Recurrent Related Party Transactions Statement
The breakdown of the aggregate value of the recurrent
transactions which the Group has entered into during
the financial year 2006 pursuant to a mandate given by
the shareholders on 31 May 2006 are set out in Note
28 to the financial statements of the Annual Report.
31
ANNUAL REPORT 2006
G. COMPLIANCE TO SECURITIES COMMISSION’S (“SC”)
REQUIREMENTS
The Company is required by SC to make the following
disclosures in relation to the following corporate exercises:
i.
Private Placement of 14,606,800 new ordinary
shares at an issue price of RM1.58 each (“Private
Placement”)
Pursuant to SC’s letter approving the Private Placement
dated 29 June 2004, HMB is required to disclose the status
of the utilization arising from the Private Placement in its
quarterly and annual reports until the proceeds are fully
utilized. The Board of Directors of HMB had on 12 August
2005, approved the following:
(a)
the extension of time frame for the completion of the
utilization of the Private Placement proceeds from
31 December 2005 to within the first half of 2006.
(b)
that any unutilized amount allocated under the
estimated expenses relating to the Private Placement
to be applied towards paying for fleet operating
costs.
The proceeds arising from the Private Placement have been
fully utilized in the first quarter ended 31 March 2006 as
follows:
ORIGINAL
UTILIZATION AS
APPROVED BY SC
RM’000
WORKING CAPITAL:- FLEET DRY-DOCK
- FLEET OPERATING COSTS*
ESTIMATED EXPENSES RELATING
TO THE CORPORATE PROPOSAL#
TOTAL
REVISED
UTILIZATION
RM’000
UTILIZATION TIMEFRAME
FINANCIAL YEAR ENDED / ENDING 31 DECEMBER
2004
2005
2006
RM’000
RM’000
RM’000
PROPOSED
ACTUAL PROSPOSED ACTUAL PROSPOSED ACTUAL
8,500
13,919
3,000
19,442
5,000
5,000
1,339
1,339
14,419 14,442^
660
637
660
587
-
23,079
23,079
5,660
5,587
15,758
1,661
-
1,661
-
50
-
-
15,831
1,661
1,661
*
The fleet operating costs include insurance for the vessels, crew costs, and repair and maintenance costs.
^
An amount of RM23,000 being the unutilized amount allocated under the estimated expenses relating to the Private Placement has
been applied towards paying for fleet operating costs in the financial year ended 31 December 2005.
#
Corporate Proposal involving Private Placement, bonus issue (completed on 27 October 2004) and share split (completed on 2 December
2004).
32
ANNUAL REPORT 2006
ii.
Disposal of Two (2) Container Vessels, Namely MSC
Tasmania and MSC America, (“MSC Disposals”)
Pursuant to the SC’s approval for:
(a) the MSC Disposals not being deemed disposals
that would result in a significant change in
business direction of HMB (vide their letter dated
4 January 2005);
(b) the modification of the corresponding disclosure
requirements (vide their letter dated 21 February
2005); and
(c) subsequently, for the variation to the utilization of
proceeds (vide their letter dated 13 July 2005).
HMB is required to disclose the following in its quarterly
results and annual reports:
(d)
(e)
the basis and justification for the disposal price,
future plans of the Group, and declaration
of interest by the directors and substantial
shareholders of HMB and persons connected
with them in the MSC Disposals; and
the status of utilization of the MSC Disposals
proceeds until the proceeds have been fully
utilized.
Disclosure on the matters relating to part (d) above was
set out in HMB’s Annual Report for the year ended 31
December 2004.
At present, the MSC Disposals proceeds have been
partially utilized for the repayment of HMB’s banking
facility of RM25.6 million on 22 July 2005 (as approved
by the SC vide their letter dated 13 July 2005). Save for
the payment, there is no specific utilization identified
for the MSC Disposals proceeds. In the interim, the
balance of proceeds of RM134.8 million has been
placed in fixed deposits.
33
ANNUAL REPORT 2006
Directors' Responsibility Statement
The Directors are responsible to ensure that the financial statements of the Group and of the
Company for each financial year are drawn up in accordance with the applicable MASB approved
accounting standards in Malaysia for entities other than private entities ("applicable approved
accounting standards"), the provisions of the Companies Act, 1995 ("the Act") and the Bursa
Securities listing Requirements ("Listing Requirements").
The Directors have to ensure that the financial statements give a true and fair view of the state of affairs of the Group and of
the Company.
In preparing those financial statements, the Directors are required to:
i. adopt appropriate accounting policies and apply them consistently;
ii. make judgments and estimates that are reasonable and prudent; and
iii. state whether applicable approved accounting standards have been followed, subject to any material departures disclosed
and explained in the financial statements.
The Directors are responsible for keeping proper accounting records, which disclose with reasonable accuracy at any time the
financial position of the Group and the Company and to enable them to ensure that the financial statements comply with
the applicable approved accounting standards, the Act, and Listing Requirements. They have a general responsibility for
taking such steps as are reasonably open to them to safeguard the assets of the Group, to detect and prevent fraud and other
irregularities.
34
ANNUAL REPORT 2006
Directors' Report and
Financial Statements
DIRECTORS' REPORT
36
STATEMENT BY DIRECTORS AND STATUTORY DECLARATION
40
REPORT OF THE AUDITORS
41
BALANCE SHEETS
42
INCOME STATEMENTS
43
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
44
STATEMENT OF CHANGES IN EQUITY
45
CASH FLOW STATEMENTS
46
NOTES TO THE FINANCIAL STATEMENTS
49
35
ANNUAL REPORT 2006
Directors' Report
for the year ended 31 December 2006
The directors have pleasure in submitting their report and the audited financial statements of the Group and of the Company for the financial year
ended 31 December 2006.
PRINCIPAL ACTIVITIES
The principal activities of the Company are investment holding and provision of management services to its subsidiaries. The principal activities of
the subsidiaries are as set out in Note 5 to the financial statements. There have been no significant changes in these activities during the financial
year except as disclosed in Note 5 to the financial statements.
RESULTS
Profit before tax
Income tax expense
Profit for the year
Group
Company
RM
RM
5,390,684
7,744,336
(11,607)
-
5,379,077
7,744,336
In the opinion of the directors, the results of the operations of the Group and of the Company for the financial year have not been substantially
affected by any item, transaction or event of a material and unusual nature other than the effects arising from the changes in accounting policies due
to the adoption of the new and revised Financial Reporting Standards (“FRSs”) which has resulted in a decrease in the Group’s and the Company’s
profit for the year by RM1,161,999 and RM5,544,000 respectively as disclosed in Note 26 to the financial statements.
DIVIDEND
During the financial year, the Company paid a first and final tax exempt dividend of 6 sen per ordinary share of RM0.50 each, amounting to
RM18,905,389 in respect of the financial year ended 31 December 2005.
The directors now recommend a first and final tax exempt dividend of 5 sen per ordinary share of RM0.50 each in respect of the financial year
ended 31 December 2006 which, subject to the approval of the shareholders at the forthcoming Annual General Meeting of the Company, will
be paid to shareholders whose names appear in the Record of Depositors on a date to be determined by the directors. Based on the outstanding
issued and paid up share capital as at 31 December 2006 of 318,000,000 ordinary shares of RM0.50 each net of 4,379,780 treasury shares
of RM0.50 each, the proposed first and final tax exempt dividend of 5 sen per ordinary share of RM0.50 each amounts to RM15,681,011. Such
dividend, if approved by the shareholders will be accounted for in the shareholders’ equity as an appropriation of retained profit in the financial
year ending 31 December 2007.
RESERVES AND PROVISIONS
There were no material transfers to or from reserves or provisions during the financial year other than those disclosed in the financial statements.
ISSUE OF SHARES
During the financial year, there was no issue of shares.
36
ANNUAL REPORT 2006
TREASURY SHARES
During the financial year, the Company repurchased 6,019,400 ordinary shares from the open market at an average price of RM0.76 per share.
The total consideration paid for the repurchase including transaction costs was RM4,589,899 and this was financed by internally generated funds.
On 24 November 2006, the Company cancelled 3,350,720 shares repurchased and an amount equivalent to their par value of RM1,675,360
was transferred to the capital redemption reserve in accordance with the requirement of Section 67A 3(E) of the Companies Act, 1965.
The remaining repurchased shares are held as treasury shares in accordance with the requirement of Section 67A of the Companies Act, 1965,
and are disclosed in Note 14 to the financial statements.
SHARE OPTION
During the financial year, the Company did not grant any option to any person to take up the unissued shares of the Company.
DIRECTORS
The directors who served since the date of the last report and at the date of this report are:
Mr Patrick Lim Keng Lee
Mr Ee Beng Wat
General (R) Dato’ Sri Abdullah Bin Ahmad @ Dollah Bin Amad
In accordance with Article 89 of the Articles of Association, General (R) Dato’ Sri Abdullah Bin Ahmad @ Dollah Bin Amad, Dato’ Abdul Kadir Bin
Mohd Deen and Mr Patrick Lim Keng Lee retire from the board at the forthcoming Annual General Meeting and being eligible offer themselves for
re-election.
In accordance with Section 129 of the Companies Act, 1965, Dato’ Seri Haji Sulaiman Bin Mohd Amin retires at the forthcoming Annual General
Meeting and being eligible offers himself for re-election.
37
ANNUAL REPORT 2006
DIRECTORS’ INTERESTS IN SHARES
According to the Register of Directors’ Shareholdings, the interests of directors in office at the end of the financial year in shares in the Company
during the financial year were as follows:
Number of ordinary shares of RM0.50 each
Balance at
Balance at
1.1.2006
Bought
Sold
31.12.2006
105,390,000
371,000
-
105,761,000
66,036,600
-
-
66,036,600
(Direct Interest)
By virtue of their interests in the shares of the Company, Tan Sri Dato’ Seri Halim Bin Mohammad and Puan Sri Datin Seri Mazmin Binti Noordin are
also deemed to have an interest in the shares of all the subsidiaries of the Company to the extent the Company has an interest.
Other than as disclosed above, none of the directors in office at the end of the financial year had any interest in the shares of the Company or its
subsidiaries during the financial year.
There were no significant changes in the above interests in the Company or its subsidiaries during the period from 31 December 2006 to 13 April
2007 except for Tan Sri Dato’ Seri Halim Bin Mohammad having acquired an additional 4,633,300 shares.
DIRECTORS’ BENEFITS
Since the end of the previous financial year, no director has received or become entitled to receive any benefit (other than a benefit included in the
aggregate amount of emoluments received or due and receivable by the directors shown in the financial statements or the fixed salary of a full-time
employee of the Company) 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 as disclosed in Note 28 to the financial
statements.
Neither during nor at the end of the financial year was the Company a party to any arrangements which object was to enable the directors to
acquire benefits by means of the acquisition of shares in or debentures of the Company or any other body corporate.
OTHER STATUTORY INFORMATION
a.
Before the Income Statements and Balance Sheets of the Group and of the Company were made out, the directors took reasonable steps:
(i)
to ascertain that proper action had been taken in relation to the writing off of bad debts and the making of allowance for doubtful
debts, and have satisfied themselves that there were no known bad debts and that adequate allowance had been made for doubtful
debts; and
(ii)
to ensure that any current assets which were unlikely to realize their book values in the ordinary course of business had been written
down to an amount which they might be expected so to realize.
b.
At the date of this report, the directors are not aware of any circumstances:
(i)
which would render the amount written off as 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;
38
ANNUAL REPORT 2006
OTHER STATUTORY INFORMATION (CONT'D)
(ii)
which would render the values attributed to the current assets in the financial statements of the Group and of the Company
misleading;
(iii)
which have arisen which render adherence to the existing methods of valuation of assets or liabilities in the financial statements of
the Group and of the Company misleading or inappropriate; and
(iv)
not otherwise dealt with in this report or in the financial statements of the Group and of the Company, that would render any amount
stated in the respective financial statements misleading.
c.
At the date of this report, there does not exist:
(i)
any charge on the assets of the Group and of the Company that has arisen since the end of the financial year which secures the
liabilities of any other person; or
(ii)
d.
any contingent liability in respect of the Group and of the Company that has arisen since the end of the financial year.
No contingent liability or other liabilities of the Group and of the Company has become enforceable, or is likely to become enforceable
within the period of twelve months after the end of the financial year which, in the opinion of the directors, will or may substantially affect
the ability of the Group and of the Company to meet its obligations as and when they fall due.
e.
No item, transaction or event of a material and unusual nature has arisen in the interval between the end of the financial year and the date
of this report, which is likely to affect substantially the results of the operations of the Group and of the Company for the financial year in
which this report is made.
SIGNIFICANT EVENTS
There were no material significant events during the financial year that require disclosure in the financial statements.
SUBSEQUENT EVENTS
There were no material events subsequent to the balance sheet date that require disclosure in or adjustments to the financial statements.
AUDITORS
The Auditors, ONG & WONG, have indicated their willingness to continue in office.
Signed in accordance with a resolution of the directors
TAN SRI DATO’ SERI HALIM BIN MOHAMMAD
Director
PUAN SRI DATIN SERI MAZMIN BINTI NOORDIN
Director
Dated: 13 April 2007
Kuala Lumpur
39
ANNUAL REPORT 2006
Statement by Directors and
Statutory Declaration
STATEMENT BY DIRECTORS
(Pursuant to Section 169[15] of the Companies Act, 1965)
We, TAN SRI DATO’ SERI HALIM BIN MOHAMMAD and PUAN SRI DATIN SERI MAZMIN BINTI NOORDIN, being two of the directors of
HALIM MAZMIN BERHAD, do hereby state that, in the opinion of the directors, the financial statements set out on pages 42 to 87 are drawn up in
accordance with the provisions of the Companies Act, 1965 and applicable MASB approved accounting standards in Malaysia for entities other
than private entities so as to give a true and fair view of the states of affairs of the Group and of the Company as at 31 December 2006 and of
the results of their operations, changes in equity and cash flows of the Group and of the Company for the financial year ended on that date.
Signed in accordance with a resolution of the directors
TAN SRI DATO’ SERI HALIM BIN MOHAMMAD
Director
PUAN SRI DATIN SERI MAZMIN BINTI NOORDIN
Director
Kuala Lumpur
STATUTORY DECLARATION
(Pursuant to Section 169[16] of the Companies Act, 1965)
I, CHUNG KIN MUN, being the officer primarily responsible for the financial management of HALIM MAZMIN BERHAD, do solemnly and sincerely
declare that the financial statements set out on pages 42 to 87 are, to the best of my knowledge and belief, correct and I make this solemn declaration
conscientiously believing the same to be true and by virtue of the provisions of the Statutory Declaration Act, 1960.
Subscribed and solemnly declared by
)
the abovenamed, at Kuala Lumpur
)
in Wilayah Persekutuan on
)
13 April 2007
) CHUNG KIN MUN
Before me,
Kok Poo Him
No. W386
Commissioner for Oaths
40
ANNUAL REPORT 2006
Report of the Auditors
REPORT OF THE AUDITORS TO THE MEMBERS OF HALIM MAZMIN BERHAD (Incorporated in Malaysia)
We have audited the financial statements set out on pages 42 to 87. These financial statements are the responsibility of the Company’s directors.
It is our responsibility to form an independent opinion, based on our audit, on those financial statements and to report our opinion to you, as a
body, in accordance with Section 174 of the Companies Act, 1965 and for no other purpose. We do not assume responsibility towards any other
person for the content of this report.
We have conducted our audit in accordance with approved auditing standards in Malaysia. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting policies used
and significant estimates made by directors as well as evaluating the overall financial statements presentation. We believe that our audit provides
a reasonable basis for our opinion.
In our opinion:
a.
the financial statements are properly drawn up in accordance with the provisions of the Companies Act, 1965 and applicable MASB
approved accounting standards in Malaysia for entities other than private entities, so as to give a true and fair view of:
(i)
the matters required by Section 169 of the Companies Act, 1965 to be dealt with in the financial statements of the Group and of
the Company; and
(ii)
the state of affairs of the Group and of the Company at 31 December 2006 and of the results of the operations and cash flows of
the Group and of the Company for the financial year ended on that date;
and
b.
the accounting and other records and the registers required by the Act to be kept by the Company and by the subsidiaries for which we
have acted as auditors have been properly kept in accordance with the provisions of the Act.
We are satisfied that the financial statements of the subsidiaries that have been consolidated with the Company’s financial statements are in form
and content appropriate and proper for the purposes of the preparation of the consolidated financial statements and we have received satisfactory
information and explanations required by us for those purposes.
The audit reports on the financial statements of the subsidiaries were not subject to any qualification and did not include any comment made under
Subsection (3) of Section 174 of the Companies Act, 1965.
ONG & WONG
AF 0241
Chartered Accountants
ONG KONG LAI
494/06/08(J/PH)
Partner of Firm
Kuala Lumpur
41
ANNUAL REPORT 2006
Balance Sheets
As at 31 December 2006
Group
Note
Company
2006
2005
2006
2005
RM
RM
RM
RM
(Restated)
ASSETS
Non-current assets
Property, plant and equipment
3
124,009,093
143,923,946
128,741
279,321
Investment property
4
5,382,675
5,382,675
-
-
Investments in subsidiaries
5
-
-
41,351,955
41,351,955
Investment in associate
6
8,256,888
8,278,250
8,878,000
8,878,000
Other investments
7
14,650,000
10,050,000
14,650,000
10,050,000
152,298,656
167,634,871
65,008,696
60,559,276
-
Current assets
Inventories
235,065
67,537
-
Trade receivables
8
248,436
343,100
-
-
Other receivables
9
2,448,800
1,069,322
1,487,145
457,279
Amount due from subsidiaries
10
-
-
96,249,768
116,839,044
Marketable securities
11
21,921,503
229,526,567
21,921,503
229,526,567
Cash and bank balances
12
259,147,914
21,149,659
253,500,608
13,871,932
284,001,718
252,156,185
373,159,024
360,694,822
436,300,374
419,791,056
438,167,720
421,254,098
TOTAL ASSETS
EQUITY AND LIABILITIES
Equity attributable to equity holders
of the Company
Share capital
13
159,000,000
160,675,360
159,000,000
160,675,360
Treasury shares
14
(3,367,714)
(1,263,228)
(3,367,714)
(1,263,228)
5,326,531
7,811,944
5,326,531
7,811,944
15
123,633,012
143,248,855
91,731,772
101,217,465
284,591,829
310,472,931
252,690,589
268,441,541
16
106,042,473
100,067,812
106,000,000
100,000,000
Trade payables
17
1,246,844
3,280,142
-
-
Other payables
18
4,372,314
5,865,599
1,211,664
822,634
Amount due to subsidiaries
10
-
-
38,265,467
51,989,923
Borrowings
16
40,046,914
104,572
40,000,000
-
45,666,072
9,250,313
79,477,131
52,812,557
Total liabilities
151,708,545
109,318,125
185,477,131
152,812,557
TOTAL EQUITY AND LIABILITIES
436,300,374
419,791,056
438,167,720
421,254,098
Share premium
Reserves
Total equity
Non-current liabilities
Borrowings
Current liabilities
The annexed notes form an integral part of these financial statements.
42
ANNUAL REPORT 2006
Income Statements
For the year ended 31 December 2006
Group
Note
Company
2006
2005
2006
2005
RM
RM
RM
RM
20,472,000
(Restated)
Revenue
39,306,476
54,661,684
14,048,000
Cost of sales
(28,017,426)
(38,244,677)
-
-
Gross profit
11,289,050
16,417,007
14,048,000
20,472,000
Other income
20
21
8,782,099
81,004,868
8,429,946
31,788,725
(7,463,103)
(8,553,500)
(2,294,222)
(2,133,699)
(748,486)
(1,310,760)
(6,003,215)
(448,481)
Profit from operations
11,859,560
87,557,615
14,180,509
49,678,545
Finance costs
(6,447,514)
(8,468,197)
(6,436,173)
(6,495,245)
(21,362)
(44,859)
-
-
5,390,684
79,044,559
7,744,336
43,183,300
Administrative expenses
Other expenses
Share of loss of associate
Profit before tax
22
Income tax expense
23
Profit for the year
(11,607)
(15,096)
-
-
5,379,077
79,029,463
7,744,336
43,183,300
Attributable to:
- Equity holders of the Company
5,379,077
48,338,494
7,744,336
43,183,300
- Minority interest
-
30,690,969
-
-
Profit for the year
5,379,077
79,029,463
7,744,336
43,183,300
24
2
15
25
5
6
5
6
Basic earnings per share attributable to equity
holders of the Company (sen)
Net dividend per share (sen)
The annexed notes form an integral part of these financial statements.
43
44
44
The annexed notes form an integral part of these financial statements
At 31 December 2006
159,000,000
(1,675,360)
14
Treasury shares:
- cancelled
-
25
Dividend
- purchased
-
Total recognized income and expense for the year
(3,367,714)
2,485,413
(4,589,899)
-
-
-
-
(1,263,228)
160,675,360
-
-
(1,263,228)
-
(1,263,228)
(1,263,228)
-
(1,263,228)
-
-
-
-
-
RM
5,326,531
(2,485,413)
-
-
-
-
-
7,811,944
-
7,811,944
-
7,811,944
7,811,944
-
-
-
-
7,811,944
-
7,811,944
RM
1,675,360
1,675,360
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
RM
(7,764,891)
-
-
-
(7,764,891)
-
(7,764,891)
-
(17,934,873)
17,934,873
-
17,934,873
17,934,873
-
-
-
-
17,934,873
-
17,934,873
RM
129,722,543
-
-
(18,905,389)
5,379,077
5,379,077
-
143,248,855
17,934,873
125,313,982
3,276,152
122,037,830
125,313,982
-
-
(22,494,550)
48,338,494
99,470,038
2,512,654
96,957,384
RM
Attributable to Equity Holders of the Company
Non-distributable
Distributable
Capital
Treasury
Share redemption
Other
Retained
shares
premium
reserve
reserves
profit
-
160,675,360
-
160,675,360
-
26(c)
26(a)
26(d)
Profit for the year
expense recognized directly in equity
Foreign currency translation, representing net
Effects of adopting FRS 3
At 1 January 2006 (restated)
- prior year adjustments
- as previously stated
At 1 January 2006
160,675,360
-
At 31 December 2005 (restated)
-
Deconsolidation of a subsidiary
14
Treasury shares:
-
-
160,675,360
-
160,675,360
RM
Share
capital
- purchased
25
26(d)
Dividend
recognized income and expense for the year
Profit for the year, representing total
At 1 January 2005 (restated)
- prior year adjustments
- as previously stated
At 1 January 2005
Note
Consolidated Statement of Changes in Equity
ANNUAL REPORT 2006
284,591,829
-
(4,589,899)
(18,905,389)
(2,385,814)
5,379,077
(7,764,891)
310,472,931
-
310,472,931
3,276,152
307,196,779
310,472,931
-
(1,263,228)
(22,494,550)
48,338,494
285,892,215
2,512,654
283,379,561
RM
Total
-
-
-
-
-
-
-
-
-
-
-
-
-
(22,947,850)
-
(19,600,000)
30,690,969
11,856,881
560,821
11,296,060
RM
Minority
Interest
284,591,829
-
(4,589,899)
(18,905,389)
(2,385,814)
5,379,077
(7,764,891)
310,472,931
-
310,472,931
3,276,152
307,196,779
310,472,931
(22,947,850)
(1,263,228)
(42,094,550)
79,029,463
297,749,096
3,073,475
294,675,621
RM
Total
Equity
ANNUAL REPORT 2006
14
Treasury shares:
(1,675,360)
The annexed notes form an integral part of these financial statements
159,000,000
- cancelled
At 31 December 2006
-
14
Treasury shares:
-
- purchased
25
Dividend
expense for the year
total recognized income and
-
160,675,360
At 1 January 2006
Profit for the year, representing
160,675,360
-
-
-
160,675,360
(3,367,714)
2,485,413
(4,589,899)
-
-
(1,263,228)
(1,263,228)
(1,263,228)
-
-
-
RM
RM
Treasury
shares
Share
capital
At 31 December 2005
- purchased
25
Dividend
expense for the year
total recognized income and
Profit for the year, representing
At 1 January 2005
Note
Statement of Changes in Equity
Share
5,326,531
(2,485,413)
-
-
-
7,811,944
7,811,944
-
-
-
7,811,944
RM
premium
Total
RM
equity
-
(22,494,550)
43,183,300
(1,263,228)
(22,494,550)
43,183,300
80,528,715 249,016,019
RM
profit
Retained
Distributable
1,675,360
1,675,360
-
-
-
7,744,336
-
(4,589,899)
(18,905,389)
90,056,412 252,690,589
-
-
(18,905,389)
7,744,336
- 101,217,465 268,441,541
- 101,217,465 268,441,541
-
-
-
-
RM
reserve
redemption
Capital
Non-distributable
45
ANNUAL REPORT 2006
ANNUAL REPORT 2006
45
ANNUAL REPORT 2006
Cash Flow Statements
Group
Note
Company
2006
2005
2006
2005
RM
RM
RM
RM
(Restated)
CASH FLOWS FROM OPERATING ACTIVITIES
Profit before tax
5,390,684
79,044,559
7,744,336
43,183,300
(1,712,230)
(2,259,512)
(1,712,230)
(26,093,009)
Adjustments for:
Gain on investments
Gain on disposal of property, plant and equipment
Depreciation of property, plant and equipment
Net unrealized foreign exchange losses/(gains)
-
(72,772,003)
-
-
13,506,542
15,776,908
198,707
232,971
266,896
(30,861)
5,544,074
5,086
21,362
44,859
-
-
Interest expense
6,447,514
8,468,197
6,436,173
6,495,245
Interest income
(6,749,105)
(5,973,353)
(6,717,716)
(5,695,716)
17,171,663
22,298,794
11,493,344
18,127,877
(167,528)
118,666
-
98,907,344
Operating profit before working capital changes
(Increase)/Decrease in inventories
(Increase)/Decrease in receivables
(1,304,935)
6,736,616
14,015,410
(Decrease)/Increase in payables
(3,526,583)
(19,257,551)
(13,335,426)
6,852,322
Cash generated from operations
12,172,617
9,896,525
12,173,328
123,887,543
8,513
(53,699)
-
-
(6,447,514)
(8,468,197)
(6,436,173)
(6,495,245)
6,749,105
5,973,353
6,717,716
5,695,716
12,482,721
7,347,982
12,454,871
123,088,014
(114,101)
Tax refund/(paid)
Interest paid
Interest received
Net cash generated from operating activities
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of property, plant and equipment
(1,535,874)
(3,299,235)
(48,127)
Proceeds from disposal of property, plant and equipment
-
149,747,544
-
-
Distribution of assets from subsidiary
-
-
-
23,879,133
-
Deconsolidation of subsidiary
Acquisition of investment
Proceeds from disposal of marketable securities
Acquisition of marketable securities
Dividend received from marketable securities
Net cash generated from/(used in) investing activities
46
B
C
-
(10,886)
-
(4,600,000)
-
(4,600,000)
-
209,317,294
23,014,500
209,317,294
23,014,500
-
(250,500,000)
-
(250,500,000)
-
218,445
-
218,445
203,181,420
(80,829,632)
204,669,167
(203,502,023)
ANNUAL REPORT 2006
Group
Note
Company
2006
2005
2006
2005
RM
RM
RM
RM
(Restated)
CASH FLOWS FROM FINANCING ACTIVITIES
Share bought back
Dividend paid to equity holders of the Company
Dividend paid to minority shareholder of subsidiary
Distribution of assets to minority shareholder of subsidiary
(4,589,899)
(1,263,228)
(4,589,899)
(1,263,228)
(18,905,389)
(22,494,550)
(18,905,389)
(22,494,550)
-
(19,600,000)
-
-
-
(22,942,696)
-
-
Proceeds from term loan
46,000,000
-
46,000,000
-
Repayment of term loans
-
(129,275,978)
-
-
(109,997)
(32,401,999)
-
(10,954)
Repayment of hire purchase and lease financing
Deposit pledged to licensed bank
(32,909)
(251,000)
-
-
Net cash generated from/(used in) financing activities
22,361,806
(228,229,451)
22,504,712
(23,768,732)
Net increase/(decrease) in cash and cash equivalents
238,025,947
(301,711,101)
239,628,750
(104,182,741)
(60,601)
30,861
(74)
(5,086)
20,651,584
322,331,824
13,871,932
118,059,759
258,616,930
20,651,584
253,500,608
13,871,932
Effects of exchange rate changes
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
A
NOTE
A.
CASH AND CASH EQUIVALENTS
Cash and cash equivalents included in the cash flow statement comprise the following balance sheet amounts:
Group
Deposits with licensed banks
Deposit pledged with licensed bank (Note 12)
Cash and bank balances
Company
2006
2005
2006
2005
RM
RM
RM
RM
253,371,211
16,107,273
252,840,227
13,337,998
(530,984)
(498,075)
-
-
5,776,703
5,042,386
660,381
533,934
258,616,930
20,651,584
253,500,608
13,871,932
47
ANNUAL REPORT 2006
B.
ACQUISITION OF PROPERTY, PLANT AND EQUIPMENT
During the financial year, the Group and the Company acquired the property, plant and equipment by:
Group
Cash
2005
2006
2005
RM
RM
RM
RM
1,535,874
3,299,235
48,127
114,101
27,000
47,349
-
-
1,562,874
3,346,584
48,127
114,101
Finance lease
C.
Company
2006
DECONSOLIDATION OF SUBSIDIARY
(i)
Effects on financial results
There was no material effect on the financial results of the Group resulting from this deconsolidation.
(ii)
Effects on financial position
The effect of this deconsolidation on the financial position of the Group was as follows:
2005
RM
Other receivable
Bank balance
Other payables and accruals
Provision for taxation
10,886
(100,000)
(367)
Net assets as at 16 December 2005
10,519
Less: Net assets belong to minority interest
(5,154)
Net assets belong to the Group
Less: Amount recoverable from deconsolidated subsidiary
Increase in Group’s net assets
(iii)
100,000
5,365
(5,365)
-
Effects on cash flow statement
The effect of this deconsolidation on the cash flow statement of the Group was as follows:
2005
RM
Bank balances of deconsolidated subsidiary on 16 December 2005
Net cash outflow due to deconsolidation
48
10,886
(10,886)
ANNUAL REPORT 2006
Notes to the Financial Statements
31 December 2006
1.
GENERAL
The principal activities of the Company are investment holding and provision of management services to its subsidiaries. The principal
activities of the subsidiaries are as set out in Note 5.
The Company is a public limited liability company, incorporated and domiciled in Malaysia, and is listed on the Main Board of Bursa
Malaysia Securities Berhad.
The registered office is located at 49, The Boulevard, Mid Valley City, Lingkaran Syed Putra, 59200 Kuala Lumpur.
2.
ACCOUNTING POLICIES
The accounting policies adopted by the Group and the Company are consistent with those adopted in the previous years except for the
adoption of the following new/revised FRSs effective for financial year beginning 1 January 2006:
FRS 2
Share-based Payment
FRS 3
Business Combinations
FRS 5
Non-current Assets Held for Sale and Discontinued Operations
FRS 101
Presentation of Financial Statements
FRS 102
Inventories
FRS 108
Accounting Policies, Changes in Estimates and Errors
FRS 110
Events after the Balance Sheet Date
FRS 116
Property, Plant and Equipment
FRS 121
The Effects of Changes in Foreign Exchange Rates
FRS 127
Consolidated and Separate Financial Statements
FRS 128
Investment in Associates
FRS 132
Financial Instruments: Disclosure and Presentation
FRS 133
Earnings Per Share
FRS 136
Impairment of Assets
FRS 138
Intangible Assets
FRS 140
Investment Property
For this set of financial statements, the Group and the Company have chosen not to early adopt the following FRSs:
FRS
Effective for financial periods beginning on or after
FRS 117
Leases
1 October 2006
FRS 124
Related Party Disclosures
1 October 2006
FRS 139
Financial Instruments: Recognition and Measurement
Deferred
The Group and the Company are not required to disclose the possible impact of applying FRS 117, 124 and 139 on these financial
statements by virtue of exemptions provided under these FRSs.
The adoption of FRS 2, 5, 102, 108, 110, 116, 127, 128, 132, 133, 136 and 140 does not have significant financial impact on the
Group and the Company. The significant effects of the changes in accounting policies resulting from the adoption of the new/revised FRSs
and change in accounting policy for dry-docking costs are disclosed in Note 26.
49
ANNUAL REPORT 2006
2.
ACCOUNTING POLICIES (CONT'D)
a.
Basis of Preparation
The financial statements of the Group and of the Company have been prepared in accordance with the provisions of the Companies
Act, 1965 and applicable approved accounting standards in Malaysia for entities other than private entities issued by the Malaysian
Accounting Standards Board (“MASB”). The financial statements have been prepared under the historical cost convention, except
where otherwise stated in the respective accounting policies.
The financial statements are presented in Ringgit Malaysia (“RM”).
b.
Subsidiaries and Basis of Consolidation
(i)
Subsidiaries
Subsidiaries are entities over which the Group has the power, directly or indirectly, to exercise control over the financial and
operating policies so as to obtain benefits from their activities.
In the Company’s separate financial statements, investments in subsidiaries are stated at cost less impairment losses, if any.
On disposal of such investments, the difference between the net disposal proceeds and their carrying amounts is included
in the income statement. The policy for the recognition and measurement of impairment losses is in accordance with Note
2(g).
(ii)
Basis of Consolidation
The consolidated financial statements include the financial statements of the Company and its subsidiaries made up to the
end of the financial year. The results of the subsidiaries are consolidated using the acquisition method.
Under the acquisition method, subsidiaries are consolidated from the date on which control is transferred to the Group and
are no longer consolidated from the date that control ceases. The cost of acquisition is measured as the aggregate of 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 business combination. Identifiable assets acquired, liabilities and contingent liabilities assumed
in a business combination are measured initially at their fair values at the acquisition date, irrespective of the extent of any
minority interest. Any difference between the cost of acquisition and the Group’s interest in the net fair value of the identifiable
assets, liabilities and contingent liabilities acquired is recognized as goodwill or negative goodwill. The accounting policy
on goodwill and negative goodwill is disclosed in Note 2(d).
Intragroup transactions, balances and resulting unrealized gains are eliminated on consolidation and the consolidated
financial statements reflect external transactions only. Unrealized losses are eliminated on consolidation unless costs cannot
be recovered. Consistent accounting policies are applied for transactions and events in similar circumstances.
Minority interest represents the portion of profit or loss and net assets in subsidiaries not held directly or indirectly by the Group.
Minority interest is measured at the minority’s share of the fair values of the identifiable assets and liabilities at the acquisition
date and the minority’s equity since then.
50
ANNUAL REPORT 2006
2.
b.
Subsidiaries and Basis of Consolidation (cont'd)
(ii)
Basis of Consolidation (cont'd)
In prior years, certain subsidiaries of the Group, from past business combinations occurred before 1 January 2006, were
presented under the merger method. Effective 1 January 2006, the merger method is prohibited under FRS 3 Business
Combinations. However, the Group adopted exemption on business combinations provided under FRS 1 First-time Adoption
of Financial Reporting Standards by electing not to apply FRS 3 retrospectively and continued to account for the past business
combinations under the merger method. As such, the results of subsidiaries are presented as if the merger had been effected
throughout the current and previous years. On consolidation, the cost of merger is cancelled with the nominal values of shares
received. Any resulting credit difference is classified as equity and regarded as a non-distributable reserve. Any resulting
debit difference is deducted directly from equity. Subsidiaries that are consolidated under the merger method and the impact
of adopting FRS 1 exemption are disclosed in Note 5 and Note 26(a) respectively.
c.
Associate
Associate is an entity in which the Group has a long term equity interest and voting rights of between 20% and 50% to exercise
significant influence. Significant influence is the power to participate in the financial and operating policy decisions of the associate
but not in control over those policies.
Investment in associate is accounted for in the consolidated financial statements using the equity method. The Group’s investment in
associate is recognized in the consolidated balance sheet at cost plus the Group’s share of post-acquisition net results of the associate
less impairment losses. The policy for the recognition and measurement of impairment losses is in accordance with Note 2(g).
The Group’s share of results of the associate is recognized in the consolidated income statement from the date that significant influence
commences until the date that significant influence ceases. Any unrealized gains and losses on transactions between the Group and the
associate are eliminated to the extent of the Group’s interest in the associate. When the Group’s share of losses in an associate equals
or exceeds its interest in the associate, the Group does not recognize further losses, unless it has incurred obligations or made payments
on behalf of the associate. Consistent accounting policies are applied for transactions and events in similar circumstances.
Goodwill relating to an associate is included in the carrying amount of the investment and is not amortized. Any excess of the Group’s
share of the fair value of the associate’s net identifiable assets 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 results
of the associate in the period in which the investment is acquired.
In the Company’s separate financial statements, investment in associate is stated at cost less impairment losses, if any. On disposal of
such investments, the difference between the net disposal proceeds and their carrying amounts is included in the income statement.
51
ANNUAL REPORT 2006
2.
d.
Goodwill
For acquisitions occurred prior to 1 January 2006, goodwill acquired in a business combination represents the excess of the cost
of the acquisition of subsidiaries over the Group’s interest in the fair values of the net identifiable assets (including intangible assets)
at the date of acquisition. With the adoption of FRS 3 Business Combinations beginning 1 January 2006, goodwill represents the
excess of the cost of the acquisition over the Group’s interest in the net fair value of the identifiable assets, liabilities and contingent
liabilities of the subsidiaries.
Goodwill is measured at cost less accumulated impairment losses, if any. Goodwill is no longer amortized. Instead it is allocated to
cash-generating units (“CGUs”) which are expected to benefit from the synergies of the business combination. Each CGU represents
the lowest level at which the goodwill is monitored and is not larger than a segment based on either the Group’s primary or secondary
reporting format. The carrying amount of goodwill is tested annually for impairment or more frequently if events or changes in
circumstances indicate that it might be impaired. Gains and losses on the disposal of an entity include the carrying amount of goodwill
relating to the entity sold.
Negative goodwill, which represents the excess of the Group’s interest in the net fair value of the identifiable assets, liabilities
and contingent liabilities acquired over the cost of the acquisition of the subsidiaries, is recognized immediately in the income
statement.
e.
Foreign Currencies
The individual financial statements of each entity in the Group are measured using the functional currency. The consolidated financial
statements are presented in Ringgit Malaysia (“RM”), which is also the Company’s functional currency.
(i)
Foreign Currency Transactions
In preparing the individual financial statements, transactions in currencies other than the entity’s functional currency (“foreign
currencies”) are translated into the functional currencies using the exchange rates prevailing at the dates of the transactions.
At each balance sheet date, monetary assets and liabilities denominated in foreign currencies are translated at the rates
prevailing on the balance sheet date. Non-monetary items that are measured in terms of historical cost in a foreign currency
are translated at the exchange rate prevailing at the date of the initial transaction. Non-monetary items measured at fair value
in a foreign currency are translated at exchange rates at the date when the fair value is determined. Exchange differences
arising on the settlement of monetary items or on translating monetary items at balance sheet date are recognized in the income
statement except for those arising on monetary items that form part of the Group’s net investment in foreign operation.
(ii)
Net Investment in Foreign Operations
Exchange differences arising on monetary items that form part of the Group’s net investment in foreign operation, where that
monetary item is denominated in either the functional currency of the reporting entity or the foreign operation, are initially taken
directly to the foreign currency translation reserve within the equity until the disposal of the foreign operation, at which time
they are recognized in the income statement. If exchange differences arise in a currency other than the functional currency
of either the reporting entity or the foreign operation, such items are recognized in the income statement for the period.
Exchange differences arising on monetary items that form part of the Company’s net investment in foreign operation, regardless
of the currency of the monetary item, are recognized in the income statement of the Company or the foreign operation, as
appropriate.
52
ANNUAL REPORT 2006
2.
e.
Foreign Currencies (cont'd)
(iii)
Foreign Operations
The results and financial position of the Group’s foreign operations are translated into presentation currency (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 a foreign currency translation reserve within equity and are subsequently
recognized in the income statement upon disposal of the foreign operations.
Goodwill and fair value adjustments arising from the acquisition of a foreign operation on or after 1 January 2006 are
treated as assets and liabilities of the foreign operation and are translated at the closing rate at the balance sheet date. For
acquisition prior to 1 January 2006, the exchange rates as at the date of initial acquisition were used.
The closing rates used in the translation of foreign currency monetary assets and liabilities and the financial statements of
foreign operations are as follows:
2006
2005
RM
RM
Singapore Dollar
2.32
2.27
United States Dollar
3.53
3.78
53
ANNUAL REPORT 2006
2.
f.
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 recognized 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 derecognized.
All other repairs and maintenance are charged to the income statement when they are incurred.
Subsequent to initial recognition, property, plant and equipment are stated at cost less accumulated depreciation and any impairment
losses. The policy for the recognition and measurement of impairment losses is in accordance with Note 2(g).
Vessel and other property, plant and equipment are depreciated to their residual values over their estimated useful lives using the
straight-line method. Dry-docking costs are recognized when incurred and allocated over the period until the next dry-docking. The
annual rates of depreciation used for the major groups of property, plant and equipment are as follows:
Vessel
18 years - 25 years
Dry-docking
24 months - 36 months
Office and other equipment
20% - 25%
Motor vehicles
20%
Renovation
20%
The residual values, useful lives 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 derecognized 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 recognized in the income
statement.
54
ANNUAL REPORT 2006
2.
g.
Impairment of Assets
The carrying amount of the Group’s assets, other than investment property and inventories, are reviewed at each balance sheet date
to determine whether there are any indications of impairment. If any such indications exist, the asset’s recoverable amount is estimated
to determine the amount of impairment loss. The policies on impairment of assets are summarized as follows:
(i)
Goodwill
Goodwill that has an indefinite useful life is tested annually for impairment or more frequently if events or changes in circumstances
indicate that it might be impaired. For impairment testing, goodwill from business combinations is allocated to CGUs which
are expected to benefit from the synergies of the business combination.
The recoverable amount is determined for each CGU based on 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. An impairment loss is recognized in the income statement when the
carrying amount of the CGU, including the goodwill, exceeds the recoverable amount of the CGU. The total impairment loss
is allocated, first, to reduce the carrying amount of goodwill allocated to the CGU and then to the other assets of the CGU
on a pro-rata basis. An impairment loss on goodwill is not reversed in subsequent periods.
(ii)
Other Assets
Other assets such as property, plant and equipment, investments in subsidiaries and associate are reviewed for objective
indications of impairment at each balance sheet date or whenever there is any indication that these assets may be impaired.
Where such indications exist, impairment loss is determined as the excess of the asset’s carrying value over its recoverable
amount (greater of value in use or fair value less costs to sell) and is recognized in the income statement. Any reversal of
an impairment loss for these assets is recognized in the income statement. The carrying amount is increased to its revised
recoverable amount, provided that the amount does not exceed the carrying amount that would have been determined (net
of amortization or depreciation) had no impairment loss been recognized for the asset in prior years.
If an asset is carried at a revalued amount, impairment loss is treated as a revaluation decrease to the extent of previously
recognized revaluation surplus for the same asset. Any subsequent reversal is treated as a revaluation increase.
h.
Investment Property
Investment property includes leasehold land which is held to earn rental income or for capital appreciation or both. Investment property
is measured initially at its cost, including transaction cost. Subsequent to initial recognition, property is measured at fair value, with
any changes recognized in the income statement. Fair value of investment property is determined either by independent professional
valuers or by management based on their judgments and estimates. Management’s estimates have been made with reference to current
prices in an active market for similar properties in the same location and condition and subject to similar lease and other contracts.
Investment property is derecognized when either it has been disposed off or when the investment property is permanently withdrawn
from use and no future economic benefit is expected from its disposal. Any gain or loss on the retirement or disposal of an investment
property is recognized in the income statement.
55
ANNUAL REPORT 2006
2.
i.
Inventories
Inventories which comprise bunker and lubricant stocks are held for own consumption and are stated at lower of cost and net realizable
value. Cost is determined on a first-in, first-out basis and comprises purchase cost and other direct charges.
j.
Financial Instruments
Financial instruments comprise financial assets, financial liabilities and off-balance sheet financial instruments. Financial instruments
are recognized in the balance sheet when the Group has become a party to the contractual provisions of the instruments.
Financial instruments are classified as liabilities or equity in accordance with the substance of the contractual arrangement. Interest,
dividends, gains and losses relating to a financial instrument classified as liability are reported as expense or income. Distributions
to holders of financial instruments classified as equity are charged directly to equity. Financial instruments are offset when the Group
has a legally enforceable right to offset and intends either to settle on a net basis, or to realize the asset and settle the liability
simultaneously.
(i)
Cash and Cash Equivalents
Cash and cash equivalents comprise bank balances, cash in hand and short term highly liquid assets that are readily convertible
to cash without significant risk of changes in value net of outstanding bank overdrafts.
(ii)
Marketable Securities
Marketable securities comprise quoted securities which are managed by external fund managers for the purpose of short
term capital gains. They are carried at market value, determined based on quoted market prices. Increases or decreases in
the carrying amount of marketable securities are recognized in the income statement. On disposal of marketable securities,
the difference between net disposal proceeds and the carrying amount is recognized in the income statement.
(iii)
Other Investments
Other investments comprise unquoted securities that are acquired and held for yield or capital growth and are usually held
to maturity. Other investments are stated at cost, adjusted for amortization of premium net of accretion of discount, where
applicable, to maturity dates, less impairment losses. On disposal of an investment, the difference between the net disposal
proceeds and its carrying amount is recognized in the income statement.
(iv)
Receivables
Receivables are carried at anticipated realizable value. Bad debts are written off in the period in which they are identified.
An estimate is made for doubtful debts based on a review of all outstanding amounts at the balance sheet date.
(v)
Payables and Interest Bearing Borrowings
Payables are stated at the fair value of the consideration to be paid in the future for goods and services received. Interest
bearing borrowings are stated at the amount of proceeds received, net of transaction costs. After initial recognition, interest
bearing borrowings are subsequently stated at amortized cost using the effective interest method.
Borrowing costs are recognized in the income statement in the period in which they are incurred.
56
ANNUAL REPORT 2006
2.
j.
Financial Instruments (cont'd)
(vi)
Equity Instruments
Ordinary shares are classified as equity in the balance sheet. Costs directly attributable to the issuance of new equity shares
are taken to equity as a deduction from the proceeds.
Dividends on ordinary shares are accounted for as an appropriation of retained profits in the period in which they are
approved.
When the Company repurchases its own equity shares, the amount of the consideration paid, including directly attributable
costs, is recognized in equity. Shares repurchased are held as treasury shares and presented as a deduction from equity.
No gain or loss is recognized in the income statement on the sale, re-issuance or cancellation of the treasury shares. When
treasury shares are re-issued by resale, the difference between the sales consideration and the carrying amount is recognized
in equity.
(vii)
Derivative Financial Instruments
Derivative financial instruments are off-balance sheet financial instruments whose values change in response to changes in
prices or rates (such as foreign exchange rate and interest rate) of the underlying instruments.
k.
Assets Held Under Hire Purchase and Finance Lease
Assets acquired under hire purchase or finance lease agreements 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 hire purchase and finance leases, less accumulated depreciation
and impairment losses. These assets are depreciated in accordance with the depreciation policy as disclosed in Note 2(f).
Outstanding obligation due under the hire purchase or finance lease agreements after deducting finance costs are included as
liabilities in the financial statements. The finance costs of the hire purchase or finance lease are charged to the income statement over
the periods of respective agreements so as to produce a constant periodic rate of interest on the remaining balance of the liabilities
for each period.
57
ANNUAL REPORT 2006
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, on temporary differences at the balance sheet date between the tax bases
of assets and liabilities and their carrying amounts in the financial statements. In principle, deferred tax liabilities are recognized for
all taxable temporary differences and deferred tax assets are recognized 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 utilized. Deferred tax is not recognized 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 realized or the liability is settled,
based on tax rates that have been enacted or substantively enacted at the balance sheet date. Deferred tax is recognized in the
income statement, except when it arises from a transaction which is recognized directly in equity, in which case the deferred tax is
also charged or credited 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 negative goodwill.
m.
Provisions for Liabilities
Provisions for liabilities are recognized 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 recognized as finance cost.
n.
Employee Benefits
(i)
Short Term Benefits
Wages, salaries, bonuses and social security contributions (“Socso”) are recognized as expenses in the year in which the
associated services are rendered by employees of the Company. Short term accumulating compensated absences such
as paid annual leave are recognized when services are rendered by employees that increase their entitlement to future
compensated absences, and short term non-accumulating compensated absences such as sick leave are recognized when
the absences occur.
(ii)
Defined Contribution Plans
As required by law, companies in Malaysia make contributions to the Employees Provident Fund (“E.P.F.”). Such contributions
are recognized as an expense in the income statement as incurred.
58
ANNUAL REPORT 2006
2.
o.
Revenue Recognition
Revenue is recognized when it is probable that the economic benefits associated with the transaction will flow to the enterprise and
the amount of the revenue can be measured reliably.
(i)
Freight/Charter Income
Revenue from all voyages, completed and uncompleted, up to the balance sheet date are included in the operating results
for the year. For voyages that remained uncompleted as at the balance sheet date, the freight receivable for cargoes loaded
onto the vessel up to the balance sheet date and their relevant discharging costs are accrued in the income statement. The
time charter equivalent of income from ship chartering activities is recognized on a time proportion basis.
(ii)
Interest Income
Interest is recognized on an accrual basis that reflects the effective yield on the asset.
(iii)
Dividend Income
Dividend income is recognized when the right to receive payment is established.
(iv)
Management Fee
Revenue arising from provision of management services is recognized as and when the services are rendered.
p.
Critical Judgments Made in Applying Accounting Policies
In the preparation of the financial statements, management has been required to make judgments, estimates and assumptions that
affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may
differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates
are recognized in the financial statements in the period in which the estimate is revised and in any future periods affected.
In the process of applying the accounting policies as described above, management is of the view that there are no instances of
application of judgments which are expected to have significant effect on the amounts recognized in the financial statements.
59
ANNUAL REPORT 2006
3.
PROPERTY, PLANT AND EQUIPMENT
Exchange
As at
1.1.2006
As at
Addition
Disposal
differences
31.12.2006
RM
RM
RM
RM
RM
213,440,287
-
-
(9,525,333)
203,914,954
Dry-docking
4,355,373
1,485,897
-
(185,173)
5,656,097
2,165,890
76,977
-
-
2,242,867
Motor vehicles
2,230,094
-
-
-
2,230,094
376,574
-
-
-
376,574
222,568,218
1,562,874
-
(9,710,506)
214,420,586
(Restated)
Group
2006
Cost
Vessels
Renovation
As at
Charge for
Exchange
As at
1.1.2006
the year
Disposal
differences
31.12.2006
RM
RM
RM
RM
RM
73,350,177
10,705,899
-
(1,693,473)
82,362,603
Dry-docking
1,079,221
2,441,601
-
(45,848)
3,474,974
1,832,295
158,186
-
-
1,990,481
Motor vehicles
2,006,023
200,856
-
-
2,206,879
376,556
-
-
-
376,556
78,644,272
13,506,542
-
(1,739,321)
90,411,493
(Restated)
Accumulated Depreciation
Vessels
Renovation
As at
31.12.2006
RM
Net Book Value
Vessels
Dry-docking
Motor vehicles
Renovation
121,552,351
2,181,123
252,386
23,215
18
124,009,093
60
ANNUAL REPORT 2006
3.
PROPERTY, PLANT AND EQUIPMENT (CONT’D)
Exchange
As at
1.1.2005
As at
Addition
Disposal
differences
31.12.2005
RM
RM
RM
RM
RM
318,840,889
-
(105,400,602)
-
213,440,287
Dry-docking
6,094,717
3,185,372
(4,924,716)
-
4,355,373
2,004,678
161,212
-
-
2,165,890
Motor vehicles
2,230,094
-
-
-
2,230,094
376,574
-
-
-
376,574
329,546,952
3,346,584
(110,325,318)
-
222,568,218
Group (cont’d)
2005 (Restated)
Cost
Vessels
Renovation
As at
Charge for
Exchange
As at
1.1.2005
the year
Disposal
differences
31.12.2005
RM
RM
RM
RM
RM
89,329,620
12,337,698
(28,317,141)
-
73,350,177
Dry-docking
3,021,242
2,982,695
(4,924,716)
-
1,079,221
1,642,956
189,339
-
-
1,832,295
Motor vehicles
1,738,847
267,176
-
-
2,006,023
376,556
-
-
-
376,556
96,109,221
15,776,908
(33,241,857)
-
78,644,272
Vessels
Renovation
As at
31.12.2005
RM
Net Book Value
Vessels
Dry-docking
140,090,110
3,276,152
333,595
Motor vehicles
224,071
Renovation
18
143,923,946
61
ANNUAL REPORT 2006
3.
As at
As at
1.1.2006
Addition
Disposal
31.12.2006
RM
RM
RM
RM
481,050
-
-
481,050
1,710,709
48,127
-
1,758,836
2,191,759
48,127
-
2,239,886
As at
Charge for
1.1.2006
the year
Disposal
31.12.2006
RM
RM
RM
RM
Company
2006
Cost
Motor vehicle
Office equipment
As at
Motor vehicle
Office equipment
384,840
96,209
-
481,049
1,527,598
102,498
-
1,630,096
1,912,438
198,707
-
2,111,145
As at
31.12.2006
RM
Net Book Value
Motor vehicle
Office equipment
1
128,740
128,741
62
ANNUAL REPORT 2006
3.
As at
As at
1.1.2005
Addition
Disposal
31.12.2005
RM
RM
RM
RM
481,050
-
-
481,050
1,596,608
114,101
-
1,710,709
2,077,658
114,101
-
2,191,759
As at
Charge for
1.1.2005
the year
Disposal
31.12.2005
RM
RM
RM
RM
Company (cont’d)
2005
Cost
Motor vehicle
Office equipment
As at
Motor vehicle
Office equipment
288,630
96,210
-
384,840
1,390,837
136,761
-
1,527,598
1,679,467
232,971
-
1,912,438
As at
31.12.2005
RM
Net Book Value
Motor vehicle
Office equipment
96,210
183,111
279,321
The net book value of motor vehicles of the Group and of the Company acquired under hire purchase agreements amounted to RM23,200
(2005: RM156,413) and RMNil (2005: RM96,210) respectively.
The net book value of office equipment of the Group acquired under finance lease agreements amounted to RM119,246 (2005:
RM140,155).
63
ANNUAL REPORT 2006
4.
INVESTMENT PROPERTY
Group
Leasehold land, at fair value
2006
2005
RM
RM
5,382,675
5,382,675
Details of the leasehold land are disclosed in List of Vessels/Investment Property of the Annual Report.
5.
INVESTMENTS IN SUBSIDIARIES
Company
2006
2005
RM
RM
41,351,955
41,402,955
Unquoted shares, at cost:
At 1 January
Deconsolidated during the year
At 31 December
-
(51,000)
41,351,955
41,351,955
The shares of all subsidiaries are held directly by the Company. Details of the subsidiaries are as follows:
Country of
Principal
Equity interest
incorporation
activities
2006
2005
* AHS Marine Sdn. Bhd.
Malaysia
Ship-owning
100%
100%
* OHM Tankers Sdn. Bhd.
Malaysia
Ship-owning
100%
100%
Colville Shipping Sdn. Bhd.
Malaysia
Ship-owning
100%
100%
Colorado Shipping Sdn. Bhd.
Malaysia
Ship-owning
100%
100%
* Prima Shipbrokers Sdn. Bhd.
Malaysia
Ship broking and ship chartering
100%
100%
* Prima Shipmanagement Sendirian Berhad
Malaysia
Ship management
100%
100%
* Meridian Shipping Sdn. Bhd.
Malaysia
Ceased operation
100%
100%
* OHM Bulk Services Sdn. Bhd.
Malaysia
Ceased operation
100%
100%
Jubilee Shipping Sdn. Bhd.
Malaysia
Ceased operation
100%
100%
Patriot Shipping Sdn. Bhd.
Malaysia
Ceased operation
100%
100%
Splendid Shipping Sdn. Bhd.
Malaysia
Dormant
100%
100%
Sterling Shipping Sdn. Bhd.
Malaysia
Dormant
100%
100%
Emerald Equity Sdn. Bhd.
Malaysia
Dormant
100%
100%
Meridian Tankers Sdn. Bhd.
Malaysia
Dormant
100%
100%
Prima Delima Sdn. Bhd.
Malaysia
Dormant
100%
100%
* Subsidiaries which are consolidated using the merger method.
64
ANNUAL REPORT 2006
6.
INVESTMENT IN ASSOCIATE
Group
Unquoted shares, at cost
Share of accumulated loss of associate
Company
2006
2005
2006
2005
RM
RM
RM
RM
8,878,000
8,878,000
8,878,000
8,878,000
(621,112)
(599,750)
-
-
8,256,888
8,278,250
8,878,000
8,878,000
8,256,888
8,278,250
Represented by:
Group’s share of net assets
There is no goodwill arising from the acquisition of the associate.
The shares of the associate are held directly by the Company. Details of the associate are as follows:
Kemaman Heavy Industries Sdn. Bhd.
7.
Country of
Principal
incorporation
activities
2006
Equity interest
2005
Malaysia
Dormant
48.15%
48.15%
OTHER INVESTMENTS
Group and Company
Unquoted shares in Malaysia, at cost
Unquoted subordinated bonds in Malaysia, at cost
2006
2005
RM
RM
50,000
50,000
14,600,000
10,000,000
14,650,000
10,050,000
The Company has entered into three (3) Facility Agreements with local financial institutions and third parties under Primary Collateralized
Loan Obligation Programs as disclosed in Note 16. As an integral part of the Facility Agreements, the Company is required to subscribe
for the Variable Rate Asset Backed Subordinated Bonds (“VRABSBs”) issued by the third parties.
The VRABSBs are unquoted and represent 10% of the principal amount of the unsecured term loan facilities. Of the total RM14.6 million
unquoted subordinated bonds, RM4,000,000 will mature in November 2007.
65
ANNUAL REPORT 2006
8.
TRADE RECEIVABLES
Group
Trade receivables
Allowance for doubtful debts
2006
2005
RM
RM
5,033,990
5,128,654
(4,785,554)
(4,785,554)
248,436
343,100
189,442
189,442
Of which,
Amount due from a related party
The amount due from a related party is unsecured, interest free and has no fixed terms of repayment. Further details on related party transactions
are disclosed in Note 28.
The Group’s normal trade credit term ranges from 14 to 30 (2005: 14 to 30) days.
9.
OTHER RECEIVABLES
Group
2006
2005
2006
2005
RM
RM
RM
RM
1,468,614
373,936
1,278,728
276,832
Deposits
601,403
258,601
208,417
180,447
Prepayments
287,958
325,840
-
-
90,825
110,945
-
-
2,448,800
1,069,322
1,487,145
457,279
Other receivables
Tax receivable
10.
Company
AMOUNT DUE FROM/(TO) SUBSIDIARIES
These balances are unsecured, interest free and have no fixed terms of repayment, except for an amount of approximately RM525,984
(2005: RM498,075) due from subsidiaries which bears interests at 3.70% (2005: 3.70%) per annum.
11.
MARKETABLE SECURITIES
Group and Company
Unit trusts quoted in Malaysia, at market value
66
2006
2005
RM
RM
21,921,503
229,526,567
ANNUAL REPORT 2006
12.
CASH AND BANK BALANCES
Group
Cash on hand and at bank
Company
2006
2005
2006
2005
RM
RM
RM
RM
253,371,211
16,107,273
252,840,227
13,337,998
5,776,703
5,042,386
660,381
533,934
259,147,914
21,149,659
253,500,608
13,871,932
Deposits with licensed banks comprise fixed deposits and short term deposits. The maturity of the deposits as at the end of the financial
year ranges from 8 to 285 (2005: 5 to 365) days.
Included in these balances is an amount of RM530,984 (2005: RM498,075) which has been pledged as security for banking facility
extended to a subsidiary.
13.
SHARE CAPITAL
Group and Company
2006
2005
400,000,000
400,000,000
RM
RM
Ordinary shares of RM0.50 each
200,000,000
200,000,000
321,350,720
321,350,720
Authorized
Issued and fully paid
At 1 January
Cancelled during the year (Note 14)
At 31 December
(3,350,720)
-
318,000,000
321,350,720
RM
RM
160,675,360
160,675,360
At 1 January
Cancelled during the year (Note 14)
At 31 December
(1,675,360)
-
159,000,000
160,675,360
67
ANNUAL REPORT 2006
14.
TREASURY SHARES
Group and Company
2006
2005
At 1 January
1,711,100
-
Repurchased during the year
6,019,400
1,711,100
Cancelled during the year
At 31 December
(3,350,720)
-
4,379,780
1,711,100
RM
RM
At 1 January
1,263,228
-
Repurchased during the year
4,589,899
1,263,228
(2,485,413)
-
3,367,714
1,263,228
Cancelled during the year
At 31 December
The shareholders of the Company by an ordinary resolution passed in the Annual General Meeting held on 31 May 2006, renewed their
approval for the Company’s plan to repurchase its own ordinary shares.
During the financial year, the Company repurchased 6,019,400 (2005: 1,711,100) ordinary shares from the open market at an average
price of RM0.76 (2005: RM0.74) per share. The total consideration paid for the repurchase including transaction costs were RM4,589,899
(2005: RM1,263,228). The repurchased transactions were financed by internally generated funds.
On 24 November 2006, the Company cancelled 3,350,720 shares repurchased and an amount equivalent to their par value of
RM1,675,360 was transferred to the capital redemption reserve in accordance with the requirement of Section 67A 3(E) of the Companies
Act, 1965. The remaining considerations of RM2,485,413 (i.e. premium and transaction costs) for the shares repurchased were offset
against share premium.
The remaining repurchased shares are held as treasury shares in accordance with the requirement of Section 67A of the Companies Act,
1965.
Of the total 318,000,000 (2005: 321,350,720) issued and fully paid ordinary shares as at the respective financial year end, 4,379,780
(2005: 1,711,100) are held as treasury shares by the Company. The number of outstanding ordinary shares in issue after the setoff is
therefore 313,620,220 (2005: 319,639,620) ordinary shares of RM0.50 each.
68
ANNUAL REPORT 2006
15.
RESERVES
Group
2006
RM
Company
2005
2006
2005
RM
RM
RM
(Restated)
Non-distributable
Capital redemption reserve
At 1 January
-
-
-
-
Cancellation of treasury shares
1,675,360
-
1,675,360
-
At 31 December
1,675,360
-
1,675,360
-
17,934,873
17,934,873
-
-
(17,934,873)
-
-
-
-
17,934,873
-
-
Other reserves
Reserve on consolidation
At 1 January
At 31 December
Foreign currency translation reserve
At 1 January
-
-
-
-
Foreign currency translation
(7,764,891)
-
-
-
At 31 December
(7,764,891)
-
-
-
Total other reserves
(7,764,891)
17,934,873
-
-
Total non-distributable reserves
(6,089,531)
17,934,873
1,675,360
-
122,037,830
96,957,384
101,217,465
80,528,715
3,276,152
2,512,654
-
-
125,313,982
99,470,038
101,217,465
80,528,715
Distributable
Retained profit
At 1 January as previously stated
prior year adjustments
as restated
Profit for the year
17,934,873
-
-
-
143,248,855
99,470,038
101,217,465
80,528,715
5,379,077
48,338,494
7,744,336
43,183,300
Dividend
(18,905,389)
(22,494,550)
(18,905,389)
(22,494,550)
At 31 December
129,722,543
125,313,982
90,056,412
101,217,465
123,633,012
143,248,855
91,731,772
101,217,465
Total Reserves
69
ANNUAL REPORT 2006
16.
BORROWINGS
Group
Company
2006
2005
2006
2005
RM
RM
RM
RM
46,914
104,572
-
-
Current
Hire purchase and finance lease liabilities (Note 19)
Term loans (unsecured)
40,000,000
-
40,000,000
-
Repayable within one year
40,046,914
104,572
40,000,000
-
Non-current
42,473
67,812
-
-
106,000,000
100,000,000
106,000,000
100,000,000
Repayable between two to five years
106,042,473
100,067,812
106,000,000
100,000,000
Total Borrowings
89,387
172,384
-
-
146,000,000
100,000,000
146,000,000
100,000,000
146,089,387
100,172,384
146,000,000
100,000,000
In prior years, the Company entered into a Facility Agreement with Affin Bank Berhad and Alliance Investment Bank Berhad for an unsecured
fixed rate term loan of RM40,000,000 and RM60,000,000 respectively under a Primary Collateralized Loan Obligation Program. During
the financial year, the Company entered into a similar Facility Agreement with Alliance Investment Bank Berhad for an unsecured fixed rate
term loan of RM46,000,000.
The unsecured term loans are for a tenor of five (5) years, of which an amount of RM40,000,000 is repayable in one lump sum in November
2007. As an integral part of the Facility Agreements, the Company is required to subscribe for the VRABSBs issued by third parties as
disclosed in Note 7.
17.
TRADE PAYABLES
Included in trade payables is an amount of RM26,142 (2005: RM73,027) due to related parties. These balances are unsecured, interest
free with repayment in accordance with normal trading terms. Further details on related party transactions are disclosed in Note 28.
The normal trade credit term granted to the Group ranges from 14 to 90 (2005: 14 to 90) days.
70
ANNUAL REPORT 2006
18.
OTHER PAYABLES
Group
Company
2006
2005
2006
2005
RM
RM
RM
RM
Other payables
1,868,928
2,600,837
117,141
149,427
Accruals
2,503,386
3,264,762
1,094,523
673,207
4,372,314
5,865,599
1,211,664
822,634
40,362
43,407
40,362
43,407
Of which,
Amount due to related parties
The amount due to related parties are unsecured, interest free and have no fixed terms of repayment. Further details on related party transactions
are disclosed in Note 28.
19.
HIRE PURCHASE AND FINANCE LEASE LIABILITIES
Group
2006
2005
RM
RM
not later than one year
52,041
114,578
later than one year and not later than five years
44,442
72,823
96,483
187,401
Minimum lease payment
Future finance costs
(7,096)
(15,017)
Present value of hire purchase and finance lease liabilities
89,387
172,384
not later than one year (Note 16)
46,914
104,572
later than one year and not later than five years (Note 16)
42,473
67,812
89,387
172,384
Present value of hire purchase and finance lease liabilities
The Group has hire purchase and finance lease contracts for various property, plant and equipment as disclosed in Note 3.
20.
REVENUE
Group
Freight/Charter income
Company
2006
2005
2006
2005
RM
RM
RM
RM
39,306,476
54,661,684
-
-
Dividend income from subsidiaries
-
-
13,880,000
20,400,000
Management fee from subsidiaries
-
-
168,000
72,000
39,306,476
54,661,684
14,048,000
20,472,000
71
ANNUAL REPORT 2006
21.
OTHER INCOME
Group
Gain on disposal of property, plant and equipment
2005
2006
2005
RM
RM
RM
RM
-
72,772,003
-
-
Gain on investments
1,712,230
2,259,512
1,712,230
26,093,009
Interest income
6,749,105
5,973,353
6,717,716
5,695,716
320,764
-
-
-
8,782,099
81,004,868
8,429,946
31,788,725
Others
22.
Company
2006
PROFIT BEFORE TAX
The following items have been charged/(credited) in arriving at profit before tax:
Group
Company
2006
2005
2006
2005
RM
RM
RM
RM
(Restated)
Auditors’ remuneration
Current year’s provision
30,500
41,000
4,000
4,000
-
(145)
-
-
13,506,542
15,776,908
198,707
232,971
184,000
184,000
184,000
184,000
1,026,112
1,026,417
850,772
671,171
-
285,221
-
-
11,341
826,527
-
71
6,436,173
7,641,670
6,436,173
6,495,174
Realized
481,590
1,341,623
459,141
443,395
Unrealized
266,896
(30,861)
5,544,074
5,086
1,502,855
1,260,000
-
-
271,452
339,396
67,822
23,611
24,325
25,763
3,395
1,539
9,011,335
10,377,549
578,372
231,766
Overprovision in prior year
Depreciation of property, plant
and equipment (Note 3)
Directors’ remuneration
Fee
Other emoluments
- Directors of the Company
- Other directors of subsidiary
Finance costs
Hire purchase and finance lease
Term loans
Net foreign exchange losses/(gains)
Rental of premises
Staff and crew costs
E.P.F.
Socso
Salaries, allowances and others
Further details on directors’ remuneration are set out in Corporate Governance Statement of the Annual Report.
72
ANNUAL REPORT 2006
23.
INCOME TAX EXPENSE
Group
Company
2006
2005
2006
2005
RM
RM
RM
18,675
-
-
(2,859)
(3,579)
-
-
11,607
15,096
-
-
2006
2005
2006
2005
%
%
%
%
28
28
28
28
RM
(Restated)
Current year’s tax charge
Overprovision in prior year
14,466
Group
Applicable tax rate
Company
Tax effect of:
Expenses not deductible for tax purposes
Income not subject to tax
Unrecognized deferred taxation assets
Average effective tax rate
67
6
23
3
(121)
(36)
(57)
(32)
26
2
6
1
-
-
-
-
The income of the Group derived from the operations of sea-going Malaysian registered ships is tax exempt under Section 54A of the
Income Tax Act, 1967. The taxation charge of the Group is attributable to other income and does not contain any deferred taxation in prior
year.
Subject to agreement with the Inland Revenue Board, the Company has the following:
Company
2006
2005
RM
RM
Unabsorbed tax losses
5,053,000
3,922,000
Unabsorbed capital allowances
1,533,000
1,471,000
Section 108
Tax exempt account
42,000
42,000
199,387,000
201,003,000
The Company has sufficient tax credit under Section 108 of the Income Tax Act, 1967 and tax exempt account to frank payment of dividends
out of its entire retained profit.
73
ANNUAL REPORT 2006
24.
EARNINGS PER SHARE
The basic earnings per share is calculated by dividing profit for the year attributable to equity holders of the Company by the weighted
average number of ordinary shares of RM0.50 each in issue during the financial year excluding the weighted average treasury shares held
by the Company.
Group
2006
2005
(Restated)
Profit for the year attributable to equity holders of the Company (RM)
Number of ordinary shares in issue at 1 January
Effect of shares bought back and held as treasury shares
5,379,077
48,338,494
319,639,620
321,350,720
(3,927,267)
(134,438)
315,712,353
321,216,282
2
15
Basic earnings per share (sen)
There was no dilutive effect on the shares of the Group during the current and previous financial year. The comparative basic earnings per
share have been restated as a result of changes in accounting policies as disclosed in Note 26.
25.
DIVIDENDS
2006
2005
Net dividend
Net dividend
per share
Amount
per share
Amount
Sen
RM
Sen
RM
6
18,905,389
7
22,494,550
5
15,681,011
6
19,178,377
Recognized during the year
First and final tax exempt dividend paid
Proposed for approval at AGM
First and final tax exempt dividend payable
At the forthcoming Annual General Meeting, a first and final tax exempt dividend in respect of the financial year ended 31 December
2006 of 5 sen per share (2005: 6 sen per share) amounting to a dividend payable of RM15,681,011 will be proposed for shareholders’
approval. The financial statements for the current financial year do not reflect this proposed dividend. Such dividend, if approved by the
shareholders, will be accounted for in equity as an appropriation of retained profit in the financial year ending 31 December 2007.
74
ANNUAL REPORT 2006
26.
CHANGES IN ACCOUNTING POLICIES AND PRIOR YEAR ADJUSTMENTS
The accounting policies disclosed in Note 2 have been applied in preparing the financial statements for the year ended 31 December 2006.
The impact resulting from changes in accounting policies arising from the adoption of the new/revised FRSs and the change in accounting
policy in respect of the accounting treatment of dry-docking costs are summarized below:
a.
FRS 3 Business Combinations, FRS 136 Impairment of Assets and FRS 138 Intangible Assets
The new FRS 3 has resulted in consequential amendments to two other accounting standards, namely FRS 136 and FRS 138.
Goodwill
In prior years:
-
positive goodwill was recognized as a deduction from equity. Such goodwill has not been retrospectively capitalized and
amortized over its estimated useful life as it was impractical to reinstate; and
-
negative goodwill was presented as other reserves (or reserve on consolidation). To the extent that it related to expectations of
future losses and expenses that were identified in the Group’s plan for the acquisition and can be measured reliably but which
did not represent identifiable liabilities, that portion of negative goodwill was recognized in the income statement when the future
losses and expenses were recognized. Any remaining negative goodwill, not exceeding the fair values of the non-monetary assets
acquired, was recognized in the income statement over the remaining weighted average useful life of those assets; negative
goodwill in excess of the fair values of those assets was recognized in the income statement immediately.
With effect from 1 January 2006, in accordance with FRS 3 and FRS 136, positive goodwill is carried at cost less accumulated
impairment losses and is now tested for impairment annually, or more frequently if events or changes in circumstances indicate that
it might be impaired. Any impairment loss is recognized in income statement when the carrying amount of the CGU to which the
goodwill has been allocated exceeds its recoverable amount, and subsequent reversal is not allowed. Under the FRS 3, when positive
goodwill was previously recognized as a deduction from equity, the Group is not allowed to recognize that goodwill in income
statement when it disposes of all or part of the business to which that goodwill relates or when a CGU to which the goodwill relates
becomes impaired.
If the fair value of the net identifiable assets acquired in a business combination exceeds the consideration paid (i.e. an amount arises
which would have been known as negative goodwill under the previous accounting policy), the excess is recognized immediately
in the income statement as it arises.
In accordance with the exemption on business combinations under FRS 1: First-time Adoption of Financial Reporting Standards, the
Group has elected not to apply FRS 3 retrospectively on past business combinations. As a result, positive goodwill of RM218,156
that previously deducted from equity was not recognized in the opening FRS balance sheet and it will not be transferred to the income
statement if the Group disposes of the subsidiary or if the investment in the subsidiary becomes impaired.
In accordance with the transitional provisions of FRS 3, the carrying amount of negative goodwill that arose from past business
combinations shall be derecognized at the beginning of 1 January 2006 with a corresponding adjustment to the opening balance
of retained profit. As such, the existing negative goodwill as at 1 January 2006 of RM17,934,873 was derecognized with a
corresponding increase in retained profit.
75
ANNUAL REPORT 2006
26.
CHANGES IN ACCOUNTING POLICIES AND PRIOR YEAR ADJUSTMENTS (CONT’D)
a.
FRS 3 Business Combinations, FRS 136 Impairment of Assets and FRS 138 Intangible Assets (cont’d)
Merger deficit
In prior years:
-
merger deficit arose from merger accounting was presented as merger adjustment and was recognized as a deduction from
equity.
Prior to the implementation of FRS 3, six (6) subsidiaries of the Group were presented under merger accounting whilst other subsidiaries
were presented under acquisition accounting under MASB 21: Business Combinations. Effective 1 January 2006, merger accounting
is prohibited under FRS 3. All business combinations within the scope are to be accounted for using the acquisition method.
However, the Group adopted FRS 1 exemption on business combinations by electing not to apply FRS 3 retrospectively, and continued
to account for the past business combinations that occurred before 1 January 2006 under the merger method. The resultant merger
deficit of RM7,983,789 was deducted directly from equity as in the Group’s previous financial statements.
b.
FRS 101 Presentation of Financial Statements
In prior years:
-
minority interest at the balance sheet date was presented in the consolidated balance sheet separately from liabilities and as a
deduction from net assets;
-
minority interest in the results of the Group for the year was also separately presented in the income statement as a deduction
before arriving at the profit attributable to shareholders; and
-
the Group’s share of taxation of associate accounted for using the equity method was included as part of the Group’s income
tax expense in the consolidated income statement.
With effect from 1 January 2006, in order to comply with the revised FRS 101, minority interest at the balance sheet date are
presented in the consolidated balance sheet within equity, separate from the equity attributable to the equity holders of the Company,
and minority interest in the results of the Group for the year are presented on the face of the consolidated income statement as an
allocation of the total profit or loss for the year between the minority interest and the equity holders of the Company. The revised FRS
101 also requires disclosure, on the face of the statement in changes in equity, total recognized income and expenses for the year,
showing separately the amounts attributable to equity holders of the Company and to minority interest.
The share of taxation of associate is now included in the respective shares of profit or loss reported in the consolidated income
statement before arriving at the Group’s profit or loss before tax.
The current year’s presentation of the Group’s financial statements is based on the requirements of revised FRS 101, with the comparative
figures restated to conform to the current year’s presentation.
76
ANNUAL REPORT 2006
26.
c.
FRS 121: The Effects of Changes in Foreign Exchange Rates
Change in functional currency of the Group’s subsidiaries
In prior years:
-
items included in the financial statements of each of the Group’s entities are measured using the functional currency, which is
Ringgit Malaysia (“RM”); and
-
the consolidated financial statements are presented in RM, which is the Company’s functional and presentation currency.
Effective 1 January 2006, the functional currency of two (2) containership-owning subsidiaries (collectively known as “foreign
operations”) of the Group has been changed from RM to United States Dollar (“USD”) as the charter hire, crew cost as well as spare
parts and other costs of providing the charter are now mainly denominated and settled in USD.
Under the revised FRS 121, the translation procedures applicable to the new functional currency are applied prospectively from the
date of the change. As such, the foreign operations translate all items into the new functional currency using the exchange rate of
RM3.78 per one unit USD as at 1 January 2006. The resulting translated amounts for non-monetary items are treated as their historical
cost.
Exchange differences arising on the settlement of monetary items or on translating monetary items at rates different from those at which
they were translated on initial recognition during the year or in previous financial statements are recognized in the income statement
in the year in which they arise, except that exchange differences arising on a monetary item that forms part of the Company’s net
investments in the foreign operations are recognized in the income statement in the separate financial statements of the Company or
the individual financial statements of the foreign operations, as appropriate. In the consolidated financial statements of the Group,
such exchange differences are recognized initially as foreign currency translation reserve and recognized in the income statement
upon disposal of the net investments.
d.
Change in Accounting Policy for Dry-docking Costs
In prior years:
-
dry-docking costs were recognized in income statement as and when incurred.
The management is of the opinion that dry-docking costs represent inspection and overhaul cost, which enhance the useful lives of
the vessels, should be capitalized. The accounting policy for dry-docking costs has been changed effective 1 January 2006.
Dry-docking costs, when incurred, are capitalized as a separate component of the vessels and are allocated until next dry-docking
over a period ranges from 24 months to 30 months.
This change in accounting policy has been applied retrospectively in accordance with FRS 108 Accounting Policies, Change in
Estimates and Errors. Certain comparative figures have been restated and the opening balances of property, plant and equipment
and retained profit as at 1 January 2006 have been adjusted accordingly.
77
ANNUAL REPORT 2006
26.
The above changes in accounting policies have resulted in the following impact on property, plant and equipment, retained profit, other
reserves, minority interest and results of the Group and of the Company:
Effects on Balance Sheets
Group
2006
2005
RM
RM
140,647,794
230,364,256
Effects on opening Property, Plant and Equipment
Effects of changing accounting policy for dry-docking costs (Note 26(d))
At 1 January as restated
3,276,152
3,073,475
143,923,946
233,437,731
122,037,830
96,957,384
3,276,152
2,512,654
Effects on opening Retained Profit
Effects of adopting FRS 3 (Note 26(a))
17,934,873
-
143,248,855
99,470,038
Effects on opening Other Reserves
17,934,873
17,934,873
(17,934,873)
-
-
17,934,873
-
11,296,060
-
560,821
-
11,856,881
Effects of adopting FRS 3 (Note 26(a))
Effects on opening Minority Interest
Effects on Income Statements for the year
Group
Company
2006
2005
2006
2005
RM
RM
RM
RM
6,541,076
78,826,786
13,288,336
43,183,300
Profit for the year
Before changes in accounting policies
Effects of changing accounting policy for
dry-docking costs (Note 26(d))
- capitalization of dry-docking costs
1,485,897
3,185,372
-
-
- depreciation of dry-docking costs
(2,441,601)
(2,982,695)
-
-
(206,295)
-
(5,544,000)
-
5,379,077
79,029,463
7,744,336
43,183,300
-
31,251,790
Effects of adopting FRS 121 (Note 26(c))
After changes in accounting policies
Profit attributable to minority interest
Before changes in accounting policies
Effects of changing accounting policy for
dry-docking costs (Note 26(d))
78
- depreciation of dry-docking costs
-
(560,821)
After changes in accounting policies
-
30,690,969
ANNUAL REPORT 2006
26.
Effects on Basic Earnings per Share
The changes in accounting policies did not materially affect the basic earnings per share attributable to equity holders of the Company.
Comparative Figures
The following comparative figures of the Group have been restated and reclassified for the effects of adopting the above changes in
accounting policies and to conform to current year’s presentation:
As
Dry-
previously
FRS
docking
Re-
As
stated
101
costs
classified
restated
RM
RM
Note 26(b)
Note 26(d)
RM
RM
RM
Property, plant and equipment
140,647,794
-
3,276,152
- 143,923,946
Reserves
139,972,703
-
3,276,152
- 143,248,855
Cost of sales
(39,758,114)
-
202,677
Gross profit
14,903,570
-
-
-
87,354,938
Group
Balance Sheet as at
31 December 2005
Income Statement for the
year ended 31 December 2005
1,310,760
(38,244,677)
202,677
1,310,760
16,417,007
-
(1,310,760)
(1,310,760)
-
202,677
-
87,557,615
(39,551)
(5,308)
-
-
(44,859)
78,847,190
(5,308)
202,677
-
79,044,559
(20,404)
5,308
-
-
(15,096)
Profit for the year
78,826,786
-
202,677
-
79,029,463
Profit attributable to minority interest
31,251,790
-
(560,821)
-
30,690,969
47,574,996
-
763,498
-
48,338,494
Other expenses
Profit before tax
Income tax expense
Profit attributable to equity holders
of the Company
The following comparative figures of the Company have been reclassified to conform to current year’s presentation:
As
previously
Re-
As
stated
classified
restated
RM
RM
RM
(2,582,180)
448,481
(2,133,699)
-
(448,481)
(448,481)
Company
Income Statement for the
year ended 31 December 2005
Administrative expenses
Other expenses
79
ANNUAL REPORT 2006
Corporate
Governance Statement
27.
DEFERRED TAXATION
As at 31 December 2006, the amount of estimated net deferred tax assets of the Group and of the Company at current tax rate, which are
not recognized in the financial statements, are as follows:
Group
Company
2006
2005
2006
2005
RM
RM
RM
RM
Temporary difference on property,
plant and equipment
Unabsorbed capital allowances
Unabsorbed tax losses
28.
(19,000)
131,000
(15,800)
(14,500)
429,000
416,000
429,300
412,000
4,231,000
2,196,000
1,414,800
1,098,000
4,641,000
2,743,000
1,828,300
1,495,500
RELATED PARTY TRANSACTIONS
In addition to the transactions disclosed elsewhere in the financial statements, the Group and the Company had the following transactions
with related parties during the financial year:
Group
Company
2006
2005
2006
2005
RM
RM
RM
RM
436,468
588,157
344,611
89,753
OHM Maritime Sdn. Bhd. (“OMSB”)
27,280
28,647
-
-
OHM Maritime Services Pte. Ltd. (“OMSPL”)
26,052
10,058
-
-
18,406
29,722
18,406
29,722
1,502,855
1,260,000
-
-
-
10,546,340
-
-
Nature of transactions and relationships:
Expenditure incurred
Airfare
City Connections Travel Sdn. Bhd. (“CCTSB”)
Agency and crew attendance fees
Hotel accommodation
Langkawi Permai Sdn. Bhd. (“LPSB”)
Rental of premises
Mentari Muara Sdn. Bhd. (“MMSB”)
Income earned
Freight/Charter income
Prima Shipping Sdn. Bhd. (“PSSB”)
80
ANNUAL REPORT 2006
28.
RELATED PARTY TRANSACTIONS (CONT’D)
The outstanding balances arising from the above transactions as at 31 December are as follows:
Group
Company
2006
2005
2006
2005
RM
RM
RM
RM
Amount due to CCTSB
39,024
21,229
39,024
1,338
Amount due to OMSB
2,900
1,200
-
-
Amount due to OMSPL
4,932
-
-
-
CCTSB, OMSB, PSSB and MMSB are deemed related to the Group and the Company as two directors of the Company, namely Tan Sri
Dato’ Seri Halim Bin Mohammad and Puan Sri Datin Seri Mazmin Binti Noordin have interests.
LPSB is deemed related to the Group and the Company as a director of the Company, namely Tan Sri Dato’ Seri Halim Bin Mohammad
has interests.
OMSPL is deemed related to the Group and the Company as two key management personnel of the Group, namely Hisham Bin Halim and
Othman Bin Samat have interests.
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.
29.
FINANCIAL INSTRUMENTS
a.
Financial Risk Management Policies
The Group’s financial risk management policies seek to ensure that adequate financial resources are available for development of
the Group’s businesses whilst managing its risks. The Group has operated within clearly defined guidelines that are approved by the
Board of Directors and the Group’s policy is not to engage in speculative transactions.
b.
Foreign Currency Risk
The Group is exposed to foreign currency risk, which refers to adverse exchange rate movements on foreign currency positions
originating from trading activities and from the Group’s investments and retained profit in its subsidiaries, whose functional currencies
are not in Ringgit Malaysia. The currencies giving rise to this risk are primarily United States Dollar (“USD”) and Singapore Dollar
(“SGD”).
The Group uses derivative financial instruments such as forward foreign exchange contracts to hedge material foreign currency transaction exposures. Where possible, the Group maintains a natural hedge by borrowing in the currencies that match the future revenue
stream to be generated from its investments.
81
ANNUAL REPORT 2006
29.
FINANCIAL INSTRUMENTS (CONT’D)
b.
Foreign Currency Risk (cont'd)
During the financial year, the Group had entered into short term forward foreign exchange contracts to hedge trade receivables that
denominated in USD. The outstanding contract amount and maturity profile of the forward foreign exchange contracts as at balance
sheet date are as follows:
Contract
Maturity
Currency
amount
RM
Forward foreign exchange contracts
1 month
USD
1,754,328
The amount represents future cash flows under the contract to sell USD at various maturity dates.
c.
Interest Rate Risk
The interest rate exposure of the Group arises primarily from interest bearing borrowings. The Group manages its interest rate exposure
by maintaining a mix of fixed and floating rate borrowings. The Group’s interest bearing financial assets are mainly short term in
nature and have been placed in fixed deposits and marketable securities.
The effective interest rates of financial assets and financial liabilities as at financial year end are as follows:
2006
2005
Carrying
Effective
Carrying
Effective
amount
interest rate
amount
interest rate
RM
%
RM
%
253,371,211
3.60 - 4.06
16,107,273
2.65 - 4.19
14,600,000
-
10,000,000
2.13 - 23.73
Group
Financial Assets
Floating rate
Unquoted subordinated bonds
Financial Liabilities
Fixed rate
Hire purchase and finance lease liabilities
Term loans
89,387
7.91- 9.31
172,384
8.06 - 10.69
146,000,000
7.46 - 8.36
100,000,000
8.09 - 8.36
252,840,227
3.60 - 4.06
13,337,998
2.65 - 4.19
14,600,000
-
10,000,000
2.13 - 23.73
146,000,000
7.46 - 8.36
100,000,000
8.09 - 8.36
Company
Financial Assets
Floating rate
Unquoted subordinated bonds
Fixed rate
Term loans
82
ANNUAL REPORT 2006
29.
d.
Credit Risk
Credit risk is controlled by the application of credit approvals, limits and monitoring procedures. This is done through reference to
published credit ratings by prime financial institutions. In the absence of published ratings, an internal credit review is conducted if
the credit risk is material. The maximum credit risk associated with recognized financial assets is the carrying amount shown in the
balance sheet.
The Group does not have any significant exposure to any single customer or counterparty nor does it have any major concentration
of credit risk related to any financial assets.
e.
Liquidity Risk
The Group seeks to achieve a balance between certainty of funding even in difficult times for the markets or the Group and a flexible,
cost-effective borrowing structure. This is to ensure that at the minimum, all projected net borrowing needs are covered by committed
facilities. Also, the objective for debt maturity is to ensure that the amount of debt maturing in any one year is not beyond the Group’s
means to repay and refinance.
f.
Fair Values
The fair values of financial assets and financial liabilities which are not carried at fair values on the balance sheets of the Group and
of the Company are presented as follows:
2006
2005
Carrying
Fair
Carrying
Fair
amount
value
amount
value
RM
RM
RM
RM
Group
Financial Assets
Other investments
- Unquoted shares
- Unquoted subordinated bonds
50,000
(1)
50,000
(1)
14,600,000
11,626,437
10,000,000
7,775,510
Hire purchase and finance lease liabilities
Term loans
89,387
79,009
172,384
151,177
146,000,000
116,264,368
100,000,000
77,755,103
-
1,693,440
-
-
Derivatives
Forward foreign exchange contracts
Company
Financial Assets
Other investments
- Unquoted shares
50,000
(1)
50,000
(1)
- Unquoted subordinated bonds
14,600,000
11,626,437
10,000,000
7,775,510
Amount due from subsidiaries
96,249,768
(2)
116,839,044
(2)
38,265,467
(2)
51,989,923
(2)
146,000,000
116,264,368
100,000,000
77,755,103
Amount due to subsidiaries
Term loans
83
ANNUAL REPORT 2006
29.
f.
Fair Values (cont’d)
(1)
It is not practical to estimate the fair value of the non-current unquoted shares because of the lack of quoted market prices
and the inability to estimate fair value without incurring excessive costs.
(2)
It is not practical to estimate the fair values of amounts due to/from subsidiaries due principally to the lack of fixed repayment
term entered into by the parties involved and without incurring excessive costs. However, the Company does 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 following methods and assumptions were used to estimate the fair value at each class of financial instruments for which it is
practicable to estimate the value:
(i)
Cash and Cash Equivalents, Trade and Other Receivables/Payables
The carrying amounts approximate fair values due to the short maturity periods of these instruments.
(ii)
Marketable Securities
The carrying amounts are recognized at fair value as the instruments are determined by reference to quoted market prices at
the close business on the balance sheet date.
(iii)
Other Investments – Unquoted Subordinated Bonds
The fair value of the unquoted subordinated bonds is estimated using discounted cash flow technique based on discount
rates that are not supported by observable market rates. Management believes the estimated fair value is reasonable and
the most appropriate at the balance sheet date.
(iv)
Borrowings
The fair value of the borrowings is estimated using discounted cash flow technique based on current lending rates offered to
the Group and the Company for borrowings of similar remaining maturities.
(v)
Forward Foreign Exchange Contracts
The fair value of a forward foreign exchange contract is the amount the Group or the Company will receive or pay to terminate
the contract as at balance sheet date. The fair value of the forward foreign exchange contract is estimated with reference to
spot rates as at balance sheet date.
(vi)
Other Financial Assets and Liabilities
The fair value of other financial assets and liabilities of the Group and of the Company is deemed to be equal to their carrying
value unless stated otherwise in the relevant notes to the financial statements.
84
ANNUAL REPORT 2006
30.
SEGMENT INFORMATION
During the financial year, the Group principally operates in Malaysia in the following main business segments:
-
Tankers shipping;
-
Container shipping; and
-
Other activities which include ship management and ship broking activities and provision of management services to subsidiaries.
The Group has not operated in bulk carrier shipping since the disposal of vessel in March 2005.
a.
Business Segment
Inter-segment revenue comprise revenue to other business segment carried out on an arm’s length basis.
Segment results represent segment revenue less segment expenses. Unallocated expenses represent corporate operating and
administrative expenses. Unallocated income represent income derived from unallocated assets such as interest bearing short term
deposits and other investments.
Segment assets consist primarily of property, plant and equipment, investment property, inventories, receivables and cash and bank
balances, exclude interest bearing short term deposits, other investments, taxation assets and investment in associate. Segment liabilities
comprise mainly payables exclude items such as interest bearing borrowings and taxation. Unallocated liabilities consist of accruals
on corporate operating and administrative expenses.
Capital expenditure comprise additions to property, plant and equipment.
Shipping
- Tankers
Shipping
Non
- Container - Bulk carrier
Shipping
- shipping
RM
RM
RM
6,996,164
32,310,312
-
-
-
-
6,996,164
32,310,312
-
(2,253,925)
12,925,707
-
RM
Elimination Consolidation
RM
RM
-
-
39,306,476
14,822,000
(14,822,000)
-
14,822,000
(14,822,000)
39,306,476
14,735,813
(14,118,545)
11,289,050
2006
Revenue
External sales
Inter-segment sales
Total revenue
Results
Segment results
Unallocated expenses
(8,211,589)
Unallocated income
8,782,099
11,859,560
Finance costs
Profit before tax
Income tax expense
Profit for the year
(6,447,514)
-
-
-
(21,362)
-
(21,362)
5,390,684
(11,607)
5,379,077
Minority interest
Profit attributable to equity
5,379,077
holders of the Company
85
ANNUAL REPORT 2006
30.
SEGMENT INFORMATION (CONT’D)
a.
Business Segment (cont’d)
Shipping
- Tankers
Shipping
Shipping
Non
- shipping
RM
RM
RM
22,342,302
119,540,613
-
-
-
-
RM
RM
RM
181,503,014 (187,181,168)
136,204,761
2006
Assets
Segment assets
8,878,000
(621,112)
8,256,888
Unallocated assets
291,838,725
Total Assets
436,300,374
Liabilities
Segment liabilities
16,457,430
81,413,916
-
51,528,641 (145,101,970)
4,298,017
Unallocated liabilities
147,410,528
Total Liabilities
151,708,545
Other Information
Capital expenditure
Depreciation
-
1,485,897
-
76,977
-
1,562,874
3,756,150
9,159,865
-
351,982
238,545
13,506,542
Shipping
Shipping
Non
- shipping
Shipping
- Tankers
RM
RM
RM
16,023,097
33,704,018
4,867,092
-
-
-
16,023,097
33,704,018
4,867,092
(711,730)
15,607,327
(75,035)
RM
RM
RM
67,477
-
54,661,684
21,260,546
(21,260,546)
-
21,328,023
(21,260,546)
54,661,684
21,983,113
(20,386,668)
16,417,007
2005 (Restated)
Revenue
External sales
Inter-segment sales
Total revenue
Results
Segment results
Unallocated expenses
(9,864,260)
Unallocated income
81,004,868
87,557,615
Finance costs
Profit before tax
Income tax expense
-
-
(44,859)
-
(44,859)
79,044,559
(15,096)
Profit for the year
79,029,463
Minority interest
(30,690,969)
Profit attributable to equity
holders of the Company
86
(8,468,197)
-
48,338,494
ANNUAL REPORT 2006
30.
SEGMENT INFORMATION (CONT’D)
a.
Business Segment (cont’d)
Shipping
Shipping
- Tankers
Shipping
Non
- shipping
RM
RM
RM
32,287,361
130,192,091
110,886
-
-
-
RM
RM
RM
208,948,744 (216,397,564)
155,141,518
2005 (Restated)
Assets
Segment assets
8,878,000
(599,750)
8,278,250
Unallocated assets
256,371,288
Total Assets
419,791,056
Liabilities
Segment liabilities
16,520,372
102,177,113
100,367
63,995,929 (174,546,392)
8,247,389
Unallocated liabilities
101,070,736
Total Liabilities
109,318,125
Other Information
b.
Capital expenditure
1,661,772
1,523,600
-
161,212
-
3,346,584
Depreciation
4,865,036
8,435,030
2,050,527
439,647
(13,332)
15,776,908
Geographical Segment
The Group’s secondary format by geographical location is not shown as the activities of the Group are predominantly in Malaysia.
31.
AUTHORIZATION FOR ISSUE
The financial statements of the Company for the financial year ended 31 December 2006 were authorized for issue in accordance with a
resolution of the Board of Directors on 13 April 2007.
87
ANNUAL REPORT 2006
Analysis of Shareholding as at 30 March 2007
A.
Authorized Share Capital
:
RM200,000,000.00
Issued and Paid-up Share Capital
:
RM159,000,000.00
Number of Shares Issued
:
318,000,000
Number of Shares Retained in Treasury
:
4,379,780
Class of Shares
:
Ordinary Shares of RM0.50 each
Number of Shareholders
:
1,911
Voting Rights
:
1 vote per ordinary share
ANALYSIS BY SIZE OF HOLDINGS
SIZE OF SHAREHOLDINGS
PERCENTAGES
24
1,214
0.00
100 To 1,000 Shares
162
135,170
0.04
1,102
5,817,138
1.85
537
14,845,076
4.73
83
103,640,922
33.05
3
189,180,700
60.32
1,911
313,620,220
100
10,001 To 100,000 Shares
100,001 To Less Than 5% Of Issued Shares
5% And Above Of Issued Shares
TOTAL
SUBSTANTIAL SHAREHOLDERS AS PER REGISTER OF SUBSTANTIAL SHAREHOLDERS
SHAREHOLDER
DIRECT INTEREST
INDIRECT INTEREST
No. of Shares
%
No. of Shares
%
1
110,394,300
35.20
66,036,600A
21.06
2
66,036,600
21.06
110,394,300B
35.20
Notes
88
NO. OF SHARES
Less Than 100 Shares
1,001 To 10,000 Shares
B.
NO. OF HOLDERS
A
Deemed interested by virtue of his spouse, Puan Sri Datin Seri Mazmin Binti Noordin
B
Deemed interested by virtue of her spouse, Tan Sri Dato’ Seri Halim Bin Mohammad
ANNUAL REPORT 2006
C.
DIRECTORS’ INTERESTS AS PER REGISTER OF DIRECTORS’ SHAREHOLDING
DIRECTOR
DIRECT INTEREST
No. of Shares
INDIRECT INTEREST
%
No. of Shares
%
21.06
1
110,394,300
35.20
66,036,600A
2
66,036,600
21.06
110,394,300B
35.20
3
-
-
-
-
4
-
-
-
-
5
-
-
-
-
6
General (R) Dato’ Sri Abdullah Bin Ahmad @ Dollah Bin Amad
-
-
-
-
(resigned on 30 April 2007)
7
-
-
89,000c
0.03
8
-
-
-
-
9
Mr. Ee Beng Wat
-
-
-
-
Notes
A
Deemed interested by virtue of his spouse, Puan Sri Datin Seri Mazmin Binti Noordin
B
Deemed interested by virtue of her spouse, Tan Sri Dato’ Seri Halim Bin Mohammad
C
Deemed interested by virtue of his spouse, Puan Zaimah Binti Ahmad
89
ANNUAL REPORT 2006
D.
TOP 30 SECURITIES ACCOUNT HOLDERS
NO
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
SHAREHOLDER
Halim Bin Mohammad
Mazmin Binti Noordin
HSBC Nominees (Asing) Sdn Bhd
- Exempt An For Credit Suisse (Sg Br-Tst-Asing)
HDM Nominees (Asing) Sdn Bhd
- Glasgow Global Fund Limited Pcc For Glasgow Global Gamma Fund
- UBS AG Zurich For Southaven Holdings Ltd
Mazmin Binti Noordin
KAF Trustee Berhad
- KAF Fund Management Sdn Bhd For Malaysian Assurance Alliance Berhad
Employees Provident Fund Board
KAF Nominees (Tempatan) Sdn.Bhd.
- KAF Fund Management Sdn Bhd For Abu Talib Bin Othman
Citigroup Nominees (Asing) Sdn Bhd
- GSI For Myan Equity Corp
Halim Bin Mohammad
Amanah Raya Nominees (Tempatan) Sdn Bhd
- Public Islamic Opportunities Fund
Yeoh Kean Hua
Lee Chee Ming
- Public Islamic Dividend Fund
- Den Norske Bank For Fearnley Fonds Asa
TA Nominees (Tempatan) Sdn Bhd
- Pledged Securities Account For Oh Kim Sun
- Public Smallcap Fund
Pm Nominees (Tempatan) Sdn Bhd
- PCB Asset Management Sdn Bhd For Mui Continental Insurance Berhad
Anamullah S/O Hamidullah
RHB Nominees (Asing) Sdn Bhd
- Kripalson International Ltd
AMMB Nominees (Tempatan) Sdn Bhd
- KAF Fund Management Sdn Bhd (7/862-1)
PRB Nominees (Tempatan) Sdn. Bhd.
- Rubber Industry Smallholders Development Authority
Quarry Lane Sdn Bhd
Bank Kerjasama Rakyat Malaysia Berhad
- As Beneficial Owner
Neoh Choo Ee & Company, Sdn. Berhad
Suresh Emmanuel Abishegam
Bank Kerjasama Rakyat Malaysia Berhad
Jagdish Singh Dhaliwal
Bimsec Nominees (Tempatan) Sdn Bhd
- Syarikat Takaful Malaysia Berhad
TOTAL
NO. OF SHARES
104,616,000
57,009,600
27,555,100
%
33.36
18.18
8.79
11,700,000
3.73
11,066,000
3.53
9,027,000
6,499,800
2.88
2.07
6,426,780
6,052,200
2.05
1.93
5,865,000
1.87
5,778,300
4,000,000
1.84
1.28
2,710,000
2,662,560
2,300,000
0.86
0.85
0.73
1,879,200
0.60
1,824,080
0.58
1,747,400
0.56
1,600,000
0.51
1,303,400
1,224,400
0.42
0.39
1,000,000
0.32
971,574
0.31
900,000
889,200
0.29
0.28
780,000
647,600
594,000
585,000
540,000
0.25
0.21
0.19
0.19
0.17
279,754,194
89.22
Note
The analysis of shareholdings is based on the issued and paid-up capital of the Company after deducting 4,379,780 Treasury Shares
held as at 30 March 2007.
90
ANNUAL REPORT 2006
Notice of Annual General Meeting and Notice of Dividend Entitlement
NOTICE IS HEREBY GIVEN that the Twelfth Annual General Meeting (“AGM”) of the Company will be held at Westside,
Rooms 1, 2 and 3, Level 8, Boulevard Hotel, Mid Valley City, Lingkaran Syed Putra, 59200 Kuala Lumpur on Wednesday, 30
May 2007 at 10.30 a.m. for the following purposes:
AGENDA
As Ordinary Business
1.
To receive the audited financial statements of the Company for the financial year ended 31
December 2006 and the Reports of the Directors and Auditors thereon. Please refer to Note
A.
2.
To approve the payment of a First and Final Tax Exempt Dividend of 5 sen per ordinary share
of RM0.50 each in respect of the financial year ended 31 December 2006.
Ordinary Resolution 1
3.
To approve the payment of Directors’ fees of RM184,000 in respect of the financial year
ended 31 December 2006.
4.
To re-elect the following Directors retiring pursuant to Article 89 of the Company’s Articles of
Association:
4.1 Mr. Patrick Lim Keng Lee
4.2 YBhg. Dato’ Abdul Kadir Bin Mohd Deen
5.
To re-elect YBhg. (R) Dato' Seri Mohd Azumi Bin Mohamed, who retires pursuant to Article
93 of the Company's Articles of Association.
6.
To re-appoint Messrs Ong & Wong as Auditors and to authorize the Board of Directors to fix
their remuneration.
As Special Business
To consider and, if thought fit, to pass the following resolutions as Ordinary and Special Resolutions
with or without any modifications:
7.
Authority To Allot Shares Pursuant To Section 132D Of The Companies Act, 1965
”THAT subject to Section 132D of the Companies Act, 1965, and approvals from the relevant
governmental and/or regulatory authorities, the Directors be and are hereby empowered to
issue new shares in the Company from time to time and upon such terms and conditions and
for such purposes as the Directors may deem fit provided that the aggregate number of shares
issued pursuant to this resolution does not exceed 10% of the issued capital of the Company
for the time being and that such authority shall continue in force until the conclusion of the
next AGM of the Company.”
8.
Proposed Renewal Of Authority For The Purchase By The Company Of Its Own Shares Up To
10% Of Its Issued And Paid–Up Capital
”THAT, subject always to the Companies Act, 1965, the provisions of the Memorandum
and Articles of Association of the Company, the requirements of Bursa Malaysia Securities
Berhad (“Bursa Securities”) and all other applicable laws, guidelines, rules and regulations,
the Company be and is hereby authorized, to the fullest extent permitted by law, to purchase
such amount of ordinary shares of RM0.50 each in the Company as may be determined by
the Directors of the Company from time to time through the Bursa Securities upon such terms
and conditions as the Directors may deem fit and expedient in the interest of the Company
provided that:
91
ANNUAL REPORT 2006
(i) the aggregate number of shares purchased does not exceed 10% of the total issued and
paid-up share capital of the Company as quoted on the Bursa Securities as at the point
of purchase;
(ii) an amount not exceeding the Company’s audited retained profit of RM90,056,412
and/or the share premium account of RM5,326,531 for the financial year ended 31
December 2006 at the time of the purchase(s) will be allocated by the Company for the
purchase of own shares; and
(iii) the Directors of the Company may decide either to retain the shares purchased as
treasury shares or cancel the shares or retain part of the shares so purchased as treasury
shares and cancel the remainder.
AND THAT the authority conferred by this resolution will commence immediately and will,
subject to renewal thereat, expire at the conclusion of the next Annual General Meeting of
the Company following the passing of this Ordinary Resolution (unless earlier revoked or
varied by an Ordinary Resolution of the shareholders of the Company in general meeting) but
shall not prejudice the completion of purchase(s) by the Company or any person before that
aforesaid expiry date and in any event, in accordance with the provisions of the guidelines
issued by Bursa Securities or any other relevant authorities;
AND THAT authority be and is hereby given unconditionally and generally to the Directors
of the Company to take all such steps as are necessary or expedient (including without
limitation, the opening and maintaining of central depository account(s) under the Securities
Industry (Central Depositories) Act, 1991, and the entering into of all other agreements,
arrangements and guarantee with any party or parties) to implement, finalize and give full
effect to the aforesaid purchase with full powers to assent to any conditions, modifications,
revaluations, variations and/or amendments (if any) as may be imposed by the relevant
authorities and with the fullest power to do all such acts and things thereafter (including
without limitation, the cancellation or retention as treasury shares of all or any part of the
purchased shares or to resell the shares or distribute the shares as dividends) in accordance
with the Companies Act, 1965, the provisions of the Memorandum and Articles of
Association of the Company and the requirements and/or guidelines of the Bursa Securities
and all other relevant governmental and/or regulatory authorities.”
9.
To Consider And If Thought Fit, To Pass The Following Resolution In Accordance With Section
129(6) Of The Companies Act, 1965:
Special Resolution 1
“THAT YBhg. Dato’ Seri Sulaiman Bin Mohd Amin being over the age of 70 years and
retiring in accordance with Section 129 (6) of the Companies Act, 1965, be and is hereby
re-appointed as Director of the Company to hold office until the next Annual General
Meeting.”
10. Proposed Amendments To The Articles Of Association Of Halim Mazmin Berhad
”THAT the alterations, modifications, additions and deletions to the Articles of Association of
Halim Mazmin Berhad as detailed in Appendix A attached with the Annual Report 2006 to
shareholders, be and are hereby approved.”
11. To transact any other business of which due notice shall have been given in accordance with
the Companies Act, 1965.
92
Special Resolution 2
ANNUAL REPORT 2006
NOTICE OF DIVIDEND ENTITLEMENT AND PAYMENT
Subject to the approval of the shareholders, a First and Final Tax Exempt Dividend of 5 sen per ordinary share of RM0.50 each
for the year ended 31 December 2006 will be paid on 18 June 2007 to Depositors registered in the Record of Depositors at
the close of business at 5.00 p.m. on 7 June 2007.
A depositor shall qualify for entitlement only in respect of:
a) shares transferred into the Depositor’s Securities Account before 4.00 p.m. on 7 June 2007, in respect of ordinary
transfers; and
b) shares bought on Bursa Securities on a cum entitlement basis according to the Rules of the Bursa Securities.
By Order of the Board
Coral Hong Kim Heong (MAICSA 7019696)
Lim Seck Wah (MAICSA 0799845)
Company Secretaries
Kuala Lumpur
8 May 2007
Notes:
A.
This Agenda item is meant for discussion only as the provision of Section 169 (1) of the Companies Act, 1965 and the
Company’s Articles of Association do not require a formal approval of the shareholders and hence, is not put forward for
voting.
1.
A member entitled to attend and vote at the meeting is entitled to appoint a proxy or proxies to attend and vote in his
stead. A proxy may but need not be a member of the Company. The provisions of Section 149(1)(a) and 149(1)(b) of the
Companies Act, 1965 (the Act) shall not apply to the Company.
2.
The instrument appointing a proxy must be deposited at the registered office of the Company not less than forty eight (48)
hours before the time appointed for the meeting.
3.
A member shall not be entitled to appoint more than two (2) proxies to attend and vote at the same meeting. The
provision of Section 149(1)(c) of the Act shall apply to the Company.
4.
Where a member appoints more than one proxy (subject always to a maximum of two (2) proxies at each meeting), the
appointment shall be invalid unless he specifies the proportions of his holdings to be represented by each proxy.
5.
In the case of a corporate member, the instrument appointing a proxy must be executed under its Common Seal or under
the hand of its attorney.
6.
Where a member of the Company is an Authorized Nominee as defined under the Securities Industry (Central Depositories)
Act 1991, it may appoint at least one proxy in respect of each Securities Account it holds with ordinary shares of the
Company standing to the credit of the said Securities Account.
93
ANNUAL REPORT 2006
7.
Explanatory Notes on Special Business
(a)
Ordinary Resolution 7 – Authority to Allot Shares Pursuant to Section 132D of the Companies Act, 1965
This resolution is proposed pursuant to Section 132D of the Companies Act, 1965, if passed, will give the flexibility and
authority to the Directors of the Company, from the date of the above AGM, to issue and allot shares in the Company up
to and not exceeding in total 10% of the issued and paid-up share capital of the Company for the time being, for such
purposes as they consider would be in the interest of the Company. This authority, unless revoked or varied at a general
meeting, will expire at the conclusion of the next AGM of the Company.
(b) Ordinary Resolution 8 – Proposed Renewal of Authority for the Purchase by the Company of Its Own Shares up to 10%
of Its Issued and Paid –up Capital
The proposed renewal of shareholders’ mandate for the Company to purchase its own shares, if passed, will empower the
Directors to purchase the Company’s shares up to 10% of the issued and paid-up share capital of the Company by utilising
the funds allocated which shall not exceed the total retained profits and share premium of the Company. This authority,
unless revoked or varied at a general meeting, will expire at the conclusion of the next Annual General Meeting of the
Company.
Detailed information on the Proposed Share Buy-Back is set out in the Share Buy-Back Statement dated 8 May 2007 which
is dispatched together with Annual Report 2006.
(c)
Special Resolution 1 – Re-appointment of YBhg. Dato’ Seri Sulaiman Bin Mohd Amin as Director Pursuant to Section
129(6) of the Companies Act, 1965
The re-appointment of YBhg. Dato’ Seri Sulaiman Bin Mohd Amin, a person over the age of 70 years as Director of the
Company to hold office until the conclusion of the next AGM shall take effect if the proposed Special Resolution 1 has
been passed by a majority of not less than three-fourths (3/4) of such members as being entitled to vote in person or, by
proxy, at a general meeting of which not less than 21 days’ notice specifying the intention to propose the resolution has
been duly given to the members of the Company.
(d) Special Resolution 2 – Proposed Amendments to the Articles of Association
The Special Resolution on proposed amendments to the Articles of Association, if approved, will render the Articles
of Association of Halim Mazmin Berhad to be consistent with the new requirement under Chapter 7 of the Listing
Requirements of Bursa Malaysia Securities Berhad.
94
ANNUAL REPORT 2006
Statement Accompanying Notice of Annual General Meeting
Further details of Directors who are standing for re-election, namely Mr. Patrick Lim Keng Lee, YBhg. Dato’ Abdul Kadir Bin
Mohd Deen, YBhg. General (R) Dato’ Seri Mohd Azumi Bin Mohamed and YBhg. Dato' Seri Sulaiman Bin Mohd Amin and their
interests in securities of the Company and its subsidiaries are set out in the Profiles of Directors and Analysis of Shareholdings
of this Annual Report.
The rest of this page is intentionally left blank
95
ANNUAL REPORT 2006
Appendix A
PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION
The Articles of Association of the Company are proposed to be amended in the following manner:
1.
AMENDMENT TO ARTICLE 2
To delete the following interpretations in the existing Article 2 and substituted as follows:
Words
Existing Article 2
Meanings
Words
New Article 2
Meanings
Central Depository
The Malaysian Central
Depository Sdn Bhd
Depository
Bursa Malaysia
Depository Sdn Bhd
Exchange
The Kuala Lumpur Stock
Exchange
Exchange
Bursa Malaysia Securities
Berhad
Approved Market
Place
A stock exchange which is
specified to be an approved
market place in the Securities
Industry (Central Depositories)
Exemption (No. 2) Order, 1998
Deleted
-
All reference to the abovementioned interpretations throughout the whole Articles of Association be changed
accordingly.
2.
Article 10 is amended by deleting the following sentences:
“but the total nominal value of the issued preference shares shall not exceed the total nominal value of the issued
ordinary shares at any time” appearing in lines 5 to 7.
96
Existing Article 10
New Article 10
Subject to the Act, the provision of these Articles, any
preference shares may with the sanction of an Ordinary
Resolution, be issued on the terms that they are, or at
the option of the Company are liable, to be redeemed
but the total nominal value of the issued preference
shares shall not exceed the total nominal value
of the issued ordinary shares at any time and the
Company shall not issue preference shares ranking in
priority above preference shares already issued, but
may issue preference shares ranking equally therewith.
Preference shareholders shall have the same rights
as ordinary shareholders as regards receiving notices,
reports and audited accounts, and attending general
meetings of the Company. Preference shareholders shall
also have the right to vote at any meeting convened for
the purpose of reducing the Company’s share capital, or
winding up, or sanctioning a sale of the whole of the
Company’s property, business and undertaking, or where
any proposition to be submitted to the meeting directly
affects their rights and privileges, or when the dividend or
part of the dividend on the preference shares is in arrears
for more than six (6) months or during the winding up of
the Company. The holder of a preference share shall be
entitled to a return of capital in preference to holders of
ordinary shares when the Company is wound up.
Subject to the Act, the provision of these Articles, any
preference shares may with the sanction of an Ordinary
Resolution, be issued on the terms that they are, or at the
option of the Company are liable, to be redeemed and
the Company shall not issue preference shares ranking
in priority above preference shares already issued, but
may issue preference shares ranking equally therewith.
Preference shareholders shall have the same rights as
ordinary shareholders as regards receiving notices, reports
and audited accounts, and attending general meetings of
the Company. Preference shareholders shall also have the
right to vote at any meeting convened for the purpose of
reducing the Company’s share capital, or winding up, or
sanctioning a sale of the whole of the Company’s property,
business and undertaking, or where any proposition to be
submitted to the meeting directly affects their rights and
privileges, or when the dividend or part of the dividend
on the preference shares is in arrears for more than six (6)
months or during the winding up of the Company. The
holder of a preference share shall be entitled to a return
of capital in preference to holders of ordinary shares when
the Company is wound up.
ANNUAL REPORT 2006
3.
To delete the existing Article 37 in its entirety and to adopt the following new Article 37:
4.
Existing Article 37
New Article 37
Transmission of Securities From Foreign Register
Transmission of Securities
Where:
(a) the Securities of the Company are listed on an
Approved Market Place; and
(b) the Company is exempted from compliance
with Section 14 of the Central Depositories Act
or Section 29 of the Securities Industry (Central
Depositories) (Amendment) Act, 1998 as the case
may be, under the Rules of the Central Depository
in respect of such Securities,
the Company shall, upon request of a Securities
holder, permit a transmission of Securities held by such
Securities holder from the register of holders maintained
by the registrar of the Company in the jurisdiction of
the Approved Market Place to the register of holders
maintained by the registrar of the Company in Malaysia
subject to the following conditions:
(i) there shall be no change in the ownership of such
securities; and
(ii) the transmission shall be executed by causing such
Securities to be credited directly into the Securities
Account of such Securities holder.
Nothing herein shall allow the transfer from the register
of holders in Malaysia to the jurisdiction of the Approved
Market Place.
Where:
(a) the Securities of the Company are listed on another
stock exchange; and
(b) the Company is exempted from compliance
with Section 14 of the Central Depositories Act
or Section 29 of the Securities Industry (Central
Depositories) (Amendment) Act, 1998 as the case
may be, under the Rules of the Depository in respect
of such Securities,
the Company shall, upon request of a Securities holder,
permit a transmission of Securities held by such Securities
holder from the register of holders maintained by the
registrar of the Company in the jurisdiction of the other
stock exchange, to the register of holders maintained by
the registrar of the Company in Malaysia and vice versa
provided that there shall be no change in the ownership
of such Securities.
Article 62 is amended by deleting the words “a date” and replace with the phrase “the latest date which is reasonably
practicable which shall in any event be” appearing in line 3.
Existing Article 62 (4th paragraph)
New Article 62 (4th paragraph)
The Company shall request the Central Depository
in accordance with the Rules, to issue a Record of
Depositors as at a date not less than three (3) market
days before the general meeting (hereinafter referred to
as the “General Meeting Record of Depositors”). Subject
to the Securities Industry (Central Depositories) (Foreign
Ownership) Regulations 1996 (where applicable), the
General Meeting Record of Depositors shall be the final
record of all Depositors who shall be deemed to be the
registered holders of the shares of the Company eligible
to be present and vote at such meetings.
The Company shall request the Depository in accordance
with the Rules, to issue a Record of Depositors as at the
latest date which is reasonable practicable which
shall in any event be not less than three (3) market
days before the general meeting (hereinafter referred to
as the “General Meeting Record of Depositors”). Subject
to the Securities Industry (Central Depositories) (Foreign
Ownership) Regulations 1996 (where applicable), the
General Meeting Record of Depositors shall be the final
record of all Depositors who shall be deemed to be the
registered holders of the shares of the Company eligible
to be present and vote at such meetings.
97
ANNUAL REPORT 2006
5.
AMENDMENT TO ARTICLE 97 (d)
Article 97 (d) is amended by deleting item (d) in its entirety which read as follows:
“if he absent from more than 50% of the total board of directors’ meeting held during a financial year.”
98
Existing Article 97
New Article 97
Subject to Section 122 (6) and (7) of the Act, the office
of a Director shall be vacated in any of the following
events, namely:a. if he resigns from office by writing under his hand
left at the Office;
b. if he becomes bankrupt or compound with his
creditors;
c.
if he is found to be a lunatic or becomes of
unsound mind;
d. if he absent from more than 50% of the total
board of directors’ meeting held during a
financial year;
e. if a notice in writing signed by the holders of at
least three-quarters of the issued shares of the
Company is given to the Company requiring such
Director to resign; and
f.
if he ceases to be or if prohibited from being a
Director by virtue of the Act.
Subject to Section 122 (6) and (7) of the Act, the office of
a Director shall be vacated in any of the following events,
namely:a. if he resigns from office by writing under his hand
left at the Office;
b. if he becomes bankrupt or compound with his
creditors;
c.
if he is found to be a lunatic or becomes of unsound
mind;
d. deleted;
e. if a notice in writing signed by the holders of at least
three-quarters of the issued shares of the Company
is given to the Company requiring such Director to
resign; and
f.
if he ceases to be or if prohibited from being a
Director by virtue of the Act.
ANNUAL REPORT 2006
Proxy Form
HALIM MAZMIN BERHAD
(330820-P)
*I/We………………………………………………………………………………………….........................(name of shareholder)
of…………………………………………………………………..…………………………………………..................(full address)
being a member(s) of HALIM MAZMIN BERHAD hereby appoint …………………………………...……...........(name of proxy)
of ………………………………………………………………………………………………………………...............(full address)
or failing him/her …………………....................... …...……………………(name of proxy) of ……………………………………
………………..................………………..............................................................................................................(full address)
or failing him/her, the *Chairman of the meeting as *my/our proxy to vote and act for *me/us on *my/our behalf, at the
Twelfth Annual General Meeting of the Company to be held at Westside, Rooms 1, 2, and 3, Level 8, Boulevard Hotel, Mid
Valley City, Lingkaran Syed Putra, 59200 Kuala Lumpur on Wednesday, 30 May 2007 at 10.30 a.m. or at any adjournment
thereof.
The proportion of *my/our holding to be represented by *my/our proxies are as follows:
(The next paragraph must be completed if two proxies are appointed)
First Proxy:
Second Proxy:
100
%
%
%
No. of Shares Held
No. RESOLUTIONS
1.
Payment of a First and Final Tax Exempt Dividend of 5 sen per ordinary share of RM0.50
each in respect of the financial year ended 31 December 2006
2.
Payment of Directors’ fees of RM184,000 in respect of the financial year ended 31
December 2006
3.
Re-election of Mr. Patrick Lim Keng Lee
4.
Re-election of YBhg. Dato’ Abdul Kadir Bin Mohd Deen
5.
Re-election of YBhg. General (R) Dato’ Seri Mohd Azumi Bin Mohamed
6.
Re-appoint Messrs Ong & Wong as Auditors and to authorize the Board of Directors to
fix their remuneration
7.
Authority to allot shares pursuant to Section 132D of the Companies Act, 1965
8.
Renewal of authority for the purchase by the Company of its own shares up to 10% of
its issued and paid–up capital
9.
Re-election of YBhg. Dato’ Seri Sulaiman Bin Mohd Amin pursuant to Section 129(6) of
the Companies Act, 1965
FOR
AGAINST
10. Proposed amendments to the Articles of Association of Halim Mazmin Berhad
Please indicate with an “X” in the appropriate space how you wish your votes to be cast. Unless otherwise instructed, the proxy
will vote as he thinks fit.
Dated this………..day of ……………………..2007
………….…………………………………………….
Signature/Common Seal of Shareholder
Notes:
1.
A member entitled to attend and vote at the meeting is entitled to appoint a proxy or proxies to attend and vote in his stead. A proxy may but need not be
a member of the Company. The provisions of Section 149(1)(a) and 149(1)(b) of the Companies Act, 1965 (the Act) shall not apply to the Company.
2.
The instrument appointing a proxy must be deposited at the registered office of the Company not less than forty eight (48) hours before the time appointed
for the meeting.
3.
A member shall not be entitled to appoint more than two (2) proxies to attend and vote at the same meeting. The provision of Section 149(1)(c) of the Act
shall apply to the Company.
4.
Where a member appoints more than one proxy (subject always to a maximum of two (2) proxies at each meeting), the appointment shall be invalid unless
he specifies the proportions of his holdings to be represented by each proxy.
5.
In the case of a corporate member, the instrument appointing a proxy must be executed under its Common Seal or under the hand of its attorney.
6.
Where a member of the Company is an Authorised Nominee as defined under the Securities Industry (Central Depositories) Act 1991, it may appoint at least
one proxy in respect of each Securities Account it holds with ordinary shares of the Company standing to the credit of the said Securities Account.
* Please delete where not applicable
99
ANNUAL REPORT 2006
100

Year ended 31 December

Transcription

Similar documents

Corporate Responsibility - National University of Singapore

Koperasi Kastam Diraja Malaysia Berhad (KOSKAM)

(1) - Bursa Malaysia Stock

State Water Supply Concession awarded to SAJ Holdings

directors` profile

RadioNotas.com | SuperGolTM | KWKW 1330AM ESPN Deportes

Board Of Director`s Profile

January 2014 Newsletter - Fresno Police Department Credit Union

FOL-1-FORMA 2 - Service Alberta

CORpORATE INFORmATION - Affin Islamic Bank Berhad