Pulai Spring DTP.indd

Transcription

Pulai Springs Berhad (Incorporated in Malaysia) Company No. 514941-K
Pulai Springs Berhad
ANNUAL
REPORT
PULAI SPRINGS BERHAD (Incorporated in Malaysia)
Company No. 514941-K
20km, Jalan Pontian Lama,
81110 Pulai, Johor, Malaysia.
Tel: 607-521 1212
Fax: 607-521 3333
Notice of the Ninth Annual General Meeting
2
Statement Accompanying the Notice of AGM
4
Corporate Information
5
Profile of Directors
7
Chairman’s Statement
10
Statement on Corporate Governance
12
Statement on Internal Control
19
Audit Committee Report
21
Statement on Directors’ Responsibility
24
Coporate Social Responsibility
25
Financial Statements
26
List of Properties Held
74
Analysis of Shareholdings
77
Proxy Form
1
Pulai Springs Berhad • Annual Report 2008
Contents
Notice of the Ninth Annual General Meeting
For the Financial Year Ended 31 December 2008
NOTICE IS HEREBY GIVEN that the Ninth Annual General Meeting
of PULAI SPRINGS BERHAD will be held at Cengal Suite, Pulai Springs Resort,
20km, Jalan Pontian Lama, 81110 Pulai, Johor Darul Takzim on Thursday, 18 June
2009 at 11.00 a.m. for the following purposes:
AGENDA
As Ordinary Business
1.
To lay the Audited Financial Statements for the financial year ended 31 December 2008
together with the Reports of the Directors and Auditors thereon.
2.
To re-elect the following Directors who are retiring pursuant to Article 114 of the Articles
of Association of the Company:
2.1
2.2
3.
4.
Prof. Emeritus Dato’ Dr Lian Chin Boon
Leong Chew Meng
(Ordinary Resolution 1)
To approve the Directors’ Fees of RM195,000 for the financial year ended 31 December
2008.
To re-appoint Messrs Horwath as Auditors of the Company and to authorise the Directors
to fix their remuneration.
As Special Business
5.
To consider and if thought fit, pass the following resolution:
Authority to Allot Shares pursuant to Section 132D of the Companies Act, 1965
“THAT pursuant to Section 132D of the Companies Act, 1965, the Directors be and are
hereby empowered to allot and issue shares in the Company, at any time, at such price, upon
such terms and conditions, for such purpose and to such person or persons whomsoever as
the Directors may in their absolute discretion deem fit provided that the aggregate number
of shares to be issued does not exceed 10% of the issued share capital of the Company for
the time being and THAT the Directors be and are hereby also empowered to obtain the
approval for the listing of and quotation for the additional shares so issued on the Bursa
Malaysia Securities Berhad and THAT such authority shall continue to be in force until
conclusion of the next annual general meeting of the Company.”
By Order of the Board
CHAN YOKE YIN (MAICSA 7043743)
LAI MEI MEI (MAICSA 7052158)
Company Secretaries
Ipoh, Perak
26 May 2009
2
Notice of the Ninth Annual General Meeting (Cont’d)
Notes :
1.
A member entitled to attend and vote at the meeting is entitled to appoint a proxy or proxies (but not more than two)
to attend and vote in his/her stead. If a member appoints two (2) proxies, the appointment shall be invalid unless he/she
specifies the proportion of his/her holdings to be represented by each proxy.
2.
A proxy may but need not be a member of the Company. Where a proxy is not a member, he need not be an advocate,
an approved company auditor or a person approved by the Companies Commission of Malaysia.
3.
In the case of a corporation, the proxy appointed must be in accordance with its Articles of Association and the
instrument appointing a proxy shall be given under the corporation’s Common Seal or under the hand of an officer or
attorney duly appointed.
4.
The instrument appointing a proxy must be deposited with the Company Secretaries at 55 Medan Ipoh 1A, Medan
Ipoh Bistari, 31400 Ipoh, Perak not less than 48 hours before the time appointed for the holding of the Annual General
Meeting or any adjournment thereof.
Explanatory Note on the Special Business
Ordinary Resolution 5
Authority to Allot Shares pursuant to Section 132D of the Companies Act, 1965
3
The proposed Ordinary Resolution 5, if passed, will empower the Directors of the Company, from the date of the Ninth
Annual General Meeting, to issue shares (other than bonus or rights issue) of the Company up to and not exceeding in total
10% of the issued share capital of the Company for the time being for such purpose as they considered would be in the best
interest of the Company. This authority, unless revoked or varied at a general meeting, will expire at the next Annual General
Meeting of the Company.
Statement Accompanying the Notice of AGM
(Pursuant to Paragraph 8.28(2) of the Listing Requirements of the Bursa Malaysia Securities Berhad)
1.
Names of Directors who are standing for re-election at the Ninth Annual General Meeting of the Company:
(a)
(b)
2.
Prof. Emeritus Dato’ Dr Lian Chin Boon; and
Leong Chew Meng.
Details of Attendance of Directors at Board Meetings
The details are set out on page 13 of this Annual Report.
3.
Date, Time and Venue of Ninth Annual General Meeting of the Company
The Ninth Annual General Meeting of the Company will be held on Thursday, 18 June 2009 at 11.00 a.m. at Cengal
Suite, Pulai Springs Resort, 20km, Jalan Pontian Lama, 81110 Pulai, Johor Darul Takzim.
4.
Further Details of Directors who are standing for re-election as Directors
The details of the Directors who are standing for re-election at the Ninth Annual General Meeting are set out on
page 8 to page 9 of this Annual Report. No individual other than the retiring Directors is seeking election as a Director
at the Ninth Annual General Meeting of the Company.
No notice of nomination has been received todate from any member nominating any individual for election as a
Director at the Ninth Annual General Meeting of the Company.
4
Corporate Information
BOARD OF DIRECTORS
NOMINATION COMMITTEE
Datuk Azzat bin Kamaludin
Independent Non-Executive Chairman
Mr. Mah Siew Chean
Executive Director
Mr. Leong Chew Meng
Independent Non-Executive Director
Mr. Leong Chew Meng
Dato’ Dr. Hj Shahir bin Nasir
Prof. Emeritus Dato’ Dr. Lian Chin Boon
Non-Independent Non-Executive Director
COMPANY SECRETARIES
Chan Yoke Yin (MAICSA 7043743)
Lai Mei Mei (MAICSA 7052158)
Cik Ruthlene binti Abu Sahid
AUDIT COMMITTEE
Mr. Leong Chew Meng
Independent Non-Executive Director (Chairman)
REMUNERATION COMMITTEE
Mr. Mah Siew Chean
Executive Director
REGISTERED OFFICE
18th Floor, MCB Plaza
Changkat Raja Chulan
50200 Kuala Lumpur
Tel. (603) 2078 8727
Fax. (603) 2078 7727
AUDITORS
Horwath (AF 1018)
Chartered Accountants
Level 16, Tower C
Megan Avenue II
No. 12, Jalan Yap Kwan Seng
50450 Kuala Lumpur
MANAGEMENT / OPERATIONS OFFICE
20km, Jalan Pontian Lama
81110 Pulai
Johor Darul Takzim
Tel. (607) 521 2121
Fax. (607) 521 1818
E-mail : [email protected]
Website : www.pulaisprings.com
5
Tan Sri Datuk Seri Abu Sahid bin Mohamed
Alternate Director to Cik Ruthlene binti Abu Sahid
Corporate Information (Cont’d)
OPERATIONS OFFICE
STOCK EXCHANGE LISTING
18th Floor, MCB Plaza
Changkat Raja Chulan
50200 Kuala Lumpur
Tel. (603) 2078 8727
Fax. (603) 2078 7727
Email : [email protected]
Bursa Malaysia Securities Berhad
Main Board (Trading / Services)
Stock Name : PSPRING
Stock Code : 5059
Sime Darby Centre
896 Dunearn Road #03-01F
Singapore 589472
Tel. (65) 6762 5655
Fax. (65) 6762 5609
Email : [email protected]
SHARE REGISTRAR
Symphony Share Registrars Sdn Bhd
Level 26, Menara Multi Purpose
Capital Square
No. 8, Jalan Munshi Abdullah
50100 Kuala Lumpur
Tel. (603) 2721 2222
Fax. (603) 2721 2530
PRINCIPAL BANKERS
OSK Investment Bank Bhd (14152 – V)
20th Floor, Plaza OSK
Jalan Ampang
50450 Kuala Lumpur
RHB Bank Berhad (6171 – M)
3, 3-01, 5, 5-01
Jalan Pembangunan
Desa Rahmat
81200 Johor Bahru
Johor Darul Takzim
Public Bank Berhad (6463 – H)
1st & 12th Floor, Public Bank Tower
No. 19, Jalan Wong Ah Fook
80000 Johor Bahru
Johor Darul Takzim
Alliance Bank Malaysia Berhad (88103 – W)
Menara Multi Purpose
Capital Square
No. 8, Jalan Munshi Abdullah
50100 Kuala Lumpur
6
Profile of Directors
Tan Sri Datuk Seri Abu Sahid
Bin Mohamed
Mr Leong Chew Meng
Datuk Azzat Bin Kamaludin
Prof. Emeritus
Dato’ Dr. Lian Chin Boon
Mr Mah Siew Chean
Dato’ Dr Hj Shahir bin Nasir
7
Cik Ruthlene Binti Abu Sahid
Profile of Directors (Cont’d)
Malaysian aged 64, was appointed to the Board of Directors
of Pulai Springs Berhad as a Non-Independent Non-Executive
Chairman on 24 September 2002 and later re-designated to
an Independent Non-Executive Chairman on 27 November
2007. He is also the Chairman of the Remuneration and
Nomination Committees.
Datuk Azzat graduated from Queens’ College, University of
Cambridge with a Degree of Bachelor of Arts in 1968 and a
Degree of Bachelor of Law in 1969. He was admitted to the
Honorable Society of the Middle Temple, London and called
to the “Degree of the Utter Bar” in 1970.
Datuk Azzat served in the Administrative Diplomatic Office
with the Ministry of Foreign Affairs from 1970 till 1979.
Since 1979, he has been a partner of legal firm, Azzat & Izzat,
Advocates & Solicitors (Formerly known as Messrs Chua
Brothers, Azzat & Izzat). He was a member of the Securities
Commission from March 1993 to March 1999. He is also
presently a director of Boustead Holdings Berhad, Affin
Holdings Berhad, KPJ Healthcare Berhad, Boustead Heavy
Industries Corporation Berhad, Visdynamics Holdings
Berhad and Axiata Group Berhad.
Dato’ Dr Hj. Shahir bin Nasir
of Pulai Springs Berhad as an Independent Non-Executive
Director on 24 September 2002. He is also a member of
Audit, Remuneration and Nomination Commitees.
Dato’ Shahir graduated with a Degree of Bachelor of Arts
(Honours) from University of Malaya in 1968. He also
holds a Masters Degree and Ph.D in Public Administration
from the University of Southern California, United States of
America. He has served in various positions since he joined
the Johor Civil Service (JCS) in May 1968, including State
Financial Officer. His Last appointment in JCS was as the
State Secretary of Johor until he retired in 2001.
He is also a Director of Ranhill Utilities Berhad, Senai-Desaru
Expressway Berhad and several private limited companies. He
currently serves as Executive Director of SAJ Holdings Sdn
Bhd, a wholly-owned subsidiary of Ranhill Utilities Berhad
and is also Executive Deputy Chairman of YPJ Holdings Sdn
Bhd.
Mr Mah Siew Chean
Malaysian, aged 33, was appointed an Executive Director of
Pulai Springs Berhad on 12 January 2007.
8
He graduated with a Bachelor of Arts Degree from University
of Sydney in 1999. From there, he joined the Hydro Majestic
Hotel Blue Mountains as a Duty Manager. In 2000, he joined
Commonwealth Securities as a non-advisory stock broker.
From 2001 to 2002, Mr Mah was appointed as General
Manager of a 120 bedroom hotel in Sydney, Australia. From
2002 to 2003, he relocated to Shanghai, China to expand
his company’s portfolio. In 2004, he relocated to Kunming
China where he was appointed as managing director of a hotel.
Currently, Mr Mah is the executive director of his family’s
group of companies which include the Mercure Majestic
Hotel in Kunming and The Hydro Hotel in Penang.
Mr Leong Chew Meng
Director on 8 December 2006. He is also Chairman of the
Audit Committee and Member of Nomination Committee.
Mr Leong graduated from the Victoria University of
Wellington, New Zealand with a Bachelor of Commerce
& Administration Degree majoring in accountancy. He
is a Chartered Accountant from the Malaysian Institute
of Accountants and qualified as an Associate Chartered
Accountant from the Institute of Chartered Accountants,
New Zealand.
Mr Leong is an Accountant by profession, having extensive
working experience for over 26 years in Malaysia. Prior to
diversifying into the business sector as Business Consultant
& Advisor, he was the Financial Controller and Finance
Director of several foreign-owned multinational companies in
the manufacturing, trading and retails sectors. He is currently
a Non-Independent Non-Executive Director of Media
Chinese International Limited (formerly known as Ming Pao
Enterprise Corporation Limited)
Prof. Emeritus Dato’ Dr Lian Chin Boon
Director on 6 December 2006. He was later redesignated as
a Non-Independent Non-Executive Director on 9 February
2007.
He graduated with Bachelor of Dental Surgery (BDS) from
Gujerat University in 1971. He obtained his post-graduate
Fellowship in Dental Surgery from the Royal College of Physicians
& Surgeon of Glasgow, Scotland (FDSRCPS) in 1979. Dato’
Lian was formerly a Professor of Oral & Maxillofacial Surgery
in University Malaya, a position he held from 1991 until his
retirement in 2004.
Profile of Directors (Cont’d)
He was conferred the Darjah Dato’ Padila Mahkota Perak (DPMP)
in 1997 and Professor Emeritus in year 2008. He has also been
conferred many fellowships and holds positions in numerous
associations and organisations. During his career, he has delivered
numerous lectures at local and international conferences as well
as published many articles in local and international academic
and professional journals and undertaken projects and research.
Presently, Prof. Emeritus Dato’ Lian is a Director of Tokio Marine
Insurans (Malaysia) Berhad.
of Pulai Springs Berhad as a Non-Independent NonExecutive Director on 26 September 2003. She is also a
member of the Audit Committee. She graduated with a
Bachelor of Business Administration in Finance (Honours)
and a Bachelor in Business Administrations in International
Business (Honours) from George Washington University,
United States of America.
Cik Ruthlene is also knowledgeable in diverse industries. In
fact, her tenure with Ipmuda Berhad, Iconsiglieri Inc, and
KPMG Corporate Services Sdn Bhd led her to her next role,
being the Managing Director of ASM Properties Sdn Bhd.
Her responsibilities included overseeing the management
of Maju Perdana development which consists of two office
towers and one shopping mall.
Cik Ruthlene effortlessly juggles a diverse portfolio of
directorship in several companies including Maju Holdings
Sdn Bhd, which is principally involved in the manufacturing,
engineering, property development, infrastructure & services
industries and ASM Development Sdn Bhd, the flagship
property development company of Maju Holdings Sdn
Bhd. Cik Ruthlene is a member of the Young Presidents
Organisation (YPO), Malaysian Chapter and holds a Private
Pilot’s license from the Malaysian Flying Academy.
In 1977, he started his first company, Maju Alat Ganti Sdn
Bhd (“MAG”) which was involved in the trading of motor
spare parts. Subsequently, MAG became the biggest Malay
spare parts company, dealing with both the private sector
and the Government. He was Vice President of the Selangor
and Federal Territory Engineering and Motor Parts Traders
Association, a position he held from 1985 to 1987. He is now
the Honorary President of the Association. Since then, Tan
Sri Datuk Seri Abu Sahid’s business interests have broadened.
The Group’s portfolio is well diversified and at present, its
activities include construction and property development,
manufacturing of steel products and furniture, trading and
distribution of building materials, infrastructure, shipping,
resorts as well as engineering and security services.
Tan Sri Datuk Seri Abu Sahid is the managing director of Maju
Expressway Sdn Bhd, which has been given the Concession for
the new highway directly linking Kuala Lumpur to Putrajaya
and subsequently onwards to the Kuala Lumpur International
Airport.
Tan Sri Datuk Seri Abu Sahid is the Executive Chairman of
Perwaja Holdings Berhad, Ipmuda Berhad and Bright Focus
Berhad, Chairman of Kinsteel Bhd and a director of MTH
Power Berhad. Tan Sri Datuk Seri Abu Sahid is a major
shareholder of Kinsteel Bhd, Perwaja Holdings Berhad and
Ipmuda Berhad. Tan Sri Datuk Seri Abu Sahid is also a director
of various other private limited companies in Malaysia.
Notes to Directors’ profile
1. Family Relationship
Mr Mah Siew Chean is the nephew of Prof. Emeritus Dato’ Dr Lian
Chin Boon whilst Cik Ruthlene binti Abu Sahid is the daughter of
Tan Sri Datuk Seri Abu Sahid bin Mohamed who is also a major
shareholder of the Company. The other Directors do not have any
family relationship with any Director and/or any shareholders of the
Company.
2. Conflict of Interest
None of the Directors have any conflict of interest with the
Company.
Malaysian, aged 57 was appointed as an Alternate Director
to Cik Ruthlene Binti Abu Sahid, a Non-Independent NonExecutive Director of the Company on 12 January 2007. He
is a major shareholder of the Company.
3. Conviction of Offences.
Tan Sri Datuk Seri Abu Sahid is presently the Group Executive
Chairman of the Maju Group of Companies
4. Attendances at Board Meeting
None of the Directors have any conviction offences other than
traffic offences if any within the past ten years.
The details of the Directors’ attendance at Board Meetings are set
out on page 13 of this Annual Report.
5. Shareholdings
The details of the Directors’ interest in the securities of the Company
are set out on page 80 of the Annual Report.
9
Tan Sri Datuk Seri Abu Sahid Bin Mohamed
Chairman’s Statement
Dear Valued
Shareholders,
On behalf of the Board of
Directors, I am pleased to
present the Annual Report and
Financial Statements of Pulai
Springs Berhad for the year
ended 31 December 2008.
10
Chairman’s Statement (Cont’d)
In 2008, the Malaysian hospitality
industry witnessed growth in both room
occupancy and average room rate. The
concerted efforts by the government
to promote domestic tourism and the
Iskandar Development has benefited
the group’s hotel and resorts in Johor.
The Group’s resort and hotel sector
continues to be the main revenue
generator. Overall, the financial year
2008 ended with the Group producing
a total revenue of RM 85.8 million and
a gross profit of RM 38.8 million, as
compared to the previous year’s revenue
of RM 73.4 million and gross profit
of RM33.4 million. However, despite
the improvements in both revenue and
gross profit, the Group still reported
a loss of RM8.1 million after tax, as
compared to RM6.5 million loss in
2007. This is mainly attributed to an
increase in finance costs by one of its
subsidiaries.
Pulai Springs Resort Berhad
(“PSRB” )
Pulai Springs Resort Berhad generated
a total revenue of RM36.8 million as
compared to RM37.5 million in 2007.
Gross profit in 2008 was RM15.8
million as compared to RM16.3
million in 2007. The Golf and Hotel
Operations generated RM30.7 million
as compared to RM28.8 million
in the previous year. Despite the
improvements in the Resort’s Golf and
Hotel operations, PSRB’s lower revenue
was mainly attributed to slower sales in
its Cinta Ayu Service Apartment.
Weaker demand lead to Cinta Ayu
Property Sales achieving sales revenue
of RM6.1 million as compared to
RM12.7 million in 2007. Operating
loss after finance and development
costs also increased to RM4.2 million
as compared to an operating profit of
RM2.6 million in 2007.
Overall for 2008, PSRB generated a
RM4.5 million loss before taxation as
compared to a loss of RM2.2 million
in 2007.
City Centre Hotel Sdn Bhd (formerly known as Hydro Hotels
Sdn Bhd) (“CCH”)
The Novotel Kuala Lumpur City
Centre had a significant increase in
business and contributed RM26.1
million to the Group as compared to
RM20.7 million in 2007. Gross profit
also increased from RM12.3 million
in 2007 to RM17.4 million in 2008.
However, due to an increase in finance
cost from RM4.2 million in 2007 to
RM10.3 million in 2008 as part of its
debt obligation, CCH ultimately ended
up with a loss of RM4.3 million as
compared to a profit of RM0.6 million
in 2007
Bina Resorts Corporation Sdn Bhd
The Pulai Desaru Beach (“TPDB”)
generated a revenue of RM11.4 million
for the Group, as compared to RM15.4
million in 2007. However, despite the
downturn in revenue, the management
of TPDB had managed to produce
a gross profit of RM4.6 million as
compared to RM4.1 million in 2007.
Further improvements and costs
cutting measures by the management
team produced a profit before tax of
RM1.04 million as compared to a loss
of RM0.23 million in 2007.
Citro Murni Sdn Bhd
Maharani Ayu, the Group’s residential
development in Muar witnessed a slight
increase in sales revenue, from RM5.2
million in 2007 toRM7.7 million in
2008. However, due to increase in
development costs and expenses, the
operating profit after finance costs is
RM0.3 million as compared to RM0.6
million in 2007.
The project also managed to complete
and obtain the Certificate For
Occupation (“CFO”) for 92 units of
Cluster houses. Total overall sales have
since achieved 83% of the total staged
development, and we are anticipating
the sale of the remaining units by the
end of 2009.
Future Prospects
The Group’s revenue has increased yearon-year and the Group will continue to
devote substantial efforts in continuing
to generate more revenue from its hotel
and resort operations and improve its
efficiencies so that the profit margins
improve.
Moving forward, in light of the
uncertainties in the global economic
environment in the last quarter of
2008 and in 2009, the Group is more
cautious on its expansion plans. It has
taken precautionary steps to reduce
unnecessary spending in the operations,
but will continue to aggressively
promote its hotel and resorts through
advertisement and tactical campaigns.
On the 23 April 2009, the Company
had entered into a Sales and Purchase
Agreement to dispose its wholly owned
subsidiary company, City Centre Hotel
Sdn Bhd to an unrelated party, for a sale
consideration of RM47.3 million. The
proposed disposal will impact positively
on the Group’s net assets.
Acknowledgments
Our achievements for the year would
not be possible without the collective
efforts of a team of highly dedicated
and commitment Board members,
Management team and staff.
On behalf of the Board of Directors,
we would like to express our gratitude
and appreciation to the efforts of the
management and staff who has shown
commitment, loyalty and contribution
to the Group.
Lastly, we would also like to convey our
deepest appreciation to our shareholders
for their confidence in us, and to our
bankers, loyal members and guests and
business partners, for their continuous
support and understanding.
Independent Non Executive Chairman
11
Group Overview
Statement on Corporate Governance
The Board of Directors (“Board”) of Pulai Springs Berhad remains committed towards ensuring the highest standard of
corporate governance is maintained throughout the Company and its subsidiaries (“the Group”). Hence, the Board is fully
dedicated to continuously evaluating the Group’s corporate governance practices and procedures with a view to ensure the
principles and best practices in corporate governance as promulgated by the Malaysian Code on Corporate Governance (“the
Code”) is applied and adhered to in the best interests of the stakeholders. The Board is pleased to report to the shareholders in
the manner in which the Group has applied the principles and best practices, and the best practices of the Code that were not
adopted during the financial year are explained in the relevant paragraphs.
THE BOARD OF DIRECTORS
(a)
Composition and Balance
The Company is led by an effective and experienced Board, encompassing of six (6) members, made up of three (3)
Independent Non-Executive Directors, two (2) Non-Independent Non-Executive Directors and one (1) Executive
Director. This composition satisfies the Bursa Malaysia Securities Berhad Listing Requirements that requires at least 2
Directors or 1/3 of the Board whichever is higher, who are Independent Directors. The profiles of the members of the
Board are set out on page 8 to page 9 of this Annual Report.
The Executive Director is primarily responsible for the implementation of policies and decisions of the Board, overseeing
the Group’s operations and developing the Group’s business strategies. The role of the Independent Non-Executive
Directors is to provide objective and independent judgment to the decision making of the Board and as such, provide
an effective check and balance to the Board’s decision making process.
The Board composition brings together an extensive group of experienced Directors who are from diverse backgrounds
and have a wide range of skills and experience in areas relevant to managing and directing the Group’s operations. With
this composition of members, the Board is satisfied that it fairly reflects the investment of the minority shareholders and
represents the mix of skills and experiences required for the effective discharge of Board’s duties and responsibilities.
The Board did not appoint a Senior Independent Non-Executive Director to whom concerns maybe conveyed as the
Chairman of the Board encourages the active participation of each and every Board member at the Board meetings.
(b)
Duties and Responsibilities
The main focus of the Board is on the overall strategic leadership, identification and management of principal risks and
development and control of the Group. The Board has delegated specific responsibilities to Board Committees, all of
which discharge the duties and responsibilities within their respective Terms of Reference.
The roles of the Chairman and Executive Director are clearly distinct to ensure that there is a balance of power and
authority. The Chairman is primarily responsible for the effective and efficient conduct and working of the Board
whilst the Executive Director is responsible for the daily management of the Group’s operations and implementation
of the policies and strategies adopted by the Board.
12
Statement on Corporate Governance (Cont’d)
THE BOARD OF DIRECTORS (CONT’D)
(c)
Board Meetings
The Board meets quarterly with additional meetings being convened when necessary. In the meetings, the Board will
deliberate on and considered matters relating to the Group’s financial performance, significant investments, corporate
development, strategic issues and business plan. For the financial year ended 31 December 2008, the Board met
5 times. The meeting attendance records of the Directors who held office are set out below:
Name of Director (Designation)
No. of meetings attended
Datuk Azzat bin Kamaludin (Independent Non-Executive Chairman)
5/5
Mr Mah Siew Chean (Executive Director)
5/5
Dato’ Dr Hj Shahir bin Nasir (Independent Non-Executive Director)
4/5
Cik Ruthlene binti Abu Sahid (Non-Independent Non-Executive Director)
4/5
Prof. Emeritus Dato’ Dr. Lian Chin Boon (Non-Independent Non-Executive Director)
5/5
Mr Leong Chew Meng (Independent Non-Executive Director)
5/5
Mr Victor Chua Chee Wey (Non-Independent Non-Executive Director)
(Resignation on 2 July 2008)
2/3
(Alternate Director to Cik Ruthlene binti Abu Sahid)
0/5
Board meetings are structured with a pre-set agenda which encompass all aspects of matters under discussion. The
Board papers are circulated to directors well in advance of the board meetings for their deliberation. All meetings of the
Board are duly recorded in the Board Minutes.
Senior management may be invited to attend these meetings to explain and clarify matters being tabled.
In furtherance of their duties, the Board has unrestricted access to any information pertaining to the Group as well as
to the advice and services of the Company Secretary and independent professional advisers whenever appropriate at
the Group’s expense.
Appointment and Re-election of Directors
Any new appointments to the Board will require deliberation by the full Board guided by formal recommendations
by the Nomination Committee. Board members who are appointed by the Board are subject to retirement at the first
Annual General Meeting (“AGM”) of the Company subsequent to their appointment. Article 114 of the Company’s
Article of Association also provides that at least one-third (1/3) of the Directors shall retire by rotation at each AGM
and that all Directors shall retire once every three (3) years. A retiring Director shall be eligible for re-election.
Directors over seventy (70) years of age are required to submit themselves for re-appointment annually in accordance
with Section 129(6) of the Companies Act, 1965 (“the Act”).
13
(d)
THE BOARD OF DIRECTORS (CONT’D)
(e)
Directors’ Training
During the year, the Directors have attended the following training programmes, either individually or collectively,
to further enhance their skills and knowledge and to keep abreast with new developments in the furtherance of their
duties:
1)
The Forensic Accounting organised by Malaysian Institute of Accountants on 24 September 2008.
2)
The National Accountants Conference 2008 organised by Malaysian Institute of accountants on 25 & 26
November 2008; and
3)
The Effective Budgeting Techniques & Strategies Workshop organised by Bridge Knowledge Events on 22 &
23 December 2008.
The Directors will continue to attend relevant training programmes to further enhance their skills and knowledge and
fully equip themselves to effectively discharge their duties.
For new Directors, the Nomination Committee ensures that they undergo an orientation program so that they are
familiar with the Group’s operation and current business issues.
BOARD COMMITTEES
Apart from the Audit Committee, there are two other additional committees established to assist the Board in execution of its
responsibilities. All the committees are provided with written terms of reference. Details of the Board committees are provided
below:
(a)
Nomination Committee
The Nomination Committee has three (3) members, all of whom are Independent Non-Executive Directors. The
members of the Nomination Committee are:
i)
Chairman
Datuk Azzat bin Kamaludin – Independent Non-Executive Chairman
ii)
Members
Dato’ Dr Hj Shahir bin Nasir – Independent Non-Executive Chairman
Mr Leong Chew Meng – Independent Non-Executive Director
The Nomination Committee is empowered by the Board of Directors and its terms of reference to assist the Board of
Directors in their responsibilities in nominating new directors to the Board and Board Committees. The Committee
also reviews the Board of Directors composition and balance as well as considering the Board of Directors’ succession
planning.
The Nomination Committee did not meet during the year ended 31 December 2008.
14
BOARD COMMITTEES (CONT’D)
(b)
Remuneration Committee
The Remuneration Committee comprises three (3) members with the majority being Independent Directors. The
Remuneration Committee is to assist the Board of Directors in their responsibilities in reviewing and assessing the
remuneration packages of the executive directors. The members of the Remuneration Committee are:
a)
Chairman
Datuk Azzat bin Kamaludin – Independent Non-Executive Chairman
b)
Members
Dato’ Dr Hj Shahir bin Nasir – Independent Non-Executive Director
Mr Mah Siew Chean – Executive Director
The Remuneration Committee is responsible for recommending to the Board the remuneration framework
for the remuneration package of the Executive Director. This includes recommending remuneration packages
necessary to attract, retain and motivate the Directors, and is reflective of the Directors’ experience and level of
responsibilities.
The Executive Director did not participate in any way in determining his individual remuneration. The
remuneration and entitlements of the Non-Executive Director shall be a matter to be decided by the Board as
a whole.
The Remuneration Committee did not meet during the year ended 31 december 2008.
(c)
Audit Committee
The report of the Audit Committee is set out on page 21 to page 24.
DIRECTORS’ REMUNERATION
The details of the remuneration of each Director during the financial year ended 31 December 2008 are as follows:
Total Remuneration
Executive Director
RM
Non-Executive Director
RM
Total
RM
Basic Salary
Bonuses
Fees
Attendance fee
Others
300,000
0
30,000
3,600
0
0
0
165,000
17,400
0
300,000
0
195,000
21,000
0
Total
333,600
182,400
516,000
15
(a)
(b)
Directors’ Remuneration by Bands
The number of Directors whose total remuneration falls within the following bands during the financial year ended 31
December 2008 is as follows:
Directors’ Remuneration
Executive Director
Non-Executive Director
Total
1
-
5
-
5
1
-
Below RM50,000
RM50,001 to RM100,000
RM100,001 to RM150,000
RM150,001 to RM200,000
RM200,001 to RM250,000
RM250,001 to RM300,000
RM300,001 to RM350,000
* Includes Non-Executive Director who resigned during the financial year.
Details of individual Director’s Remuneration are not disclosed in this report as the Board considers that the
above Remuneration disclosures by band and analysis between Executive and Non Executive Directors satisfies the
accountability and transparency aspects of the Code.
SHAREHOLDERS
(a)
Shareholders and Investors Relations
The Board acknowledges the importance of accountability to the shareholders. Timely release of the financial results
on a quarterly basis, press releases and announcements provide an overview of the Group’s performance and operations
to its shareholders.
Information disseminated to the investment community is in accordance to Bursa Malaysia Securities Berhad (“Bursa
Securities”) disclosure rules and regulations. The Board has taken steps to ensure that no market sensitive information
is disclosed to any party prior to making an official announcement to Bursa Securities.
The Group has also established a website at www.pulaisprings.com from which shareholders as well as members of the
public may access for the latest information on operations and activities of the Group.
(b)
Annual General Meeting
The Annual General Meeting (“AGM”) is the principal platform for dialogue with the shareholders. At the AGM, the
Board presents the progress and performance of the Group to provide shareholders with the opportunity to question
the business issues, concerns and operations in general. The Board will also ensure that each item of special business
is included in the notice of the AGM and will be accompanied by an explanation of the effects of the proposed
resolutions.
16
ACCOUNTABILITY AND AUDIT
(a)
Financial Reporting
In presenting the annual financial statements and quarterly announcements to shareholders, the Directors aim to
ensure that the financial statements and quarterly announcements are prepared in accordance with the Companies
Act, 1965 and applicable approved accounting standards so as to offer a balanced and comprehensive assessment of
the Group’s financial position and prospects. A Responsibility Statement by the Directors is set out on page 24 of this
Annual Report.
(b)
Internal Control
The Group’s Statement on Internal Control is set out on page 19 to page 20 of the Annual Report to provide an overview
on the state of internal control throughout the year. In relation to the internal audit function, having considered the
Group’s operational requirements, the Board is of the view that the Group should still continue to outsource its internal
audit function to external consultants. Nevertheless, this outsourcing arrangement shall be reviewed annually to ensure
that it continues to meet the Group’s requirements. The outsourced internal auditors assist the Board and the Audit
Committee in providing independent assessment of the adequacy, efficiency and effectiveness of the Group’s internal
control systems. They report directly to the Audit Committee.
(c)
Relationship with Auditors
The role of the Audit Committee in relation to the external auditors is explained in the Audit Committee Report
set out on page 21 to page 24 of the Annual Report. During the financial year ended 31 December 2008, the Audit
Committee has met the external auditors two times without Executive Director and management’s present.
OTHER INFORMATION
(a)
Shares Buy-Backs
During the financial year, there were no share buy-backs by the Company.
(b)
Options, Warrants or Convertible Securities
During the financial year, there were no options, warrants or convertible securities exercised.
Material Contracts involving Directors’ Interests
There were no contracts involving directors’ interests which are or may be material, not being contracts entered into
in the ordinary course of business, which have been entered into by the Company and its subsidiary companies since
the end of the previous financial year.
17
(c)
(d)
Related Party Transactions
The details of the transactions with related parties undertaken by the Company during the financial year are disclosed
in note 37 on page 67 of the notes to the financial statements.
(e)
American Depository Receipt (“ADR”) or Global Depository Receipt (“GDR”) Programmes
During the financial year, the Company did not sponsor any ADR or GDR programme.
(f)
Imposition of Sanctions/Penalties
There were no sanctions and/or penalties imposed on the Company and its subsidiaries, Directors or management by
the authorities during the financial year.
(g)
Profit Guarantees
During the financial year, there were no profit guarantees given by the Company.
(h)
Utilisation of Proceeds
The Company did not implement any fund raising exercise during the financial year.
(i)
Contracts Relating to Loans
There was no contract relating to loans by the Company.
(j)
Revaluation of Landed Properties
The Group does not have any revaluation policy on landed properties.
(k)
Variation in Results
There was no material variance between the audited results for the financial year ended 31 December 2008 and
unaudited results previously released for the financial quarter ended 31 December 2008.
(l)
Non-Audit Fees
The Group did not pay any non-audit fees to external auditors for the current financial year.
18
Statement on Internal Control
INTRODUCTION
Pursuant to paragraph 15.27 (b) of the Listing Requirements (“LR”) of Bursa Malaysia Securities Berhad (“Bursa Securities”)
and as guided by the Bursa Securities’ Statement on Internal Control: Guidance for Directors of Public Listed Companies (“the
Guidance”), the Board of Directors (“the Board”) of Pulai Springs Berhad is pleased to include a statement on the state of the
Group’s internal control in the Annual Report.
RESPONSIBILITY
The Board acknowledges its responsibility and re-affirms its commitment in maintaining a sound system of internal control
to safeguard shareholders’ investments and the Group’s assets as well as reviewing the adequacy and integrity of the system
of internal control. However, as there are inherent limitations in any system of internal control, such systems put into effect
by Management can only reduce but cannot eliminate all risks that may impede the achievement of the Group’s business
objectives. Therefore, the internal control system can only provide reasonable and not absolute assurance against material
misstatement or loss.
KEY FEATURES OF THE GROUP’S INTERNAL CONTROL SYSTEM
2.
Control Environment
•
Organisation Structure & Authorisation Procedures: The Group maintains a formal organisation structure
with well-defined delegation of responsibilities and accountability within the Group’s Senior Management. It
sets out the roles and responsibilities, appropriate authority limits, review and approval procedures in order to
enhance the internal control system of the Group’s various operations.
•
Periodical and/or Annual Budget: Budgetary control for every operations of the Group, where actual performance
is closely monitored against budgets to identify and to address significant variances.
•
Group Policies and Procedures: The Group has documented policies and procedures that are regularly reviewed
and updated to ensure that it maintains its effectiveness and continues to support the Group’s business activities
at all times as the Group continues to grow.
•
Site visits: Regular site visits by members of the senior management team, the internal auditor and external
consultants are conducted.
Risk Management Framework
Risk management is regarded by the Board to be an integral part of managing business operations. The respective
Heads of Departments are responsible for managing risks related to their functions on a day-to-day basis. Periodic
management meetings are held to ensure that risks faced by the Group are discussed, monitored and appropriately
addressed. It is at these meetings that key risks and corresponding controls implemented are communicated amongst
the Senior Management team. Significant risks identified are subsequently brought to the attention of the Board at
their scheduled meetings.
The abovementioned practices and initiatives by the Management serves as the ongoing process used to identify, assess
and manage key business, operational and financial risks faced by the Group.
19
1.
Statement on Internal Control (Cont’d)
3.
Internal Audit Function
The Group’s internal audit function is outsourced to external consultants. The outsourced internal auditors assist the
Board and the Audit Committee in providing independent assessment of the adequacy, efficiency and effectiveness of
the Group’s internal control systems. They report directly to the Audit Committee and internal audit plans are tabled
to the Audit Committee for review and approval to ensure adequate coverage.
On a quarterly basis, the Group’s internal auditors table the results of their review of the business processes of different
operating units to the Audit Committee at their scheduled meetings. The status of the implementation of corrective
actions to address control weaknesses are also followed up by the internal auditors to ensure that these actions have
been satisfactorily implemented.
During the financial year under review, identified weaknesses in internal controls have been appropriately addressed
and Senior Management will continue to ensure that appropriate action is taken to enhance and strengthen the internal
control environment.
4.
Information And Communication
Information critical to the achievement of the Group’s business objectives are communicated through established
reporting lines across the Group. This is to ensure that matters that require the Board and Senior Management’s
attention are highlighted for review, deliberation and decision on a timely basis.
5.
Monitoring And Review
Scheduled management meetings are held to discuss and review the business planning, budgeting, financial and
operational performances.
6.
•
Financial and Operational Review: The monthly management accounts and the quarterly financial statements
containing key financial results, operational performance results and comparisons of performance against
budget are presented to the Board for their review, consideration and approval.
•
Business Planning and Budgeting Review: The Board plays an active role in discussing and reviewing the
business plans, strategies, performance and risks faced by the Group.
Conclusion
The Board is of the view that the Group’s system of internal control is adequate to safeguard shareholders’ investments
and the Group’s assets. However, the Board is also cognizant of the fact that the Group’s system of internal control
and risk management practices must continuously evolve to meet the changing and challenging business environment.
Therefore, the Board will, when necessary, put in place appropriate action plans to further enhance the system of
internal control.
This statement was approved by the Board of Directors on 20 May 2009.
20
Audit Committee Report
The Board of Directors of Pulai Springs Berhad (“PSB”) is pleased to present the report of the Audit Committee for the
financial year ended 31 December 2008.
COMPOSITION AND MEETINGS
The members of the Audit Committee and details of their attendance at meetings during the financial year ended 31 December
2008 are as follows:
Chairman:
Members:
Number of meetings
Attendance of meetings
Leong Chew Meng
(Independent Non-Executive Director)
5
5
Dato’ Dr Hj Shahir bin Nasir
(Independent Non-Executive Director)
5
5
Ruthlene binti Abu Sahid
(Non-Independent Non-Executive Director)
(appointed on 19 February 2008)
5
5
Senior Management staff and the external consultants, to whom the internal audit function was outsourced to, attended the
meetings at the invitation of the Audit Committee. The agenda of the meetings and relevant information are distributed to
its members with sufficient notice. The proceedings of the meetings are formalised in the form of meeting minutes by the
Company Secretary who is appointed by the Board to be the Secretary during the Audit Committee meetings.
TERMS OF REFERENCE OF AUDIT COMMITTEE
The terms of reference of the Committee are as follows:
1.
Composition
The Committee shall be appointed from amongst the Board and shall comprise no fewer than three (3) members.
All the audit committee members must be non-executive directors, with a majority of whom shall be independent
directors and at least one (1) member must be a member of the Malaysian Institute of Accountants or possess such other
qualifications and/or experience as approved by the Bursa Malaysia Securities Berhad (“Bursa Securities”).
In the event of any vacancy with the result that the number of members is reduced to below three (3), the vacancy must
be filled within three (3) months.
No alternate director shall be appointed as a member of the Audit Committee.
2.
Chairman
3.
Secretary
The Company Secretary shall be the Secretary of the Committee and shall be responsible, in conjunction with the
Chairman, for drawing up the agenda and circulating it prior to each meeting.
The Secretary shall also be responsible for keeping the minutes of meetings of the Committee and circulating them to
the Committee Members.
21
The Chairman, who shall be elected by the Audit Committee, shall be an independent director.
Audit Committee Report (Cont’d)
4.
Meetings
The Committee shall meet at least four (4) times in each financial year. The quorum for a meeting shall be two (2)
members, provided that the majority of members present at the meeting shall be independent.
The Committee may call for a meeting as and when required with reasonable notice as the Committee Members deem
fit. The Committee Members may participate in a meeting by means of conference telephone, conference videophone
or any similar or other communications equipment by means of which all persons participating in the meeting can hear
each other. Such participation in a meeting shall constitute presence in person at such meeting.
The internal auditors and external auditors have the right to appear at any meeting of the Audit Committee and shall
appear before the Committee when required to do so by the Committee. The internal auditors and external auditors
may also request a meeting if they consider it necessary.
5.
Rights
The Audit Committee shall:
(a)
(b)
(c)
(d)
(e)
(f )
(g)
(h)
(i)
6.
have authority to investigate any matter within its terms of reference;
have the resources which are required to perform its duties;
have full and unrestricted access to any information pertaining to the Group;
have direct communication channels with the external auditors and person(s) carrying out the internal audit
function or activity;
have the right to obtain independent professional or other advice at the Company’s expense;
have the right to convene meetings with the internal auditors and external auditors, excluding the attendance of
the executive directors or employees of the Group, whenever deemed necessary;
promptly report to the Bursa Securities matters which have not been satisfactorily resolved by the Board of
Directors resulting in a breach of the listing requirements;
the Chairman shall call for a meeting upon the request of the internal auditors and external auditors; and
have the right to pass resolutions by a simple majority vote from the Committee and that the Chairman shall
have the casting vote should a tie arise.
Duties
(a)
To review with the external auditors on:
•
•
•
•
(b)
To do the following, in relation to internal audit function:
•
•
•
•
•
22
the audit plan, its scope and nature;
the audit report;
the results of their evaluation of the accounting policies and systems of internal accounting controls
within the Group; and
the assistance given by the officers of the Company to external auditors, including any difficulties or
disputes with Management encountered during the audit.
review the adequacy of the scope, functions, competency and resources of the internal audit function,
and that it has the necessary authority to carry out its work;
review the internal audit programme and results of the internal audit process and, where necessary,
ensure that appropriate actions are taken on the recommendations of the internal audit function;
review any appraisal or assessment of the performance of members of the internal audit function;
approve any appointment or termination of senior staff members of the internal audit function; and
take cognisance of resignations of internal audit staff members and provide the resigning staff member
an opportunity to submit his reasons for resigning.
(c)
To provide assurance to the Board of Directors on the effectiveness of the system of internal controls and risk
management practices of the Group.
(d)
To review with management:
•
•
•
audit reports and management letter issued by the external auditors and the implementation of audit
recommendations;
interim financial information; and
the assistance given by the officers of the Company to external auditors.
(e)
To monitor related party transactions entered into by the Company or the Group and to determine if such
transactions are undertaken on an arm’s length basis and normal commercial terms and on terms not more
favourable to the related parties than those generally available to the public, and to ensure that the Directors
report such transactions annually to shareholders via the annual report, and to review conflict of interest that
may arise within the Company or the Group including any transaction, procedure or course of conduct that
raises questions of management integrity.
(f )
To review the quarterly reports on consolidated results and annual financial statements prior to submission to
the Board of Directors, focusing particularly on:
•
•
•
•
•
changes in or implementation of major accounting policy and practices;
significant and/or unusual issues arising from the audit;
the going concern assumption;
compliance with accounting standards and other legal requirements; and
major judgemental areas.
(g)
To consider the appointment and/or re-appointment of internal and external auditors, the audit fee and
any questions of resignation or dismissal including recommending the nomination of person or persons as
auditors.
(h)
To verify any allocation of options in accordance with the employees share scheme of the Company, at the end
of the financial year.
SUMMARY OF ACTIVITIES OF THE AUDIT COMMITTEE
(a)
Reviewed the unaudited quarterly report on the consolidated results of the Group for the quarters ended 31 December
2007, 31 March 2008, 30 June 2008 and 30 September 2008.
(b)
Reviewed with the external auditors the audit plan, scope of audit and the results of the external audit.
(c)
Reviewed and approved the internal audit plan prepared by the Internal Audit Function.
(d)
Reviewed internal audit reports which outlined recommendations towards correcting area of weaknesses and ensured that
there are management action plans established for the implementation of the internal auditors’ recommendations.
(e)
Reviewed the annual audited financial statements, external auditors’ reports and their audit findings.
23
The following activities were undertaken by the Audit Committee during the financial year ended 31 December 2008:
INTERNAL AUDIT FUNCTION
The internal Audit function was outsourced to an external consultant, Audex Governance Sdn Bhd, the total cost incurred for
the internal audit function in respect of the year ended 31 December was RM 104,500.
The activities of the Internal Audit Function during the financial year were as follows:
(a)
develop the internal audit plan for year 2008, 2009 and 2010;
(b)
execution of the approved internal audit plan;
(c)
presentation of the internal audit findings at the quarterly Audit Committee meetings. All findings raised by the
Internal Audit Function have been appropriately addressed by Management; and
(d)
conducted follow up reviews to ensure that action plans are properly and appropriately implemented by
Management.
The internal audits conducted did not reveal weaknesses which would result in material losses, contingencies or uncertainties
that would require disclosure in the Annual Report.
Statement on Directors’ Responsibility
In Respect of the Preparation of the Financial Statements
The Directors acknowledge their responsibility for ensuring that the financial statements of the Group are drawn up in
accordance with applicable approved accounting standards in Malaysia and the provision of the Companies Act, 1965 so as to
give a true and fair view of the state of affairs of the Company and the Group as at 31 December 2008 and of the results and
cash flows of the Company and the Group for the financial year ended on that date.
In preparing the financial statements of the Company and the Group for the year ended 31 December 2008, the Directors
have:
•
Ensured that relevant and appropriate accounting policies are consistently applied and that these policies are in
accordance with applicable approved accounting standards.
•
Made judgments and estimates that are reasonable and prudent; and
•
Used the going concern basis for the preparation of the financial statements.
The Directors have ensured that proper accounting records are kept which enable the preparation of the financial statements
with reasonable accuracy and that these records are kept in accordance with the Companies Act, 1965. The Directors are also
responsible for taking steps as are reasonable to safeguard the Group’s assets and to prevent fraud and other irregularities.
24
Corporate Social Responsibility
•
Ramadan Charity Buffet Dinner for the 45 patients at the Hospital Permai on the 5 September 2008. Hari Raya
Packets of RM10 each were presented to each patient, together with a goodies bag each which includes a water tumbler
and kurma dates.
•
30 children from Pusat Kebajikan Kalvari Johor celebrated their Christmas in Pulai Springs Resort on 21 December
2008 with the Management staffs of the Resort during the Christmas Charity Night. The Donations and contributions
in cash or in kind were collected for the centre and the needy children from the employees, members, hotel guests and
patrons during the event.
•
A 3 week donation drive from the Novotel Kuala Lumpur City Centre on 14 February 2008, for the Johor Flood
Donation with the proceeds going to help the flood victims of Johor.
•
A joint organization between Kuala Lumpur City Centre and Pullman Putrajaya for a buka puasa treat for
17 underprivileged children and staff from Kompleks Kebajikan Rukaiyah Amal Bangi on the 10 September 2008.
25
Pulai Springs Berhad continue to be committed to serve the community and the disadvantaged. The contributions for 2008
from the Group include:
Financial Statements
Directors’ Report
27
Statement by Directors
31
Statutory Declaration
31
Auditors’ Report
32
Balance Sheets
34
Income Statements
36
Statements of Changes in Equity
37
Cash Flow Statements
38
Notes to the Financial Statements
40
26
Directors’ Report
The directors hereby submit their report and the audited financial statements of the Group and of the Company for the
financial year ended 31 December 2008.
PRINCIPAL ACTIVITY
The Company is principally engaged in the business of investment holding whilst the principal activities of the subsidiaries are
set out in Note 6 to the financial statements. There have been no significant changes in the nature of these activities during
the financial year.
RESULTS
THE GROUP
RM
Loss for the financial year
THE COMPANY
RM
(8,102,652)
(497,825)
DIVIDENDS
No dividend was paid since the end of the previous financial year and the directors do not recommend the payment of any
dividend for the current financial year.
RESERVES AND PROVISIONS
All material transfers to or from reserves or provisions during the financial year are disclosed in the financial statements.
ISSUES OF SHARES AND DEBENTURES
During the financial year,
(a)
there were no changes in the authorised and issued and paid-up share capital of the Company; and
(b)
there were no issues of debentures by the Company.
OPTIONS GRANTED OVER UNISSUED SHARES
BAD AND DOUBTFUL DEBTS
Before the financial statements of the Group and of the Company were made out, the directors took reasonable steps to
ascertain that action had been taken in relation to the writing off of bad debts and the making of allowance for doubtful debts,
and satisfied themselves that there are no known bad debts and that adequate allowance had been made for doubtful debts.
At the date of this report, the directors are not aware of any circumstances that would require the writing off of bad debts, or
the additional allowance for doubtful debts in the financial statements of the Group and of the Company.
27
During the financial year, no options were granted by the Company to any person to take up any unissued shares in the
Company.
Directors’ Report (Cont’d)
CURRENT ASSETS
Before the financial statements of the Group and of the Company were made out, the directors took reasonable steps to
ascertain that any current assets other than debts, which were unlikely to be realised in the ordinary course of business,
including their value as shown in the accounting records of the Group and of the Company, have been written down to an
amount which they might be expected so to realise.
At the date of this report, the directors are not aware of any circumstances which would render the values attributed to the
current assets in the financial statements of the Group and of the Company misleading.
VALUATION METHODS
At the date of this report, the directors are not aware of any circumstances which have arisen which render adherence to the
existing methods of valuation of assets or liabilities of the Group and of the Company misleading or inappropriate.
CONTINGENT AND OTHER LIABILITIES
The contingent liabilities of the Group and of the Company are disclosed in Note 38 to the financial statements. 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)
any contingent liability of the Group and of the Company which has arisen since the end of the financial year.
No contingent or other liability 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 their obligations when they fall due.
CHANGE OF CIRCUMSTANCES
At the date of this report, the directors are not aware of any circumstances not otherwise dealt with in this report or the
financial statements of the Group and of the Company which would render any amount stated in the financial statements
misleading.
ITEMS OF AN UNUSUAL NATURE
The results of the operations of the Group and of the Company during the financial year were not, in the opinion of the
directors, substantially affected by any item, transaction or event of a material and unusual nature.
There has not arisen in the interval between the end of the financial year and the date of this report any item, transaction or
event of a material and unusual nature likely, in the opinion of the directors, to affect substantially the results of the operations
of the Group and of the Company for the financial year.
28
DIRECTORS
The directors who served since the date of the last report are as follows:PROF. EMERITUS DATO’ DR LIAN CHIN BOON
DATO’ DR. HJ. SHAHIR BIN NASIR
RUTHLENE BINTI ABU SAHID
LEONG CHEW MENG
DATUK AZZAT BIN KAMALUDIN
MAH SIEW CHEAN
TAN SRI ABU SAHID BIN MOHAMED (ALTERNATE TO RUTHLENE BINTI ABU SAHID)
VICTOR CHUA CHEE WEY (RESIGNED ON 2 JULY 2008)
DIRECTORS’ INTERESTS
According to the register of directors’ shareholdings, the interests of directors holding office at the end of the financial year in
shares in the Company and its related corporations during the financial year are as follows:NUMBER OF ORDINARY SHARES OF RM1 EACH
AT
AT
1.1.2008
BOUGHT
SOLD
31.12.2008
DIRECT INTERESTS
DATUK AZZAT BIN KAMALUDIN
RUTHLENE BINTI ABU SAHID
TAN SRI ABU SAHID BIN MOHAMED
767,338
1,000,000
18,951,000
74,200
(17,000)
-
750,338
1,000,000
19,025,200
INDIRECT INTERESTS
MAH SIEW CHEAN (I)
PROF. EMERITUS DATO’ DR LIAN CHIN BOON (II)
33,600,000
20,000
-
-
33,600,000
20,000
(I)
(II)
Indirect interest through Sepenah Emas (M) Sdn. Bhd. by virture of Section 6A of the Companies Act 1965 in Malaysia.
Indirect interest by virtue of family relationship.
None of the other directors holding office at the end of the financial year had any interest in shares in the Company or its
related corporations during the financial year.
29
By virtue of their interests in the Company, Tan Sri Abu Sahid Bin Mohamed and Mah Siew Chean are deemed to have
interests in shares in the subsidiaries, to the extent of the Company’s interest, in accordance with the Section 6A of the
Company Act 1965 in Malaysia.
DIRECTORS’ BENEFITS
Since the end of the previous financial year, no director has received or become entitled to receive any benefit (other than
benefits included in the aggregate amount of emoluments received or due and receivable by directors as shown in the financial
statements, or the fixed salary of a full-time employee of the Group and of the Company) by reason of a contract made by the
Company or a related corporation with the director or with a firm of which the director is a member, or with a company in
which the director has a substantial financial interest except for any benefits which may be deemed to arise from transactions
entered into in the ordinary course of business with a shareholder as disclosed in Note 37 to the financial statements.
Neither during nor at the end of the financial year, was the Company or any of its subsidiaries a party to any arrangements
whose object is 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.
SIGNIFICANT EVENT SUBSEQUENT TO THE BALANCE SHEET DATE
The significant event subsequent to the balance sheet date is disclosed in Note 43 to the financial statements.
AUDITORS
The auditors, Messrs. Horwath have expressed their willingness to continue in office.
SIGNED IN ACCORDANCE WITH A RESOLUTION OF THE DIRECTORS
DATED 29 APRIL 2009
Mah Siew Chean
30
Statement By Directors
We, Mah Siew Chean and Datuk Azzat Bin Kamaludin, being two of the directors of Pulai Springs Berhad, state that, in
the opinion of the directors, the financial statements set out on pages 34 to 73 are drawn up in accordance with Financial
Reporting Standards and the provisions of the Companies Act 1965 in Malaysia so as to give a true and fair view of the state
of affairs of the Group and the Company at 31 December 2008 and of their results and cash flows for the financial year ended
on that date.
SIGNED IN ACCORDANCE WITH A RESOLUTION OF THE DIRECTORS
DATED 29 APRIL 2009
Mah Siew Chean
Statutory Declaration
I, Charlie Lim, I/C No. 600703-04-5301, being the officer primarily responsible for the financial management of Pulai
Springs Berhad, do solemnly and sincerely declare that the financial statements set out on pages 34 to 73 are, to the best of my
knowledge and belief, correct, and I make this solemn declaration conscientiously believing the same to be true and by virtue
of the provisions of the Statutory Declarations Act 1960.
Subscribed and solemnly declared by
Charlie Lim, I/C No. 600703-04-5301,
at Kuala Lumpur in the Federal Territory
on this 29 April 2009
Charlie Lim
Datin Hajah Raihela Wanchik
No. W-275, Commissioner for Oaths
B-16-15, Block B, Tingkat 16, Unit-5,
Megan Avenue II,
12, Jalan Yap Kwan Seng,
50450 Kuala Lumpur.
31
Before me
Independent Auditors’ Report
To the Members of Pulai Springs Berhad
REPORT ON THE FINANCIAL STATEMENTS
We have audited the financial statements of Pulai Springs Berhad, which comprise the balance sheets as at 31 December 2008
of the Group and of the Company, and the income statements, statements of changes in equity and cash flow statements of
the Group and of the Company for the financial year then ended, and a summary of significant accounting policies and other
explanatory notes, as set out on pages 34 to 73.
Directors’ Responsibility for the Financial Statements
The directors of the Company are responsible for the preparation and fair presentation of these financial statements in
accordance with Financial Reporting Standards and the Companies Act 1965 in Malaysia. This responsibility includes designing,
implementing and maintaining internal control relevant to the preparation and fair presentation of financial statements that
are free from material misstatement, whether due to fraud or error, selecting and applying appropriate accounting policies, and
making accounting estimates that are reasonable in the circumstances.
Auditors’ Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance
with approved standards on auditing in Malaysia. Those standards require that we comply with ethical requirements and plan
and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial
statements. The procedures selected depend on our judgement, including the assessment of risks of material misstatement of
the financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant
to the Company’s preparation and fair presentation of the financial statements in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s
internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of
accounting estimates made by the directors, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the financial statements have been properly drawn up in accordance with Financial Reporting Standards
and the Companies Act 1965 in Malaysia so as to give a true and fair view of the financial position of the Group and of the
Company as of 31 December 2008 and of their financial performance and cash flows for the financial year then ended.
32
Independent Auditors’ Report (Cont’d)
To the Members of Pulai Springs Berhad
REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS
In accordance with the requirements of the Companies Act 1965 in Malaysia, we also report the following:(a)
In our opinion, the accounting and other records and the registers required by the Act to be kept by the Company and
its subsidiaries of which we have acted as auditors have been properly kept in accordance with the provisions of the
Act.
(b)
We have considered the financial statements and the auditors’ reports of the subsidiaries of which we have not acted as
auditors, which are indicated in Note 6 to the financial statements.
(c)
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 financial
statements of the Group and we have received satisfactory information and explanations required by us for those
purposes.
(d)
The audit reports on the financial statements of the subsidiaries did not contain any qualification or any adverse
comment made under Section 174(3) of the Act.
Other Matters
This report is made solely to the members of the Company, as a body, in accordance with Section 174 of the Companies
Act 1965 in Malaysia and for no other purpose. We do not assume responsibility to any other person for the content of this
report.
Horwath
Firm No: AF 1018
Chartered Accountants
James Chan Kuan Chee
Approval No: 2271/10/09 (J)
Partner
33
Kuala Lumpur
29 April 2009
Balance Sheets
As at 31 December 2008
NOTE
THE GROUP
2008
2007
RM
RM
THE COMPANY
2008
2007
RM
RM
ASSETS
NON-CURRENT ASSETS
Investments in subsidiaries
Property, plant and equipment
Prepaid land lease payments
Amount owing by a subsidiary
Goodwill on consolidation
CURRENT ASSETS
Inventories
Property development costs
Trade receivables
Other receivables, deposits and
prepayments
Amount owing by subsidiaries
Amount owing by maintenance account
Tax recoverable
Fixed deposits with licensed banks
Cash and bank balances
TOTAL ASSETS
34
6
7
8
9
10
298,352,062
1,705,125
3,803,919
298,546,136
1,759,327
3,803,919
130,195,842
18,069,098
-
130,195,842
18,069,098
-
303,861,106
304,109,382
148,264,940
148,264,940
11
12
13
36,594,127
10,314,588
10,651,357
36,457,072
19,125,378
6,456,295
-
-
14
9
15
2,673,521
186,575
18,000
750,021
3,472,717
496
2,438,397
1,524
9,415,757
-
9,415,757
-
6,875,351
5,632,634
117
24,364
68,063,540
73,582,989
9,417,398
9,440,121
371,924,646
377,692,371
157,682,338
157,705,061
16
Balance Sheets (Cont’d)
EQUITY AND LIABILITIES
EQUITY
Share capital
Share premium
Reserve
17
18
19
THE COMPANY
2008
2007
RM
RM
105,000,000
23,222,612
(2,943,399)
105,000,000
23,222,612
5,159,253
105,000,000
23,222,612
15,801,426
105,000,000
23,222,612
16,299,251
125,279,213
133,381,865
144,024,038
144,521,863
59,368,426
632,906
53,937,468
632,906
-
-
60,001,332
54,570,374
-
-
3,013,478
87,161,925
353,000
16,397,001
76,236,513
3,482,184
5,607,082
87,808,799
312,000
16,550,001
78,532,932
929,318
234,089
353,000
13,069,611
1,600
-
75,798
312,000
12,793,800
1,600
-
186,644,101
189,740,132
13,658,300
13,183,198
TOTAL LIABILITIES
246,645,433
244,310,506
13,658,300
13,183,198
TOTAL EQUITY AND LIABILITIES
371,924,646
377,692,371
157,682,338
157,705,061
119
127
SHAREHOLDERS’ EQUITY
NON-CURRENT LIABILITIES
Long-term borrowings
Deferred taxation
CURRENT LIABILITIES
Trade payables
Other payables and accruals
Amount owing to directors
Amount owing to subsidiaries
Provision for taxation
Short-term borrowings
Bank overdrafts
NET ASSETS PER SHARE (SEN)
20
23
24
25
26
9
27
28
29
35
NOTE
THE GROUP
2008
2007
RM
RM
Income Statements
NOTE
REVENUE
30
THE GROUP
2008
2007
RM
RM
THE COMPANY
2008
2007
RM
RM
85,815,166
73,476,200
-
-
COST OF SALES
(46,989,410)
(39,995,185)
-
-
GROSS PROFIT
38,825,756
33,481,015
-
-
1,704,637
854,452
-
4,597
40,530,393
34,335,467
-
4,597
(17,901,890)
(17,244,986)
(483,616)
(973,149)
(3,651,840)
(7,170,313)
(1,068,967)
(17,541,849)
(10,483,205)
(445,500)
(1,334,938)
(3,348,100)
(6,759,545)
(803,090)
(497,825)
-
(589,860)
-
(48,494,761)
(40,716,227)
(497,825)
(589,860)
(497,825)
(585,263)
OTHER INCOME
EXPENSES:ADMINISTRATIVE EXPENSES
FINANCE COSTS
HOUSEKEEPING EXPENSES
MAINTENANCE EXPENSES
MARKETING EXPENSES
OTHER EXPENSES
PERSONNEL EXPENSES
LOSS BEFORE TAXATION
31
(7,964,368)
(6,380,760)
INCOME TAX EXPENSE
32
(138,284)
(153,000)
LOSS AFTER TAXATION
(8,102,652)
(6,533,760)
(497,825)
(585,263)
ATTRIBUTABLE TO:
Equity holders of the Company
(8,102,652)
(6,533,760)
(497,825)
(585,263)
(7.72)
N/A
(6.22)
N/A
LOSS PER SHARE (SEN):
- Basic
- Diluted
36
33
-
-
Statements of Changes in Equity
ATTRIBUTABLE TO EQUITY HOLDERS OF THE COMPANY
EXCHANGE
ACCUMULATED
LOSS
RM
RETAINED
PROFITS/
SHARE
CAPITAL
RM
SHARE
PREMIUM
RM
TRANSLATION
RESERVE
RM
Balance at 1.1.2007
Loss after taxation
105,000,000
-
23,222,612
-
7,792
-
11,685,221
(6,533,760)
139,915,625
(6,533,760)
Balance at
31.12.2007/
1.1.2008
Loss after taxation
105,000,000
-
23,222,612
-
7,792
-
5,151,461
(8,102,652)
133,381,865
(8,102,652)
Balance at 31.12.2008
105,000,000
23,222,612
7,792
(2,951,191)
125,279,213
ATTRIBUTABLE TO EQUITY HOLDERS OF THE COMPANY
SHARE
SHARE
CAPITAL
ACCUMULATED
CAPITAL
PREMIUM
RESERVE
LOSSES
RM
RM
RM
RM
TOTAL
RM
TOTAL
RM
THE GROUP
Balance at 1.1.2007
105,000,000
-
23,222,612
-
18,069,098
-
(1,184,584)
(585,263)
145,107,126
(585,263)
Balance at 31.12.2007/1.1.2008
105,000,000
-
23,222,612
-
18,069,098
-
(1,769,847)
(497,825)
144,521,863
(497,825)
Balance at 31.12.2008
105,000,000
23,222,612
18,069,098
(2,267,672)
144,024,038
37
THE COMPANY
NOTE
CASH FLOWS FROM/(FOR)
OPERATING ACTIVITIES
Loss before taxation
Adjustments for:Allowance for doubtful debts
Amortisation of prepaid land lease payments
Depreciation of property, plant
and equipment
Equipment written off
Interest expense
Provision for liquidated ascertained damages
Interest income
Gain on disposal of plant and equipment
Unrealised gain on foreign exchange
Writeback of allowance for doubtful debts
Operating profit/(loss) before
working capital changes
Increase in inventories
Decrease/(Increase) in property
development costs
(Increase)/Decrease in trade
and other receivables
Increase in maintenance account
(Decrease)/Increase in trade and
other payables
CASH FROM/(FOR) OPERATIONS
Interest paid
Tax paid
NET CASH FROM/(FOR)
CARRIED FORWARD
38
THE GROUP
2008
2007
RM
RM
(7,964,368)
347,310
54,202
(6,380,760)
475,034
54,204
THE COMPANY
2008
2007
RM
RM
(497,825)
(585,263)
-
-
-
-
7,362,183
15,242
16,919,862
552,719
(46,549)
(123,138)
(14,812)
(94,694)
7,013,305
106,620
10,191,798
(309,845)
(99,868)
(9,868)
(214,799)
17,007,957
(137,055)
10,825,821
(35,287,798)
8,810,790
(5,061,475)
(3,778,656)
(186,575)
(3,389,614)
-
(3,785,405)
22,922,045
158,291
60,798
17,931,056
(16,919,862)
(171,594)
(9,991,021)
(10,191,798)
86,976
(341,058)
-
(524,465)
-
(20,095,843)
(341,058)
(524,465)
839,600
(497,825)
(1,524)
-
(585,263)
-
Cash Flow Statements (Cont’d)
NET CASH FROM/(FOR)
BROUGHT FORWARD
CASH FLOWS (FOR)/FROM
INVESTING ACTIVITIES
Advances from subsidiaries
Interest received
Purchase of property, plant and equipment
Proceeds from disposal of
plant and equipment
839,600
34
46,549
(4,706,611)
139,125
(20,095,843)
309,845
(6,304,242)
355,211
THE COMPANY
2008
2007
RM
RM
(341,058)
(524,465)
-
15,413,584
-
-
15,413,584
NET CASH (FOR)/FROM
INVESTING ACTIVITIES
(4,520,937)
(5,639,186)
-
CASH FLOWS FROM/(FOR)
FINANCING ACTIVITIES
Advances from subsidiaries
Advances from/(Repayment to) directors
Repayment of term loans
Net repayment of hire purchase obligations
Drawdown of term loan
41,000
(2,571,260)
(2,786,928)
6,000,000
(39,000)
(50,789,981)
(734,742)
76,500,000
275,811
41,000
-
(39,000)
(15,008,000)
-
24,936,277
316,811
(15,047,000)
NET CASH FROM/(FOR)
FINANCING ACTIVITIES
682,812
NET DECREASE IN CASH
AND CASH EQUIVALENTS
(2,998,525)
CASH AND CASH EQUIVALENTS
AT BEGINNING OF THE
FINANCIAL YEAR
AT END OF THE FINANCIAL YEAR
35
(798,752)
(24,247)
(157,881)
7,141,713
7,940,465
24,364
182,245
4,143,188
7,141,713
117
24,364
39
NOTE
THE GROUP
2008
2007
RM
RM
Notes to the Financial Statements
1.
GENERAL INFORMATION
The Company is a public company limited by shares and is incorporated under the Malaysian Companies Act 1965.
The domicile of the Company is Malaysia. The registered office and principal place of business are as follows:Registered office
:
Principal place of business :
Level 18, MCB Plaza,
Changkat Raja Chulan,
50200 Kuala Lumpur.
81110 Pulai, Johor Darul Takzim.
The financial statements were authorised for issue by the Board of Directors in accordance with a resolution of directors
dated 29 April 2009.
2.
PRINCIPAL ACTIVITY
The Company is principally engaged in the business of investment holding whilst the principal activities of the
subsidiaries are set out in Note 6 to the financial statements. There have been no significant changes in the nature of
these activities during the financial year.
3.
FINANCIAL RISK MANAGEMENT POLICIES
The Group’s financial risk management policy seeks to ensure that adequate financial resources are available for the
development of the Group’s business whilst managing market, credit, liquidity and cash flow risks. The policies in
respect of the major areas of treasury activity are as follows:-
(a)
Market Risk
(i)
Foreign Currency Risk
The foreign currency risk of the Company arises from subsidiaries operating in a foreign country, as well
as local operations, which generate revenue and incur costs denominated in foreign currencies.
It manages its foreign exchange exposure by a policy of matching as far as possible receipts and payments
in each individual currency.
(ii)
Interest Rate Risk
The Group obtains financing through banking and hire purchase facilities. The Group’s policy is to
obtain the most favourable interest rates available.
Surplus funds are placed with reputable financial institutions at the most favourable interest rates.
(iii)
Price Risk
The Group does not have any quoted investments and hence is not exposed to market risks.
40
Notes to the Financial Statements (Cont’d)
3.
FINANCIAL RISK MANAGEMENT POLICIES (CONT’D)
(b)
Credit Risk
The Group’s exposure to credit risk, or the risk of counterparties defaulting, arises mainly from receivables. The
maximum exposure to credit risk is represented by the total carrying amounts of these financial assets in the
balance sheet.
The Group does not have any major concentration of credit risk related to any individual customer or
counterparty.
The Group manages its exposure to credit risk by investing its cash assets safely and profitably, and by the
application of credit approvals, credit limits and monitoring procedures on an ongoing basis.
(c)
Liquidity and Cash Flow Risk
The Group’s exposure to liquidity and cash flow risks arises mainly from general funding and business
activities.
The Group practices prudent liquidity risk management by maintaining sufficient cash and the availability of
funding through certain committed credit facilities.
BASIS OF PREPARATION
The financial statements of the Group are prepared under the historical cost convention and modified to include other
bases or valuation as disclosed in other sections under significant accounting policies, and in compliance with Financial
Reporting Standards (“FRS”) and the Companies Act 1965 in Malaysia.
(a)
During the current financial year, the Group has adopted the following:
(i)
FRSs issued and effective for financial periods beginning on or after 1 July 2007:
FRS 107
FRS 111
FRS 112
FRS 118
FRS 120
FRS 134
FRS 137
Construction Contracts
Income Taxes
Revenue
Accounting for Government Grants and Disclosure of Government Assistance
Interim Financial Reporting
Provisions, Contingent Liabilities and Contingent Assets
FRS 111 and FRS 120 are not relevant to the Group’s operations. The adoption of the other standards did
not have material impact on the form and content of disclosures presented in the financial statements.
(ii)
Amendment to FRS 121 - The Effects of Changes in Foreign Exchange Rates Net Investment in a Foreign
Operation has been issued and is effective for financial periods beginning on or after 1 July 2007.
The adoption of the standard did not have any material impact on the form and content of disclosures
presented in the financial statements.
41
4.
4.
BASIS OF PREPARATION (CONT’D)
(iii)
IC Interpretations issued and effective for financial periods beginning on or after 1 July 2007:
IC Interpretation 1
IC Interpretation 2
IC Interpretation 5
IC Interpretation 6
IC Interpretation 7
IC Interpretation 8
Changes in Existing Decommissioning, Restoration and Similar Liabilities
Members’ Shares in Co-operative Entities and Similar Instruments
Rights to Interests arising from Decommissioning, Restoration
and Environmental Rehabilitation Funds
Liabilities arising from Participating in a Specific Market – Waste Electrical
and Electronic Equipment
Applying the Restatement Approach under FRS 1292004 Financial Reporting
in Hyperinflationary Economies
Scope of FRS 2
The above IC Interpretations are not relevant to the Group’s operations.
(b)
The Group has not adopted the following FRSs and IC Interpretations that have been issued as at the date of
authorisation of these financial statements but are not yet effective for the Group:
(i)
FRS issued and effective for financial periods beginning on or after 1 July 2009:
FRS 8 Operating Segments
FRS 8 replaces FRS 1142004 Segment Reporting and requires a “management approach”, under which
segment information is presented on the same basis as that used for internal reporting purposes. The
adoption of this standard only impacts the form and content of disclosures presented in the financial
statements of the Group. This FRS is expected to have no material impact on the financial statements of
the Group upon its initial application.
(ii)
FRSs issued and effective for financial periods beginning on or after 1 January 2010:
FRS 4
FRS 7
FRS 139
Insurance Contracts
Financial Instruments: Disclosures
Financial Instruments: Recognition and Measurement
The Group considers financial guarantee contracts entered to be insurance arrangements and accounts
for them under FRS 4. In this respect, the Group treats the guarantee contract as a contingent liability
until such a time as it becomes probable that the Group will be required to make a payment under the
guarantee. The adoption of FRS 4 is expected to have no material impact on the financial statements of
the Group.
The possible impacts of FRS 7 and FRS 139 on the financial statements upon their initial applications
are not disclosed by virtue of the exemptions given in these standards.
(iii)
IC Interpretations issued and effective for financial periods beginning on or after 1 January 2010:
IC Interpretation 9
IC Interpretation 10
Reassessment of Embedded Derivatives
Interim Financial Reporting and Impairment
IC Interpretation 9 is not relevant to the Group’s operations. IC Interpretation 10 prohibits the impairment
losses recognised in an interim period on goodwill and investments in equity instruments and in financial
assets carried at cost to be reversed at a subsequent balance sheet date. This interpretation is expected to
have no material impact on the financial statements of the Group upon its initial application.
42
SIGNIFICANT ACCOUNTING POLICIES
(a)
Critical Accounting Estimates And Judgements
Estimates and judgements are continually evaluated by the directors and management and are based on historical
experience and other factors, including expectations of future events that are believed to be reasonable under
the circumstances. The estimates and judgements that affect the application of the Group’s accounting policies
and disclosures, and have a significant risk of causing a material adjustment to the carrying amounts of assets,
liabilities, income and expenses are discussed below:(i)
Depreciation of Property, Plant and Equipment
The estimates for the residual values, useful lives and related depreciation charges for the property, plant
and equipment are based on commercial factors which could change significantly as a result of technical
innovations and competitors’ actions in response to the market conditions.
The Group anticipates that the residual values of its property, plant and equipment will be insignificant.
As a result, residual values are not being taken into consideration for the computation of the depreciable
amount.
Changes in the expected level of usage and technological development could impact the economic useful
lives and the residual values of these assets, therefore future depreciation charges could be revised.
(ii)
Income Taxes
There are certain transactions and computations for which the ultimate tax determination may be
different from the initial estimates. The Company recognises tax liabilities based on its understanding of
the prevailing tax laws and estimates of whether such taxes will be due in the ordinary course of business.
Where the final outcome of these matters is different from the amounts that were initially recognised,
such difference will impact the income tax and deferred tax provisions in the period in which such
determination is made.
(iii)
Impairment of Assets
When the recoverable amount of an asset is determined based on the estimate of the value-in-use of the
cash-generating unit to which the asset is allocated, the management is required to make an estimate of
the expected future cash flows from the cash-generating unit and also to apply a suitable discount rate in
order to determine the present value of those cash flows.
(iv)
Property Development
The Company recognises property development revenue and expenses in the income statement by
using the stage of completion method. The stage of completion is determined by the proportion that
property development costs incurred for work performed to date bear to the estimated total property
development costs.
Significant judgement is required in determining the stage of completion, the extent of the property
development costs incurred, the estimated total property development revenue and costs, as well as the
recoverability of the development projects. In making the judgement, the Company evaluates based on
past experience and by relying on the work of specialists.
43
5.
5.
SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
(a)
Critical Accounting Estimates And Judgements (Cont’d)
(v)
Allowance for Doubtful Debts of Receivables
The Group makes allowance for doubtful debts based on an assessment of the recoverability of
receivables. Allowances are applied to receivables where events or changes in circumstances indicate that
the carrying amounts may not be recoverable. Management specifically analyses historical bad debt,
customer concentrations, customer creditworthiness, current economic trends and changes in customer
payment terms when making a judgement to evaluate the adequacy of the allowance for doubtful debts
of receivables. Where the expectation is different from the original estimate, such difference will impact
the carrying value of receivables.
(vi)
Fair Value Estimates for Certain Financial Assets and Liabilities
The Group and the Company carries certain financial assets and liabilities at fair value, which requires
extensive use of accounting estimates and judgement. While significant components of fair value
measurement were determined using verifiable objective evidence, the amount of changes in fair value
would differ if the Group and the Company uses different valuation methodologies. Any changes in fair
value of these assets and liabilities would affect profit and equity.
(vii)
Allowance for Inventories
Reviews are made periodically by management on damaged, obsolete and slow-moving inventories.
These reviews require judgement and estimates. Possible changes in these estimates could result in
revisions to the valuation of inventories.
(viii) Revaluation of Properties
The Group’s properties which are reported at valuation are based on valuations performed by independent
professional valuers.
The independent professional valuers have exercised judgement on determining discount rates, estimates
of future cash flows, capitalisation rate, terminal year value, market freehold rental and other factor used
in the valuation process. Also judgement has been applied in estimating prices for less readily observable
external parameters. Other factors such as model assumptions, market dislocations and unexpected
correlation can also materially affect these estimates and the resulting valuation estimates.
(b)
Basis of Consolidation
The consolidated financial statements include the financial statements of the Company and its subsidiaries
made up to 31 December 2008.
A subsidiary is defined as an enterprise in which the Group has the power, directly or indirectly, to exercise
control over the financial and operating policies so as to obtain benefits from its activities.
All subsidiaries are consolidated using the purchase method of accounting. Under the purchase method of
accounting, the results of subsidiaries acquired or disposed of are included from the date of acquisition or up
to the date of disposal. At the date of acquisition, the fair values of the subsidiaries’ net assets are determined
and these values are reflected in the consolidated financial statements. The cost of acquisition is measured at the
aggregate of the fair values, at the date of exchange, of assets given, liabilities incurred or assumed, and equity
instruments issued by the Group in exchange for control of the acquiree, plus any costs directly attributable to
the business combination.
44
(b)
Basis of Consolidation (Cont’d)
Intragroup transactions, balances and unrealised gains on transactions are eliminated; unrealised losses are also
eliminated unless cost cannot be recovered. Where necessary, adjustments are made to the financial statements
of the subsidiary to ensure consistency of accounting policies with those of the Group.
Minority interests are presented in the consolidated balance sheet of the Group within equity, separately from the
Company’s equity holders, and are separately disclosed in the consolidated income statement of the Group.
(c)
Financial Instruments
Financial instruments are recognised in the balance sheet when the Group or the Company 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 a liability, are
reported as an expense or income. Distributions to holders of financial instruments classified as equity are
charged directly to equity.
Financial instruments are offset when the Group or the Company has a legally enforceable right to offset and
intends to settle either on a net basis or to realise the asset and settle the liability simultaneously.
Financial instruments recognised in the balance sheet are disclosed in the individual policy statement associated
with each item.
(d)
Functional and Foreign Currency
(i)
Functional and Presentation Currency
The functional currency of the Company and each of the Group’s entity is measured using the currency
of the primary economic environment in which the Company or that entity operates.
The Group financial statements are presented in Ringgit Malaysia (“RM”) which is also the Company’s
functional and presentation currency.
(ii)
Transactions and Balances
Transactions in foreign currency are converted into the respective functional currencies of the Group
and are recorded on initial recognition in the functional currencies on initial recognition, using the
exchange rates approximating those ruling at the transaction dates. Monetary assets and liabilities at the
balances sheet date are translated at the rates ruling as of that date. Non-monetary assets and liabilities are
translated using exchange rates that existed when the values were determined. All exchange differences
are taken to the income statement.
45
5.
5.
(d)
Functional and Foreign Currency (Cont’d)
(iii)
Foreign Operations
The results and financial position of all the Group entities that have a functional currency different from
the presentation currency are translated into the presentation currency as follows:-
(e)
(a)
assets and liabilities for each balance sheet presented are translated at the closing rate at the date
of the balance sheet;
(b)
income and expenses for income statement are translated at average exchange rates for the year;
and
(c)
all resulting exchange differences are recognised as a separate component of equity, as a foreign
currency translation reserve. On disposal, accumulated translation differences are recognised in
the consolidated income statements as part of the gain or loss on sale.
Goodwill on Consolidation
Goodwill on consolidation represents the excess of the fair value of the purchase consideration over the Group’s
share of the fair values of the identifiable net assets of the subsidiaries at the date of acquisition.
Goodwill is measured at cost less accumulated impairment losses, if any. The carrying value of goodwill is reviewed
for impairment annually. The impairment value of goodwill is recognised immediately in the consolidated
income statement. An impairment loss recognised for goodwill is not reversed in a subsequent period.
If, after reassessment, the Group’s interest in the fair values of the identifiable net assets of the subsidiaries
exceeds the cash of the business combinations, the exceeds the cash of the business combinations, the excess is
recognised immediately in the consolidated income statement.
(f)
Investments in Subsidiaries
Investments in subsidiaries are stated at cost in the balance sheet of the Company, and are reviewed for
impairment at the end of the financial year if events or changes in circumstances indicate that their carrying
values may not be recoverable.
(g)
Property, Plant and Equipment
Property, plant and equipment, other than freehold land, are stated at cost or revalued amount, less accumulated
depreciation and impairment losses, if any.
Freehold land is stated at cost or revalued amount, less impairment loss, if any and is not depreciated.
Depreciation is not provided on the golf course and development expenditure. The golf course is not depreciated
as it is the Group’s practice to maintain the golf course in such condition that the residual values are not
significantly affected. Crockery, glassware, cutlery and linen are capitalised at the minimum level required for
normal operations and no depreciation is provided on these items as the amount involved is not material to the
financial statements.
46
(g)
Property, Plant and Equipment (Cont’d)
Depreciation is calculated under the straight-line method to write off the cost of the assets over their estimated
useful lives. Depreciation of an asset does not cease when the asset becomes idle or is retired from active use
unless the asset is fully depreciated. The principal annual rates used for this purpose are:Buildings and hostel
Equipment
Furniture and fittings
Machinery
Motor vehicles
2%
10%
10%
20%
20%
The depreciation method, useful life and residual values are reviewed, and adjusted if appropriate, at each
balance sheet date 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
the property, plant and equipment.
Surplus arising from the revaluation of the properties are credited to a revaluation reserve. Deficits arising from
the revaluation, to the extent that they are not support by any previous revaluation surplus, are charged to the
income statement.
Upon the disposal of an item of property, plant and equipment, the difference between the net disposal proceeds
and the net carrying amount is recognised in the income statement and the unutilised portion of the revaluation
surplus on that item is taken directly to unappropriated profits.
Fully depreciated plant and equipment with a total cost of RM24,046,335 (2007 - RM20,261,556) are retained
in the balance sheet of the Group until they are no longer in use.
(h)
Impairment of Assets
The carrying amounts of assets, other than those to which FRS 136 - Impairment of Assets does not apply, are
reviewed at each balance sheet date for impairment when there is an indication that the assets might be impaired.
Impairment is measured by comparing the carrying values of the assets with their recoverable amounts. The
recoverable amount of the assets is the higher of the assets’ net selling price and their value-in-use, which is
measured by reference to discounted future cash flow.
An impairment loss is charged to the income statement immediately unless the asset is carried at its revalued
amount. Any impairment loss of a revalued asset is treated as a revaluation decrease to the extent of a previously
recognised revaluation surplus for the same asset.
In respect of assets other than goodwill, and when there is a change in the estimates used to determine the
recoverable amount, a subsequent increase in the recoverable amount of an asset is treated as a reversal of the
previous impairment loss and is recognised to the extent of the carrying amount of the asset that would have
been determined (net of amortisation and depreciation) had no impairment loss been recognised. The reversal is
recognised in the income statement immediately, unless the asset is carried at its revalued amount. A reversal of
an impairment loss on a revalued asset is credited directly to the revaluation surplus. However, to the extent that
an impairment loss on the same revalued asset was previously recognised as an expense in the income statement,
a reversal of that impairment loss is recognised as income in the income statement.
47
5.
5.
(i)
Prepaid Land Lease Payments
Leases of land under which the lessor has not transferred all the risks and benefits of ownership are classified
as operating leases. Lease prepayment of land use rights is stated at cost less accumulated amortisation and
impairment losses, if any. Amortisation is charged to the income statement on a straight-line basis over the term
of the leases.
(j)
Assets under Hire Purchase
Plant and equipment acquired under hire purchase are capitalised in the financial statements and are depreciated
in accordance with the policy set out in Note 5(g) to the financial statements. Each hire purchase payment is
allocated between the liability and finance charges so as to achieve a constant rate on the finance balance
outstanding. Finance charges are allocated to the income statement over the period of the respective finance
lease and hire purchase agreements.
(k)
Property Development Costs
Property development costs comprise costs associated with the acquisition of land and all costs that are directly
attributable to development activities or that can be allocated on a reasonable basis to such activities.
Property development costs that are not recognised as an expense are recognised as an asset and carried at the
lower of cost and net realisable value.
When the financial outcome of a development activity can be reliably estimated, the amount of property
revenues and expenses recognised in the income statement are determined by reference to the stage of completion
of development activity at the balance sheet date.
When the financial outcome of a development activity cannot be reliably estimated, the property development
revenue is recognised only to the extent of property development costs incurred that are probable will be
recoverable. The property development costs on the development units sold are recognised as an expense in the
period in which they are incurred.
Where it is probable that the property development costs will exceed property development revenue, any
expected loss is recognised as an expense immediately, including costs to be incurred over the defects liability
period.
(l)
Revaluation Reserve
Surpluses arising from the revaluation of properties are credit to the revaluation reserve account. Deficits arising
from the revaluation, to the extent that they are not supported by any previous revaluation surpluses, are
charged to the income statement.
In the year of disposal of the revalued asset, the attributable remaining revaluation surplus is transferred from
the revaluation reserve account to retained profits.
48
(m)
Inventories
Inventories are stated at the lower of cost and net realisable value. Cost is determined on a first-in-first-out basis,
and includes the cost of materials and incidentals incurred in bringing the inventories to their present location
and condition.
Net realisable value represents the estimated selling price less the estimated costs necessary to make the sale.
Where necessary, due allowance is made for all damaged, obsolete and slow-moving items.
(n)
Receivables
Receivables are carried at anticipated realisable value. Bad debts are written off in the period in which they are
identified. An estimate is made for doubtful debts based on a review of all outstanding amounts at the balance
sheet date.
(o)
Payables
Payables are stated at cost which is the fair value of the consideration to be paid in the future for goods and
services received.
(p)
Income Taxes
Income taxes for the year comprise 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 or substantively enacted at the balance sheet date.
Deferred tax is provided in full, using the liability method, on temporary differences arising between the tax
bases of assets and liabilities and their carrying amounts in the financial statements. Deferred tax liabilities are
recognised for all taxable temporary differences.
Deferred tax liabilities are recognised for all taxable temporary differences other than those that arise from
goodwill or excess of the acquirer’s interest in the net fair value of the acquiree’s identifiable assets, liabilities and
contingent liabilities over the business combination costs 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 assets are recognised for all deductible temporary differences, unused tax losses and unused tax
credits to the extent that it is probable that future taxable profit will be available against which the deductible
temporary differences, unused tax losses and unused tax credits can be utilised.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period when the
asset is realised or the liability is settled, based on the tax rates that have been enacted or substantively enacted
at the balance sheet date.
Deferred tax is recognised in the income statement, except when it arises from a transaction which is recognised
directly in equity, in which case the deferred tax is also charged or credited directly to 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 excess of the acquirer’s interest in the net fair value of the acquiree’s identifiable assets, liabilities
and contingent liabilities over the business combination costs. The carrying amounts of deferred tax assets are
reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable
profits will be available to allow all or part of the deferred tax assets to be utilised.
49
5.
5.
(q)
Interest-bearing Borrowings
Interest-bearing bank borrowings, finance lease and hire purchase are recorded at the amounts of proceeds
received, net of transaction costs.
All borrowing costs are charged to the income statement as expenses in the period in which they are incurred.
(r)
Equity Instruments
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or
options are shown in equity as a deduction, net of tax from proceeds.
Dividends on ordinary shares are recognised as liabilities when approved for appropriation.
(s)
Segmental Information
Segment revenues and expenses are those directly attributable to the segments and include any joint venture
and expenses where a reasonable basis of allocation exists. Segment assets include all assets used by a segment
and consist principally of property, plant and equipment, land held for development, inventories, receivables,
and cash and bank balances.
Most segment assets can be directly attributed to the segments on a reasonable basis. Segment assets do not
include income tax assets, whilst segment liabilities do not include income tax liabilities and borrowings from
financial institutions.
Segment revenues, expenses and results include transfers between segments. The prices charged on intersegment
transactions are based on normal commercial terms. These transfers are eliminated on consolidation.
(t)
Cash and Cash Equivalents
Cash and cash equivalents comprise cash in hand, bank balances, demand deposits, deposits pledged with
financial institutions, bank overdrafts and short term, highly liquid investments that are readily convertible to
known amounts of cash and which are subject to an insignificant risk of changes in value.
(u)
Employee Benefits
(i)
Short-term Benefits
Wages, salaries, paid annual leave, bonuses and non-monetary benefits are accrued in the period in
which the associated services are rendered by employees of the Group.
(ii)
Defined Contribution Plans
The Group’s contributions to defined contribution plans are charged to the income statement in the
period to which they relate. Once the contributions have been paid, the Group has no further liability
in respect of the defined contribution plans.
50
(v)
Related Parties
A party is considered to be related to an entity if:(i)
(ii)
(iii)
(iv)
(v)
(vi)
(vii)
directly, or indirectly through one or more intermediaries, the party:•
controls, is controlled by, or is under common control with, the entity (this includes parents,
subsidiaries and fellow subsidiaries);
•
has an interest in the entity that gives it significant influence over the entity; or
•
has joint control over the entity;
the party is an associate of the entity;
the party is a joint venture in which the entity is a venturer;
the party is a member of the key management personnel of the entity or its parent;
the party is a close member of the family of any individual referred to in (i) or (iv);
the party is an entity that is controlled, jointly controlled or significantly influenced by, or for which
significant voting power in such entity resides with, directly or indirectly, any individual referred to in
(iv) or (v); or
the party is a post-employment benefit plan for the benefit of employees of the entity, or of any entity
that is a related party of the entity.
Close members of the family of an individual are those family members who may be expected to influence, or
be influenced by, that individual in their dealings with the entity.
(w)
Revenue Recognition
The following fees are payable upon joining as members of Pulai Springs Country Club (“PSCC”) operated by
a subsidiary:
Licence Fee
A further sum payable by a member towards the account of the annual licence fees to be utilised and applied
in accordance with the provisions of the membership licence agreement, being part of the consideration for the
grant of the revocable non-exclusive licence to use and enjoy the facilities of PSCC or to nominate a nominee
to use and enjoy the same.
The licence fee in respect of memberships sold prior to year 2000 is recognised as income over the warranty
period of the licensing agreement on a receipt basis.
The licence fee in respect of memberships sold on or after 1 January 2000 is recognised as income in the year
of sale on an accrual basis.
A provision for refund of the licence fee in respect of memberships sold on or after 1 January 2000 is made
in the financial statements based on directors’ estimate, taking into account, inter alia, the historical trend of
cancellations and the amount of refunds.
Subscription Fee
Members are levied a monthly subscription fee for the use and enjoyment of the facilities of PSCC.
The subscription fee is receivable monthly in advance and is recognised as income on an accrual basis.
51
5.
5.
(w)
Revenue Recognition (Cont’d)
Property Development
Revenue from property development is recognised from the sale of completed and uncompleted development
properties.
Revenue from sale of completed properties is recognised when the sale is contracted.
Revenue on uncompleted properties contracted for sale is recognised based on the stage of completion method
unless the outcome of the development cannot be reliably determined in which case the revenue on the
development is only recognised to the extent of development costs incurred that are recoverable.
The stage of completion is determined based on the proportion that the development costs incurred for work
performed to date bear to the estimated total development costs.
Foreseeable losses, if any, are provided for in full as and when it can be reasonably ascertained that the development
will result in a loss. Foreseeable losses, if any, are recognised immediately in the income statement.
Others
Revenue from sports and recreation, golfing, rental of rooms and sale of food and beverages is recognised as
income on a receivable basis.
(x)
Contingent Liabilities
A contingent liabilities is a possible obligation that arises from past event and whose existence will only be
confirmed by the occurrence of one or more uncertain future events not wholly within the control of the Group
and the Company. It can also be a present obligation arising from past events that is not recognised because it
is not probable that an outflow of economic resources will be required or the amount of obligation cannot be
measured reliably.
A contingent liability is not recognised but is disclosed in the notes to the financial statements. When a change in
the probability of an outflow occurs so that the outflow is probable, it will then be recognised as a provision.
(y)
Progress Billings/Accrued Billings
In respect of progress billings:-
52
(i)
where revenue recognised in the income statement exceeds the billings to purchasers, the balance is
shown as accrued billings under current assets; and
(ii)
where billings to purchasers exceed the revenue recognised to the income statement, the balance is
shown as progress billings under current liabilities.
INVESTMENTS IN SUBSIDIARIES
THE COMPANY
2008
2007
RM
RM
Unquoted shares, at cost
130,195,842
130,195,842
The details of the subsidiaries are as follows:Name of Company
Country Of
Incorporation
Effective Equity
Interest
2008
2007
Principal Activities
Pulai Springs Resort Berhad
Malaysia
100%
100%
Proprietor and operator of PSCC,
hotel and other sport and
recreational facilities, and
property development.
Wawasan Maharani Sdn. Bhd.
Malaysia
100%
100%
Property development
and investment.
Citro Murni Sdn. Bhd.
Malaysia
100%
100%
Property development
and investment.
Pulai Springs Management
Services Sdn. Bhd.
Malaysia
100%
100%
Provision of property
management service.
The Republic
of Singapore
100%
100%
Sales and marketing agent.
Bina Resorts Corporation
Sdn. Bhd.
Malaysia
100%
100%
Proprietor and
operator of a hotel.
Pulai Springs Property Services
Sdn. Bhd. #
Malaysia
100%
100%
Provision of
management services.
City Centre Hotel Sdn.Bhd.
(Formerly known as Hydro
Hotels Sdn. Bhd.)
Malaysia
100%
100%
Proprietor and operator of a hotel.
PSB Resorts Pte. Ltd. *
*
#
audited by another firm of auditors.
subsidiary of Pulai Springs Resort Berhad.
53
6.
7.
54
7,199,338
298,546,136
3,907,206
-
6,289,620
10,196,826
67,274,232
155,677,520
4,943,772
50,591,225
17,237,829
295,724,578
Freehold land
Buildings
Capital
work-in-progress
Golf course and
development
expenditure
Others *
NET BOOK VALUE
THE GROUP
6,614,495
19,779,365
Others *
(15,987)
(15,987)
-
-
DISPOSALS
RM
(255,343)
(195,419)
-
-
(59,924)
(106,620)
(106,620)
-
-
-
-
3,264,625
-
(3,264,625)
RECLASSIFICATION
RM
-
-
-
(4,943,772)
4,943,772
-
(196,499)
-
-
196,499
TRANSFER RECLASSIFICATION
RM
RM
(15,242)
-
-
(15,242)
WRITTEN OFF
RM
DISPOSALS WRITTEN OFF
RM
RM
541,918
50,591,225
AT
1.1.2007 ADDITIONS
RM
RM
42,925
67,274,232
160,901,314
ADDITIONS
RM
Freehold land
Buildings
Golf course and development
expenditure
NET BOOK VALUE
THE GROUP
AT
1.1.2008
RM
PROPERTY, PLANT AND EQUIPMENT
AT
31.12.2008
RM
51,133,143
AT
31.12.2007
RM
19,779,365
50,591,225
-
(7,013,305) 298,546,136
(3,249,546)
-
-
67,274,232
(3,763,759) 160,901,314
DEPRECIATION
CHARGE
RM
(7,362,183) 298,352,062
(3,589,718) 26,052,780
-
- 67,274,232
(3,772,465) 153,891,907
DEPRECIATION
CHARGE
RM
PROPERTY, PLANT AND EQUIPMENT (CONT’D)
AT 31.12.2008
Freehold land
Buildings
expenditure
Others *
AT 31.12.2007
Freehold land
Buildings
expenditure
Others *
AT
COST
RM
AT
VALUATION
RM
ACCUMULATED
DEPRECIATION
RM
NET BOOK
VALUE
RM
47,703,563
188,480,720
19,570,669
-
(34,588,813)
67,274,232
153,891,907
51,133,143
62,551,551
-
(36,498,771)
51,133,143
26,052,780
349,868,977
19,570,669
(71,087,584)
298,352,062
47,703,563
191,467,661
19,570,669
-
(30,566,347)
67,274,232
160,901,314
50,591,225
52,793,801
-
(33,014,436)
50,591,225
19,779,365
342,556,250
19,570,669
(63,580,783)
298,546,136
As at 31 December 2008, had the revalued freehold land been carried at cost, the carrying amount of freehold land
would be RM 31,924,763 (2007 – RM31,924,763).
The directors revalued the freehold land and building in 1991 using the market value basis based on valuation carried
out by firms of independent valuers.
*
These comprise of golf course machinery and equipment, buggies, kitchen furniture and equipment,
housekeeping equipment, lighting system, art and craft, furniture and fittings, office equipment, computer
system, motor vehicles, golf course lighting system, maintenance equipment, library books, substation, base
stock, driving range auto equipment, base stock-towels and linen and laundry equipment.
As at the balance sheet date, the following assets were acquired under hire purchase terms:THE GROUP
2008
2007
RM
RM
Carrying amount:Golf course machinery and equipment
Buggies
Motor vehicles
Equipments
252,463
3,067,357
406,073
158,129
151,848
1,090,534
223,495
-
3,884,022
1,465,877
Property, plant and equipment of the Group with aggregate carrying amount of RM196,224,023 (2007 - RM286,703,446)
have been charged as security for banking facilities (Note 22 and Note 28).
55
7.
8.
PREPAID LAND LEASE PAYMENTS
THE GROUP
2008
2007
RM
RM
At 1.1.2008/2007
Amortisation for the financial year
1,759,327
(54,202)
1,813,531
(54,204)
At 31.12.2008/2007
1,705,125
1,759,327
The prepaid land lease payments relate to a piece of leasehold land which has been charged to financial institutions as
security for banking facilities granted to the Group (Note 22 and Note 28).
9.
AMOUNT OWING BY/(TO) SUBSIDIARIES
THE COMPANY
2008
2007
RM
RM
Amount owing by:Non-trade balances
Less: Portion repayable after twelve months
Portion repayable within twelve months
Amount owing to:Non-trade payables
27,484,855
(18,069,098)
27,484,855
(18,069,098)
9,415,757
9,415,757
13,069,611
12,793,800
The amounts owing are non-trade in nature, unsecured, interest-free and repayable.
10.
GOODWILL ON CONSOLIDATION
Goodwill on consolidation arose from the acquisition of City Centre Hotel Sdn. Bhd. (formerly known as Hydro
Hotels Sdn. Bhd.) during 2007.
Goodwill is stated at cost and reviewed for impairment annually.
During the financial year, the Group assessed the recoverable amount of goodwill based on the fair value of City Centre
Hotel Sdn. Bhd., less cost to sell, and determined that goodwill is not impaired.
56
11.
INVENTORIES
THE GROUP
2008
2007
RM
RM
At Cost:Cinta Ayu Resort Apartments (Note 22)
Fertilisers and chemicals
Food and beverages
Maharani Ayu – cluster houses (Note 12)
Others
Pro-shop
Room supplies
Trading stocks
32,535,136
106,669
622,541
2,778,540
360,896
38,750
101,695
49,900
35,390,837
73,176
540,444
288,088
32,344
90,053
42,130
36,594,127
36,457,072
None of the inventories are carried at net realisable value.
PROPERTY DEVELOPMENT COSTS
THE GROUP
2008
2007
RM
RM
At 1.1.2008/2007
- freehold land, at cost
- development costs
6,818,570
21,471,842
6,818,570
11,167,842
28,290,412
17,986,412
2,263,177
10,304,000
At 31.12.2008/2007
30,553,589
28,290,412
Costs recognised as an expense in the income statement:
- brought forward
- current year
(8,853,743)
(6,885,898)
(4,643,068)
(4,210,657)
(15,739,641)
(8,853,745)
18,601,714
(20,322,534)
10,808,635
(11,119,924)
(1,720,820)
(311,289)
Costs incurred during the financial year:
- development costs
Cumulative revenue recognised in the income statement
Cumulative billings to purchasers
Progress billings
Less: Transfer to:
- inventories (Note 11)
(2,778,540)
10,314,588
19,125,378
57
12.
13.
TRADE RECEIVABLES
THE GROUP
2008
2007
RM
RM
Trade receivables
11,619,677
7,171,999
Allowance for doubtful debts:At 1.1.2008/2007
Addition
Writeback
(715,704)
(347,310)
94,694
(455,469)
(475,034)
214,799
At 31.12.2008/2007
(968,320)
(715,704)
10,651,357
6,456,295
The Group’s normal trade credit terms range from 30 to 90 days. Other credit terms are assessed and approved on a
case-by-case basis.
The foreign currency exposure profile of the trade receivables is as follows:-
Singapore Dollar
14.
2008
RM
2007
RM
409,680
156,071
OTHER RECEIVABLES, DEPOSITS AND PREPAYMENTS
Included in other receivables, deposits and prepayments of the Group is an amount of RM68,702 (2007 – RM554,589)
which is held in a sinking fund account pursuant to the trust deed entered into between a subsidiary and the members
of Pulai Springs Country Club (“PSCC”) . Under the provisions of the trust deed, the sinking fund is set up for the
purpose of covering the costs of periodic major repairs or replacements of the facilities of PSCC operated by the
subsidiary.
15.
AMOUNT OWING BY MAINTENANCE ACCOUNT
Amount owing by maintenance account represents periodic maintenance charges receivables from the owners of Cinta
Ayu Resort Apartment which are required to be maintained under the Building and Common Property (Maintenance
and Management) Act 2007.
16.
FIXED DEPOSITS WITH LICENSED BANKS
As at balance sheet date,
58
(i)
the weighted average effective interest rate of the fixed deposits at the balance sheet date was 3.43% (2007 3.43%) per annum;
(ii)
the average maturity period is 30 days (2007 - 30 days); and
(iii)
certain fixed deposits totalling to RM750,021 (2007 – RM720,142) were pledged to the bank for banking
facilities granted to the Group (Note 28).
17.
SHARE CAPITAL
THE GROUP/ THE COMPANY
2008
2007
RM
RM
NUMBER OF SHARES
2008
2007
RM
RM
AUTHORISED
250,000,000
250,000,000
250,000,000
250,000,000
ISSUED AND FULLY
PAID-UP
105,000,000
105,000,000
105,000,000
105,000,000
ORDINARY SHARES OF
RM1 Each:-
18.
SHARE PREMIUM
The share premium is not distributable by way of dividends.
19.
RESERVE
2008
2007
RM
RM
Capital reserve
Exhange translation reserve
(Accumulated losses)/retained profits
2008
2007
RM
RM
7,792
(2,951,191)
7,792
5,151,461
18,069,098
(2,267,672)
18,069,098
(1,769,847)
(2,943,399)
5,159,253
15,801,426
16,299,251
The capital reserve is not distributable as cash dividends.
The exchange translation reserve arose from the translation of the financial statements of the foreign subsidiary and is
not distributable by way of dividends.
LONG-TERM BORROWINGS
THE GROUP
2008
2007
RM
RM
Hire purchase payables (Note 21)
Term loan (Note 22)
2,318,426
57,050,000
1,037,468
52,900,000
59,368,426
53,937,468
59
20.
21.
HIRE PURCHASE PAYABLES
THE GROUP
2008
2007
RM
RM
Minimum hire purchase payments:
- not later than one year
- later than one year but not later than five years
1,446,568
2,325,394
611,526
1,129,779
Less: Future finance charges
3,771,962
(381,910)
1,741,305
(199,914)
Present value of hire purchase payables
3,390,052
1,541,391
Non-current (Note 20):
- later than one year but not later than five years
2,318,426
1,037,468
Current (Note 27):
- not later than one year
1,071,626
503,923
3,390,052
1,541,391
The net hire purchase payables are repayable as follows:-
The effective interest rates for hire purchase payables of the Group range from 4.3% to 11.0% (2007 - 4.3% to 9.1%)
per annum.
22.
TERM LOANS
THE GROUP
2008
2007
RM
RM
Non-current (Note 20):
- repayable between two to five years
- repayable after five years
Current (Note 27):
- repayable within one year
60
57,050,000
-
12,200,000
40,700,000
57,050,000
52,900,000
75,164,887
78,029,009
132,214,887
130,929,009
22.
TERM LOANS (CONT’D)
At the balance sheet date, the weighted average effective interest rate of the term loans was 8.2% (2007 - 7.9%) per
annum. The term loans are secured by way of:-
23.
(a)
a fixed charge on the property, plant and equipment of the Group (Note7);
(b)
a registered debenture on the entire fixed and floating assets of the Group;
(c)
all unsold units of Cinta Ayu Resort Apartments (Note 11);
(d)
a joint and several guarantee of a director and a person related to a director of the Company; and
(e)
a corporate guarantee of the Company.
DEFERRED TAXATION
The deferred taxation of the Group relates to temporary differences arising from the revaluation of freehold land.
24.
TRADE PAYABLES
The normal trade credit terms granted to the Group range from 30 to 60 days.
The foreign currency exposure profile of the trade payables is as follows:-
US Dollar
Singapore Dollar
25.
2008
RM
2007
RM
266,784
6,346
247,516
4,109
OTHER PAYABLES AND ACCRUALS
Included in other payables and accruals at the balance sheet date are the following:(i)
RM55,935,309 (2007 – RM55,398,121) owing to a company in which a director has substantial financial
interests.
The Group entered into an agreement with the aforementioned creditor on 17 September 2008 to repay the
creditor the principal amount due together with the interest of 6% per annum, not later than 4 November
2008. The parties involved have subsequently agreed to defer the repayment by another year.
(ii)
26.
Provision of liquidated ascertain damages of RM552,719.
AMOUNT OWING TO DIRECTORS
The amount owing is unsecured, interest-free and repayable on demand.
61
The details are disclosed in Note 37o the financial statements
27.
SHORT-TERM BORROWINGS
THE GROUP
2008
2007
RM
RM
Hire purchase payables (Note 21)
Term loan (Note 22)
28.
1,071,626
75,164,887
503,923
78,029,009
76,236,513
78,532,932
BANK OVERDRAFTS
At the balance sheet date, the bank overdrafts bore an weighted average effective interest rate of 8.50% (2007 - 8.25%)
per annum. The bank overdrafts are secured by way of :-
29.
(i)
an “all monies” facilities agreement stamped to the amount of facilities advanced;
(ii)
a legal charge over the freehold land of the Group (Note 7);
(iii)
a debenture on the fixed and floating assets of the Group; and
(iv)
a corporate guarantee from the Company.
NET ASSETS PER SHARE
The net assets per share is calculated based on the net assets value of RM125,279,213 (2007 - RM133,381,865) divided
by the total ordinary shares of RM1 each in issue at the balance sheet date of 105,000,000 (2007 - 105,000,000).
30.
REVENUE
THE GROUP
2008
2007
RM
RM
62
HOSPITALITY:
- annual license fee
- entrance fee
- food and beverages
- gift shop
- golfing
- membership income
- others
- room income
- service charge
- sports and recreation
- subscription fee
- transportation
154,322
20,938,320
233,965
3,953,189
135,894
5,642,757
32,129,247
90,977
1,111,299
6,911,783
663,011
48,003
48,800
18,052,197
214,034
3,208,784
92,247
1,007,100
21,866,180
1,838,384
1,092,194
7,622,384
493,785
PROPERTY DEVELOPMENT
71,964,764
13,850,402
55,584,092
17,892,108
85,815,166
73,476,200
LOSS BEFORE TAXATION
THE GROUP
2008
2007
RM
RM
THE COMPANY
2008
2007
RM
RM
Loss before taxation is arrived at after
charging/(crediting):Allowance for doubtful debts:
- for the financial year
- writeback
Amortisation of prepaid land lease payments
Audit fee
- for the financial year
- underprovision in the previous financial year
Depreciation of property, plant and equipment
Directors’ fee
Directors’ non-fee emoluments
Interest expense
Lease of apartments
Plant and equipment written off
Provision of liquidated ascertain damages
Rental of:
- equipment
- machinery
- premises
Staff costs
Foreign exchange:
- realised gain
- unrealised gain
Gain on disposal of plant and equipment
Interest income
347,310
(94,694)
54,202
475,034
(214,799)
54,204
-
-
86,000
(2,748)
7,362,183
233,000
470,400
16,919,862
285,465
15,242
552,719
99,200
7,013,305
314,000
400,772
10,191,798
643,093
106,620
-
17,000
233,000
-
15,000
312,000
-
142,184
87,404
148,058
19,291,369
58,600
5,850
141,140
14,789,775
-
-
-
-
(109,341)
(14,812)
(123,138)
(46,549)
(115,584)
(9,868)
(99,868)
(309,845)
63
31.
32.
INCOME TAX EXPENSE
THE GROUP
2008
2007
RM
RM
Current tax:
- for the current financial year
- underprovision in the previous financial years
80,000
58,284
153,000
-
138,284
153,000
During the current financial year, the statutory tax rate was reduced from 27% to 26%, as announced in the Malaysian
Budget 2007.
A reconciliation of income tax expense applicable to the loss before taxation at the statutory tax rate to income tax
expense at the effective tax rate of the Group and of the Company is as follows:THE GROUP
2008
2007
RM
RM
(7,964,368)
(6,380,760)
(497,825)
(585,263)
Tax at the applicable corporate tax rate
of 26% (2007 - 27%)
(2,070,736)
(1,722,805)
(129,434)
(158,021)
1,836,488
-
2,081,686
(318,161)
129,434
-
158,021
-
1,047,704
541,515
-
-
(713,456)
58,284
(20,000)
(377,839)
(51,396)
-
-
138,284
153,000
-
-
Tax effects of:
Non-deductible expenses
Investment tax allowances utilised
Deferred tax assets not
recognised during the year
Utilisation of previously
unrecognised deferred tax assets
Underprovision in the previous financial years
Differential in tax rates
33.
THE COMPANY
2008
2007
RM
RM
LOSS PER SHARE
Loss per share is arrived at by dividing the Group’s loss attributable to shareholders of RM8,102,652 (2007 RM6,533,760) by the number of ordinary shares in issue of 105,000,000 (2007 - 105,000,000).
Diluted loss is not presented as there were no potential dilutive ordinary shares during the financial year.
64
34.
PURCHASE OF PROPERTY, PLANT AND EQUIPMENT
THE GROUP
2008
2007
RM
RM
Cost of property, plant and equipment purchased
Amount financed through hire purchase
Cash paid for purchase of property, plant and equipment
35.
7,199,338
(2,492,727)
10,196,826
(3,892,584)
4,706,611
6,304,242
For the purpose of the cash flow statements, cash and cash equivalents comprise the following:THE GROUP
2008
2007
RM
RM
Fixed deposits with
licensed banks
Cash and bank balances
Bank overdraft
THE COMPANY
2008
2007
RM
RM
750,021
6,875,351
(3,482,184)
2,438,397
5,632,634
(929,318)
117
-
24,364
-
4,143,188
7,141,713
117
24,364
Included in the cash and bank balances of the Group is RM448,138 (2007 - RM493,210) maintained under the
Housing Development Accounts pursuant to Section 7A of the Housing Development (Control and Licensing) Act,
1966.
DIRECTORS’ REMUNERATION
The aggregate amount of emoluments received and receivable by the directors of the Group and of the Company
during the financial year in bands of RM50,000 are as follows:NO. OF
DIRECTORS
DIRECTORS’
FEE
RM
NO. OF
DIRECTORS
DIRECTORS’
NON-FEE
EMOLUMENTS
RM
GROUP
2008
Below RM50,000
RM100,001 – RM150,000
RM300,001 – RM350,000
6
-
233,000
-
1
1
134,400
336,000
2007
Below RM50,000
RM100,001 – RM150,000
RM250,001- RM300,000
9
-
314,000
-
1
1
109,643
291,129
65
36.
36.
DIRECTORS’ REMUNERATION (CONT’D)
NO. OF
DIRECTORS
DIRECTORS’
FEE
RM
NO. OF
DIRECTORS
DIRECTORS’
NON-FEE
EMOLUMENTS
RM
COMPANY
37.
2008
Below RM50,000
6
233,000
-
-
2007
Below RM50,000
9
312,000
-
-
SIGNIFICANT RELATED PARTY DISCLOSURES
The balances with related parties are disclosed in Note 9, Note 25 and Note 26 to the financial statements.
In addition to the balances detailed elsewhere in the financial statements, the Group carried out the following
transactions with the related parties during the financial year:THE GROUP
2008
2007
RM
RM
Advances from an entity in which a director has a substantial financial interest: At 1.1.2008/1.7.2007
Advances
Repayments
Interest charged
(55,398,121)
5,808,576
(6,345,764)
(55,003,317)
(394,804)
-
At 31.12.2008/2007 (Note 25)
(55,935,309)
(55,398,121)
2,799,556
2,612,518
Key management personnel compensation:Salaries and other short-term employee benefits
The outstanding amounts of related party will be settled in cash. No guarantees have been given or received. No
expenses have been recognised during the financial year as bad and doubtful debts in respect of amounts owing by
related parties.
66
CONTINGENT LIABILITIES
THE GROUP
2008
2007
RM
RM
Potential tax liabilities
- Note (i)
Claims for work done
- Note (ii)
Corporate guarantees given to secure
banking facilities granted
to certain subsidiaries
(i)
THE COMPANY
2008
2007
RM
RM
6,500,000
6,500,000
-
-
13,430,000
13,430,000
-
-
75,000,000
75,000,000
75,000,000
75,000,000
94,930,000
94,930,000
75,000,000
75,000,000
The Company has submitted revised tax returns for the years of assessment 1995 to 2005 to the Inland Revenue
Board (“IRB”). The revised tax returns have incorporated the claim for capital allowances on the capital
expenditure incurred on the golf course and the club house, other than the costs incurred for the acquisition
of the golf course land. The directors are of the opinion that these capital expenditure qualify for capital
allowances.
However, the IRB has not allowed the Company to claim the capital allowances as they consider the aforesaid
capital expenditure to be non-qualifying.
The Company has appealed to the IRB on their decision. Should the appeal be successful, the amount of tax
payable for the years of assessment 1995 to 2005 will be reduced by approximately RM14.9 million. On the
other hand, if the appeal by the Company is unsuccessful, the Company may incur an additional tax liability
excluding tax penalties for late payment of RM6.5 million.
The additional tax provision and the resulting late payment penalties have not been effected in the financial
statements as at 31 December 2008 as the appeal process is ongoing and the next hearing scheduled for May
2008 had been postponed to February 2008 and subsequently to May 2009. The solicitors are of the view that
the outcome of the appeal is likely to be favourable.
(ii)
The litigation claims are in respect of the following:(a)
A third party has initiated arbitration proceedings against a subsidiary claiming RM11.0 million for
general damages. The Group has disputed the claim and has filed a counterclaim of RM6.2 million for,
inter alia, rectification of defective work and costs to complete the third party’s unfinished work and
other related damages in respect of the works.
Pending the arbitration proceedings, the Court of Appeal had allowed an appeal with costs against the
decision of the High Court for refusing the Group interlocutory application for security of costs and the
plaintiffs was ordered to deposit a sum of RM250,000 as security for cost of the arbitration.
The plaintiffs have closed their case and the Group is now calling their witnesses. The arbitration
proceedings are continuing and the next hearing scheduled for May 2008 had been postponed. The
plaintiff has submitted their evidence in November 2008 and the Group will submit their evidence by
April/May 2009.
The claim by the third party has not been effected in the financial statements as the directors of the
Group are of the opinion that the arbitration proceedings by the third party will not be successful.
67
38.
38.
CONTINGENT LIABILITIES (CONT’D)
(ii)
The litigation claims are in respect of the following:- (Cont’d)
(b)
A third party has initiated High Court proceedings against a subsidiary for the sum of RM1.3 million
for works purportedly done for the Group. The Group is defending the claim, and is counter-claiming
a total sum of RM0.9 million against the third party. The third party has been subsequently awarded
a summary judgement for the sum of RM865,096 plus interest and costs. The summary judgment
granted by the Senior Assistant Registrar against the Group has been set aside by the Johor Bahru High
Court on appeal by the Group. The written judgement by the trial Judge has been issued.
The High Court has dismissed the claims of both parties and both parties have made an appeal to Court
of Appeal.
(c)
A third party has initiated arbitration proceedings against a subsidiary claiming a sum of approximately
RM1.1 million in respect of work purportedly done for the Group. The Group is disputing the claim
and has counterclaimed for approximately RM1.9 million, inter alia, for defective work and costs to
complete the third party’s unfinished work and other related damages in respect of the work.
Before the hearing of the arbitration commenced, the Group filed an application for security of costs
in the Kuala Lumpur High Court. The Group’s application was dismissed with costs. Thereafter, the
Group appealed to the Court of Appeal but which was dismissed with costs in September 2007. The
Group has decided not to appeal the Court of Appeal’s decision.
The arbitration proceedings are presently on-going.
The claim by the third party has not been effected in the financial statements as the directors of the Group are of the
opinion that the Group is likely to succeed in the arbitration proceedings.
The management has yet to reach an out-of-count settlement with the Claimant.
39.
COMMITMENTS
Detailed below are commitments of the Group at the balance sheet date:(i)
Non-cancellable operating lease
THE GROUP
2008
2007
RM
RM
Not later than one year
Later than one year and not later than five years
68
127,802
120,384
64,608
184,992
248,186
249,600
COMMITMENTS (CONT’D)
(ii)
40.
A subsidiary, Pulai Springs Resort Berhad entered into tenancy agreements with the beneficial owners of the
Cinta Ayu Resort Apartments whereby the beneficial owners let the premises together with all the fixtures,
fittings, furniture and chattels for an initial term of 36 months commencing from the vacant possession of the
said premises, with an option to renew the tenancy upon terms and conditions to be agreed upon.
FOREIGN EXCHANGE RATE
The principal closing foreign exchange rate used (expressed on the basis of one unit of foreign currency to RM
equivalent) for the translation of foreign currency balances at the balance sheet date is as follows:THE GROUP
2008
2007
RM
RM
US Dollar
Singapore Dollar
3.34
2.22
3.33
2.29
69
39.
41.
SEGMENTAL REPORTING
(i)
By business segment:-
HOSPITALITY
RM
PROPERTY
DEVELOPMENT
AND
INVESTMENT
RM
INVESTMENT
HOLDING
RM
ELIMINATION
RM
TOTAL
RM
71,964,764
13,850,402
-
-
85,815,166
13,466,891
(4,060,121)
-
8,908,945
(16,919,862)
46,549
THE GROUP
2008
REVENUE
External revenue
RESULTS
Segment results
Interest expense
Interest income
(497,825)
Taxation
(7,964,368)
(138,284)
Loss after taxation
(8,102,652)
OTHER
INFORMATION
Segment assets
269,112,651
102,792,353
1,642
- 371,906,646
Total assets#
Segment liabilities
371,906,646
120,233,082
108,795,355
587,089
- 229,615,526
Total liabilities*
Capital expenditure
7,199,338
-
-
-
7,199,338
Depreciation
7,354,694
7,489
-
-
7,362,183
54,202
-
-
-
54,202
552,719
-
-
-
552,719
Amortisation of
prepaid land lease
payments
Provision for
liquidated
ascertained
damages
70
229,615,526
SEGMENTAL REPORTING (CONT’D)
(i)
By business segment:- (Cont’d)
HOSPITALITY
RM
PROPERTY
DEVELOPMENT
AND
INVESTMENT
RM
INVESTMENT
HOLDING
RM
ELIMINATION
RM
TOTAL
RM
55,584,092
17,892,108
-
-
73,476,200
1,121,099
2,965,357
-
3,501,193
(10,191,798)
309,845
THE GROUP
2007
REVENUE
External revenue
RESULTS
Segment results
Interest expense
Interest income
(585,263)
Taxation
(6,380,760)
(153,000)
Loss after taxation
(6,533,760)
OTHER
INFORMATION
Segment assets
Unallocated assets
249,753,733
127,913,778
24,364
- 377,691,895
476
Total assets#
377,692,371
377,692,371
Segment liabilities
Unallocated liabilities
108,740,760
117,999,041
387,798
- 227,127,599
17,182,907
Total liabilities*
244,310,506
Capital expenditure
6,379,148
3,817,678
-
-
10,196,826
Depreciation
6,928,503
84,802
-
-
7,013,305
54,204
-
-
-
54,204
Amortisation of
prepaid land lease
payments
# - Segment assets comprise total current and non-current assets, excluding tax assets.
* - Segment liabilities comprise total current and non-current liabilities, excluding income tax liabilities.
71
41.
41.
SEGMENTAL REPORTING (CONT’D)
(ii)
By geographical market:SEGMENT REVENUE
2008
2007
RM
RM
Malaysia
Singapore
42.
SEGMENT ASSETS
2008
2007
RM
RM
85,815,166
-
73,476,200
-
371,816,754
107,892
377,414,083
278,288
85,815,166
73,476,200
371,924,646
377,692,371
FAIR VALUES OF FINANCIAL INSTRUMENTS
Fair value is defined as the amount for which the financial instrument could be exchanged in a current transaction
between knowledgeable willing parties in an arm’s length transaction, other than in a forced sale or liquidation.
The following methods and assumptions are used to estimate the fair value of each class of financial instruments:
(a)
Long-Term Bank Loans
The carrying amount approximated the fair value of this instrument. The fair value of the long-term bank loan
is determined by discounting the relevant cash flows using current interest rates for similar instruments at the
balances sheet date.
(b)
Hire Purchase Payables
The carrying amounts approximated their fair value as the fair value of hire purchase payables are determined
by discounting the relevant cash flows using current interest rates for similar types of instruments.
(c)
Cash and Cash Equivalents and Other Liquid and Short-Term Receivables/Payables
The carrying amounts approximated their fair values due to the relatively short-term maturity of these
instruments.
72
42.
FAIR VALUES OF FINANCIAL INSTRUMENTS (CONT’D)
(d)
Contingent Liabilities
The nominal amount and net fair value of financial instruments not recognised in the balance sheet of the
Company are as follows:
Note
THE COMPANY
Nominal
Net
Amount
Fair Value
RM
RM
At 31 December 2008/2007
Potential tax liabilities
Litigation claim for work done
Corporate guarantees
6,500,000
13,430,000
75,000,000
#
#
*
#
It is not practicable to estimate the fair value due to uncertainty of timing and eventual outcome.
*
The net fair value of the contingent liabilities is estimated to be minimal as the subsidiaries are expected
to fulfill their obligations to repay their borrowings.
SIGNIFICANT EVENT SUBSEQUENT TO THE BALANCE SHEET DATE
The Group had on 23 April 2009 entered into a Sale and Purchase Agreement of Shares for the disposal of 10,000,000
ordinary shares of RM1.00 each, representing the entire issued and paid up share capital in its wholly owned subsidiary,
City Centre Hotel Sdn. Bhd. to an unrelated third party, namely, for a total consideration of RM47,300,000.
The disposal of the above is subject to the approval of shareholders of the Company at an extraordinary general meeting
to be convened at a later date.
73
43.
38
38
38
List of Properties
Location
Tenure
Land
Area in
sq. ft.
Age of
Building
Year
PTD 63408
HSD 248327
PTD 63409
HSD 248328
PTD 130053
HSD359875
PTD 63417
HSD 248336
PTD 63430
HSD 248347
Mukim of
Pulai, District
of Johor Bahru,
Johor Darul
Takzim
Freehold
4,807,054
N/A
PTD 130052
HSD359874
Mukim of
Pulai, District
of Johor Bahru,
Johor Darul
Takzim
Freehold
884,645
11
PTD 130055
HSD359876
PTD 63414
HSD 248333
Mukim of
Pulai, District
of Johor Bahru,
Johor Darul
Takzim
Freehold
169,609
PTD 63415
HSD 248334
PTD 63416
HSD 248335
PTD 63426
HSD 248343
PTD 63429
HSD 248346
Mukim of
Pulai, District
of Johor Bahru,
Johor Darul
Takzim
Freehold
689,538
74
Description
Registered
Owner
NBV as at
31/12/2008
Date of
Acquisition/
Last
Valuation
18 hole golf
course “Melana
Course” (within
Pulai Springs
Resort, 20 km
Jalan Pontian
Lama, 81110
Pulai, Johor
(PSR))
Pulai Springs
Resort Berhad
(“PSRB”)
17,576,016
26/5/00
Pulai Springs
Resort
Clubhouse
Hotel within
PSR
PSRB
Land
3,234,522
Building
59,105,323
26/5/00
N/A
Vacant Land
approved for
workers’ quarters
development
within PSR
PSRB
620,140
26/5/00
N/A
Vacant Land
approved for
condominium
development
within PSR
PSRB
2,521,153
9/11/07
List of Properties (Cont’d)
Location
Tenure
Land
Area in
sq. ft.
Age of
Building
Year
Description
Registered
Owner
NBV as at
31/12/2008
Date of
Acquisition/
Last
Valuation
PTD 63425
HSD 248342
PTD 63427
HSD 248344
PTD 63428
HSD 248345
Mukim of
Pulai, District
of Johor Bahru,
Johor Darul
Takzim
Freehold
67,238
N/A
Vacant Land
approved for
bungalow lot
development
with PSR
PSRB
245,840
26/5/00
PTD 130047
HSD359870
PTD 130048
HSD359871
PTD 130049
HSD359872
Mukim of
Pulai, District
of Johor Bahru,
Johor Darul
Takzim
Freehold
4,985,498
N/A
18 hole golf
course, “Pulai
Course”, within
PSR
PSRB
18,228,460
26/5/00
PTD 11857
HSD 76690
PTD 11858
HSD 76691
PTD 11859
HSD 76692
Mukim of
Pulai, District
of Johor Bahru,
Johor Darul
Takzim
Freehold
4,620
14
Double storey
terrace house
for PSRB staff
accommodation
at 7,9 and 11,
Jalan Meranti
11, Taman Sri
Pulai
81110 Pulai,
Johor Darul
Takzim
PSRB
282,288
26/5/00
75
List of Properties (Cont’d)
Location
Tenure
Land
Area in
sq. ft.
Age of
Building
Year
Description
Registered
Owner
PTD 1672
HSD 13065
99 years
leasehold
expiring on
6/11/2088
311,631
N/A
Vacant Land
Bina Resort
Corporation
Sdn Bhd
PTD 1673
HSD 13066
60 years
leasehold
expiring on
19/12/2055
with
possible
extension
for 35 years
436,906
N/A
Vacant Land
Lembaga
Kemajuan
Johor Tenggara
(KEJORA)
PTD 1674
HSD 13067
99 years
leasehold
expiring on
6/11/2088
276,649
11
210 rooms resort
hotel
Bina Resort
Corporation
Sdn Bhd
PTD 1675
HSD 13068
60 years
leasehold
expiring on
19/12/2055
with
possible
extension
for 35 years
113,308
N/A
Vacant Land
Lembaga
Kemajuan
Johor Tenggara
(KEJORA)
76
Date of
Acquisition/
Last
Valuation
Land
1,759,328
Building
22,921,727
Mukim of
Pantai Timur,
District of Kota
Tinggi, Johor
Darul Takzim
Geran 28301,
Lot 191,
Section 57,
Bandar Kuala
Lumpur,
Wilayah
Persekutuan
NBV as at
31/12/2008
Freehold
21,506
31 months 28 storey hotel
building with
5 levels of
basement car
park
City Centre
Hotel Sdn
Bhd (formerly
known as
Hydro Hotels
Sdn Bhd)
Land
24,848,100
Building
75,327,350
N/A
Statement on Shareholdings
As at 5 May 2009
Authorised Capital
:
RM250,000,000.00
Issued and Fully Paid-up Capital
:
RM105,000,000.00
Class of Shares
:
Ordinary shares of RM1.00 each
Voting Rights
:
Every member of the Company, present in person or by proxy, shall have on a
show of hands, one (1) vote or on a poll, one (1) vote for each share he holds.
DISTRIBUTION OF SHAREHOLDINGS
Range of Shareholdings
1 - 99
100 - 1,000
1,001 - 10,000
10,001 - 100,000
100,001 - 5,249,999 (*)
5,250,000 and above (**)
TOTAL
No. of
Holders
% of
Holders
No. of
RM1.00 Shares
% of
Issued Capital
49
841
110
30
21
4
4.64
79.72
10.43
2.84
1.99
0.38
178
221,105
430,268
842,900
41,819,572
61,685,977
0.00
0.21
0.41
0.80
39.83
58.75
1,055
100.00
105,000,000
100.00
Note: * - Less than 5% of issued holdings
** - 5% and above of issued holdings
Name of Holder
1.
2.
3.
4.
5.
6.
7.
8.
9.
OSK Nominees (Tempatan) Sdn Berhad
(Pledged Securities Account for Sepenah Emas (M) Sdn Bhd)
Abu Sahid bin Mohamed
PSC Resort Pte Ltd
HDM Nominees (Asing) Sdn Bhd
(UOB Kay Hian Pte Ltd for PSC Resort Pte Ltd)
(Pledged Securities Account for Rega Emas (M) Sdn Bhd)
Alliancegroup Nominees (Asing) Sdn Bhd
(Alliance Merchant Nominees (Asing) Sdn Bhd for PSC Resort Pte Ltd)
(Pledged Securities Account for Cash Deluxe (M) Sdn Bhd)
JF Apex Nominees (Tempatan) Sdn Bhd
(Pledged Securities Account for Little Equity (M) Sdn Bhd)
Chua Jui Leng
Holdings
% of Issued
Capital
33,600,000
14,674,200
8,151,118
32.00
13.98
7.76
5,260,659
5.01
5,205,900
4.96
5,095,000
4.85
5,065,400
4.82
5,051,300
4,510,234
4.81
4.30
77
THIRTY LARGEST REGISTERED HOLDERS AS AT 5 MAY 2009
Analysis of Shareholdings (Cont’d)
As at 5 May 2009
THIRTY LARGEST REGISTERED HOLDERS AS AT 5 MAY 2009 (CONT’D)
Name of Holder
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
22.
23.
24.
25.
26.
27.
28.
29.
30.
M.I.T Nominees (Tempatan) Sdn Bhd
(Pledged Securities Account for Abu Sahid bin Mohamed)
JF Apex Nominees (Tempatan) Sdn Bhd
(Pledged Securities Account for Inrich Nominees (M) Sdn Bhd)
Liew Chiew Hoye
Nescaya Wangi Sdn Bhd
Azzat bin Kamaludin
Kenanga Nominees (Tempatan) Sdn Bhd
(Pledged Securities Account for Nescaya Wangi Sdn Bhd)
Amsec Nominees (Tempatan) Sdn Bhd
(Pledged Securities Account for Doreen Chua Mei Yen)
Amsec Nominees (Tempatan) Sdn Bhd
(Pledged Securities Account for Jesselyn Chua Mei Yong)
Tay Moi Huat
Maharani Consolidated Holdings Sdn Bhd
MKW Jaya Sdn Bhd
Liew Chiew Hoye
Citigroup Nominees (Asing) Sdn Bhd
(CBNY for DFA Emerging Markets Fund)
T.S.L. Corporation Sdn Bhd
Bong May Lee
Lim Khing Seng
Ching Tong Joy
Leow Pek Fong @ Liew Pek Fong
Hoe Woon Keong
Hoo Kok Yong @ Ho Kok Yong
TOTAL
78
Holdings
% of Issued
Capital
4,351,000
4.14
4,200,200
1,500,000
1,211,700
1,000,000
750,338
4.00
1.43
1.15
0.95
0.71
635,800
0.61
500,000
0.48
500,000
497,100
480,000
470,000
390,900
0.48
0.47
0.46
0.45
0.37
159,800
139,900
105,000
91,000
66,800
60,000
50,300
50,000
0.15
0.13
0.10
0.09
0.06
0.06
0.05
0.05
103,823,649
98.88
Analysis of Shareholdings (Cont’d)
As at 5 May 2009
SUBSTANTIAL SHAREHOLDERS AS AT 5 MAY 2009
According to the Register of Substantial Shareholders required to be kept under Section 69L of the Companies Act, 1965, the
following are the substantial shareholders of the Company:
Name of
Substantial Shareholder
Sepenah Emas (M) Sdn Bhd
Mah Siew Chean
PSC Resort Pte Ltd
PSC Corporation Limited
Rich Life Holdings Pte Ltd
Hanny Magnetics (B.V.I.) Limited
Hanny Holdings Limited
Direct
Interest
%
Deemed
Interest
%
33,600,000
13,411,777
19,025,200
-
32.00
12.77
18.12
-
33,600,0001
13,411,7772
13,411,7773
13,411,7774
13,411,7775
32.00
12.77
12.77
12.77
12.77
Notes
(1)
(2)
(3)
(4)
(5)
Deemed interest by virtue of his interest in Sepenah Emas (M) Sdn Bhd.
Deemed interest by virtue of its interest in PSC Resort Pte Ltd.
Deemed interest by virtue of its interest in PSC Corporation Limited.
Deemed interest by virtue of its interest in Rich Life Holdings Pte Ltd.
Deemed interest by virtue of its interest in Hanny Magnetics (B.V.I.) Limited.
DIRECTORS’ INTEREST AS AT 5 MAY 2009
Name of Director
Prof. Emeritus Dato’ Dr. Lian Chin Boon
Dato’ Dr. Hj. Shahir bin Nasir
Leong Chew Meng
Mah Siew Chean
(Alternate Director to Ruthlene binti Abu Sahid)
Direct
Interest
%
Deemed
Interest
%
750,338
1,000,000
19,025,200
0.71
0.95
18.12
20,0001
33,600,0002
-
0.02
32.00
-
Notes
(1)
(2)
Deemed Interested by virtue of family relationship.
Deemed interest by virtue of his interest in Sepenah Emas (M) Sdn Bhd.
79
According to the Register of Directors’ Shareholdings required to be kept under Section 134 of the Companies Act, 1965 the
Directors’ interests in the ordinary share capital of RM1.00 each of the Company are as follows:
This page is intentionally left blank.
80
Proxy Form
CDS Account No. (i)
No. of Shares held
PULAI SPRINGS BERHAD
(Company No. 514941-K)
(Incorporated in Malaysia)
*I/We
NRIC No. / Company No.
(FULL NAME IN BLOCK CAPITALS)
of
(FULL ADDRESS)
being a member / members of PULAI SPRINGS BERHAD (514941-K), hereby appoint
NRIC No.
of
(FULL ADDRESS)
or failing *him / her,
NRIC No.
of
(FULL ADDRESS)
or failing *him / her, *the Chairman of the Meeting as *my / our proxy to attend and vote on my / our behalf at the Ninth
Annual General Meeting of the Company to be held at Cengal Suite, Pulai Springs Resort, 20km, Jalan Pontian Lama, 81110
Pulai, Johor Darul Takzim on Thursday, 18 June 2009 at 11.00 a.m. and at any adjournment thereof.
(Please indicate with an “X” in the appropriate boxes on how you wish your vote to be cast. Unless voting instructions are
indicated in the space above, the proxy will vote as he / she thinks fit.)
Resolutions
FOR
AGAINST
Ordinary Resolution 1 - Re-election of Prof. Emeritus Dato’ Dr Lian Chin Boon
Ordinary Resolution 2 - Re-election of Leong Chew Meng
Ordinary Resolution 3 - Approval of Directors’ Fees
Ordinary Resolution 4 - Re-appointment of Messrs Horwath
Ordinary Resolution 5 - Authority to Allot Shares
Signed this _______ day of _______________ 2009
For appointment of two proxies, percentage if shareholdings
to be represented by the proxies:
No. of shares
Percentage
Proxy 1
Proxy 2
_________________________________________
Signature/Common Seal of Member
Total
100%
1.
2.
3.
4.
*
*
A member entitled to attend and vote at the meeting is entitled to appoint a proxy or proxies (but not more than two) to attend and vote in his /
her stead. If a member appoints two (2) proxies, the appointment shall be invalid unless he / she specifies the proportion of his / her holdings to be
represented by each proxy.
A proxy may but need not be a member of the Company. Where a proxy is not a member, he need not be an advocate, an approved company auditor
or a person approved by the Companies Commission of Malaysia.
In the case of a corporation, the proxy appointed must be in accordance with its Articles of Association and the instrument appointing a proxy shall
be given under the corporation’s Common Seal or under hand of an officer or attorney duly appointed.
The instrument appointing a proxy must be deposited with the Company Secretaries at 55 Medan Ipoh 1A, Medan Ipoh Bistari, 31400 Ipoh, Perak
not less than 48 hours before the time appointed for the holding of the Annual General Meeting or any adjournment thereof.
Delete where applicable
(i)
Applicable to shares held through a nominee account.
81
Notes :
Fold here for sealing
Fold along this line (1)
Postage
The Company Secretaries
Pulai Springs Berhad (514941-K)
55 Medan Ipoh 1A,
Medan Ipoh Bistari,
31400 Ipoh, Perak.
Fold along this line (2)
Pulai Springs Berhad (Incorporated in Malaysia) Company No. 514941-K
Pulai Springs Berhad
ANNUAL
REPORT
PULAI SPRINGS BERHAD (Incorporated in Malaysia)
Company No. 514941-K
81110 Pulai, Johor, Malaysia.
Tel: 607-521 1212
Fax: 607-521 3333

Pulai Spring DTP.indd

Transcription

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