Meda Inc. Berhad Annual Report For Year 2005 (Page 01-31)

. .our
. . . .profile
............
Meda started its commercial operations way back in 1993, was listed on the Main Board of the Bursa
Malaysia Securities Bhd under the property sector on 19 March 2002. The Group’s core activities are in the
property development, holding of investment properties and hotel business. The Group through its subsidiaries
also involve in project management services, provision of landscaping services, and car park operations. The
Group has successfully completed various shopping complexes, hotels and office buildings such as The Summit
Subang USJ and The Summit, Bukit Mertajam. The Group has also several on-going property development projects
and they are ‘Semantan Avenue Suites’ in Damansara Heights Kuala Lumpur; ‘Nusa Dusun Orchard Resort’, Kuala
Linggi, Melaka; ‘Kota Malim Prima’ in Tanjung Malim Perak and ‘Semaba Park’, Kuching, Sarawak.
Strong customer orientation and innovative products and services are the foundation of Meda’s business that are
essential to its success. The Group is driven by the principles of innovativeness. Meda is committed to deliver quality
products and services on time. Meda aspires to lead the market by continuing to add value to its core businesses and
satisfying its customers’ needs better.
The Group views its human capital as the primary source of success towards achieving its vision and mission. The
Group’s employees have a diverse educational and operational background whom will be able to lead the Group.
The overall thrust of Meda Human Resource Strategy is to recruit, reward and retain the best and the brightest
employees.
As Meda moves ahead, Meda will continue to focus on creating innovative concepts and solutions to its
customers and stakeholders whilst maintaining the highest degree of professionalism and integrity.
Cover R etionale
..................
The rationale of this cover design with a serene image of a lakeview denotes that the
company is evolving towards the progression and the conservation of an environmentalfriendly business pathway. The natural hue of green adds a convincing yet
unequivocal touch that better leads the direction in ecological-awareness that
the company is working towards for. As an enrichment to the visual, a
soon-to-bloom lotus bud image is complimented to diffuse the
notion of the opening of a brand new chapter for
the company.
.our
. . . .vision
.............
To establish the Group’s reputation as a pioneer in perfecting
Nusa Dusun Orchard Resort,
Kuala Linggi, Melaka
innovative development concept and a leading developer of
projects with excellent location and value.
.our
. . . .mission
.............
To create and introduce innovative concepts and solutions to
Semantan Avenue Suites,
Damansara Heights
all the Company’s businesses via exemplary and dynamic
leadership and consultative networking.
To strive and thrive hard in order to achieve excellence and
carve a reputation as an ‘innovative, reliable and dependable’
developer.
To constantly provide expedient and effective services to our
customers at all levels of operations.
To continually deliver good and quality products as promised
Semaba Park,
Kuching, Sarawak
and on time.
To create, develop and provide challenging and rewarding
careers for all employees as well as safeguard and enhance
the interests of the stakeholders.
To remain creative, firm, adventurous and dynamic as a
leading developer.
Kota Malim Prima,
Tanjung Malim, Perak
contents
Corporate
03
Notice Of Annual General Meeting
05
Statement Accompanying Notice Of Annual General Meeting
06
Corporate Information
07
Corporate Structure
10
Board Of Directors
12-17
Profile Of Directors
18
Management Team
22-24
Chairman’s Statement
25-31
Review of Operations
32-36
Statement On Corporate Governance
37
Statement Of Directors’ Responsibilities
38
Audit Committee Report
42
Statement On Internal Control
44
Other Information
Financial Statements
46-49
Directors’ Report
50
Statement By Directors
50
Statutory Declaration
51-52
Report Of The Auditors
53-54
Balance Sheets
55
Income Statements
56
Statements Of Changes In Equity
57-58
59-106
Cash Flow Statements
Notes To The Financial Statements
107-110
Analysis Of Shareholdings
111-112
List Of Properties
Proxy Form
Meda Inc Bhd
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notice of annual general meeting
NOTICE IS HEREBY GIVEN that the Sixth Annual General Meeting of the Company will be held at Ballroom
1, Level 5, The Summit Hotel Subang USJ, Persiaran Kewajipan, USJ 1, 47600 UEP Subang Jaya,
Selangor on Thursday, 29 June 2006 at 10:00 a.m.
AGENDA
1. To receive and adopt the Audited Financial Statements for the year ended 31 December 2005
together with the Directors’ and Auditors’ Reports thereon.
2. To approve the payment of Directors’ fee.
3. To re-elect the following Directors who retire in accordance with the Company’s Articles of Association:(a) Ong Bok Siong
(b) Chiam Tau Meng
(c) Dato’ Dr. Loga Bala Mohan a/l Jaganathan
4. To re-appoint Tan Sri Dato' Mohd Ramli Bin Kushairi who retires in accordance with Section 129 of the
Companies Act, 1965.
5. To consider the change of auditors:“That in view of Messrs BDO Binder not seeking re-appointment, Messrs Monteiro & Heng having
consented to act, be and are hereby appointed as auditors of the Company for the year ending
31 December 2006 to hold office until the conclusion of the next Annual General Meeting and that
authority be and is hereby given for the Directors to determine their remuneration.”
6. To transact any other business appropriate to an Annual General Meeting.
7. As SPECIAL BUSINESS, to consider and if thought fit, to pass the following resolution:-
ORDINARY RESOLUTION
AUTHORITY TO ALLOT AND ISSUE SHARES IN GENERAL PURSUANT TO SECTION 132D OF THE
COMPANIES ACT, 1965
“That, subject to the Companies Act, 1965 and the Articles of Association of the Company and approvals
from the Securities Commission and Bursa Malaysia Securities Berhad and other relevant governmental or
regulatory authorities, the Directors be and are hereby empowered pursuant to Section 132D of the
Companies Act, 1965 to allot and issue shares in the capital of the Company from time to time upon such
terms and conditions and for such purposes as the Directors may in their discretion deem fit provided that
the aggregate number of shares issued pursuant to this resolution does not exceed 10% of the issued
share capital of the Company for the time being and that such authority shall continue in force until the
conclusion of the next Annual General Meeting of the Company.”
BY ORDER OF THE BOARD
TAI SIEW MAY
Secretary
Subang Jaya, Selangor
7 June 2006
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Meda Inc Bhd
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notice of annual general meeting (cont'd)
Notes:
(a) A member entitled to attend and vote at the meeting is entitled to appoint not more than
two (2) proxies to attend and vote in his stead. A proxy need not be a member of the
Company and Section 149(1) of the Companies Act,1965 shall not apply. Where a
member appoints more than one (1) proxy, the appointment shall be invalid unless he
specifies the proportion of his holdings to be represented by each proxy.
(b) In the case of a corporate body, the proxy appointed must be in accordance with the
Articles of Association and the instrument appointing a proxy shall be given under the
company s common seal or under the hand of an officer or attorney of the corporation
duly authorized.
(c) The Form of Proxy must be deposited at the Company s Registered Office at 9th Floor,
Menara Summit, Persiaran Kewajipan, USJ 1, 47600 UEP Subang Jaya, Selangor not less
than forty-eight (48) hours before the time set for holding the meeting or at any
adjournment thereof.
(d) Any alteration in the Form of Proxy must be initialed.
EXPLANATORY NOTES TO SPECIAL BUSINESS
ORDINARY RESOLUTION
The proposed Ordinary Resolution, if passed, will give the Directors of the Company the
power to issue shares in the Company up to an amount not exceeding in total 10% of the
issued share capital of the Company for such purposes as the Directors consider would be
in the interest of the Company. This would avoid any delay and cost involved in convening a
general meeting to specifically approve such an issue of shares. This authority, unless revoked
or varied at a general meeting, will expire at the next Annual General Meeting of the Company.
4
Meda Inc Bhd
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statement accompanying notice of
annual general meeting
1. Directors who are standing for re-election or re-appointment at the Sixth
Annual General Meeting of the Company
Directors who are standing for re-election in accordance with Article 96(1) of the Company s Articles of
Association:(a) Ong Bok Siong
(b) Chiam Tau Meng
Director who is standing for re-election in accordance with Article 103 of the Company s Articles of
Association:(a) Dato Dr. Loga Bala Mohan a/l Jaganathan
Director who is standing for re-appointment in accordance with Section 129 of the Companies Act, 1965:(a) Tan Sri Dato’ Mohd Ramli Bin Kushairi
The profiles of the above Directors are set out in the Section entitled Profile of Directors . Their
shareholdings in the Company and the subsidiary companies are set out in the Section entitled Directors
Report on page 47.
2. Attendance of Board Meetings
There were five(5) Board Meetings held during the financial year ended 31 December 2005. The
attendance of the Directors is set out on Page 32 on the Statement of Corporate Governance in the Annual
Report.
3. Sixth Annual General Meeting
Place
Date
Time
: Ballroom 1, Level 5, The Summit Hotel Subang USJ, Persiaran Kewajipan,
USJ 1, 47600 UEP Subang Jaya, Selangor
: 29 June 2006
: 10:00 a.m.
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corporate information
Board of Directors
Company Secretary
Tan Sri Dato’ Mohd Ramli bin Kushairi
Non-Executive Director/Chairman
Tai Siew May
Auditors
Dato’ (Dr.) Teoh Seng Foo
Executive Director/President
Teoh Seng Kian
Executive Director/Group Managing Director
Ong Bok Siong
Executive Director/Chief Executive Officer
BDO Binder
Chartered Accountants
12th Floor, Menara Uni.Asia
1008, Jalan Sultan Ismail, 50250 Kuala Lumpur
Stock Exchange Listing
Chiam Tau Meng
Independent Non-Executive Director
Bursa Malaysia Securities Berhad Main Board
Ooi Giap Ch’ng
Independent Non-Executive Director
Bankers
Dato’ Dr. Loga Bala Mohan a/l Jaganathan
Non-Independent Non-Executive Director
AmMerchant Bank Berhad
Bumiputra-Commerce Bank Berhad
Malayan Banking Berhad
Affin Bank Berhad
Audit Committee
Alliance Bank Malaysia Berhad
Chiam Tau Meng (Chairman)
Public Bank Berhad
RHB Bank Berhad
Ooi Giap Ch’ng (Member)
SME Bank Berhad
Teoh Seng Kian (Member)
(Formerly known as Bank Pembangunan
& Infrastruktur (M) Berhad)
Registered Office
Share Registrar
9th Floor, Menara Summit
Tel: 03 - 8024 8866
Symphony Share Registrars Sdn. Bhd.
Level 26, Menara Multi-Purpose
Capital Square
No. 8, Jalan Munshi Abdullah
50100 Kuala Lumpur
Email address : ssrs@symphony.com.my
Tel No. : 03-2721 2222
Fax: 03 - 8024 8966
Fax No. : 03-2721 2530 / 2721 2531
Persiaran Kewajipan USJ 1
47600 UEP Subang Jaya
Selangor Darul Ehsan
Website: www.meda.com.my
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Meda Inc. Bhd
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corporate structure
Meda :
Meda Development Sdn Bhd
ZKP :
ZKP Development Sdn Bhd
Litaran Bayu :
Litaran Bayu Sdn Bhd
Kota Malim :
Kota Malim Sdn Bhd
Kota Malim
30%
Nandex :
70%
Nandex Development Sdn Bhd
Everlasting
100%
Everlasting :
Everlasting Growth Sdn Bhd
Litaran
Bayu
100%
MIB
Construction
100%
Impressive :
Impressive Performance Sdn Bhd
ZKP
100%
Sri Lingga :
Sri Lingga Sdn Bhd
Nandex
Land
100%
Cemerlang Land :
Cemerlang Land Sdn Bhd
Meda Project :
Meda Project Management Sdn Bhd
Meda
Project
100%
Impressive
100%
Nandex
100%
Meda
Realty
100%
PutarErat
Cemerlang
Land
100%
Meda Realty :
Meda Realty Sdn Bhd
40%
60%
Performance
Sciences
Sri
Lingga
100%
MIB Construction :
MIB Construction Sdn Bhd
Meda
100%
Nandex Land :
Nandex Land Sdn Bhd
Performance Sciences :
Performance Sciences Sdn Bhd
Putar-Erat:
Putar-Erat Sdn Bhd
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Meda Inc. Bhd
(Company No.: 507785-P)
7
board of directors
From left to right:
Teoh Seng Kian
Ooi Giap Ch ng
Ong Bok Siong
10
Meda Inc. Bhd
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From left to right:
Dato Dr. Loga Bala Mohan a/l Jaganathan
Tan Sri Dato Mohd Ramli bin Kushairi
Chiam Tau Meng
Dato (Dr.) Teoh Seng Foo
11
profile of board of directors
Tan Sri Dato’ Mohd Ramli Bin Kushairi, aged 70, was appointed to the Board as a Director
and Chairman on 28th December 2001. He graduated from the Hull University, United
Kingdom, with an Honours Degree in Social Science, and did his post-graduate studies
at the King’s College, University of London.
Tan Sri Ramli began his career in the public service in 1961 as Assistant Secretary at Bank
Negara Malaysia. From 1965 to 1972, he served in senior positions at Tariff Advisory
Board and Federal Agricultural Marketing Authority. From 1972 to 1983, he served as a
Director and subsequently the Group Managing Director of Kumpulan FIMA Berhad.
Tan Sri Ramli is also currently the Chairman of South Malaysia Industries Berhad and a
Non-Executive Director of Gamuda Berhad, Masscorp Berhad and Sime Engineering
Services Berhad.
TAN SRI DATO'
MOHD RAMLI BIN KUSHAIRI
PSM, DPMP, JMN, KMN
Chairman
(Non-Independent / Non Executive) Malaysian
Tan Sri Ramli was a past Vice President of the Dewan Perniagaan Melayu Malaysia and
past Secretary-General of the National Chamber of Commerce and Industry Malaysia and
ASEAN-Chambers of Commerce and Industry. He has also served as UMNO Liaison
Secretary for Federal Territory from 1980 to 1982, and a member of the Advisory Board
of Dewan Bandaraya. Currently he is a member of the Malaysian Business Council (MBC),
Board of the National Productivity Corporation (NPC), the National Standards and
Accreditation Council and Chairman of the Council s Standards Committee.
Tan Sri Ramli was appointed to the Board of Trustees of Yayasan Tuanku Bainun on 10th
June 2002, and Yayasan Suluh Budiman Universiti Pendidikan Sultan Idris on 1st October
2002. He is a member of the External Planning Group of the University of Hull, United
Kingdom, since 23rd June 2003. He is also as a Director of the Board of Universiti
Teknologi Malaysia since 15th March 2004. He is the Vice President of Persatuan Darul
Ridzuan DiSelangor dan Wilayah Persekutuan.
Tan Sri Ramli was awarded the Darjah Panglima Setia Mahkota (P.S.M.) which carries the
title Tan Sri by His Majesty the Yang Dipertuan Agong, Sultan Salahuddin Abdul Aziz
Shah on 5th June 1999. He was also awarded the Darjah Dato Paduka Mahkota Perak
(D.P.M.P.), which carries the title Dato by His Royal Highness, Sultan Perak, on 19th April
1988.
Tan Sri Ramli sits on the Remuneration Committee of the Company as Chairman.
Tan Sri Ramli has a direct shareholdings of 782,710 ordinary shares of RM0.50 each as
at 16 May 2006 in the Company and does not have any interest in shares of all the
subsidiaries, neither does he have any family relationship with any Director and/or major
shareholder. He does not have any conflict of interest with the Company nor any
convictions for offences within the past 10 years.
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profile of board of directors
Dato (Dr.) Teoh Seng Foo, aged 49, was appointed to the Board as President on 28
December 2001 and re-designated to executive position on 19 February 2004. An
Accountant by profession, Dato is a Chartered Accountant of the Malaysian Institute of
Accountants and a Fellow Member of the Chartered Institute of Management
Accountants, United Kingdom. Dato also holds a Diploma in Commerce from Tunku
Abdul Rahman College and was conferred the Honorary Doctorate in Business
Administration by University of Abertay Dundee, United Kingdom on 2 November 2002.
Dato has wide experience in commerce and industry, having held senior management
positions in multi-nationals such as Intel Technology, Woodward & Dickerson Inc. and
PricewaterhouseCoopers. Dato is currently the Chairman of the Education Committee
in the Malaysian-China Business Council. In addition, Dato holds these board positions
in the following public listed companies:EcoFirst Consolidated Berhad
DATO' (DR.) TEOH SENG FOO
President
(Non-Independent / Executive) Malaysian
(Formerly known as Kumpulan Emas Berhad)
- Executive Deputy Chairman
SEG International Bhd
- President/ Executive Director
Dato is the Chairman of the Nominating and Risk Management Committees and a
member of the Remuneration Committee of the Company.
Dato has direct and indirect shareholdings of 17,872,224 and 48,165,008 ordinary
shares of RM0.50 each respectively as at 16 May 2006 in the Company. He is deemed
to have an interest in all the shares held by the Company in the subsidiaries by virtue of
his substantial interest in shares in the Company.
Dato is a brother to Teoh Seng Aun, a substantial shareholder of the Company and
Teoh Seng Kian, the Group Managing Director and substantial shareholder of the
Company. Aside from this, he has no other family relationship with any other Director
and/or major shareholder of the Company nor any convictions for offences within the
past 10 years.
Dato has not entered into any transaction, whether directly or indirectly, which have a
conflict of interest with the Company, other than those disclosed in Note 43 in the
accompanying financial statements.
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profile of board of directors
Teoh Seng Kian, aged 46, was appointed to the Board as Group Managing Director on 28
December 2001. He graduated with a Bachelor of Engineering (Mechanical) degree from
Australia in 1984.
He started his career with an Australian company specializing in manufacturing of building
materials. Upon returning to Malaysia, he served as a director in a company involved in
quarrying and infrastructure construction. He has been with the Meda Inc. Group since
1993 as the Group Project Director.
He is also the Chairman of the Executive Committee and a member of the Audit and Tender
Committees of the Company.
He has a direct and indirect shareholdings of 28,373,424 and 48,165,008 ordinary shares
of RM0.50 each respectively as at 16 May 2006 in the Company. He is deemed to have an
interest in all the shares held by the Company in the subsidiaries by virtue of his substantial
interest in shares in the Company.
TEOH SENG KIAN
Group Managing Director
(Non-Independent / Executive) Malaysian
14
He is a brother to Dato (Dr.) Teoh Seng Foo, the President cum substantial shareholder and
Teoh Seng Aun, a substantial shareholder of the Company. Aside from this, he has no other
family relationship with any other Director and/or major shareholder of the Company nor
any convictions for offences within the past 10 years.
He has not entered into any transaction which have a conflict of interest with the Company,
other than those disclosed in Note 43 in the accompanying financial statements.
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profile of board of directors
Ong Bok Siong, aged 46, was appointed as Chief Executive Officer of the Company on
23 April 2002 and to the Board on 15 May 2002. He holds a Bachelor of Law Degree
from University of London, a First Class Honours Bachelor of Science degree in Building
Economics and Quantity Surveying from the Heriot Watt University, Scotland, United
Kingdom and a Diploma in Building Technology from the Tunku Abdul Rahman College.
He is also a registered Quantity Surveyor with the Lembaga Juruukur Bahan Malaysia.
He is currently a member of the Chartered Institute of Building, United Kingdom, the
Malaysian Institute of Arbitrators, the Chartered Institute of Arbitrators, UK, the
Malaysian Institute of Management, the Institute of Surveyors, Malaysia and the Institute
of Value Management, Malaysia.
He started his career in the construction and property industry since 1983 and had
been involved in mega construction and property development projects. Prior to his
appointment as a Chief Executive Officer of the Company, he was the Project Director
of the Group overseeing the property development activities of Meda Inc. Group.
In his private involvement, he is the Deputy Chairman of the Board of Governors of
SJK(C) Chee Wen, Subang Jaya, Selangor. He has been elected as the Vice President
(Finance) of The Chartered Institute of Building, Malaysia for year 2005 to 2007.
ONG BOK SIONG
Chief Executive Officer
(Non-Independent / Executive) Malaysian
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He is also the Chairman of Tender Committee and a member of the Executive and Risk
Management Committees of the Company.
He does not hold any shares in the Company and subsidiaries neither does he have any
family relationship with any Director and/or major shareholder. He does not have any
conflict of interest with the Company nor any convictions for offences within the past
10 years.
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profile of board of directors
Chiam Tau Meng, aged 52, was appointed to the Board on 28 December 2001. He
graduated with a Bachelor of Commerce Degree majoring in Accountancy from the
University of Otago, Dunedin, New Zealand in 1976. He was admitted as an Associate
Chartered Accountant of the Institute of Chartered Accountants of New Zealand in 1980. He
is also a Chartered Accountant of the Malaysian Institute of Accountants.
He started his career in 1976 as a Finance Manager of Tolley Industries Ltd (New Zealand)
and in 1979, he joined Malaysian Containers (1974) Berhad as a finance manager cum
company secretary. In 1984, he joined Menang Corporation (M) Berhad as a General
Manager of Corporate Services and in 1989, he joined Bee Hin Holdings Sdn. Bhd. which
was undergoing a reconstruction scheme under Section 176 of the Act on Kuala Lumpur
Industries Berhad as General Manager of Corporate Finance. In 1992, he was in the
Management consultancy practice of an international accounting organization and in 1994,
he set up his own consulting practice.
He sits on the Audit Committee as Chairman and is also a member of the Nominating
Committee of the Company.
CHIAM TAU MENG
Director
(Independent / Non-Executive) Malaysian
16
He also sits on the Board of Menang Corporation (M) Berhad and LCL Corporation Berhad,
both are public companies listed on the Main Board and Second Board of Bursa Malaysia
Securities Berhad respectively as an Independent Non-Executive Director.
He does not hold any shares in the Company and subsidiaries neither does he have any
family relationship with any Director and/or major shareholder. He does not have any conflict
of interest with the Company nor any convictions for offences within the past 10 years.
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profile of board of directors
Ooi Giap Ch’ng, aged 47, was appointed to the Board on 28 December 2001. He
graduated with a Bachelor of Law degree and a Bachelor of Economics degree from the
Australian National University and was called to the Malaysian Bar in 1987. He has more
than 19 years’ experience in law practice, mainly in area of commercial, property and
corporate law. He is partner of a legal firm in Kuala Lumpur. He currently sits on the Board
of Avenue Capital Resources Berhad, CME Group Berhad and Mulpha International Berhad.
He is also a member of the Audit and Remuneration Committees of the Company.
He does not hold any shares in the Company and subsidiaries neither does he have any
family relationship with any Director and/or major shareholder. He does not have any conflict
of interest with the Company nor any convictions for offences within the past 10 years.
OOI GIAP CH'NG
Director (Independent / Non-Executive) Malaysian
Dato’ Dr. Loga Bala Mohan a/l Jaganathan, aged 40, was appointed to the Board on 27
January 2006. He obtained a Bachelor of Law (LLB) Honours from King’s College, University
of London, United Kingdom in 1987 and was admitted to the Honourable Society of the
Middle Temple, London, United Kingdom. He was conferred a Doctorate in Philosophy from
an American university in 1997. He started his career as Managing Director with Sanatan
Holdings Sdn. Bhd. in 1993. He was formerly director of several listed companies namely
Tenco Berhad, Wing Tiek Holdings Berhad, Associated Kaolin Industries Berhad and
EcoFirst Consolidated Berhad (Formerly known as Kumpulan Emas Berhad). Presently, he
sits on the board of several private limited companies in Malaysia and was appointed as
Executive Director of Comintel Corporation Berhad in September 2005.
He does not hold any shares in the Company and subsidiaries neither does he have any
family relationship with any Director and/or major shareholder. He does not have any conflict
of interest with the Company nor any convictions for offences within the past 10 years.
DATO' DR. LOGA BALA MOHAN
a/l JAGANATHAN
Director (Non-Independent /
Non-Executive) Malaysian
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management team
Standing from left to right:
1. Lee Choong Hong (Manager - Landscape)
2. Ong Bok Siong (Chief Executive Officer)
3. Ikhuan Bin Yusroh (Director – Performance Sciences Learning Centre)
4. Robert Chin (Director - Hotel Division/The Summit USJ)
5. Kong Chan Cheong (Director - The Summit BM)
6. Tan Beng Hwa (Director – Sales & Marketing)
Sitting from left to right:
7. Chen Mei Jing (Manager – Strategic Risk Management & Internal Audit)
8. Anne Lee (Senior Manager - Sales Admin)
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Standing from left to right:
9. Serene Tan (Senior Manager – HR & Admin)
10. Sally Yong (Senior Manager - Contracts)
11. Jimmy Leong (AGM - Property)
12. Tai Siew May (Company Secretary)
13. Tengku Khirlinah (Manager - Corporate Communications)
Sitting from left to right:
14. Joshua Wong (Senior Manager - Business Development)
15. Wilbert Goh (AGM – Corporate Finance & Accounts)
16. Lim Chwee Guan (GM– Project/Construction) - Absent
17. Kathleen Loong (Legal Manager) - Absent
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cum
Performance
Performance Sciences
Sciences
Adventure
Adventure Learning
Learning Centre
Centre
chairman's statement
On behalf of the Board of Directors of Meda Inc.
Berhad, I present to you the Annual Report and
Financial Statements of the Company and the Group
for the financial year ended 31 December 2005.
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chairman's statement (cont'd)
FINANCIAL PERFORMANCE
For the financial year ended 31 December 2005, the Group’s revenue was RM89.11 million, an increase
of 5.3% over the last financial year. The Group, however incurred a pretax loss of RM97.46 million of
which approximately RM70.40 million were due to allowance for doubtful debts and charged out of
certain development expenditures.
The Group’s total tangible assets and shareholders’ fund now stands at RM724.67 million and
RM253.29 million respectively.
CORPORATE DEVELOPMENTS
The Group’s subsidiary company, Performance Sciences Sdn Bhd, which was set up in the last financial
year to be a leading company in training and skill development in line with the Government’s focus on
human capital development, has established a facility centre at the Group’s Nusa Dusun orchard
development project at Kuala Linggi, Melaka. This subsidiary is expected to contribute positively to the
business of the Group in the years to come.
The Group’s 40% owned associated company, Putar-Erat Sdn Bhd, is expected to complete its resort
hotel also located at Nusa Dusun orchard development project within the next two years.
Cashflow remained a concern to the Group due to the Group’s borrowings secured against investment
properties.
The Board’s main focus was directed to unlocking the value of these investment properties to degear,
improve its cash flow position, as well as free up cash for property development, which is the Group’s
core business.
HUMAN RESOURCE DEVELOPMENT
The Group had a successful year in terms of building the Group’s human resource capability and
employees interaction, which were attained through training and team building programs to sustain its
competitive edge.
Emphasis has been placed on training of the Group’s employees in order to raise their competencies to
face the ever-challenging business environment. Developing human potential is in tandem with the
nation’s need to build a relevant and competent work-force that will take the country far into the future.
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chairman's statement (cont’d)
FUTURE PROSPECT
Given the country’s underlying strong economic fundamentals and positive economic growth amidst the
current global economic uncertainties, the property sector should continue to hold up though
somewhat contracted as compared to 2005. The country has a favourable demographic factor with a
great number of a relatively young population and with a high demand for lifestyle changes. Thematic
or niched development projects based on nature or ecologically-inspired concepts will have continuous
strong demand whilst the demand for affordable landed residential properties should remain positive in
the immediate term.
The Group recognizes the above trend and will focus on ecologically-inspired projects to cater the
lifestyles or needs of its customers. This will guide Group’s development of its landed properties.
The Group’s hotel and shopping mall businesses are expected to undergo further growth amidst the
country’s expected improvement in the tourism industry and private consumption, consonant with the
country’s continued strong economic fundamentals and the implementation of the Ninth (9th)
Malaysia Plan.
DIVIDEND
No dividend was paid during the year and the Directors do not recommend any dividend to be paid for
the year under review.
APPRECIATION
On behalf of the Board, I would like to extend our utmost appreciation to the relevant authorities, our
shareholders, bankers, customers and associates for their confidence and support for the Group.
Appreciation is also extended to our Management and staff for their dedication and commitment to
the Group.
The Board would like to take the opportunity to thank Dato’ Syed Ariff Fadzillah Bin Syed Awalluddin for
his contribution to the Group during his tenure with the Company as Non-Executive Director and
welcome Dato’ Dr. Loga Bala Mohan a/l Jaganathan to the Board.
TAN SRI DATO' MOHD RAMLI BIN KUSHAIRI
Chairman
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The revenue generated and assets employed by each of the divisions for the financial year
ended 31 December 2005 are shown below.
Revenue Generated by Division
Property
Investment
21%
Assets Employed by Division
Property
Development
33%
Hotel
25%
Property
Investment
49%
Others
1%
Property
Development
49%
Others
5%
Hotel
17%
PROPERTY DEVELOPMENT
The country’s economic performance has registered a commendable growth of 5.3 % in year 2005.
During the year, there were increased numbers of launches especially within the vicinity of the KLCC
area but as compared to year 2004, many property developers were concentrating in disposing their
existing stocks.
The increase in the Base Lending Rate from 6% to 6.8% has somehow impacted the demand of
properties including that of medium-cost properties.
The property outlook for year 2006 would remain cautious, and property developers would have to be
even more creative and selective in terms of locations and pricing strategies.
The Property Development Division recorded a revenue of RM43.48 million which represented an
increase of RM 3.26 million as compared to RM40.22 million in the previous year.
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Semantan Avenue, Kuala Lumpur
As at todate, Semantan Avenue achieved a remarkable sale of
RM 135 million in terms of sales value. It is anticipated that the
remaining units will be sold by the 2nd Quarter of 2006.
With the intention to ensure high capital appreciation to all our
customers/investors, a reputable hotel operator has been
appointed to provide hotel services to the property. The
Company expects to deliver vacant possession to the
purchasers by the 3rd Quarter of 2006.
Natural Heritage Orchard and Country Resort,
Linggi, Melaka
During the financial year, the project recorded a remarkable sale
of 100% and 90% for its Phase 1 and Phase 2 of orchard
development respectively. The works is progressing well and
more owners have confirmed constructing their dream
bungalows. Both phases of the orchard development have been
handed with vacant possession.
The construction of the resort hotel is underway. A reputable
resort hotel operator has been appointed to manage the
proposed resort hotel.
By the 2nd Quarter of 2006, a new phase comprising 342 units
of resort bungalows will be launched. These properties will be
uniquely designed and attractively priced.
To live up to its reputation as a resort township, upgrading works
are regularly carried out.
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Kota Malim Prima, Tanjung Malim, Perak
During the financial year, all phases of launched properties
except phase 1C and parcel 2 of phase 2B2 were handed over
to the purchasers.
Phase 1C comprising 243 units of hostels would be completed
and handed over by July 2006.
Works under parcel 2 of phase 2B2 comprising 70 units of
single-storey terrace houses are in progress.
Semaba Park, Kuching, Sarawak
With the emergence of locally grown listed property
companies in Sarawak, the Company saw more competition
among the property developers. Phase 1 comprising 58 units
of double-storey terrace house and 18 units of double-storey
semi-detached house are 81% and 83% sold respectively
and work are in progress. Phase 2 comprising 47 units of
double-storey terrace house and 6 units of double-storey
semi-detached house are expected to be launched and fully
sold by 2006.
Desa Larkin, Johor Bharu
Despite Desa Larkin receiving encouraging sales response during its initial launches of low, lowmedium and medium cost properties, the delay in the relocation of squatters, in particular for the
utilities facility sites had hindered the progress of works.
The management had obtained approval for the localized utility facility sites to enable works to
recommence on the launched parcels. However, the property market in Johor Bahru is expected
to be challenging for 2006.
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PROPERTY INVESTMENT
The consistent growth in the country’s economy had helped in generating consumer spending and
resulted in steady demands for retail spaces in shopping malls. The Summit Subang USJ and The
Summit Bukit Mertajam shopping malls remained strong in demand with an average of more than
93% occupancy rate.
The company is well-aware of the need to further enhance the tenant-mix with renowned and
established household and foreign brand names, as well as undertaking refurbishing works and
improving many of the existing amenities within both of the shopping malls to retain its strength as
suburban shopping malls.
The office space at Menara Summit, Subang USJ maintained at high occupancy rate of 97%
However, Wisma Summit, Bukit Mertajam, saw a drop to 10% as the unfavourable demand for
multi-storey office accommodation in Bukit Mertajam still persisted.
The property investment division contributed RM18.97 million in term of revenue representing 21% of
the total group revenue.
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HOTEL
The Malaysian tourism industry is targeting to achieve between 3.4% to 4.2% annual growth between
2006 and 2010. Tourist arrivals are expected to breach the 20 million mark by 2008. The Company
expects the government will intensify its promotions in promoting Malaysia as a safe haven in addition
to its already successful MICE (meeting, incentive, convention and exhibition) activities that will benefit
the hotel industry.
During the financial year, the Summit Hotel, Subang USJ recorded a revenue of RM18.7 million against
RM17.3 million in 2004. Its occupancy remained strong and closed at 70% with average room rates
of RM131.58.
The Summit Hotel, Bukit Mertajam had a sales turnover of RM3.3 million and its annual occupancy
was 50% with average room rates of RM83.00.
The Summit Hotels will ride on the government promotions and the Company will further promote the
hotel as a business class hotel with specific targeted segments and focus its marketing efforts in the
corporate, government and leisure segments.
The hotel facilities at USJ will be further enhanced with the additions of the ‘Alfresco’ known as
‘Warung Junction’ targeting late-night supper crowd, and the ‘Cabana Club’, a chill out Café-and-Bar
catering the needs of corporate figures where one will be entertained with soothing music in a
business friendly ambience.
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