talam corporation berhad 1120-h

Transcription

TALAM CORPORATION BERHAD 1120-H
Laporan Tahunan 2008 Annual Report
contents
2 Corporate Structure
4 Corporate Information
5 Financial Highlights
6 Profile of Board of Directors
10 Chairman’s Statement
12 Review of Operations
16 Statement on Corporate Governance
21 Additional Compliance Information
24 Statement on Internal Control
25 Audit Committee Report
29 Financial Statements
112 List of Properties
119 Statement on Directors’ Interests
120 Analysis of Ordinary Shareholdings
123 Analysis of Irredeemable
Convertible Preference Shareholdings
125 Notice of 83rd Annual General Meeting
130 Statement Accompanying
Notice of Annual General Meeting
• Form of Proxy
L a p o r a n Ta h u n a n 2 0 0 8 A n n u a l R e p o r t
corporate structure
2
TALAM CORPORATION BERHAD (1120-H)
corporate structure
ANNUAL REPORT 2008
3
corporate information
BOARD OF DIRECTORS
COMPANY SECRETARY
Tan Sri Dato’ (Dr) Ir Chan Ah Chye @ Chan Chong Yoon
Executive Chairman
Ting Kok Keong (MAICSA 7058942)
Y.A.M. Tengku Sulaiman Shah Al-Haj Ibni Al-Marhum Sultan
Salahuddin Abdul Aziz Shah Al-Haj
Deputy Chairman
Independent Non Executive Director
PRINCIPAL BANKERS
RHB Investment Bank Berhad
EON Bank Berhad
Datuk Ab Rauf Bin Yusoh
Non Independent Executive Director
REGISTERED OFFICE
Chua Kim Lan
Suite 2.05, Level 2 Menara Maxisegar
Jalan Pandan Indah 4/2
Pandan Indah
55100 Kuala Lumpur
Tel no.: 03-42962000
Fax no.: 03-42977220
Website: www.talam.com.my
Dato’ Kamaruddin Bin Mat Desa
Tsen Keng Yam
Customer Service Action Centre
Loy Boon Chen
Non Independent Non Executive Director
Tel no.: 03-42943388
Fax no.: 03-42805035
Lee Swee Seng
SHARE REGISTRAR
AUDIT COMMITTEE
Member
Securities Services (Holdings) Sdn Bhd
Level 7, Menara Milenium
Jalan Damanlela
Pusat Bandar Damansara
Damansara Heights
50490 Kuala Lumpur
Tel no.: 03-20849000
Fax no.: 03-20949940/03-20950292
Member
AUDITORS
Tsen Keng Yam
Chairman
Deloitte KassimChan
NOMINATION & REMUNERATION COMMITTEE
STOCK EXCHANGE LISTING
Tsen Keng Yam
Chairman
Listed on Main Board of
Bursa Malaysia Securities Berhad
Member
Lee Swee Seng
Member
4
Financial highlights
Restated
2007
RM’000
2008
RM’000
Restated
2006
RM’000
2005
RM’000
2004
RM’000
GROUP
Property, plant and equipment
Shareholders’ fund
Revenue
Profit/(Loss) before taxation
Earnings/(Loss) per share (sen)
191,177
344,460
248,349
5,821
0.53
196,458
346,516
216,723
(6,936)
1.43
204,109
338,540
599,814
(772,644)
(124.50)
252,852
1,081,574
1,006,032
130,746
15.83
275,225
1,006,018
911,985
71,099
18.29
1,699
320,195
3,496
(23,142)
1,971
343,081
1,646
5,744
2,392
333,407
2,199
(466,782)
2,937
798,104
12,626
12,033
2,733
805,857
66,384
35,609
COMPANY
Shareholders’ fund
Revenue
Earnings/(Loss)Per Share (sen)
Revenue (RM’000)
Property, Plant and Equipment (RM’000)
Profit/(Loss) before Taxation (RM’000)
ANNUAL REPORT 2008
5
profile of board of directors
Executive Chairman
Malaysian, aged 62, Executive Chairman since 27 March 2002 joined the Board of Talam
Corporation Berhad (“Talam”) on 6 November 1990. He is also currently an Executive
Director (President/Chief Executive) of Kumpulan Europlus Berhad.
He graduated with a Bachelors Degree in Civil Engineering from the University of Malaya
in 1970 and is a member of the Institution of Engineers, Malaysia since 1974 and was
subsequently made a Fellow in 1984. He has over 37 years of experience in the property
and construction industry since he started his career with Messrs Binnie & Partners (M)
Sdn Bhd and later joined Perbadanan Kemajuan Negeri Selangor in 1971 as a Project
Manager handling project designs, management and property development. Tan Sri was
awarded the prestigious “Property Man of the Year 1998” by Federation Internationale
Des Professions Immobilieres (“FIABCI”) in recognition of his achievements in property
development. Tan Sri was conferred the Honorary Doctorate of Science (Engineering) by
the University Malaya on 11 August 2003.
Tan Sri is the spouse of Puan Sri Datin Thong Nyok Choo, a major shareholder of Talam. He has direct and deemed interest in
Kumpulan Europlus Berhad, a major shareholder of Talam. There is no conflict of interest with the Company except for those
transactions disclosed in item 2, page 21 of the Additional Compliance Information and Note 46 to the Financial Statements of
this Annual Report. Within the last 10 years, he has no convictions for offences.
He has attended all the ten (10) Board of Directors’ meetings held during the financial year ended 31 January 2008.
Y.A.M. Tengku Sulaiman Shah Al-Haj Ibni Al-Marhum
Sultan Salahuddin Abdul Aziz Shah Al-Haj
Deputy Chairman
Malaysian, aged 58, Independent Non Executive Director joined the Board of Talam as
Deputy Chairman on 22 December 2000. He is a member of the Audit Committee and was
redesignated as a member of the Nomination & Remuneration Committee on 1 October 2007.
He is currently a director of Cosway Corporation Berhad and Baneng Holdings Berhad.
Since 1970, Y.A.M. Tengku Sulaiman Shah became actively involved in business particularly
in building construction and housing development. Y.A.M. Tengku Sulaiman Shah with his
other partners formed Syarikat Pembinaan Setia Sdn Bhd (now known as SP Setia Berhad)
and in 1997, he relinquished his position and sold off all his shares in SP Setia Berhad. In
1970 Y.A.M. Tengku Sulaiman Shah was appointed as the State Palace’s Officer which
carries the title “Tengku Panglima Besar of Selangor” by His Royal Highness, the Sultan of
Selangor Sultan Salahuddin Abdul Aziz Shah. In 1978 Y.A.M. Tengku Sulaiman Shah was
then promoted as the Chief of Ceremony for the State of Selangor which carries the title
“Tengku Panglima DiRaja Selangor” until today. Y.A.M. Tengku Sulaiman Shah is also a
member of The Council of Royal Court of Selangor (Ahli Dewan DiRaja Selangor).
He has no family relationship with any other directors or major shareholders of the Company. There is no conflict of interest with
the Company. Within the last 10 years, he has no convictions for offences.
He has attended six (6) out of ten (10) Board of Directors’ meetings held during the financial year ended 31 January 2008.
6
Malaysian, aged 46, Non Independent Executive Director, joined the Board of Talam on 28
February 2002 as a Non Independent Non Executive Director and was redesignated as an
Executive Director on 1 October 2007.
He was formerly a Director of Europlus Berhad (“Europlus”) from October 1998 until
28 February 2002 and Senior Vice President of Europlus until 1 January 2004. He was
appointed as a Senior Vice President of Kumpulan Europlus Berhad on 1 January 2004. He
was a founder Director of Asia Lab Sdn Bhd.
He has no family relationship with any other directors or major shareholders of the
Company. There is no conflict of interest with the Company. Within the last 10 years, he
has no convictions for offences.
He has attended nine (9) out of ten (10) Board of Directors’ meetings held during the
financial year ended 31 January 2008.
Malaysian, aged 57, Independent Non Executive Director, joined the Board of Talam on 1
October 2007. He is also a member of the Audit Committee.
He holds a Bachelor of Laws (Hons) from International Islamic University, Petaling Jaya,
Selangor (1993) and currently an Advocate and Solicitor, High Court of Malaya.
Dato’ Kamaruddin had extensive experience in the Royal Malaysian Police Force. During his
distinguished career, he held positions such as General Duty/Traffic, Platoon Commander,
Police Field Force, Office in-charge of Police Sub-District, Area Inspector, State Traffic Chief
Selangor, Deputy OCPD, Staff Officer (Prosecution) Session Court (Selangor), Staff Officer
(Admin) CID Selangor, Police Secretary/Special Officer to IGP, Officer in-charge Criminal
Investigation Department, Deputy Chief Police Officer and Deputy Director, Commercial
Crime Investigation Department.
He is currently a Partner in a law firm, Faridzah & Co.
He has attended all the three (3) Board of Directors’ meetings held during his tenure in office for the financial year ended
31 January 2008.
ANNUAL REPORT 2008
7
Tsen Keng Yam
Malaysian, aged 58, Independent Non Executive Director, joined the Board of Talam on 30
April 2004. He was redesignated as the Chairman of the Audit Committee and appointed as
the Chairman of the Nomination & Remuneration Committee on 1 October 2007. He is also
currently a Director of Riverview Rubber Estates Berhad and Narlborough Plantations Plc.
He is a Fellow of the Institute of Chartered Accountants (England and Wales) and a
member of Malaysian Institute of Accountants and Malaysian Institute of Certified Public
Accountants.
In 1978, he joined Hanafiah Raslan & Mohamed as a consultant and was subsequently
promoted to Senior Consultant in 1980. He was a principal of Hanafiah Raslan & Mohamed
from 1984 to 1987 and was a partner of Arthur Andersen & Co. for more than 14 years from
1988 to 2003.
He has attended seven (7) out of ten (10) Board of Directors’ meetings held during the financial year ended 31 January 2008.
Loy Boon Chen
Malaysian, aged 56, Non Independent Non Executive Director, joined the Board of Talam
on 1 October 2007.
Mr Loy Boon Chen holds a Master Degree in Business Administration from Golden Gate
University, San Francisco, USA and is a Certified Public Accountant, Malaysia.
Mr Loy served an international accounting firm for seven (7) years prior to joining Chong
Kok Lin & Sons Berhad in 1980 as Accountant cum Secretary for a year. In 1981, he
joined Mudajaya Construction Sdn Bhd as Chief Accountant before being appointed
Group Financial Controller of IJM Corporation Berhad in 1994. Mr Loy was appointed the
Financial Director of IJM Corporation Berhad from 1998, and was the Head of the Finance
& Accounts Department and Chairman of IJM Group Risk Management Committee up till
the end of 2006. Thereafter, he was assigned to be in charge of special projects.
Mr Loy was a member of the Accounting Standards Sub-Committee of the Federation of
Public Listed Companies Berhad (1998-2006).
He is presently an Independent and Non Executive Director of Guandong Provincial Expressway Development Co. Limited, a
Company listed on the Shenzhen Stock Exchange, China.
He has attended all the three (3) Board of Directors’ meetings held during his tenure in office for the financial year ended 31
January 2008.
8
Chua Kim Lan
Non Independent Executive Director,
Malaysian, aged 44, Non Independent Executive Director, joined the Board of Talam on 1
October 2007.
Ms Chua Kim Lan graduated from College Tunku Abdul Rahman in Building Technology in
1984 and holds a Master of Business Administration from Honolulu University, Hawaii in
2000. She was previously attached to Brisdale (M) Sdn Bhd for 5 years from 1984 to 1989
and Talam for 1 year prior to joining Europlus Berhad as a Quantity Surveyor in 1991. She
was transferred back to Talam subsequent to the merger exercise in 2003 and was formerly
the Deputy President of Talam.
She has no family relationship with any other directors or major shareholders of the
Company. There is no conflict of interest with the Company. Within the last 10 years, she
has no convictions for offences.
She has attended all the three (3) Board of Directors’ meetings held during her tenure in
office for the financial year ended 31 January 2008.
Lee Swee Seng
Malaysian, aged 47, Non Independent Non Executive Director, joined the Board of Talam
on 1 October 2007. He is also a member of the Nomination & Remuneration Committee.
Mr Lee Swee Seng holds a Bachelor of Laws (Hons) from University of Malaya, Master
of Laws from University of Malaya and Master of Business Administration from Southern
Cross University, Australia.
Mr Lee was called to the Malaysian Bar in 1985 and has been in active law practice since
then. He is currently the Managing Partner of Lee Swee Seng & Co. He is also a Certified
National Trainer of Junior Chamber International and a Past National President of Junior
Chamber Malaysia in 1999.
Mr Lee is a Member of the Malaysian Institute of Arbitrators and an associate member
of the Malaysian Institute of Management (“MIM”) as well as the President of the MIM
KL Toastmasters Club 2005/2006 and Distinguished Toastmaster of Toastmasters
International. He was a Division Governor for Toastmasters International 2006/2007. He is
a Certified Mediator of the Malaysian Mediation Centre. He is also a Trade Marks and Industrial Designs Agent as well as Patent
Agent. He is a member of the Malaysian Institute of Corporate Governance as well as a Chartered Audit Committee Director. He
is also a Notary Public.
Mr Lee believes in continuing education and is often invited to speak to directors of public listed companies in their Continuing
Education Programme and also by other professional bodies like MAICSA and Lexis-Nexis in their professional development
programmes.
He is presently an Independent Non Executive Director of OpenSys (M) Berhad and also a Director of TCM Development Berhad
and MAP Partners Berhad.
He has attended all the three (3) Board of Directors’ meetings held during his tenure in office for the financial year ended 31
January 2008.
ANNUAL REPORT 2008
9
chairman’s statement
On behalf of the Board of directors of Talam Corporation
Berhad (“Talam”), I hereby present the Annual Report and
Financial Statements of the Group and the Company for
the financial year ended 31 January 2008.
Financial Highlights
For the financial year ended 31 January 2008, the Group
achieved a revenue of RM248.35 million compared with the
previous financial year of RM216.72 million, mainly due to the
revival of certain development projects. The Group, despite a
lower gross profit, was able to record a pretax profit of RM5.82
million against a pretax loss of RM6.94 million of the previous
financial year. This was achieved mainly through gains arising
from disposal of investment properties and subsidiaries, and
reversal of provisions no longer required of certain doubtful
receivables and liquidated ascertained damages.
Talam Proposed Regularisation Plan
On 1 September 2006, the Board announced that based on
the audited consolidated financial statements of Talam for the
financial year ended 31 January 2006, the auditors were unable
to express their opinion on Talam’s audited consolidated
financial statements and the Group had defaulted on
payments pursuant to Practice Note No. 1/2001 of the Listing
Requirements of Bursa Malaysia Securities Berhad (“Listing
Requirements”). As such, Talam announced that it was an
affected listed issuer pursuant to Practice Note No. 17/2005
(“PN17”) of the Listing Requirements.
Pursuant to the provisions of PN17, Talam was required to
submit its regularisation plan to the relevant authorities within
8 months of the first announcement, i.e. by 30 April 2007. In
this respect, RHB Investment Bank Berhad was appointed
by the Board as the Financial Adviser for its Proposed
Regularisation Plan (“PRP”) and to procure the necessary
approvals to implement the PRP.
Talam submitted its PRP to the Securities Commission (“SC”)
on 30 April 2007, which involved, inter alia, the restructuring
of the Group’s defaulted debts amounting to approximately
RM833.0 million into redeemable and convertible instruments
and/or Al- Bai Bithaman Ajil Islamic Debt Securities to be
issued by Talam.
Subsequent to SC’s rejection on 25 September 2007, Talam,
on 25 October 2007, re-submitted its revised PRP of the
Group to the SC. The Board is glad to report that approval
has since been obtained from the SC vide SC’s letter dated 29
April 2008, subject to certain terms and conditions imposed
by SC.
Major Corporate Developments
On March 2007, a subsidiary, Mutual Prosperous Sdn
Bhd (“MPSB”), entered into a Joint Venture/Shareholders’
Agreement with IJM Properties Sdn Bhd (“IJMP”) for IJMP
and MPSB to use Cekap Tropikal Sdn Bhd (“CTSB”) as the
50:50 joint venture company to takeover the development of
204 acres of land located in Mukim Batu, Daerah Gombak,
10
chairman’s statement
Selangor (“Land”) known as Sierra Selayang. The Land
for development was previously owned and/or beneficially
owned by three subsidiaries, namely Zhinmun Sdn Bhd,
Untung Utama Sdn Bhd and Seaview Plantations Sdn Bhd.
The development has an estimated gross development value
of RM1.0 billion and comprises mainly bungalows and semidetached houses and will be developed over 6 years.
On 28 June 2007, Larut Overseas Ventures Sdn Bhd entered
into a Share Sale Agreement with IJMP to dispose of 1,515,000
ordinary shares of HK$1 each representing 50% equity interest
in Larut Leisure Enterprise (Hong Kong) Limited (“LLE”) for
HK$1 and IJMP will also assume a loan of RM25.63 million
from the Talam Group to LLE. The entry of IJMP would enable
LLE to complete the proposed 35-storey commercial complex
in the central business district of Changchun, capital of Jilin
Province, People’s Republic of China. The development has
an estimated gross development value of RM450 million and
will take 3 years to be completed.
Besides the above, during the financial year, the Group
continues to improve its financial position by disposing of
its non-core assets such as the leasehold land and building
known as Hospital Pantai Indah for RM63.50 million, and a 25acre freehold industrial land in Bukit Beruntung for RM18.60
million.
For the financial year, IJM Construction Sdn Bhd (“IJMC”)
commenced work as the principal contractor for the
construction work in relation to the various property
development projects, namely Taman Puncak Jalil, Ukay
Perdana, Kinrara Section 3, Bukit Beruntung and Putra
Perdana for a total contract sum of approximately RM700
million. The appointment of IJMC has helped to improve the
billings of the Group and would ensure early completion of
the said projects. With the resumption of construction works,
Talam would be able to sell the remaining unsold units of the
re-launched phases on a build-and-sell basis.
Towards the end of financial year ending 31 January 2009,
upon the implementation and completion of the revised PRP
as approved by the SC, the Group will be able to significantly
improved its capital structure and gearing position.
Prospect
The Group will also continue to find buyers or joint venture
partners for its land and properties. Non-core assets will be
disposed of at the right price so as to further strengthen its
financial position.
The Board of Directors is of the opinion that considering
the recent developments in the Group, there will be a better
prospect for the future years, despite present bearish market
sentiment.
Appreciation
On behalf of the Board of Directors, I wish to thank our
valued customers, shareholders, creditors and lenders for
their continued support. I would also like to express my
heartfelt appreciation to the management team and dedicated
employees of the Group for their unrelenting commitment and
hard work during the financial year.
I wish to express on behalf of the Board, my sincere
appreciation to Mr. Lai Moo Chan and Encik Sulaiman Hew
Bin Abdullah, who have both resigned from the Board, for
their immense contribution and valuable counsel to the Group
during their tenure as Independent Non-Executive Directors
with the Company. My deepest gratitude and appreciation
also goes to Puan Sri Datin Thong Nyok Choo, our President/
Chief Executive who has retired from the Company on 1
October 2007.
On another note, I wish to warmly welcome on Board, IJM
Corporation Berhad (“IJM”)’s nominees, Mr. Loy Boon Chen,
former IJM Group Finance Director and Mr. Lee Swee Seng as
Non-Independent Non-Executive Directors, Ms Chua Kim Lan
as Executive Director and Dato’ Kamaruddin Bin Mat Desa as
Independent Non-Executive Director.
The Board of Directors would also like to record its deepest
appreciation and gratitude to all our business partners,
in particular IJM, and all regulatory authorities for their
cooperation and assistance rendered throughout the year.
TAN SRI DATO’ (DR) IR. CHAN AH CHYE
@ CHAN CHONG YOON
Executive Chairman
ANNUAL REPORT 2008
11
review of operations
Property Development
Property development is the core business of Talam
Corporation Berhad (“Talam”) which has contributed 92.5%
of its turnover. Talam and its subsidiaries have a total balance
land bank of approximately 5,792 acres comprising a mixed
portfolio of commercial, residential and industrial properties
at various strategic locations in Ampang, Sepang, Puchong,
Bukit Jalil and Rawang.
The development consists of 6,200 units of
residential and commercial properties with an
expected Gross Development Value of RM870.90
million. As at 31 January 2008, a total of 6,053
units of properties valued at RM823.17 million
were sold.
c.
Lestari Puchong
Information of the housing development projects currently
being undertaken and to be undertaken by the Talam Group
of Companies are detailed as follows:-
Lestari Puchong is a project undertaken by Lestari
Puchong Sdn Bhd, a 99.999%-owned subsidiary
of Talam. The proposed site is located off Jalan
Akademi Putra, approximately 1.2 kilometers
from Persimpangan Serdang Exit No. 1123, in the
vicinity of Seri Kembangan, Selangor. The site is
easily accessible from Kuala Lumpur-Seremban
Highway via Jalan Sungai Besi and strategically
located to the north of University Putra Malaysia
research centre.
Lestari Puchong is a mixed development
comprising 8,256 units of residential properties,
and 327 units of commercial properties. With an
estimated Gross Development Value of RM1.10
billion, Lestari Puchong is expected to span
over a development period of twelve (12) years.
Launched in March 2001, Lestari Puchong has
achieved sales of 4,793 units valued at RM733.13
million as at 31 January 2008.
(1)
Existing Projects
a.
Taman Puncak Jalil
Taman Puncak Jalil, a 801 acres leasehold land,
is located next to Technology Park along Sungai
Besi, Puchong road. Adjacent developments are
Lestari Perdana on the southest, Taman Equine
on the south, Bandar Kinrara on the northwest
and Bukit Jalil Sports Complex on the north. The
development, which is undertaken by Maxisegar
Sdn Bhd, a wholly-owned subsidiary of Talam,
is an integrated and self-contained township
comprising 8,102 units of residential and
commercial properties. This strategically located
project has attracted strong interest from the
public. The Gross Development Value of Taman
Puncak Jalil estimated to be about RM2.13 billion
with an expected development period of twelve
(12) years. The project was first launched in June
2001 and as at 31 January 2008, the project has
recorded sales of 7,358 units valued at RM1.59
billion.
b.
Ukay Perdana
Ukay Perdana is a mixed development project
located at 7th mile off Jalan Ulu Klang in the
vicinity of Bukit Antarabangsa and Taman Ukay
which is undertaken by Ukay Land Sdn Bhd. It
is approximately 14.4 km north-east of Kuala
Lumpur City Centre, which is about 15 minutes
drive north-east of Kuala Lumpur City Centre via
elevated highway. The project is situated on 345
acres of converted leasehold land which is being
developed by Ukay Land Sdn Bhd, a 99.999%owned subsidiary of Talam.
12
d. Kinrara Section 3
Kinrara Section 3 is a project undertaken by
Sentosa Restu (M) Sdn Bhd, a 99.999%-owned
subsidiary of Talam. The project is located on 43
acres of land in the Daerah of Petaling, opposite
of the Kinrara Army Camp. The proposed
development, consists of 3,296 units of residential
and commercial properties. It was first launched
in 1999 with an estimated Gross Development
Value of RM426.55million. As at 31 January 2008,
Kinrara Section 3 has achieved sales of RM 418.5
million representing 3,213 units sold.
e.
Jalil Heights
Jalil Heights is located on a 31.4 acres leasehold
land in Mukim of Petaling, Petaling District within
the development known as Lestari Perdana. It
is earmarked for the development of 284 units
of semi-detached houses undertaken by Abra
Development Sdn Bhd, a wholly-owned subsidiary
of Talam. The project will generate a Gross
Development Value of RM101.0 million. Since its
first launch in September 2001, Jalil Heights has
recorded sales of RM96.3 million (representing
268 units sold) as at 31 January 2008.
f.
Saujana Puchong
Saujana Puchong is a development undertaken
by Expand Factor Sdn Bhd, a wholly-owned
subsidiary of Talam, on approximately 423 acres
of 99 years leasehold land in the Petaling District.
The project site is located in the growth area of
Puchong and is easily accessible via Lebuhraya
Damansara Puchong and the Kuala LumpurSeremban Highway through the Serdang-Puchong
dual carriageway that links Jalan Puchong to
Serdang.
Cyberjaya and adjacent to the Multimedia Super
Corridor, 5 km west of Putrajaya and 13 km north
of the Kuala Lumpur International Airport.
With an expected Gross Development Value of
RM1.92 billion, Putra Perdana will consist of
residential houses, apartments, shop offices,
commercial complex, exhibition center, theme
garden, hotel and service apartments. As at 31
January 2008, the project has recorded sales of
7,816 units valued at RM834.76 million.
i.
Saujana Putra
Saujana Putra is a project undertaken by Galian
Juta Sdn Bhd, a wholly-owned subsidiary of
Talam measuring about 200 acres in size, is
located opposite Putra Heights in Mukim Tanjung
Duabelas, Kuala Langat District. With a proposed
development comprising low to medium cost
apartments and medium cost terrace house, it will
generate a Gross Development Value of RM336.75
million over a development life span of eleven (11)
years. Launched in March 2003, Saujana Putra
has achieved sales of 527 units valued at RM74.6
million as at 31 January 2008.
The entire development comprises 4,933 units of
terrace houses, apartments and shop lots, which
upon completion, are expected to generate a
Gross Development Value of RM634.37 million.
As at 31 January 2008, the project has recorded
sales of 4, 546 units valued at RM606.68 million.
g.
Danau Putra
j.
Lestari Permai
Danau Putra is a mixed development undertaken
by Cekap Mesra Development Sdn Bhd, a
subsidiary of Talam, on approximately 417.34
acres of 99 years leasehold land in the Mukim of
Dengkil, District of Sepang, within the Multimedia
Super Corridor.
Danau Putra is planned for mixed development of
medium low cost apartment, cluster bungalows
and shop/apartments with a Gross Development
Value of RM630.0 million. Launched in August
1998, Danau Putra has achieved sales 3,878 units
at RM361.0 million as at 31 January 2008.
Lestari Permai is situated on approximately 76.01
acres of 99 years leasehold land and located
opposite the Putrajaya Gate 2 entrance which is
undertaken by Europlus Construction Sdn Bhd, a
99.999%-owned subsidiary of Talam. The project
will be accessible via Lebuhraya Damansara
Puchong, Puchong-Serdang bypass, and Jalan
Puchong. The proposed development comprises
1,004 units of residential houses and 24 units of
double storey shop and 7 units of low cost shop.
h.
Putra Perdana
Putra Perdana is a project undertaken by
Kenshine Corporation Sdn Bhd, a 99.999%owned subsidiary of Talam, situated on 600
acres of converted leasehold land, the project is
located on the southern side of Puchong-Kajang
trunk road, 5 km from Batu 14 Puchong, within
ANNUAL REPORT 2008
13
With Gross Development Value of RM132.07
million, Lestari Permai was launched in March
2003 and has achieved sales of 566 units valued
at RM80.37 million as at 31 January 2008.
k.
Bukit Sentosa
m.
Prima Beruntung
Bukit Sentosa I & III form an integrated township
covering approximately 1,898 acres of freehold
land in the Mukim of Serendah, approximately 47
km north of Kuala Lumpur. It is easily accessible
through the North-South Expressway and exit at
Bukit Beruntung Interchange. The comprehensive
new township comprises a mixed development of
residential, commercial and industrial properties.
Bukit Sentosa I, which is being developed by
Talam Industries Sdn Bhd, is planned for mixed
development comprising 9,573 units of terrace
house, apartments and shoplots. Launched in
September 1999, the project has generated total
sales of RM712.6 million as at 31 January 2008.
Prima Beruntung is a converted 250 acres of
freehold land planned for with mixed development.
A project launched by Europlus Berhad since
1996, Prima Beruntung is seen as an extension
of the Bandar Bukit Beruntung project due to its
proximity to Bandar Bukit Beruntung. With an
estimated Gross Development Value of RM257.8
million, Prima Beruntung has achieved a total
sales value of RM182.7 million (representing 1,896
units sold) as at 31 January 2008. Bukit Sentosa III, covering 1,010 acres of freehold
land, is developed by Maxisegar Sdn Bhd. It is
planned for a mixed development of 14,790 units
of terrace houses, apartments and shoplots, with
a Gross Development Value of RM1.3 billion.
Launched in March 1997, Bukit Sentosa III has
achieved a total sales of RM577.8 million (or 7,191
units sold) as at 31 January 2008.
l.
Bandar Bukit Beruntung
Bandar Bukit Beruntung, a converted 5,500 acres
of freehold land is located north-west of Rawang,
approximately 40 km from Kuala Lumpur. It is
undertaken by Europlus Corporation Sdn Bhd, a
99.999%-owned subsidiary of Talam. The mega
township which is marketed as the “2nd Petaling
Jaya” has a golf resort, country homes, campus,
industrial, commercial and housing units with an
expected Gross Development Value of RM3.36
billion. The development of the entire township
is expected to span another 12 years to the year
2020.
(2)
Future Projects
Shah Alam 2 (Berjuntai Bistari Land)
The proposed Shah Alam 2 covering 1,284 acres is
located adjacent to the Universiti Industri Selangor
(“UNISEL”) campus about 44 km from the towns of
Batang Kali and Kuala Selangor, 30 km from Rawang
and 20 km from Bukit Beruntung. While the current
access to the site is by the coastal road passing by
Kuala Selangor or the trunk road from Rawang, Shah
Alam 2 will eventually be reached by a 10 km proposed
road from the Bukit Beruntung Interchange off the
North-South Highway, to be constructed by Maxisegar
Sdn Bhd.
Berjuntai Bistari is to be developed over 15 years and
will comprise approximately 15,500 units of residential
and commercial properties with an estimated Gross
Development Value of RM1.5 billion.
(3)Joint-Venture Project
Launched in late 1991, this project has achieved
a total sales value of RM1.52 billion representing
13,353 units as at 31 January 2008.
14
a.
252 Units 2½ Storey Terrace House at Ukay
Perdana
This parcel of development is a 50 : 50 jointventure undertaken by Good Debut Sdn Bhd. The
development is part of Ukay Perdana project and
is located at 7th mile off Jalan Ulu Klang in the
vicinity of Bukit Antarabangsa. The Gross Sales
Value is estimated to be RM96.55 million. As at 31
January 2008, a total of 150 units of sales value of
RM 57.50 million were achieved.
b.
Sierra Ukay
Sierra Ukay is a 50 : 50 joint-venture project
undertaken by Sierra Ukay Sdn Bhd. The project
measures 90 acres and is located in Mukim Ulu
Kelang adjacent to the existing Ukay Perdana.
The Gross Development Value of Sierra Ukay is
estimated to be RM403 million and is expected
to implement over a period of 5 years. Launched
in October 2007, the project has achieved sales
of 108 units valued at RM31.28 million as at 31
January 2008.
c.
Sierra Selayang
Sierra Selayang is a 50 : 50 joint-venture project
undertaken by Cekap Tropikal Sdn Bhd. The
project measures 204 acres and is located at
Ulu Gombak Forest Reserve, Mukim of Batu,
District of Gombak, State of Selangor. The
Gross Development Value of Sierra Selayang is
estimated to be RM1 billion and is expected to
implement over a period of 8 years.
ANNUAL REPORT 2008
d.
Yin Hai Complex in Changchun, Jilin Province,
People’s Republic of China
Yin Hai Complex is a project undertaken by
Jilin Dingtai Enterprise Development Company
Limited, a wholly-owned subsidiary of Larut
Leisure Enterprise (Hong Kong) Limited, a 50 : 50
equity interest company held by Larut Overseas
Ventures Sdn Bhd, a 99.999%-owned subsidiary
of Talam and IJM Properties Sdn Bhd. The
proposed Yin Hai Complex is a 35-storey building
comprising 28 office-cum-residential levels, 7
shopping podium levels and 2 basement levels.
The Gross Sales Value of Yin Hai Complex is
estimated to be RM450 million.
Other Businesses
The Group’s other businesses in complexes and hotel
contributed approximately 7.5% of its turnover in financial
year 2008.
15
statement on
corporate governance
INTRODUCTION
The Board of Directors (“Board”) of Talam Corporation Berhad (“Talam” or “the Company”) recognizes the importance of
achieving best practices in its standards of business integrity and corporate accountability and is committed to subscribing to
the recommendations of the Malaysian Code on Corporate Governance (“Code”).
The Board has considered the manner in which it has applied the Principles of the Code and to the best of its ability complied
with the Best Practices of the Code as required under the Listing Requirements of Bursa Malaysia Securities Berhad (“Bursa
Securities”). It also enhances shareholders’ participation and value as well as safeguards the interest of other stakeholders.
THE BOARD OF DIRECTORS
Talam is led by a Board comprising members with extensive experience in the property, construction and various business
sectors supported by a wide range of other professionals in the legal and financial sectors. This wide spectrum of skills and
experience provides the strength that is needed to lead the Company in meeting its objectives and enables the Company to rest
in the firm control of an accountable and competent Board of Directors.
Board Composition
The Board of Talam currently has eight (8) members comprising an Executive Chairman, two (2) Executive Directors and five
(5) Non-Executive Directors, of whom three (3) are independent and two (2) are non independent. The Company considers that
its complement of Non-Executive Directors provides an effective Board with a mix of industry-specific knowledge and broad
business and commercial experience. They ensure that all proposals by management are fully deliberated and examined, taking
into account the interest of shareholders and stakeholders. The role of the Independent Non-Executive Directors is particularly
important as they provide unbiased and independent views, advice and judgment to the Board to safeguard the interest of
minority shareholders. The profiles of the Directors are set out on pages 6 to 9 of this Annual Report.
Tan Sri Dato’ (Dr) Ir Chan Ah Chye @ Chan Chong Yoon is the Executive Chairman of the Board while Datuk Ab Rauf Bin Yusoh
and Ms Chua Kim Lan are the Executive Directors. The roles of the Chairman and the Executive Directors are segregated to
ensure that there is a balance of power and authority. The Chairman is responsible for the orderly conduct and working of the
Board and ensures that all Directors receive sufficient relevant information on financial and non-financial matters to enable them
to participate actively in Board decisions whilst the Executive Directors are responsible for the day-to-day management of the
business and implementation of Board decisions.
The Board has identified Mr Tsen Keng Yam, the Chairman of Audit and Nomination & Remuneration Committee as Senior
Independent Non-Executive Director to whom concerns may be conveyed, and to deal with issues regarding the Company
where it would be inappropriate for these to be dealt with by the Executive Chairman or Executive Directors.
Board Meetings
The Board meets quarterly to review its quarterly performances and discuss new policies and strategies. Additional meetings will
be called as and when necessary. During the financial year ended 31 January 2008, ten (10) Board Meetings were held and the
attendance of the Board members are as follows:Number of meetings
attended by Directors
Directors
Y.A.M. Tengku Sulaiman Shah Al-Haj Ibni Al-Marhum Sultan Salahuddin Abdul Aziz Shah Al-Haj
Chua Kim Lan (appointed on 1 October 2007)
Dato’ Kamaruddin Bin Mat Desa (appointed on 1 October 2007)
Tsen Keng Yam
Loy Boon Chen (appointed on 1 October 2007)
Lee Swee Seng (appointed on 1 October 2007)
Lai Moo Chan (resigned on 1 October 2007)
Sulaiman Hew Bin Abdullah (resigned on 1 October 2007)
16
10 out of 10
6 out of 10
9 out of 10
3 out of 3
3 out of 3
7 out of 10
3 out of 3
3 out of 3
6 out of 7
4 out of 7
statement on
THE BOARD OF DIRECTORS (CONT’D)
Appointment to the Board
The Nomination & Remuneration Committee recommends to the Board, suitable candidates for appointment as Director and to
fill vacant seats on committees of the Board after which the Company Secretary ensures that all appointments are properly made
and all legal and regulatory compliance are met. However, the main decision lies with the Board after taking into consideration
the nomination by the Committee. The Nomination & Remuneration Committee also assesses the effectiveness of the Board and
Board Committees.
The Board, through the Nomination & Remuneration Committee, reviews annually the required mix of skills, expertise, attributes
and core competencies of its Directors as well as the Board structure, size and composition.
Supply of Information to the Board
All the Directors are notified about the Board meetings scheduled by the Company Secretary before the meetings. The Board
papers together with the agenda are circulated to all the Directors prior to the scheduled meetings to enable the Directors to
review and consider the agenda items to be discussed at the meeting and where necessary, to obtain further explanations so
they can be fully briefed before the meeting. The Board is kept updated on the Company’s financial activities and operations on
a regular basis.
In exercising their duties, the Directors have access to all information within the Company and to the advice and services of the
Company Secretary. If necessary, the Directors are entitled to seek independent professional advice from external consultants.
Any such request is presented to the Board for approval.
Senior management staff as well as advisers and professionals are appointed to advise on corporate proposals, may be invited
to attend Board meetings to provide the Board with their views and explanations on certain agenda items tabled to the Board,
and to state their clarification on issues that may be raised by the Directors.
Directors’ Training
All the Directors have attended the Mandatory Accreditation Programme prescribed by Bursa Securities. The Directors have also
attended various training programmes pursuant to the requirements of Bursa Securities to keep abreast with developments in
the market place and relevant new regulatory requirements on a continuous basis.
Re-election of Directors
In accordance with the Articles of Association of the Company (“Articles”), all Directors shall retire from office at least once in
three years but shall be eligible for re-election. The Articles also provide that one-third of the Board shall retire from office and be
eligible for re-election at every Annual General Meeting. The Directors who are appointed by the Board are subject to re-election
by shareholders at the next Annual General Meeting following their appointment.
The Directors standing for re-election at the 83rd Annual General Meeting of the Company to be held are Tan Sri Dato’ (Dr) Ir
Chan Ah Chye @ Chan Chong Yoon, Dato’ Kamaruddin Bin Mat Desa, Ms Chua Kim Lan, Mr Loy Boon Chen and Mr Lee Swee
Seng.
BOARD COMMITTEES
The Board has delegated certain responsibilities to several Board Committees which operate within clearly defined terms of
reference. The Chairman of the various Committees will report to the Board the outcome of the Committee meetings and such
reports are incorporated in the minutes of the Board meetings. The various Committees are:-
ANNUAL REPORT 2008
17
statement on
BOARD COMMITTEES (CONT’D)
A.
Executive Committee
The Executive Committee was established on 27 September 2007 and its membership consists of the Directors and senior
management personnel of the Group. The Executive Committee meets monthly to review the performance of the Group’s
operating decisions. The members are as follows:Member
Designation
Chua Kim Lan (Chairwoman)
Chew Kok Hing
Tan Bak Hai
Leow Chi Lih
Loy Boon Chen
Executive Director
Consultant
Senior Vice President I
Senior Vice President I
By Invitation
The main Terms of Reference of the Executive Committee include the following:1.
approving and reviewing the budget and cashflow projections prepared by the Group’s strategic business units;
2.
reviewing the performance of the Group’s strategic business units;
3.
deciding on all transactions and matters relating to the Group’s core business/investments within the restricted limits
of authority determined by the Board;
4.
deciding on all matters relating to banking facilities as may be required for the conduct of the Group’s operations;
5.
reviewing and recommending new investments/land bank acquisitions before tabling to the internal audit committee
and recommending to the Board for approval;
6.
assisting the Board in ensuring the effectiveness of the Group’s core businesses in accordance to the corporate
objective, strategies, policies and business direction approved by the Board; and
7.
formulating strategies on an on-going basis and addressing issues arising from changes in both external business
environment and internal operating conditions of the strategic business units.
During the financial year, three (3) Executive Committee meetings were held.
B.
Audit Committee
The Audit Committee was established on 24 February 1994 and is currently chaired by Mr Tsen Keng Yam. Other members
of the Audit Committee are Y.A.M. Tengku Sulaiman Shah Al-Haj Ibni Al-Marhum Sultan Salahuddin Abdul Aziz Shah Al-Haj
and Dato’ Kamaruddin Bin Mat Desa.
The Terms of Reference and activities of the Audit Committee during the financial year of the Audit Committee are set out
under the Audit Committee Report on pages 25 to 28 of this Annual Report.
C.
Nomination & Remuneration Committee
The Nomination Committee and Remuneration Committee were established on 27 September 2001 and 22 December
2000 respectively and were renamed Nomination & Remuneration Committee on 27 September 2007. The Nomination &
Remuneration Committee currently comprises three members as follows:Member
Designation
Tsen Keng Yam (Chairman)
Y.A.M. Tengku Sulaiman Shah Al-Haj Ibni Al-Marhum
Lee Swee Seng
Independent Non-Executive Director
Non-Independent Non-Executive Director
18
statement on
BOARD COMMITTEES (CONT’D)
C.
Nomination & Remuneration Committee (Cont’d)
The Terms of Reference of the Nomination & Remuneration Committee include the following :-
(i)
to make recommendations on the candidate for directorships directly to the Board or recommendations to the Board
as proposed by the Chairman.
(ii)
to make recommendations to the Board on candidates for Board Committees which includes the Audit Committee.
(iii)
to review the mix of skills, experience and competence of the Board on an annual basis.
(iv)
to make recommendations to the Board on the remuneration framework for all Executive Directors and determining
the remuneration arrangements for the Executive Directors.
(v)
to ensure that the remuneration framework recommended is applicable to the Group and reflective of the performance
of the Group both in the short and long term.
Before the Nomination Committee and Remuneration Committee were combined, the Remuneration Committee had a
meeting during the financial year, while, the Nomination Committee had three (3) meetings during the financial year.
DIRECTORS’ REMUNERATION
The Executive Chairman’s remuneration comprises director’s fees and allowance while the remuneration of the Executive
Directors comprises salary. Other customary benefits are made available as appropriate. Any salary review will take into account
market rates and the performance of the individual and the Group.
The determination of remuneration of Non-Executive Directors is a matter for the Board as a whole. The Non-Executive Directors
will abstain from discussion on their respective remuneration.
The details of the remuneration of Directors during the financial year for the Company is disclosed in Note 10 to the Financial
Statements of this Annual Report.
RELATIONSHIP WITH SHAREHOLDERS AND INVESTORS
The Group recognises the need to inform shareholders of all major developments concerning the Group on a timely basis. In
accordance with the Listing Requirements of Bursa Securities, various announcements were made during the year such as
quarterly reports, related party transactions and corporate proposals, if any, which provide shareholders and the investing public
with an overview of the Group’s performance and operations.
In addition, the Company has been using the Annual General Meetings (“AGM”) and Extraordinary General Meetings (“EGM”)
to communicate with shareholders and opportunities are given to them to raise questions or seek clarifications pertaining to
the operation and financial performance of the Group. The external auditors are also present to provide their professional and
independent clarification on issues and concerns raised by shareholders. Status of all resolutions proposed at the AGM or EGM
are submitted to Bursa Securities at the end of the meeting day.
ACCOUNTABILITY AND AUDIT
Financial Reporting
The Board is responsible for ensuring that the quarterly and annual financial statements of the Group present a fair and balanced
view and assessment of the Group’s financial position, performance and prospects. Such financial statements are announced
quarterly whilst the final annual audited financial statements are submitted to Bursa Securities after they are approved by the
Board and will be received by shareholders at the Company’s Annual General Meeting. The Audit Committee assists the Board
in reviewing and scrutinizing the information for disclosure to ensure accuracy and completeness with particular emphasis on the
application of accounting standards and policies and the making of reasonable and prudent estimates and assumptions.
ANNUAL REPORT 2008
19
statement on
ACCOUNTABILITY AND AUDIT (CONT’D)
Statement of Directors’ Responsibility in relation to the Financial Statements
The Board is required by the Companies Act, 1965 (“the Act”) to prepare the financial statements for each financial year, which
give a true and fair view of the state of affairs of the Company and the Group as at the end of each financial year and of their
results for the financial year.
As required by the Act and the Listing Requirements of Bursa Securities, the financial statements have been prepared in
accordance with the approved accounting standards in Malaysia and comply with the provisions of the Act.
In preparing the financial statements for the financial year ended 31 January 2008, the Group has used appropriate accounting
policies, consistently applied and supported by reasonable and prudent judgements and estimates.
The Directors have responsibility for ensuring that the Company and the Group maintain accounting records, which disclose, with
reasonable accuracy, the financial position of the Company and the Group and which enable them to ensure that the financial
statements comply with the Act. The Directors have general responsibilities for taking such steps as are reasonably available to
them to safeguard the assets of the Group and to prevent and detect fraud and other irregularities.
Internal Control
The Board acknowledges that it is responsible for maintaining a system of internal controls which provides reasonable assessment
of effective and efficient operations, internal financial controls, and compliance with laws and regulations as well as with internal
procedures and guidelines. The internal control system also aims at identifying and managing any risks that the Company may
encounter in pursuit of its business objectives. The Group’s Statement on Internal Control is set out on page 24 of this Annual
Report.
Relationship with the External Auditors
The external auditors, Messrs Deloitte KassimChan has continued to report to members of the Company on its findings which are
included as part of the Company’s statutory financial statements. The Company has thus established a transparent arrangement
with the auditors to meet the auditors’ professional requirements. From time to time, the auditors will highlight to the Audit
Committee and Board of Directors matters that require the Board’s attention through the issuance of management letters.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
As a responsible corporate citizen, the Group will continuously ensure that all pertinent activities relating to corporate social
responsibility are considered and supported in its operations for the well being of stakeholders, community and environment.
Our employees are the heart of the Group and the key to the competitive success in the marketplace. As a policy, we do not
discriminate against any race, gender, age and minorities. The employees are also provided adequate medical benefits as well
as hospitalisation and personal accident insurance coverage. We believe that employees’ involvement is vital to the success of
the Group.
As part of efforts towards the preservation of environment, the Group would ensure there are sufficient measures at all construction
sites to prevent any adverse impact on the environment.
Apart from the above, Talam, on 27 Feb 2008 had donated 3.34 acres of land at Taman Puncak Jalil for the construction of the
SMJK Confucian to be relocated from Jalan Hang Jebat.
This Statement is made in accordance with the resolution approved by the Board of Directors on 27 May 2008.
20
additional compliance information
AS AT 31 JANUARY 2008
1.
Utilisation of Proceeds
The Company did not raise funds through any corporate proposal during the financial year ended 31 January 2008.
2.
Recurrent Related Party Transactions of a Revenue or Trading Nature (“RRPT”)
Details of the recurrent related party transactions made during the financial year ended 31 January 2008 pursuant to the
shareholders’ mandate obtained by the Company at the Annual General Meeting held on 25 July 2007 are as follows:Name of
Company/Group
Involved
Value of
Transactions
(RM)
KEB Builders Sdn Bhd
(“KEB Builders”)
Expand Factor Sdn Bhd
877,931.46
TSDCAC, PSDTNC &
KEURO (Notes 1 and 3)
KEB Builders
Galian Juta Sdn Bhd
60,217.51
TSDCAC, PSDTNC &
Agrocon (M) Sdn Bhd
(“Agrocon”)
Abra Development
Sdn Bhd (“Abra”)
64,101.24
TSDCAC & PSDTNC
(Notes 1 and 2)
KEB Builders
Abra
936,207.10
TSDCAC, PSDTNC &
Konsortium LPB Sdn Bhd
Abra
549,696.00
TSDCAC, PSDTNC &
Name of
Related Party
A)
B)
Class of
Related Party
Construction Contract
Rental of Office Premises
at Menara Maxisegar,
Jalan Pandan Indah 4/2,
Pandan Indah,
55100 Kuala Lumpur
ANNUAL REPORT 2008
21
Name of
Company/Group
Involved
Value of
Transactions
(RM)
KEURO Leasing
TCB Resources Sdn Bhd
32,492.55
KEURO Leasing
Talam Corporation Berhad 1,044,080.64
Name of
Related Party
C)
Class of
Related Party
Provision of Leasing
Facilities by KEURO
Leasing Sdn Bhd
(“KEURO Leasing”)
TSDCAC, PSDTNC &
TSDCAC, PSDTNC &
NOTES:
1.
Tan Sri Dato’ (Dr) Ir Chan Ah Chye @ Chan Chong Yoon (“TSDCAC”) is a Director of Talam. TSDCAC and Puan Sri
Datin Thong Nyok Choo (“PSDTNC”), the spouse of TSDCAC are the Major Shareholders of Talam. As at 31 January
2008, TSDCAC and PSDTNC have direct and deemed equity interest 52.71% in Talam. TSDCAC and PSDTNC are
deemed interested in the shares of all subsidiary companies of Talam to the extent Talam has an interest.
2.
TSDCAC is the brother of Chan Keat Wan, a Major Shareholder and Director of Agrocon.
3.
TSDCAC and PSDTNC are Directors and Major Shareholders of Kumpulan Europlus Berhad (“KEURO”) which owns
42.94% equity interest in Talam as at 31 January 2008.
3.
Shares Buy-Back
There were no shares buy-back by the Company during the financial year.
4.
American Depository Receipt (ADR) or Global Depository Receipt (GDR) Programmes
During the financial year, the Company did not sponsor any ADR or GDR programmes.
22
5.
Imposition of Sanctions and/or Penalties
There were no other sanctions and/or penalties imposed by any regulatory bodies on the Company or its subsidiaries,
or management of the Company and its subsidiaries except that on 1 April 2008, one of the subsidiaries managed by
the Company was found to be not in compliance with Section 139 of the Securities Commission Act, 1993. The noncompliance had since been regularised and rectified at the Extraordinary General Meeting of the Company held on 15
November 2007. Tan Sri Dato’ (Dr) Ir Chan Ah Chye @ Chan Chong Yoon, as the Executive Chairman of the Company was
fined a sum of RM500,000.00. The Board of Directors had been informed that the compound and the matters have been
fully settled on 14 April 2008.
6.
Non-Audit Fees
During the financial year end, the Company paid non-audit fee of RM50,000.00 to Deloitte KassimChan for the Proposed
Revised Regularisation Plan.
7.Variation in Results
There were no material variances between the audited results for the financial year ended 31 January 2008 and the
unaudited results for the quarter ended 31 January 2008 of the Group.
8.
Material Contracts
There were no material contracts entered into by the Company and its subsidiaries involving Directors’ and major
shareholders’ interests of the Company which were still subsisting as at the end of the financial year.
9.
Contracts Relating To Loans
There were no material contracts relating to loans entered into by the Company involving Directors and major
shareholders.
10.
Options, Warrants or Convertible Securities
There were no options, warrants or convertible securities exercised during the financial year ended 31 January 2008.
ANNUAL REPORT 2008
23
statement on
internal control
The Board of Directors hereby provide the following statement which outlines the key elements and processes of the internal
control system within the Group for the current financial year.
RESPONSIBILITY
The Board of Director’s recognises its responsibility for the Group’s system of internal controls and for reviewing its adequacy
and integrity. The system of internal controls is designed to manage, rather than eliminate, the risk of failure to achieve the
business objectives of the Group. In pursuing these objectives, internal controls can only provide reasonable and not absolute
assurance against material misstatement or loss. The system of internal controls incorporates, inter alia, risk management,
financial, operational and compliance controls as well as the governance process.
RISK MANAGEMENT FRAMEWORK
During the current financial year, the Audit Committee and management continued to review and update the risk profile of various
departments audited by the Internal Audit Department. The review was conducted to further update and identify the significant
risks and corresponding controls, and develop the enterprise-wide risk profile. In assessing priority for the risks identified, the
process takes into account, the possibility of the risk occurring and its impact to the Group in the event the risk takes place. The
risk profile is being reviewed regularly by the management and serves as an on-going process used to identify, evaluate and
manage significant risks.
INTERNAL AUDIT FUNCTION
The Group’s Internal Audit Department reports independently to the Audit Committee. The Audit Committee reviews and approves
the internal audit plan, which was developed and based on the finalised key risk profile of the Group, on an annual basis. The
Internal Audit Department provided reports on key findings and progress of areas audited to the Audit Committee on a quarterly
basis.
Based on the review of the internal auditors to-date, there is no major weaknesses noted in the areas audited. All recommendations
proposed in improving the internal controls were considered and appropriate corrective measures have been implemented by
the management to rectify the shortcomings and prevent further recurrence of issues and findings highlighted. All the internal
controls instituted were applicable and intact.
OTHER KEY ELEMENTS OF INTERNAL CONTROLS
Other key elements of the Group’s system of internal controls are:
• the Group’s Internal Audit Department, which reports to the Audit Committee, performed regular reviews of business
processes to assess the effectiveness of internal controls.
• operational structure with defined lines of responsibilities and delegation of authority. A process of hierarchical reporting has
been established, which provides for a documented and auditable trail of accountability.
• management reports, which are presented by the respective division heads to the Board each quarter, providing financial
information including performance indicators and information of significant changes in accounting standards and reporting.
• defined lines of responsibilities for approving authority of various transactions. The internal control function acts as a check
and balance.
• the Standing Instructions and Standard Operating Procedures of all departments are regularly reviewed and up-dated to
ensure effective management of the Group’s operations.
• Monitoring of financial results by the Audit Committee every quarter.
The Board and the management continued to take measures to strengthen the internal control environment to safeguard
shareholders’ investment and the Group’s assets.
This statement is made in accordance with the resolution approved by the Board of Directors on 27 May 2008.
24
audit committee report
COMPOSITION
Members of the Committee
Designation
1. Tsen Keng Yam (Chairman)
(Member of the Malaysian Institute of Accountants)
2. Y.A.M Tengku Sulaiman Shah Al-Haj Ibni Al-Marhum Sultan
3. Dato’ Kamaruddin Bin Mat Desa (appointed on 1 October 2007)
TERMS OF REFERENCE
The following terms of reference of the Audit Committee have been adopted.
Constitution
The Audit Committee was established by the Board of Directors on 24 February, 1994.
Membership
The Committee shall be appointed by the Board of Directors from amongst their numbers and shall consist of not less than 3
members, of whom a majority shall be independent directors. The members of the Audit Committee are elected in accordance
to the Listing Requirements of Bursa Malaysia Securities Berhad.
At least one member of the Audit Committee must be either a member of the Malaysian Institute of Accountants or if he is not a
member of the Malaysian Institute of Accountants he must have:i)
at least 3 years’ working experience and passed the examinations specified in Part 1 of the 1st Schedule of the Accountants
Act 1967; or
ii)
at least 3 years’ working experience and is a member of one of the associations of accounts specified in Part 11 of the 1st
Schedule of the Accountants Act 1967; or
iii)
a degree/masters/doctorate in accounting or finance and at least 3 years’ post qualification experience in accounting or
finance; or
iv)
at least 7 years’ experience being a chief financial officer of a corporation, or having the function of being primarily
responsible for the management of the financial affairs of a corporation.
The members of the Audit Committee shall elect a Chairman from amongst their number, who shall be an independent director.
If a member of the Audit Committee resigns, dies or for any other reason ceases to be a member with the result that the number
of members is reduced to below 3, the Board of Directors shall, within 3 months of that event, appoint such number of new
members as may be required to make up the minimum number of 3 members.
No alternate director can be appointed as a member of the Audit Committee.
Authority
The Audit Committee is granted the authority to investigate any activity of its Company and its subsidiaries within its terms of
reference. In particular, the Audit Committee has the authority to:i)
have resources, which are required to perform its duties;
ii)
have full and unrestricted access to any information, including any information it requires from any employee, and all
employees are directed to co-operate with any request made by the Audit Committee;
iii)
be able to obtain independent professional or other advice; and
iv)
have direct communication channels with the external and internal auditors.
ANNUAL REPORT 2008
25
TERMS OF REFERENCE (CONT’D)
Meetings and Reporting Procedures
The Audit Committee will meet at least four (4) times a year. A quorum for a meeting shall be two members, both being independent
directors. At least twice a year, the Audit Committee shall meet with the external auditors without any executive directors being
present. The external auditor may request for a meeting, if they consider necessary.
The directors and employees will attend any particular Audit Committee meeting only at the Audit Committee’s invitation, specific
to the relevant meeting.
The Company Secretary shall be the secretary of the Audit Committee. Minutes of the meeting shall be duly entered in the books
provided therefore. The minutes will be circulated to all members of the Board of Directors and shall be presented at the Board
of Directors’ meeting.
Duties and Functions
The duties and functions of the Audit Committee shall be:i)
To consider the appointment of the external auditor, the audit fee and any questions of the resignation or dismissal of the
external auditor before making a recommendation to the Board of Directors;
ii)
To discuss with external auditors before the audit commences, the audit plan, the nature and scope of the audit and ensure
co-ordination where more than one audit firm is involved;
iii)
To review the quarterly results and year-end financial statements prior to the approval by the Board, focusing particularly
on :
a)
Any changes in the accounting policies and practices;
b)
Significant and unusual events;
c)
The going concern assumption;
d)
Compliance with accounting standards, stock exchange and legal requirements;
iv)
To review any related party transaction and conflict of interest situation that may arise in the Company, including any
transaction, procedure or course of conduct that raises question of management integrity;
v)
To discuss problems and reservations arising from the interim and final audits, and matters the auditor may wish to discuss
(in the absence of management where necessary);
vi)
In relation to internal audit function:a)
to review the adequacy of the scope, functions, competency and resources of the internal audit function that it has
the necessary authority to carry out its work;
b)
to 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;
c)
to review any appraisal or assessment of the performance of members of the internal audit function;
d)
to approve any appointment or termination of senior staff members of the internal audit function;
e)
to take cognizance of resignations of internal audit staff members and provide the resigning staff member an
opportunity to submit his reasons for resigning;
26
TERMS OF REFERENCE (CONT’D)
Duties and Functions (Cont’d)
vii)
To keep under review, the effectiveness of the internal control system and in particular review the external auditor’s
management letter and management’s response;
viii) To review the audit reports;
ix)
To prepare periodic reports to the Board of Directors, summarising the work performed in fulfilling the Audit Committee’s
primary responsibilities; and
x)
To consider other topics, as defined by the Board of Directors.
ATTENDANCE AT AUDIT COMMITTEE MEETINGS
During the financial year ended 31 January 2008, there were seven (7) Audit Committee meetings held and the number of
meetings attended by each Audit Committee member are as follows:
Audit Committee Member
Number of Meetings attended
by Audit Committee Member
1. Tsen Keng Yam
(appointed as Chairman on 1 October 2007)
6 out of 7
2. Y.A.M Tengku Sulaiman Shah Al-Haj Ibni Al-Marhum
6 out of 7
3. Dato’ Kamaruddin Bin Mat Desa
(appointed on 1 October 2007)
2 out of 2
4. Lai Moo Chan
(resigned as Chairman on 1 October 2007)
5 out of 5
The Senior Vice President 1 of Finance and the Head of Internal Audit would normally attend all Audit Committee meetings at
the invitation of the Audit Committee.
SUMMARY OF AUDIT COMMITTEE ACTIVITIES
During the year, the Audit Committee carried out its duties as set out in the terms of reference and made various recommendations
to the Board of Directors.
INTERNAL AUDIT FUNCTION
The Audit Committee is supported in its duties by the internal audit function. The Committee is aware of the fact that the internal
audit function is essential to assist in obtaining the assurance and consulting services it requires, regarding the effectiveness of
the system of internal controls in the Group.
The primary objective of the internal audit function is to review the effectiveness of the system of internal controls and this is
performed with impartiality, proficiency and due professional care. The Internal Audit Department assisted the Audit Committee
in the discharge of its duties by undertaking independent regular and systematic reviews of the system of internal controls, so as
to provide reasonable assurance that such system continue to operate satisfactorily and effectively.
However, due to the continued downturn of the industry and the consequent reduction of overall staff position, the internal audit
activities were also scaled down accordingly.
ANNUAL REPORT 2008
27
INTERNAL AUDIT FUNCTION (CONT’D)
In attaining the above objective, the following activities were carried out by the Internal Audit Department on the adequacy of risk
management, operational controls, compliance controls and statutory requirements:i)
Conducted internal audits in accordance with the risk based / driven internal audit plan. A total of 3 routine audits and 2
follow up audits were carried out during the year;
ii)
Compliance reviews of the internal control procedures as stipulated in the Group’s Standing Instructions and Standard
of Operating Procedures. During the same period, Standing Instructions and Standard of Operating Procedures of the
departments were being jointly reviewed and updated and practical internal controls were incorporated;
iii)
Carried out 2 investigations cum special reviews as requested by management and / or Audit Committee;
iv)
With the involvement of Internal Audit Department, carried out a review on the risk management process within the Group
based on Internal Audit findings and ensured continuous monitoring, assessment and mitigation of risks. The Internal
Audit Department highlighted all the audit risks by departments during the Routine and Follow-up Audits and this has been
correspondingly updated into the Risk Profiling of Departments. Meetings were also held with all Head of Departments
on their risks and actions taken to mitigate the risks. This was then executed by way of Management Response on Audit
Findings;
v)
Reviewed the Recurrent Related Party Transactions (RRPT) quarterly and made the necessary recommendations;
The register at the Secretarial Department was also reviewed to ensure that all Recurrent Related Party Transactions have
been duly updated in the register;
vi)
Reviewed the Human Resource, Administration and Purchasing Department’s operations, process and governance and
made recommendations thereof;
vii)
Reviewed the Information Technology (“IT”) Department operations, process, governance and the Group’s IT infrastructure
and made recommendation thereof;
viii) Reviewed Standing Instruction and Standard Operating Procedures of Human Resources, Administration and Purchasing
Department and Information Technology Department and made recommendation thereof; and
ix)
All Internal Audit Department’s reports, which were deliberated by the Audit Committee and recommendations made to the
Board and / or the Management, were acted upon.
28
Talam Corporation Berhad 1120-H
ANNUAL REPORT 2008
Financial
Statements
Directors’ Report
Report of the Auditors
Income Statements
Balance Sheets
Statements of Changes in Equity
Cash Flow Statements
Notes to the Financial Statements
Statement by Directors
Declaration by the Officer Primarily
Responsible for the Financial
Management of the Company
30 - 34
35 - 36
37
38 - 39
40 - 41
42 - 44
45 - 110
111
111
DIRECTORS’ REPORT
The directors of TALAM CORPORATION BERHAD hereby present their report together with the audited financial statements of
the Group and of the Company for the financial year ended 31 January 2008.
PRINCIPAL ACTIVITIES
The principal activities of the Company are provision of management services, investment holding and property development.
The principal activities of the subsidiaries are described in Note 44 to the Financial Statements.
There have been no significant changes in the nature of the principal activities of the Company and its subsidiaries during the
financial year.
RESULTS OF OPERATIONS
Group
RM’000
Company
RM’000
Profit/(Loss) before tax
Income tax expense
5,821
(2,273)
(23,142)
(336)
Profit/(Loss) for the year
3,548
(23,478)
Attributable to:
Equity holders of the Company
Minority interest
3,420
128
(23,478)
-
3,548
(23,478)
In the opinion of the directors, the results of the operations of the Group and of the Company during the financial year were not
substantially affected by any item, transaction or event of a material and unusual nature.
DIVIDENDS
No dividends have been paid or declared by the Company since the end of the previous financial year. The directors also do not
recommend any dividend payment in respect of the current financial year.
RESERVES AND PROVISIONS
There were no material transfers to or from the reserves or provisions during the financial year other than those disclosed in the
financial statements.
ISSUE OF SHARES AND DEBENTURES
The Company has not issued any new shares or debentures during the financial year.
SHARE OPTIONS
No options have been granted by the Company to any parties during the financial year to take up unissued shares of the
Company.
No shares have been issued during the financial year by virtue of the exercise of any option to take up unissued shares of the
Company. As at the end of the financial year, there were no unissued shares of the Company under options.
30
DIRECTORS’ REPORT
OTHER FINANCIAL INFORMATION
Before the income statements and balance sheets of the Group and of the Company were made out, the directors took reasonable
steps:
a)
to ascertain that proper action had been taken in relation to the writing off of bad receivables and the making of allowance
for doubtful receivables and had satisfied themselves that all known bad receivables had been written off and that adequate
allowance had been made for doubtful receivables; and
b)
to ensure that any current assets which were unlikely to realise their book values in the ordinary course of business have
been written down to their estimated realisable values.
As at 31 January 2008, the Group and the Company have net current liabilities of RM995,109,000 and RM35,519,000 respectively.
However, the financial statements of the Group and the Company have been prepared on a going concern basis. This going
concern basis presumes that the Group and the Company will be able to successfully implement the Regularisation Plan that
has been approved by the Securities Commission subsequent to the year-end, within the anticipated timeframe to enable the
Group and the Company to operate profitably in the foreseeable future and consequently, the realisation of assets and settlement
of liabilities in the ordinary course of business. Accordingly, the financial statements do not include any adjustments relating
to the recoverability and classification of assets or the amounts and classification of liabilities that might be necessary should
the Group and the Company be unable to continue on a going concern. In this connection, the directors are confident that the
Regularisation Plan, as more fully explained in Note 43 to the Financial Statements, would be implemented successfully without
any material modifications and within the anticipated time frame.
Other than as stated above, at the date of this report, the directors are not aware of any circumstances:
a)
which would render the amount written off as bad receivables or the amount of the allowance for doubtful receivables in
the financial statements of the Group and of the Company inadequate to any substantial extent; or
b)
which would render the values attributed to current assets in the financial statements of the Group and of the Company
misleading; or
c)
which have arisen which would render adherence to the existing method of valuation of assets or liabilities of the Group
and of the Company misleading or inappropriate; or
d)
not otherwise dealt with in this report or financial statements which would render any amount stated in the financial
statements of the Group and of the Company misleading.
As at the date of this report, there does not exist:
a)
any charge on the assets of the Group or of the Company which has arisen since the end of the financial year which
secures the liabilities of any other person; or
b)
any contingent liability of the Group or of the Company which has arisen since the end of the financial year.
Subject to the successful completion of the Regularisation Plan mentioned in Note 43 to the Financial Statements, no contingent
or other liability has become enforceable or is likely to become enforceable within the period of twelve months after the end of
the financial year which, in the opinion of the directors, will or may substantially affect the ability of the Group or of the Company
to meet their obligations as and when they fall due.
Save as disclosed in Note 43 to the Financial Statements, in the opinion of the directors, no item, transaction or event of a
material and unusual nature has arisen in the interval between the end of the financial year and the date of this report which is
likely to affect substantially the results of the operations of the Group or of the Company for the succeeding financial year.
ANNUAL REPORT 2008
31
DIRECTORS’ REPORT
DIRECTORS
The following directors served on the Board of the Company since the date of the last report:
Tan Sri Dato’ (Dr.) Ir. Chan Ah Chye @ Chan Chong Yoon
YAM Tengku Sulaiman Shah Al-Haj Ibni Al-Marhum Sultan Salahuddin Abdul Aziz Shah Al-Haj
Datuk Ab Rauf bin Yusoh
Tsen Keng Yam
Dato‘ Kamaruddin bin Mat Desa (appointed on 1st October 2007)
Chua Kim Lan (appointed on 1st October 2007)
Loy Boon Chen (appointed on 1st October 2007)
Lee Swee Seng (appointed on 1st October 2007)
Lai Moo Chan (resigned on 1st October 2007)
Sulaiman Hew bin Abdullah (resigned on 1st October 2007)
In accordance to Article 97 of the Company‘s Articles of Association, Tan Sri Dato’ (Dr.) Ir. Chan Ah Chye @ Chan Chong Yoon,
retires by rotation and, being eligible, offers himself for re-election at the forthcoming Annual General Meeting.
In accordance to Article 81 of the Company’s Articles of Association, Dato’ Kamaruddin bin Mat Desa, Chua Kim Lan, Loy
Boon Chen and Lee Swee Seng, retire by rotation and, being eligible, offer themselves for re-election at the forthcoming Annual
General Meeting.
DIRECTORS’ INTERESTS
The shareholdings in the Company and its related companies of those who were directors at the end of the financial year as
recorded in the Register of Directors’ Shareholdings kept by the Company under Section 134 of the Companies Act, 1965, are
as follows:
Shares in the Company
Number of ordinary shares of RM1.00 each
Balance as
of 1.2.2007/
Sold /
Balance as
Appointment date
Bought
Converted
of 31.1.2008
Registered in the name of directors
Direct interest
Tan Sri Dato’ (Dr.) Ir. Chan Ah Chye
@ Chan Chong Yoon
YAM Tengku Sulaiman Shah Al-Haj
Ibni Al-Marhum Sultan Salahuddin
Abdul Aziz Shah Al-Haj
Chua Kim Lan
Loy Boon Chen
41,366,739
1,000,000
-
42,366,739
500
74,006
803,300
-
-
500
74,006
803,300
290,837,177
7,500
-
Indirect interest
@ Chan Chong Yoon
Chua Kim Lan
32
(2,000,000)
-
288,837,177 *
7,500^
DIRECTORS’ REPORT
DIRECTORS’ INTERESTS (COnt’d)
The Company
Number of 5% Irredeemable Convertible
Preference Shares (“ICPS”) of RM0.10 each
Balance as
of 1.2.2007/
Sold/
Balance as
Appointment date
Bought
Converted
of 31.1.2008
Direct interest
@ Chan Chong Yoon
Chua Kim Lan
Loy Boon Chen
12,231,250
65
10,000
-
-
37
18,750
-
-
12,231,250
65
10,000
Indirect interest
@ Chan Chong Yoon
Chua Kim Lan
*
37#
18,750^
Deemed interest by virtue of the shares held by his family members, Puan Sri Datin Thong Nyok Choo and Chan Siu Wei.
Also deemed interest by virtue of his direct and indirect interest in Kumpulan Europlus Berhad, Pengurusan Projek Bersistem
Sdn. Bhd., Sze Choon Holdings Sdn. Bhd. and Prosperous Inn Sdn. Bhd. pursuant to Section 6A of the Companies Act,
1965.
# Deemed interest by virtue of his interest in Sze Choon Holdings Sdn. Bhd. pursuant to Section 6A of the Companies Act,
1965.
^ Deemed interest through her spouse, Chin Chee Meng.
Tan Sri Dato’ (Dr.) Ir. Chan Ah Chye @ Chan Chong Yoon, by virtue of his interest in shares of the Company, is also deemed
interested in the shares of all the Company’s subsidiaries to the extent the Company has an interest.
None of the other directors in office at the end of the financial year held any shares or had beneficial interest in the shares of the
Company or of its related companies during and at the end of the financial year.
ANNUAL REPORT 2008
33
DIRECTORS’ REPORT
DIRECTORS’ BENEFITS
Since the end of the previous financial year, none of the directors of the Company has received or become entitled to receive
benefit (other than the benefit included in the aggregate of emoluments received or due and receivable by directors as disclosed
in the financial statements or being fixed salary of a full-time employees 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, other than any benefits which may deemed to have arisen by virtue of those
transactions entered between the Company and the companies in which certain directors of the Company have substantial
financial interest, as disclosed in Note 46 to the Financial Statements.
During and at the end of the financial year, no arrangement subsisted to which the Company was a party whereby directors of
the Company might acquire benefits by means of the acquisition of shares in, or debentures of, the Company or any other body
corporate.
AUDITORS
The auditors, Messrs. Deloitte KassimChan, have indicated their willingness to continue in office.
Signed on behalf of the Board
in accordance with a resolution of the Directors,
________________________________________
CHUA KIM LAN
________________________________________
DATUK AB RAUF BIN YUSOH
Kuala Lumpur
27 May 2008
34
REPORT OF THE AUDITORS
TO THE MEMBERS OF TALAM CORPORATION BERHAD (Incorporated in Malaysia) AND ITS SUBSIDIARIES
We have audited the accompanying balance sheets as of 31 January 2008 and the related statements of income, cash flows and
changes in equity for the financial year then ended. These financial statements are the responsibility of the Company’s directors.
It is our responsibility to form an independent opinion, based on our audit, on these financial statements and to report our opinion
to you, as a body, in accordance with Section 174 of the Companies Act, 1965 and for no other purpose. We do not assume
responsibility towards any other person for the contents of this report.
We conducted our audit in accordance with approved standards on auditing in Malaysia. These standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.
An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and significant estimates made by the directors, as well as
evaluating the overall financial statements presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion:
(a) (b) the financial statements are properly drawn up in accordance with the provisions of the Companies Act, 1965 and the
applicable Malaysian Accounting Standards Board approved accounting standards in Malaysia so as to give a true and fair
view of:
(i) the state of affairs of the Group and of the Company as of 31 January 2008 and of the results and the cash flows of
the Group and of the Company for the financial year ended on that date; and
(ii) the matters required by Section 169 of the Act to be dealt with in the financial statements and consolidated financial
statements; and
the accounting and other records and the registers required by the Act to be kept by the Company and by the subsidiaries
of which we have acted as auditors, have been properly kept in accordance with the provisions of the Act.
We have considered the financial statements of subsidiaries and the auditors’ reports thereon of the subsidiaries of which we
have not acted as auditors, as indicated in Note 44 to the Financial Statements, being financial statements that have been
included in the consolidated financial statements.
We are satisfied that the financial statements of the subsidiaries that have been consolidated with the financial statements of
the Company are in form and content appropriate and proper for the purposes of the preparation of the consolidated financial
statements and we have received satisfactory information and explanation as required by us for these purposes.
The auditors’ report on the financial statements of the subsidiaries were not subject to any qualification and did not include
any comment made under Sub-section (3) of Section 174 of the Act other than those disclosed in Note 44 to the Financial
Statements.
ANNUAL REPORT 2008
35
REPORT OF THE AUDITORS
TO THE MEMBERS OF TALAM CORPORATION BERHAD (Incorporated in Malaysia) AND ITS SUBSIDIARIES
Without qualifying our opinion, we draw attention to Note 2 to the Financial Statements. As disclosed in Note 2 to the Financial
Statements, the Group and the Company have net current liabilities of RM995,109,000 and RM35,519,000 respectively as at 31
January 2008. However, the financial statements of the Group and the Company have been prepared on a going concern basis.
This going concern basis presumes that the Group and the Company will be able to successfully implement the Regularisation
Plan that has been approved by the Securities Commission subsequent to the year-end, within the anticipated timeframe to
enable the Group and the Company to operate profitably in the foreseeable future and consequently, the realisation of assets and
settlement of liabilities in the ordinary course of business. Accordingly, the financial statements do not include any adjustments
relating to the recoverability and classification of assets or the amounts and classification of liabilities that might be necessary
should the Group and the Company be unable to continue on a going concern. In this connection, the directors are confident
that the Regularisation Plan, as more fully explained in Note 43 to the Financial Statements, would be implemented successfully
without any material modifications and within the anticipated time frame.
DELOITTE KASSIMCHAN
AF 0080
Chartered Accountants
TAN BUN POO
1304/05/08 (J/PH)
Partner
27 May 2008
36
INCOME STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2008
Note
2008
RM’000
Revenue
5
248,349
Cost of sales
6
(224,796)
Gross profit
Other income
Administrative and other
expenses
Gain on disposal of subsidiaries
Finance costs
Share of results of jointly
controlled entities
20
Profit/(Loss) before tax
Income tax (expense)/credit
8
11
18
7
216,723
3,496
(72,969)
(597)
Company
2007
RM’000
1,646
-
2,899
1,646
130,893
60,556
1,316
20,182
(100,263)
18,474
(67,085)
(156,509)
3,321
(57,398)
(14,295)
(13,062)
(3,930)
10
(12,164)
249
5,821
(2,273)
Attributable to:
Equity holders of the Company
Minority interest
3,420
128
(660)
(6,936)
7,918
982
8,957
(7,975)
3,548
982
0.53
0.53
1.43
1.39
The accompanying Notes form an integral part of the Financial Statements.
ANNUAL REPORT 2008
2008
RM’000
143,754
3,548
12
12
2007
RM’000
23,553
Profit/(Loss) for the year
Earnings per share
attributable to equity holders
of the Company:
Basic (sen)
Diluted (sen)
Group
37
-
-
(23,142)
(336)
5,744
3,907
(23,478)
9,651
(23,478)
-
9,651
-
(23,478)
9,651
BALANCE SHEETS
Group
Note
Company
2008
RM’000
2007
RM’000
2008
RM’000
2007
RM’000
14
15
16
17
18
19
20
21
18
19
191,177
1,129,501
84,516
11,126
10,077
76,332
26,042
196,458
1,155,469
84,622
11,821
9,328
76,332
6
1,699
18,126
344,801
268,951
57
1,971
18,126
344,801
316,989
6
20
22
5,874
9,801
6,231
6,810
5,874
-
5,874
-
1,544,446
1,547,077
639,508
687,767
15
23
24
1,181,547
74,723
88,668
1,164,217
71,291
100,635
95,617
5,687
-
49,913
5,687
-
25
26
27
194,832
22,281
-
321,844
15,282
40,049
25,516
433
-
24,364
514
-
Total current assets
1,562,051
1,713,318
127,253
80,478
TOTAL ASSETS
3,106,497
3,260,395
766,761
768,245
ASSETS
Non-current assets
Land held for property development
Investment properties
Prepaid lease payments
Investment in subsidiaries
Investment in associates
Interest in jointly controlled entities
Other investment
Amount owing by subsidiaries
Amount owing by associates
Amount owing by jointly
controlled entities
Sinking funds held by trustees
Total non-current assets
Current assets
Property development costs
Inventories
Trade receivables
Other receivables, deposits
and prepaid expenses
Cash and bank balances
Asset classified as held for sale
38
BALANCE SHEETS
Note
2008
RM’000
28
30
31
Group
Company
2007
RM’000
2008
RM’000
2007
RM’000
643,015
(844)
(297,711)
642,423
(844)
(295,063)
643,015
(844)
(321,976)
642,423
(844)
(298,498)
Equity attributable to equity
holders of the Company
Minority interest
344,460
1,783
320,195
-
343,081
-
Total equity
346,243
346,516
14,750
361,266
320,195
343,081
33
36
18
87,630
75,541
-
144,776
76,620
-
565
283,229
1,157
309,334
20
37
35,964
3,959
6,879
4,116
-
-
203,094
232,391
283,794
310,491
97,014
729,831
241,287
861,812
444,920
182,296
130,172
694,250
278,435
937,851
444,920
181,110
88,248
2,590
71,934
-
58,351
2,848
53,474
-
Total current liabilities
2,557,160
2,666,738
162,772
114,673
Total liabilities
2,760,254
2,899,129
446,566
425,164
TOTAL EQUITY AND
LIABILITIES
3,106,497
3,260,395
766,761
768,245
EQUITY AND LIABILITIES
Capital and Reserves
Share capital
Treasury shares
Reserves
Non-current liabilities
Borrowings
Other long term payables
Amount owing to subsidiaries
Amount owing to jointly
controlled entities
Deferred tax liabilities
Total non-current
liabilities
Current liabilities
Provision for liabilities
Borrowings
Trade payables
Other payables
Deferred progress billings
Current tax liabilities
38
33
39
40
35
ANNUAL REPORT 2008
39
40
(844)
-
592
-
643,015
-
-
At 31 January 2008
-
-
-
710
(844)
-
-
642,423
-
685
At 1 February 2007
Foreign currency
translation, representing
net (expense)/income
recognised directly in
equity
Profit for the year
Total recognised income
and expenses for the
year
Decrease in liability
component of ICPS
Disposal of subsidiaries
-
-
(844)
-
-
642,423
(844)
Treasury
Shares
RM’000
(Note 30)
641,028
Share
Capital
RM’000
(Note 28)
At 31 January 2007
At 1 February 2006
Foreign currency
translation,
representing
net (expense)/income
recognised directly in equity
Profit for the year
Total recognised
income and expenses
for the year
Dividends (Note 13)
Conversion of 7% ICULS
2003/2006
Equity component of 7%
ICULS 2003/2006
Decrease in liability
component of ICPS
Group
11,201
-
-
-
11,201
11,201
-
-
-
-
-
11,201
Capital
Reserve
RM’000
124,551
-
-
-
124,551
124,551
-
-
-
-
-
124,551
26,346
(6,375)
307
307
-
32,414
32,414
-
-
-
(1,004)
-
(1,004)
-
33,418
-
-
-
-
-
-
-
33
(685)
-
-
652
Foreign
Equity
Share Exchange Component
Premium
Reserve
of ICULS
RM’000
RM’000
RM’000
(Note 32)
<---------- Non-Distributable Reserve ---------->
(459,809)
-
3,420
3,420
(463,229)
(463,229)
-
-
-
8,957
(720)
8,957
(471,466)
Distributable
Reserve Accumulated
Losses
RM’000
344,460
592
(6,375)
3,727
307
3,420
346,516
346,516
710
33
-
7,953
(720)
(1,004)
8,957
338,540
Attributable
to Equity
Holders
of the
Company
RM’000
1,783
(13,195)
228
100
128
14,750
14,750
-
-
-
(4,408)
-
3,567
(7,975)
19,158
Minority
Interest
RM’000
346,243
592
(19,570)
3,955
407
3,548
361,266
361,266
710
33
-
3,545
(720)
2,563
982
357,698
Total
Equity
RM’000
STATEMENTS OF
CHANGES IN EQUITY
STATEMENTS OF
CHANGES IN EQUITY
Company
Share
Capital
RM’000
(Note 28)
At 1 February 2006
Profit for the year, representing total
recognised income and expense
for the year
Dividends (Note 13)
Conversion of 7% ICULS 2003/2006
Equity component of 7% ICULS
2003/2006
Decrease in liability component of ICPS
641,028
At 31 January 2007
642,423
At 1 February 2007
Loss for the year, representing total
recognised income and expense
for the year
Decrease in liability component of ICPS
642,423
At 31 January 2008
643,015
Treasury
Shares
RM’000
(Note 30)
(844)
Non-Distributable
Reserves
Distributable
Reserves Equity
Share Component Accumulated
Losses
Premium
of ICULS
RM’000
RM’000
RM’000
(Note 32)
124,551
652
(431,980)
333,407
685
-
-
(685)
710
-
-
33
-
(844)
124,551
-
(423,049)
343,081
(844)
124,551
-
(423,049)
343,081
-
-
(23,478)
-
124,551
-
(446,527)
592
(844)
ANNUAL REPORT 2008
41
9,651
(720)
-
Total
Equity
RM’000
-
9,651
(720)
33
710
(23,478)
592
320,195
cash flow statements
Group
2008
RM’000
2007
RM’000
3,548
982
CASH FLOWS FROM OPERATING ACTIVITIES
Profit for the year
Adjustments for:
Interest expenses
Allowance for doubtful receivables
Land and development costs written off
Depreciation of property, plant and equipment
Allowance for writedown in inventories
Bad receivables written off
Income tax expense/(credit) recognised in income statements
Amortisation of prepaid lease payments
Loss/(gain) on disposal of property, plant and equipment
Depreciation of investment properties
Property, plant and equipment written off
Reversal of provision for liquidated ascertained damages
Reversal of allowance for doubtful receivables
Gain on disposal of investment properties
Waiver of debts
Waiver of interest
Interest income
Reversal of allowance for writedown in inventories
Share of results of jointly controlled entities
Amortisation of discount on deferred progress billing
Operating (loss)/profit before working capital changes
(Increase)/decrease in property development costs
(Increase)/decrease in inventories
Decrease/(increase) in receivables
Decrease in payables
Cash generated from operations
Interest received
Income taxes refund
Interest paid
Payment for liquidated ascertained damages
Net Cash (Used In)/Generated From Operating Activities
42
67,085
14,083
9,588
8,912
7,586
7,030
2,704
2,273
695
124
106
77
(38,247)
(36,437)
(23,451)
(18,474)
(3,700)
(2,300)
(2,005)
(603)
(249)
-
57,398
22,982
7,709
1,369
14,162
(7,918)
698
(114)
83
(2,515)
(17,437)
(3,321)
(3,799)
(1,330)
660
26,133
(1,655)
(21,532)
(18,336)
158,133
(105,978)
95,742
85,488
2,487
(24,502)
(35,221)
10,632
2,005
1,431
(14,930)
(1,342)
123,994
3,799
1,146
(24,022)
(154)
(2,204)
104,763
Group
2008
RM’000
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from disposal of investment property
Advances from jointly controlled entities
Proceeds from disposal of property, plant and equipment
Additions to land held for property development
Amount paid to land vendors
Purchase of property, plant and equipment
Net cash outflow arising from deconsolidation and disposal of subsidiaries
Investment in jointly controlled entities
Net cash inflow arising from acquisition of subsidiaries
Repayment of advances from jointly controlled entities
Net cash outflow arising on disposal, representing
cash and cash equivalents of subsidiaries disposed
63,500
29,442
131
(36,253)
(11,572)
(2,729)
(1,312)
(500)
-
2007
RM’000
6,879
305
(60,355)
(4)
(325)
889
652
-
(541)
Net Cash Generated From/(Used In) Investing Activities
40,707
(52,500)
CASH FLOWS FROM FINANCING ACTIVITIES
Net drawdown of term loans and bridging loans
Net repayment of Islamic debt securities
Net repayment of short term borrowings
Net (placement)/withdrawal from sinking funds held by trustees
Dividends paid
Net repayment of hire purchase and lease financing
Repayment of deferred progress billings
Withdrawal with an Escrow account
65,865
(59,228)
(31,382)
(2,991)
(503)
-
3,370
(8,500)
(44,342)
9,488
(720)
(1,038)
(68,323)
58,617
Net Cash Used In Financing Activities
(28,239)
(51,448)
NET INCREASE IN CASH AND CASH EQUIVALENTS
10,264
815
407
4,098
2,563
720
14,769
4,098
EFFECTS OF EXCHANGE DIFFERENCES
CASH AND CASH EQUIVALENTS AT BEGINNING OF FINANCIAL YEAR
CASH AND CASH EQUIVALENTS AT END OF FINANCIAL YEAR (NOTE 26)
ANNUAL REPORT 2008
43
Company
2008
RM’000
CASH FLOWS FROM OPERATING ACTIVITIES
(Loss)/Profit for the year
Adjustments for:
Interest expenses
Allowance for doubtful receivables
- Intercompany balances
- Others
Income tax expense/(credit) recognised in income statement
Depreciation of property, plant and equipment
Waiver of interest
Bad receivables written off
Reversal of allowance for doubtful receivables
- Others
Gain on disposal of investment in subsidiaries
2007
RM’000
(23,478)
9,651
13,062
12,164
2,753
6,059
336
272
(914)
97
2
(3,907)
421
45
(28)
(45)
-
(19,623)
(10)
Operating loss before working capital changes
Increase in property development costs
Increase in inventories
Increase in receivables
Net changes in related companies balances
Increase in payables
(1,886)
(45,704)
(7,622)
19,180
11,871
(1,257)
(4,328)
(5,414)
(14,109)
13,170
20,693
Cash (used in)/generated from operations
Interest paid
(24,161)
(5,720)
8,755
(7,540)
Net Cash (Used In)/Generated From Operating Activities
(29,881)
1,215
CASH FLOWS FROM FINANCING ACTIVITIES
Net drawdown of short term borrowings
Dividends paid
Net repayment of hire purchase and lease payables
33,301
-
890
(720)
(71)
Net Cash Generated From Financing Activities
33,301
99
NET INCREASE IN CASH AND CASH EQUIVALENTS
3,420
1,314
CASH AND CASH EQUIVALENTS AT BEGINNING OF FINANCIAL YEAR
(8,701)
(10,015)
CASH AND CASH EQUIVALENTS AT END OF FINANCIAL YEAR (NOTE 26)
(5,281)
(8,701)
44
notes to the
financial statements
1.
GENERAL INFORMATION
The principal activities of the Company are provision of management services, investment holding and property
development.
The principal activities of the subsidiaries are described in Note 44.
There have been no significant changes in the nature of the principal activities during the financial year.
The principal place of business and the registered office of the Company is located at Suite 2.05, Level 2, Menara Maxisegar,
Jalan Pandan Indah 4/2, Pandan Indah, 55100 Kuala Lumpur.
The financial statements of the Group and of the Company for the year ended 31 January 2008 were approved by the
Board of Directors and were authorised for issuance on 27 May 2008.
2. BASIS OF PREPARATION OF FINANCIAL STATEMENTS
The financial statements of the Group and of the Company have been prepared in accordance with the provisions of
the Companies Act, 1965 and the applicable Malaysian Accounting Standards Board (“MASB”) approved accounting
standards in Malaysia.
On 1 February 2007, the Group and the Company adopted all the new and revised Financial Reporting Standards (“FRS”)
and amendments to FRS issued by MASB that are relevant to its operations and effective for financial periods beginning
on or after 1 January 2007 as follows:
FRS 124
Amendments to FRS 1192004
Related Party Disclosures
Employee Benefits - Actuarial Gains and Losses, Group Plans and Disclosures
The adoption of these new/revised FRSs and amendments to FRS did not have significant financial impact on the financial
statements of the Group and the Company.
Accounting Standards, Amendments to FRSs and IC Interpretations Issued But Not Yet Effective
At the date of authorisation of the financial statements, the following new and revised FRSs, amendments to FRSs and IC
Interpretations were in issue but not yet effective until future periods:
FRS 107
FRS 111
FRS 112
FRS 118
FRS 119
FRS 120
FRS 126
FRS 129
FRS 134
FRS 137
FRS 139
Amendment to FRS 121
IC Interpretation 1
IC Interpretation 2
IC Interpretation 5
IC Interpretation 6
IC Interpretation 7
IC Interpretation 8
Construction Contracts
Income Taxes
Revenue
Employee Benefits
Accounting for Government Grants and Disclosure of Government Assistance
Accounting and Reporting by Retirement Benefits Plans
Financial Reporting in Hyperinflationary Economies
Interim Financial Reporting
Provision, Contingent Liabilities and Contingent Assets
Financial Instruments: Recognition and Measurement
The Effects of Changes in Foreign Exchange Rates - Net Investment in a Foreign Operation
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 129 Financial Reporting in Hyperinflationary
Economies
Scope of FRS 2
ANNUAL REPORT 2008
45
notes to the
2. BASIS OF PREPARATION OF FINANCIAL STATEMENTS (CONT’D)
Accounting Standards, Amendments to FRSs and IC Interpretations Issued But Not Yet Effective (Cont’d)
The above FRSs, amendment to FRSs and IC Interpretations shall apply to annual periods beginning on or after 1 July 2007
except for the following renamed FRSs which have the same effective dates as their original Standards, i.e., annual periods
beginning on or after 1 January 2003:
(a)
FRS 119 Employee Benefits, which supersedes FRS 1192004 Employee Benefits and Amendment to FRS1192004
Employee Benefits - Actuarial Gains and Losses, Group Plans and Disclosures;
(b)
FRS 126 Accounting and Reporting by Retirement Benefit Plans, which supersedes FRS 1262004 Accounting and
Reporting by Retirement Benefit Plans; and
(c)
FRS 129 Financial Reporting in Hyperinflationary Economies, which supersedes FRS 1292004 Financial Reporting in
Hyperinflationary Economies.
The effective adoption date in respect of FRS 139 has yet to be determined by MASB. This new standard establishes
principles for recognising and measuring financial assets, financial liabilities and some contracts to buy and sell nonfinancial items.
Save for FRS 139, the directors anticipate that the adoption of these FRSs, amendments to FRSs and IC Interpretations in
future periods will have no material financial effect on the financial statements of the Group and the Company in the period
of initial application. By virtue of the exemption in paragraph 103AB of FRS 139, the impact of applying FRS 139 on the
financial statements upon first adoption of this standard as required by paragraph 30(b) of FRS 108, Accounting Policies,
Changes in Accounting Estimates and Errors, is not disclosed.
Going Concern Basis
As at 31 January 2008, the Group and the Company have net current liabilities of RM995,109,000 and RM35,519,000
respectively. However, the financial statements of the Group and the Company have been prepared on a going concern
basis. This going concern basis presumes that the Group and the Company will be able to successfully implement the
Regularisation Plan that has been approved by the Securities Commission subsequent to the year-end, within the anticipated
timeframe to enable the Group and the Company to operate profitably in the foreseeable future and consequently, the
realisation of assets and settlement of liabilities in the ordinary course of business. Accordingly, the financial statements
do not include any adjustments relating to the recoverability and classification of assets or the amounts and classification
of liabilities that might be necessary should the Group and the Company be unable to continue on a going concern. In
this connection, the directors are confident that the Regularisation Plan, as more fully explained in Note 43, would be
implemented successfully without any material modifications and within the anticipated time frame.
3.
SIGNIFICANT ACCOUNTING POLICIES
Basis of Accounting
The financial statements of the Group and of the Company have been prepared under the historical cost convention unless
otherwise stated in the accounting policies below.
Basis of Consolidation
(i)
Subsidiaries
The consolidated financial statements include the financial statements of the Company and all its subsidiaries.
Subsidiaries are those entities in which the Group has power to exercise control over the financial and operating
policies so as to obtain benefits from their activities.
46
notes to the
3.
SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
Basis of Consolidation (Cont’d)
(i)
Subsidiaries (Cont’d)
Subsidiaries are consolidated using the acquisition method of accounting. Under the acquisition method of accounting,
the results of subsidiaries acquired or disposed of during the financial year are included in the consolidated income
statement from the effective date of acquisition or up to the effective date of disposal as appropriate. The assets and
liabilities of the subsidiaries are measured at their fair values at the date of acquisition. The difference between the
cost of an acquisition and the fair value of the Group’s share of the net assets of the acquired subsidiary at the date
of acquisition is included in the consolidated balance sheet as goodwill. If the cost of acquisition is less than the fair
value of the net assets of the subsidiaries acquired, the difference is recognised directly in the income statement.
Intra-group transactions, balances and resulting unrealised gains are eliminated on consolidation and the consolidated
financial statements reflect external transactions only. Unrealised losses are eliminated on consolidation unless
costs cannot be recovered.
The gain or loss on disposal of a subsidiary is the difference between net disposal proceeds and the Group’s share
of its net assets together with any attributable amount of goodwill and exchange differences.
Minority interests in the consolidated balance sheet consist of the minorities’ share of the fair value of the identifiable
assets and liabilities of the acquiree as at acquisition date and the minorities’ share of movements in the acquiree’s
equity since then.
(ii) Associates
Associates are those entities in which the Group exercises significant influence but not control, through participation
in the financial and operating policy decisions of the entities.
Investments in associates are accounted for in the consolidated financial statements by the equity method of
accounting based on the audited or management financial statements of the associates. Under the equity method
of accounting, the Group’s share of profits less losses of associates during the financial year is included in the
consolidated income statement. The Group’s interest in the associates is carried in the consolidated balance sheet
at cost. The carrying amount of such investments is reduced to recognise any decline, other than a temporary
decline, in the value of investment. Losses of an associate in excess of the Group’s interest in that associate are
recognised only to the extent that the Group has incurred legal or constructive obligations or made payments on
behalf of the associate.
Unrealised gains on transactions between the Group and the associates are eliminated to the extent of the Group’s
interest in the associates. Unrealised losses are eliminated unless cost cannot be recovered.
(iii)
Jointly Controlled Entities
A jointly controlled entity is an entity in which the Group has joint control over its economic activity established under
a contractual arrangement.
Investments in jointly controlled entities are accounted for in the consolidated financial statements by the equity
method of accounting based on the audited or management financial statements of the jointly controlled entities.
Under the equity method of accounting, the Group’s share of profits less losses of jointly controlled entities during the
financial year is included in the consolidated income statement. The Group’s interest in jointly controlled entities is
carried in the consolidated balance sheet at cost. The carrying amount of such investments is reduced to recognise
any decline, other than a temporary decline, in the value of investment.
Unrealised gains on transactions between the Group and its jointly controlled entities are eliminated to the extent
of the Group’s interest in the jointly controlled entities. Unrealised losses are eliminated unless cost cannot be
recovered.
ANNUAL REPORT 2008
47
notes to the
3.
Goodwill on Consolidation
Goodwill (if any) is initially recognised as an asset at cost and is subsequently measured at cost less any accumulated
impairment losses.
For the purpose of impairment testing, goodwill is allocated to each of the Group’s cash-generating units expected to
benefit from the synergies of the combination. Cash-generating units to which goodwill has been allocated are tested
for impairment annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable
amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to
reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the
basis of the carrying amount of each asset in the unit. An impairment loss recognised for goodwill is not reversed in a
subsequent period.
On disposal of a subsidiary, the attributable amount of goodwill is included in the determination of the profit or loss on
disposal.
Impairment of Assets Excluding Goodwill
At each balance sheet date, the Group and the Company review the carrying amounts of their non-current assets to
determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists,
the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where
it is not possible to estimate the recoverable amount of an individual asset, the Group and the Company estimate the
recoverable amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated
future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments
of the time value of money and the risks specific to the asset.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the
carrying amount of the asset (cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised
immediately in the income statements.
Where an impairment loss subsequently reverses, the carrying amount of the asset (cash-generating unit) is increased
to the revised estimate of its recoverable amount, so that the increased carrying amount does not exceed the carrying
amount that would have been determined had no impairment loss been recognised for the asset (cash-generating unit) in
prior years. A reversal of an impairment loss is recognised immediately in the income statements.
Revenue Recognition
Revenue is recognised when it is probable that the economic benefits associated with the transaction will flow to the
enterprise and the amount of the revenue can be measured reliably.
(i)
Property development revenue
Revenue from properties development projects is accounted for by the stage of completion method, which is
determined by the proportion that the property development costs incurred for work performed to date bear to the
estimated total property development costs and is recognised net of discount.
(ii)
Rental income
Rental income are recognised on accrual basis.
(iii)
Revenue from hotel operations
Revenue from rental of hotel rooms, sale of food and beverage and other related income are recognised on accrual
basis.
48
notes to the
3.
Revenue Recognition (Cont’d)
(iv)
Management fees and charges
Management fees net of service taxes and charges are recognised on accrual basis.
(v) Sale of goods
Revenue relating to sale of goods is recognised net of sales taxes and discounts upon the transfer of risks and
rewards.
(vi)
Dividend income
Dividend income is recognised when the right to receive payment is established.
(vii) Interest income
Interest income is recognised on a time proportion basis that reflects the effective yield on the asset.
Income Tax
Income tax for the year comprises current and deferred tax. Current tax is the expected amount of income taxes payable in
respect of the taxable profit for the year and is measured using the tax rates that have been enacted at the balance sheet
date.
Deferred tax is provided for, using the liability method, on temporary differences at the balance sheet date between the
tax bases of assets and liabilities and their carrying amounts in the financial statements. In principle, deferred tax liabilities
are recognised for all taxable temporary differences and deferred tax assets are recognised for all deductible temporary
differences, unused tax losses and unused tax credits to the extent that it is probable that future taxable profit will be
available against which the deductible temporary differences, unused tax losses and unused tax credits can be utilised.
Deferred tax is not recognised if the temporary difference arises from goodwill or from 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.
The carrying amount of deferred tax assets, if any, is reviewed at each balance sheet date and reduced to the extent that
it is no longer probable that sufficient taxable profit will be available to allow all or part of the asset to be recovered.
Deferred tax is measured at the tax rates that are expected to apply in the period when the asset is realised or the liability
is settled, based on tax rates that have been enacted or substantively enacted at the balance sheet date. Deferred tax
is recognised 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 recognised directly in equity, or when it arises from a business combination that is an
acquisition, in which case the deferred tax is included in the resulting goodwill.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against
current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Group intends to
settle its current tax assets and liabilities on a net basis.
ANNUAL REPORT 2008
49
notes to the
3.
Employee Benefits
(i)
Short term benefits
Wages, salaries, bonuses and social security contributions are recognised as an expense in the year in which the
associated services are rendered by employees of the Group. Short term accumulating compensated absences
such as paid annual leave are recognised when services are rendered by employees that increase their entitlement
to future compensated absences. Short term non-accumulating compensated absences such as sick leave are
recognised when the absences occur.
(ii)
Defined contribution plans
As required by law, companies in Malaysia make contributions to the Employees Provident Fund (“EPF”). Some of
the Group’s foreign subsidiaries make contributions to their respective countries’ statutory pension schemes. Such
contributions are recognised as an expense in the income statements as incurred. Once the contributions have been
made, there are no further payment obligations.
Foreign Currencies
(i)
Functional and presentation currency
The individual financial statements of each entity in the Group are presented using the currency of the primary
economic environment in which the entities operate (its functional currency). The consolidated financial statements
of the Group are presented in Ringgit Malaysia, which is also the functional currency of the Group.
(ii)
Foreign currency transactions
In preparing the financial statements of the Group and of the Company, transactions in currencies other than the
Group’s and the Company’s functional currency (foreign currencies) are recorded at the rates of exchange prevailing
on the dates of the transactions. At each balance sheet date, monetary items denominated in foreign currencies
are translated at the rates prevailing on the balance sheet date. Non-monetary items carried at fair value that
are denominated in foreign currencies are translated at the rates prevailing on the date when the fair value was
determined. Non-monetary items that are denominated in foreign currencies which are carried at historical cost are
translated using the historical rate as of the date of acquisition.
Exchange differences arising on the settlement of monetary items, and on the translation of monetary items, are
included in the income statement for the period. Exchange differences arising on the translation of non-monetary
items carried at fair value are included in the income statements for the period except for differences arising on the
translation of non-monetary items in respect of which gains and losses are recognised directly in equity. For such
non-monetary items, any exchange component of that gain or loss is also recognised directly in equity.
(iii)
Foreign operations
For the purpose of presenting consolidated financial statements, the assets and liabilities of the Group’s foreign
operations (including comparatives) are expressed in Ringgit Malaysia using exchange rate prevailing on the balance
sheet date. Income and expense items (including comparatives) are translated at the average exchange rates for
the period, unless exchange rates fluctuated significantly during that period, in which case the exchange rates at the
dates of the transactions are used. Exchange differences arising, if any, are classified as equity and transferred to the
Group’s foreign exchange reserve. Such translation differences are recognised in income statements in the period in
which the foreign operation is disposed.
50
notes to the
3.
Property, Plant and Equipment and Depreciation
Property, plant and equipment are stated at cost less accumulated depreciation and impairment losses (if any).
Subsequent costs are included in the assets’ carrying amount or recognised as separate assets as appropriate, only when
it is probable that future economic benefits associated with the item will flow to the Group and the Company and the cost
of the item can be measured reliably. All other repairs and maintenance are charged to the income statement during the
financial period which they were incurred.
Hotel building is depreciated over its revised estimated residual economic life of 50 years with effect from 1 February
2006.
Depreciation of other property, plant and equipment is computed on the straight line method at the following rates based
on the estimated useful lives of the depreciable assets.
Buildings
Renovation
Plant and machinery, tools and equipment, crockery and kitchenware
Office equipment, furniture and fittings
Motor vehicles
1% - 2%
10%
10% - 33.33%
10% - 50%
20% - 25%
The residual value, depreciation method and estimated useful life of an asset are reviewed at each financial year-end, and
if expectation differs from previous estimates, the changes will be accounted for as a change in an accounting estimate.
Gain or loss arising from disposal of an asset is determined as the difference between the net disposal proceeds and the
carrying amount of the asset, and is recognised in the income statements.
Property, Plant and Equipment Acquired Under Hire-Purchase Arrangements
Property, plant and equipment acquired under hire-purchase arrangements are capitalised in the financial statements and
the corresponding obligations treated as liabilities. Finance costs are allocated to the income statement to give a constant
periodic rate of interest on the remaining hire-purchase liabilities.
Leased Assets
Assets acquired under leases which transfer substantially all of the risks and rewards incident to ownership of the assets
are capitalised under property, plant and equipment. The assets and the corresponding lease obligations are recorded at
their fair value or, if lower, at the present value of the minimum lease payments of the leased assets at the inception of the
respective leases.
Finance costs, which represent the difference between the total lease commitments and the fair values of the assets
acquired, are charged to the income statements over the term of the relevant lease periods so as to give a constant
periodic rate of charge on the remaining balance of the obligations for each accounting period.
All other leases which do not meet such criteria are classified as operating leases. Lease payments under operating leases,
including prepaid lease payments, are recognised as an expense in the income statements on a straight-line basis over the
terms of the relevant lease.
ANNUAL REPORT 2008
51
notes to the
3.
Prepaid Lease Payment
Leasehold land that has an indefinite economic life and title that is not expected to pass to the Group by the end of the
lease period is classified as operating lease. The up front payments for right to use the leasehold land over a predetermined
period are accounted for as prepaid lease payments and are stated as cost less amount amortised.
Where the leasehold land had been previously revalued, the Group retained the unamortised revalued amount as the
surrogate carrying amount of prepaid lease payments as allowed under the transitional provisions of FRS 117.
Leasehold land recognised as prepaid lease payments are amortised in equal installments over a period of 25 years.
Investment Properties
Investment properties are properties which are held either to earn rental income or for capital appreciation or for both.
Investment properties are stated at cost less accumulated depreciation and accumulated impairment losses which include
cost of land, all direct building costs and other related construction costs including borrowing costs incurred during the
period of construction.
Freehold land is not depreciated. Depreciation on buildings is computed so as to write off the cost of the assets on the
straight line method over the expected useful lives. The annual depreciation rate for buildings is 2.5%.
Upon the disposal of an investment property, the difference between the net disposal proceeds and the carrying amount
is recognised in the income statements.
Non-Current Assets Held for Sale
Non-current assets are classified as held for sale if their carrying amount will be recovered through a sale transaction
rather than through continuing use. This condition is regarded as met only when the sale is highly probable and the asset
is available for immediate sale in its present condition. Management must be committed to the sale which should be
expected to qualify for recognition as a completed sale within one year from the date of classification. Non-current assets
classified as held for sale are measured at the lower of the asset’s previous carrying amount and fair value less costs to
sell.
Investments
The investments in subsidiaries, associates, jointly controlled entities and unquoted loan stocks are stated at cost less
impairment losses.
On disposal of such investments, the difference between net disposal proceeds and their carrying amounts is recognised
in the income statements.
Land Held for Property Development and Property Development Costs
(i)
Land held for property development consists of land where no development activities have been carried out or where
development activities are not expected to be completed within the normal operating cycle. Such land is classified
within non-current assets and is stated at cost less any accumulated impairment losses.
Land held for property development is reclassified as property development costs at the point when development
activities have commenced and where it can be demonstrated that the development activities can be completed
within the normal operating cycle.
52
notes to the
3.
Land Held for Property Development and Property Development Costs (Cont’d)
(ii)
Property development costs comprise all costs that are directly attributable to development activities or that can be
allocated on a reasonable basis to such activities.
When the financial outcome of a development activity can be reliably estimated, property development revenue and
expenses are recognised in the income statement by using the stage of completion method. The stage of completion
is determined by the proportion that property development costs incurred for work performed to date bear to the
estimated total property development costs.
Where the financial outcome of a development activity cannot be reliably estimated, property development revenue
is recognised only to the extent of property development costs incurred that is probable will be recoverable, and
property development costs on properties sold are recognised as an expense in the period in which they are
incurred.
Any expected loss on a development project, including costs to be incurred over the defects liability period, is
recognised as an expense immediately.
Property development costs not recognised as an expense are recognised as an asset, which is measured at the
lower of cost and net realisable value.
Inventories
Inventories are stated at the lower of cost and net realisable value. Net realisable value represents the estimated selling price
less all estimated costs to completion and costs to be incurred in marketing, selling and distribution. Cost of inventories
are determined as follows:
Finished goods and consumables - weighted average basis
Properties held for sale - specific identification basis
The cost of consumables consists of the cost of purchase plus the cost of bringing the inventories to their present
location. The cost of finished goods includes cost of raw materials used, direct labour, other direct costs and appropriate
production overheads. The cost of unsold properties comprises cost associated with the acquisition of land, direct costs
and appropriate proportions of common costs.
Provisions for Liabilities
Provisions for liabilities are recognised when the Group has a present obligation as a result of a past event and it is probable
that an outflow of resources embodying economic benefits will be required to settle the obligation, and a reliable estimate
of the amount can be made. Provisions are reviewed at each balance sheet date and adjusted to reflect the current best
estimate. Where the effect of the time value of money is material, the amount of a provision is the present value of the
expenditure expected to be required to settle the obligation.
Provision for liquidated ascertained damages is recognised on estimated claims by reference to the agreements entered
into with the principals.
Contingent Liabilities
A contingent liability 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. It can also be a present
obligation arising from past events that is not recognised because it is not probable that 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.
ANNUAL REPORT 2008
53
notes to the
3.
The Group and the Company adopt the indirect method in the preparation of the cash flow statements.
For the purposes of the cash flow statements, cash and cash equivalents include cash on hand and at banks and
deposits at call, (excluding sinking funds held by trustees for the redemption of financing facilities) net of outstanding bank
overdrafts.
Segment Reporting
Segment reporting is presented for enhanced assessment of the Group’s risks and returns. A business segment is a group
of assets and operations engaged in providing products or services that are subject to risks and returns that are different
from those or other business segments. A geographical segment is engaged in providing products or services within a
particular economic environment that are subject to risks and returns that are different from those components operating
in other economic environment.
Segment revenue, expenses, assets and liabilities are those amounts resulting from the operating activities of a segment
that are directly attributable to the segment and the relevant portion that can be allocated on a reasonable basis to the
segment. Segment revenue, expenses, assets and liabilities are determined before intra-group balances and intra-group
transactions are eliminated as part of the consolidation process, except to the extent that such intra-group balances and
transactions are between group enterprises within the same segment. Inter-segment pricing is based on similar terms as
those available to other external parties.
Financial Instruments
Financial assets and financial liabilities are recognised in the balance sheet when the Group has become a party to the
contractual provisions of the instrument.
Financial instruments are classified as liabilities or equity in accordance with the substance and intention of the contractual
arrangement. Interest, dividends, gains and losses relating to a financial instrument classified as a liability, are reported
as expense or income. Distributions to holders of financial instruments classified as equity are charged directly to equity.
Financial instruments are offset when the Group has a legally enforceable right to offset and intends to settle either on a
net basis or to realise the asset and settle the liability simultaneously.
(i)
Other non-current investments
Non-current investments other than investments in subsidiaries, associates, jointly controlled entities, unquoted
loan stocks and investment properties are stated at cost less impairment losses. On disposal of an investment, the
difference between net disposal proceeds and its carrying amount is recognised in the income statements.
(ii)
Receivables
Receivables are carried at anticipated realisable values. Bad debts are written off when identified. An estimate is
made for doubtful debts based on a review of all outstanding amounts as at the balance sheet date.
(iii)
Payables
Payables are stated at cost which is the nominal value of the consideration to be paid in the future for goods and
services received.
(iv)
Interest-bearing borrowings
Interest-bearing bank loans and overdrafts are recorded at the amount of proceeds received, net of transaction
costs.
54
notes to the
3.
Financial Instruments (Cont’d)
(iv)
Interest-bearing borrowings (Cont’d)
Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are
assets that necessarily take a substantial period of time to get ready for their intended use or sale, are capitalised
as part of the cost of those assets, until such time as the assets are substantially ready for their intended use or
sale. The amount of borrowing costs eligible for capitalisation is determined by applying a capitalisation rate which
is the weighted average of the borrowing costs applicable to the Group’s borrowings that are outstanding during
the financial year, other than borrowings made specifically for the purpose of acquiring another qualifying asset.
For borrowings made specifically for the purpose of acquiring a qualifying asset, the amount of borrowing costs (if
any) eligible for capitalisation is the actual borrowing costs incurred on that borrowing during the period less any
investment income on the temporary investment of funds drawndown from that borrowing facility.
All other borrowing costs are recognised as an expense in the income statement in the period in which they are
incurred.
(v)
Deferred progress billings are stated at cost, which is the fair value of the consideration to be paid in the future for
the contractual obligations entered into under the Islamic Assets Backed Securitisation arrangement.
(vi)
Ordinary shares
Ordinary shares are classified as equity. Dividends on ordinary shares are recognised in equity in the period in which
they are declared.
The transaction costs of an equity transaction are accounted for as a deduction from equity, net of tax. Equity
transaction costs comprise only those incremental external costs directly attributable to the equity transaction which
would otherwise have been avoided.
The consideration paid, including attributable transaction costs on repurchased ordinary shares of the Company
that have not been cancelled, are classified as treasury shares and presented as a deduction from equity. Shares
repurchased are held as treasury shares and are accounted for using the treasury stock method. Under the treasury
stock method, the shares repurchased are not cancelled but are held as treasury shares. The treasury shares are
carried at cost.
Where treasury shares are distributed as share dividends, the cost of the treasury shares will be applied in the
reduction of the share premium account or the distributable reserves, or both, where appropriate.
Where treasury shares are reissued by re-sale in the open market, the difference between the sales consideration
and the carrying amount of the treasury shares will be shown as a movement in equity.
(vii) Warrants
Warrants issued pursuant to the issuance of Bonds in financial year ended 31 January 2000 are not recognised on
the date of issue. The issue of ordinary shares upon exercise of the warrants are treated as new subscription of
ordinary shares for the consideration equivalent to the exercise price of the warrants.
(viii) Convertible instruments
Convertible instruments are regarded as compound instruments, consisting of a liability component and an equity
component. At the date of issue, the fair value of the liability component is estimated using the prevailing market
interest rate for a similar non-convertible instrument. The difference between the proceeds of issue of the convertible
instruments and the fair value assigned to the liability component, representing the conversion option is included in
shareholders’ equity. The liability component is subsequently stated at amortised cost using the effective interest
rate method until extinguished on conversion or redemption whilst the value of the equity component is not adjusted
in subsequent periods. Attributable transaction costs are apportioned and deducted directly from the liability and
equity component based on their carrying amounts at the date of issue.
ANNUAL REPORT 2008
55
notes to the
3.
Financial Instruments (Cont’d)
(viii) Convertible instruments (Cont’d)
4.
Under the effective interest rate method, the interest expense on the liability component is calculated by applying
the prevailing market interest rate for a similar non-convertible instrument. The difference between this amount and
the interest paid is added to the carrying value of the convertible instrument.
CRITICAL ACCOUNTING JUDGEMENTS AND ESTIMATES
Estimates and judgements are continually evaluated by the directors and are based on historical experience and other
factors, including expectations of future events that are believed to be reasonable under the circumstances.
(a)
Critical judgements in applying the Group’s accounting policies
In the process of applying the Group’s and the Company’s accounting policies, management is of the opinion that
there are no instances of application of judgement which are expected to have a significant effect on the amounts
recognised in the financial statements except for matters discussed below:
Contingent liabilities
As described in Note 3, a contingent liability is not recognised but is disclosed in the notes to the financial statements
and when a change in the probability of an outflow occurs so that the outflow is probable, it will then be recognised as
a provision. As at the end of the financial year, the Company has provided guarantees to financial and non-financial
institutions for facilities granted to its subsidiaries (Note 41a) and in the event that the Regularisation Plan (RP) (as
mentioned in Note 43) is not successfully implemented, a contingent liability of approximately RM479.5 million may
become enforceable on the Company. The directors are confident that the Group will successfully implement the
RP and no provision for liabilities has been made in the financial statements of the Company as the quantum of the
shortfall of which the Company is liable to make good cannot be presently determined.
Capitalisation of borrowing costs
As described in Note 3, it is the Group’s policy to capitalise borrowing costs directly attributable to the acquisition,
construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to
get ready for their intended use or sale, as part of the cost of those assets, until such time as the assets are substantially
ready for intended use or sale. Borrowing costs have been capitalised in the Group’s property development costs,
as mentioned in Notes 7 and 15 amounting to RM9,609,000 (2007: RM19,068,000). The directors are satisfied that
the capitalisation of borrowing costs on property development projects relate mainly to projects whose activities
are currently in progress to prepare the project for its intended sale. All other borrowing costs are recognised as an
expense in the income statement in the period in which they are incurred.
Provision for Liquidated Ascertained Damages
Provision for liquidated ascertained damages (“LAD”) is in respect of projects undertaken by certain subsidiaries
and is recognised for expected LAD claims based on the terms of the applicable sale and purchase agreements.
Significant judgement is required in determining the amount of provision for LAD to be made. The Group evaluates
the amount of provision required based on past experience and the industry norm. As at 31 January 2008, the
amount of provisions made for LAD is disclosed in Note 38.
56
notes to the
4.
CRITICAL ACCOUNTING JUDGEMENTS AND ESTIMATES (CONT’D)
(b)
Key sources of estimation uncertainty
Management believes that there are no key assumptions made concerning the future, and other key sources of
estimation uncertainty at balance sheet date, that have a significant risk of causing a material adjustment to the
carrying amounts of assets and liabilities within the next financial year except as discussed below:
Property development projects
The Group recognises property development revenue and costs 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 of work performed.
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 Group evaluates based on past experience and by relying on
the appointment of the IJM Corporation Berhad’s Group of companies as their principal contractor to construct and
complete all their stalled projects and to be the lead driver of the Group’s sales and project implementation. As at 31
January 2008, the carrying amount of property development projects are disclosed in Note 15(b).
Other investments
As disclosed in Notes 21 and 25, investment in Irredeemable Convertible Unsecured Loan Stocks and an amount
owing by Venue Venture Sdn. Bhd. (“VVSB”) is carried at cost of RM76,332,000 and RM50,087,000 respectively
(collectively referred to as “total investments in VVSB”). Management has represented that the total investments in
VVSB are supported by the assets held by VVSB and thus are recoverable.
Subsequent to the year end, VVSB, through its subsidiary, entered into a joint venture agreement with the Selangor
State Government to develop a piece of land. The directors are of the opinion that the development of this land will
enhance VVSB’s net assets.
Impairment of non-current assets
The Group reviews the carrying amount of their non-current assets, which include land held for property development,
property, plant and equipment and investment properties, to determine whether there is an indication that those
assets have suffered an impairment loss. However, the Group has not conducted any independent professional
valuations to determine the carrying amount of these assets as the directors are confident that the Regularisation
Plan, which is currently being implemented, would be concluded successfully without any material modification and
within the anticipated time frame and accordingly, no adjustments would need to be made to reduce the values
of assets to their recoverable amounts and classification of non-current assets to current. As at 31 January 2008,
the carrying amounts of land held for development, property, plant and equipment and investment properties are
disclosed in Notes 15(a), 14 and 16 respectively.
Allowances for doubtful receivables
The Group makes allowances for doubtful receivables based on an assessment of the recoverability of trade and
other receivables. Allowances are applied to trade and other receivables where events or changes in circumstances
indicate that the balances may not be collectible. The identification of doubtful receivables requires use of judgement
and estimates. Where the expectation is different from the original estimate, such difference will impact the carrying
value of the trade and other receivables and doubtful receivables expenses in the period in which such estimate has
been changed. As at 31 January 2008, allowances for doubtful receivables for trade and sundry receivables have
been disclosed in Notes 24 and 25 respectively.
ANNUAL REPORT 2008
57
notes to the
5.
REVENUE
2008
RM’000
Property development revenue
Rental income
Revenue from hotel operations
Management fees and
charges from third parties
Sales of goods
6.
Group
2008
RM’000
206,621
18,836
18,678
178,604
17,687
16,091
-
-
3,612
602
2,812
1,529
1,946
1,550
1,646
-
248,349
216,723
3,496
1,646
2007
RM’000
2008
RM’000
2007
RM’000
2008
RM’000
2007
RM’000
208,562
8,740
7,269
225
56,911
8,333
6,342
1,383
597
-
224,796
72,969
597
-
2008
RM’000
2007
RM’000
2008
RM’000
2007
RM’000
28,629
29,546
982
36
17,501
30,453
29,643
1,069
81
15,220
2,174
851
10,037
2,867
987
8,310
76,694
76,466
13,062
12,164
(9,609)
(19,068)
-
-
67,085
57,398
13,062
12,164
COST OF SALES
Group
Cost of rental
Cost of sales for hotel operations
Cost of inventories sold
7.
Company
2007
RM’000
Company
FINANCE COSTS
Group
Interest expenses on:
- term loans
- Islamic debt securities
- bank overdraft
- hire purchase
- other borrowings
Less: Interest capitalised in
property development
costs (Note 15)
58
Company
notes to the
7.
FINANCE COSTS (Cont’d)
Included in interest expense of the Group and the Company is amount paid or payable to the following related parties:
Group
Pengurusan Projek
Bersistem Sdn. Bhd. (Note 46)
KEB Group (Note 46)
Company
2008
RM’000
2007
RM’000
2008
RM’000
2007
RM’000
2,050
1,076
1,951
79
1,043
-
The nature of the relationship with the above related parties are disclosed in Note 46.
8.
PROFIT/(LOSS) BEFORE TAX
Profit/(loss) before tax is stated after charging/(crediting) the following:
Group
Staff costs (Note 9)
Allowance for doubtful receivables:
- third parties
- subsidiary companies
Land and development costs written off
- Liquidated ascertained damages
Depreciation of property,
plant and equipment
Allowance for writedown in inventories
Direct operating expenses
of investment properties:
- revenue generating during the year
- non-revenue generating
during the year
Bad receivables written off:
- third parties
- subsidiary companies
Amortisation of prepaid
lease payment
Auditors’ remuneration:
- current year provision
- (over)/ under provision in prior years
- others
Loss/(gain) on disposal of
property, plant and equipment
Depreciation of investment
properties
Property, plant and
equipment written off
Rental of complex
ANNUAL REPORT 2008
Company
2008
RM’000
2007
RM’000
2008
RM’000
2007
RM’000
14,303
16,505
-
-
14,083
9,588
22,982
-
6,059
2,753
-
2
-
8,912
-
-
-
7,586
7,030
7,709
1,369
272
-
421
-
4,269
3,969
-
-
1,184
1,749
-
-
2,704
-
14,162
-
97
-
5
40
695
698
-
-
353
(33)
135
380
89
-
70
18
135
70
8
-
124
(114)
-
*
106
-
-
-
77
25
83
19
-
-
59
notes to the
8.
PROFIT/(LOSS) BEFORE TAX (CONT’D)
Profit/(loss) before tax is stated after charging/(crediting) the following: (Cont’d)
2008
RM’000
Reversal of provision for liquidated
ascertained damages no longer required
Reversal of allowance no longer required
for doubtful receivables:
- Third parties
Gain on disposal of
investment properties
Waiver of debts
- Third parties
Waiver of interest
Interest income
Rental income
Reversal of allowance for
writedown in inventories
Provision for diminution in investments
Amortisation of discount on
deferred progress billings
* Represents RM4
** Represents RM2
9.
STAFF COSTS
(2,515)
(36,437)
-
(17,437)
-
(23,451)
(18,474)
(3,321)
(3,700)
(2,300)
(2,005)
(1,489)
(3,799)
(1,158)
(603)
-
(1,330)
**
2008
RM’000
Company
2007
RM’000
(45)
(28)
(19,623)
-
(10)
(914)
-
-
-
-
26,133
-
-
2007
RM’000
2008
RM’000
11,771
103
1,051
1,378
14,409
119
1,244
733
-
-
14,303
16,505
-
-
2007
RM’000
2008
RM’000
121
16
9
-
-
-
146
-
-
-
1,654
1,466
540
325
-
2008
RM’000
Included in the staff costs:
Key Management Personnel Other Than
Directors:
Salary and other remuneration
Defined contribution
Benefit-in-kind
Executive Directors as disclosed in Note 10:
Total remuneration
2007
RM’000
(38,247)
2008
RM’000
Wages and salaries
Social security
Other staff related expenses
Group
60
Group
Group
Company
2007
RM’000
Company
2007
RM’000
notes to the
10.
DIRECTORS’ REMUNERATION
Group
Company
2008
RM’000
2007
RM’000
2008
RM’000
2007
RM’000
588
70
341
25
300
178
21
341
25
300
999
325
540
325
552
56
47
926
103
112
-
-
655
1,141
-
-
1,654
1,466
540
325
164
125
258
31
8
120
164
125
120
164
542
164
245
1,818
2,008
704
570
Executive directors:
Company:
Fees
Salaries
Other emoluments
Subsidiaries:
Fees
Other emoluments
Non-executive directors:
Fees
Salaries
Benefit-in-kind
Other emoluments
Total
The estimated monetary value of benefits-in-kind received and receivable by the directors otherwise than in cash from the
Group amounted to RM41,000 (2007: RM18,000).
The number of directors of the Company whose total remuneration during the financial year fall within the following bands
is as follows:
Executive directors:
RM300,001 - RM350,000
RM350,001 – RM400,000
Non-Executive directors:
Below RM50,000
ANNUAL REPORT 2008
61
2008
RM’000
2007
RM’000
2
1
1
-
5
5
8
6
notes to the
11.
TAXATION
Group
2008
RM’000
Tax expense for the year
Under/(over) provision in prior years
Deferred tax:
Overprovision in prior year (Note 37)
1,709
721
Income tax expense/(credit)
2,273
Company
2007
RM’000
(157)
2008
RM’000
2007
RM’000
1,101
(1,278)
334
2
(3,628)
(7,741)
-
(279)
(7,918)
336
(3,907)
Income tax is calculated at the Malaysian statutory tax rate of 26% (2007: 27%) of the estimated assessable profit for the
year. Taxation for small and medium scale subsidiaries with paid-up capital of RM2,500,000 and below are calculated at
the rate of 20% on chargeable income of up to RM500,000. For chargeable income in excess of RM500,000, the statutory
tax rate of 26% (2007: 27%) is applicable.
A reconciliation of income tax expense applicable to profit/(loss) before taxation at the statutory income tax rate to income
tax expense at the effective income tax rate of the Group and of the Company are as follows:
Group
2008
RM’000
Taxation at Malaysian statutory tax rate of
26% (2007: 27%)
Effect of different tax rate for small and
medium scale subsidiaries of 20% for
the first chargeable income of RM500,000
Income not subject to tax
Expenses not deductible for tax purposes
Deferred tax assets not recognised:
Utilisation of previously unused
tax losses and unabsorbed
capital allowances brought
forward
Current year deferred tax assets
not recognised
Effects of changes in tax rate
Overprovision of deferred tax in prior years
Under/(over) provision of income
tax expense in prior years
Tax expense/(credit) for the year
Company
2007
RM’000
2008
RM’000
2007
RM’000
5,821
(6,936)
(23,142)
5,744
1,513
(1,873)
(6,017)
1,608
(30)
(30,496)
29,923
(116)
(16,170)
18,309
(342)
6,700
(5,298)
3,592
(12,736)
(2,774)
(7)
13,535
-
10,356
(6,631)
-
100
(2)
799
(157)
951
(7,741)
(7)
-
98
(279)
721
(1,278)
2
(3,628)
2,273
(7,918)
336
(3,907)
62
-
notes to the
12.
EARNINGS PER SHARE
(a)
Basic
Basic earnings per share is calculated by dividing the net profit for the year by the weighted average number of
ordinary shares in issue during the financial year, excluding treasury shares held by the Company.
Net profit for the year (RM’000)
Weighted average number of shares (’000)
Basic earnings per share (sen)
2008
2007
3,420
642,701
0.53
8,957
628,158
1.43
(b) Diluted
For the purpose of calculating diluted earnings per share, the net profit for the year and the weighted average
number of ordinary shares in issue during the financial year have been adjusted for the effects of dilutive potential
ordinary shares from conversion of 5% ICPS. The adjusted weighted average number of ordinary shares is the
weighted average number of ordinary shares which would be issued on the conversion of the outstanding ICPS into
ordinary shares. The ICPS are deemed to have been converted into ordinary shares at the date of issuance.
The effects of dilutive potential ordinary shares from assumed conversion of warrants is anti-dilutive and as such
have been excluded from the computation of diluted earnings per share.
Group
2008
2007
3,420
8,957
Weighted average number of ordinary shares in issue (’000)
Adjustment for assumed conversion of ICPS (’000)
628,304
14,397
628,158
14,397
Adjusted weighted average number of ordinary
shares in issue and issuable (’000)
642,701
642,555
0.53
1.39
Net profit for the year (RM’000)
Diluted earnings per share (sen)
13.
DIVIDENDS
Amount
2008
RM’000
2007
RM’000
-
720
Year 2007/2006 ICPS dividend of 5%
(net of taxation)
ANNUAL REPORT 2008
63
Dividend per share
2008
2007
Sen
Sen
-
5.0
notes to the
14. PROPERTY, PLANT AND EQUIPMENT
Group
Leasehold
Land and
Buildings
RM’000
Plant and
Machinery,
Tools and
Equipment,
Crockery and
Kitchenware
RM’000
Office
Equipment,
Furniture
and Fittings
RM’000
Motor
Vehicles
RM’000
Total
RM’000
Cost
At 1 February 2006
Additions
Acquisition of subsidiaries
Write-offs
Disposals
Reclassification
199,845
114
(261)
(766)
32,520
180
11
(93)
(25)
(4)
745
19,110
26
(24)
(15)
(1)
-
10,444
5
12
(1,437)
21
261,919
325
23
(378)
(1,477)
(5)
-
At 31 January 2007
Additions
Write-offs
Disposals
198,932
1,568
(213)
(22)
(166)
33,334
691
(2,861)
(2)
19,096
276
(1,965)
(110)
-
9,045
194
(502)
(208)
260,407
2,729
(2,178)
(3,495)
(376)
At 31 January 2008
200,099
31,162
17,297
8,529
257,087
Accumulated Depreciation
At 1 February 2006
Charge for the year
Write-offs
Disposals
Reclassification
12,516
3,749
(215)
-
19,190
2,758
1
(63)
(11)
(2)
1,074
15,687
1,108
(17)
(553)
10,417
94
2
(1,265)
(521)
57,810
7,709
3
(295)
(1,276)
(2)
-
At 31 January 2007
Charge for the year
Write-offs
Disposals
Reclassification
16,050
3,763
(213)
(22)
(76)
-
22,947
2,826
(2,646)
76
16,225
738
(1,888)
(70)
(76)
8,727
259
(502)
(208)
-
63,949
7,586
(2,101)
(3,240)
(284)
-
At 31 January 2008
19,502
23,203
14,929
8,276
65,910
Net Book Value
At 31 January 2007
182,882
10,387
2,871
318
196,458
At 31 January 2008
180,597
7,959
2,368
253
191,177
64
notes to the
14. PROPERTY, PLANT AND EQUIPMENT (CONT’D)
Leasehold
Land and
Buildings
RM’000
Office
Equipment,
Furniture
and Fittings
RM’000
Renovation
RM’000
Cost
At 1 February 2006
Disposals
1,107
-
411
-
4,850
-
At 31 January 2007 /
31 January 2008
1,107
411
4,850
At 1 February 2006
Charge for the year
Disposals
392
27
-
328
83
-
3,256
311
-
At 31 January 2007
Charge for the year
419
28
411
-
3,567
244
-
4,397
272
At 31 January 2008
447
411
3,811
-
4,669
Net Book Value
At 31 January 2007
688
-
1,283
-
1,971
At 31 January 2008
660
-
1,039
-
1,699
Company
ANNUAL REPORT 2008
65
Motor
Vehicles
RM’000
646
(646)
-
646
(646)
Total
RM’000
7,014
(646)
6,368
4,622
421
(646)
notes to the
14. PROPERTY, PLANT AND EQUIPMENT (CONT’D)
a)Leasehold land and buildings consist of the following:
Hotel and
Other Land
And Buildings
RM’000
Group
Renovation
RM’000
Total
RM’000
Cost
At 1 February 2006
Additions
Write-offs
Reclassification
192,537
(766)
7,308
114
(261)
-
199,845
114
(261)
(766)
At 31 January 2007
Additions
Write-offs
Disposals
191,771
(166)
7,161
1,568
(213)
(22)
-
198,932
1,568
(213)
(22)
(166)
At 31 January 2008
191,605
8,494
200,099
At 1 February 2006
Charge for the year
Write-offs
8,424
3,242
-
4,092
507
(215)
12,516
3,749
(215)
At 31 January 2007
Charge for the year
Write-offs
Disposals
Reclassification
11,666
3,237
(76)
(1)
4,384
526
(213)
(22)
1
16,050
3,763
(213)
(22)
(76)
-
At 31 January 2008
14,826
4,676
19,502
Net Book Value
At 31 January 2007
180,105
2,777
182,882
At 31 January 2008
176,779
3,818
180,597
b)Net book values of property, plant and equipment held under hire purchase and finance lease arrangements are as
follows:
2008
RM’000
-
Motor vehicles
c)
Group
2007
RM’000
2008
RM’000
161
-
Company
2007
RM’000
-
The net book values of property, plant and equipment charged to financial institutions for borrowings as disclosed in
Note 33 are as follows:
2008
RM’000
Leasehold land and buildings
176,357
66
Group
2007
RM’000
2008
RM’000
182,089
660
Company
2007
RM’000
688
notes to the
15.
LAND HELD FOR PROPERTY DEVELOPMENT AND PROPERTY DEVELOPMENT COSTS
(a)
Land Held for Property Development
Freehold
Land
RM’000
Leasehold
Land
RM’000
Development
Costs
RM’000
Total
RM’000
101,875
198,908
-
624,098
8,132
21,307
1,087,510
21,634
-
7,604
7,604
24
50,063
38,721
143,458
300,807
711,204
1,155,469
143,458
-
300,807
2
(7,035)
711,204
36,251
(55,807)
(2,553)
1,155,469
36,253
(55,807)
(9,588)
Group
At 31 January 2007
Cost
At 1 February 2006
Reclassification
Additions
Acquisition of subsidiaries during
the year
Transfer (to)/from property
development costs
At 31 January 2007
361,537
(207,040)
327
(11,366)
At 31 January 2008
Cost
At 1 February 2007
Additions
Disposal of subsidiaries during the year
Write-offs
Transfer (to)/from property
development costs
At 31 January 2008
-
1,248
1,926
3,174
143,458
295,022
691,021
1,129,501
17,987
-
139
18,126
Company
At 31 January 2008/2007
Cost
At 31 January 2008/2007
ANNUAL REPORT 2008
67
notes to the
15.
LAND HELD FOR PROPERTY DEVELOPMENT AND PROPERTY DEVELOPMENT COSTS (CONT’D)
(b)
Property Development Costs
2008
RM’000
At 1 February 2007/2006:
- Freehold land
- Leasehold land
- Development costs
Reversal in development
costs of completed
projects during the year:
- Freehold land
- Leasehold land
- Development costs
Costs incurred during the year:
- Freehold land
- Leasehold land
- Development costs
Disposal during the year:
- Freehold land
2008
RM’000
358,775
489,116
4,085,860
344,978
599,790
4,735,309
87,172
35,250
82,844
35,250
4,933,751
5,680,077
122,422
118,094
-
75,020
-
-
-
75,020
-
-
(9,029)
(33,204)
(92,002)
-
-
(42,233)
(92,002)
-
-
(72,156)
(5,500)
(20,787)
(114,747)
(751,966)
-
-
(98,443)
(866,713)
-
-
2007
RM’000
253,166
2,347
4,158
174,855
46,300
4,328
-
253,166
181,360
46,300
4,328
Write-off during the year:
- Development costs
Transfers:
- To land held for property
development
- To inventories
Company
2007
RM’000
during the year:
- Development costs
during the year:
- Freehold land
- Development costs
Group
(596)
-
(596)
-
(596)
-
(596)
-
-
(21)
-
-
-
(21)
-
-
(3,174)
(10,671)
(38,721)
(5,249)
-
-
(13,845)
(43,970)
-
-
168,126
122,422
5,031,800
4,933,751
68
notes to the
15.
LAND HELD FOR PROPERTY DEVELOPMENT AND PROPERTY DEVELOPMENT COSTS (CONT’D)
(b)
Property Development Costs (Cont’d)
2008
RM’000
Costs recognised in
income statements:
- At 1 February 2007/2006
- Disposal of subsidiaries during
the year
- Adjustments to completed projects
during the year
- Recognised during the year
- At 31 January
Foreseeable losses:
- At 1 February 2007/2006
- Recognised during the year
- At 31 January
(c)
At 31 January
(3,713,300)
Group
2007
RM’000
(4,538,822)
2008
RM’000
(72,509)
Company
2007
RM’000
(72,509)
35,608
81,451
-
-
98,443
(213,466)
866,713
(122,642)
-
-
(3,792,715)
(3,713,300)
(56,234)
(1,304)
(15,801)
(40,433)
-
-
(57,538)
(56,234)
-
-
95,617
49,913
1,181,547
1,164,217
(72,509)
(72,509)
The following are charged as security for borrowings of the Group as disclosed in Note 33.
Freehold land
Leasehold land
Development expenditure
2008
RM’000
2007
RM’000
391,192
725,103
1,131,264
463,945
737,636
1,095,947
2,247,559
2,297,528
(d)
Certain proceeds from sales of development properties of a subsidiary of the Group has been sold to a third party
under the Islamic Assets Backed Securitisation (“ABS”) arrangement as disclosed in Note 35.
(e)
Certain proceeds from sales of development properties of a subsidiary has been assigned to a third party under the
Bai Bithaman Ajil Islamic Debt Securities (“BaIDS”) as disclosed in Note 33.
(f)
Certain title deeds in respect of the land are not registered under the subsidiaries’ names as these title deeds will be
transferred directly to house buyers upon sale of the properties.
(g)
Certain land held for development of two subsidiaries are charged as securities for banking facilities granted to a
corporate shareholder, Kumpulan Europlus Berhad.
ANNUAL REPORT 2008
69
notes to the
15.
LAND HELD FOR PROPERTY DEVELOPMENT AND PROPERTY DEVELOPMENT COSTS (Cont’D)
(h)Included in the development costs for the year are:
(i)
construction costs charged by the following related parties:
2008
RM’000
938
Agrocon (M) Sdn. Bhd.
Kumpulan Europlus Bhd (“KEB”) and its subsidiaries (“KEB Group”)
(ii)
16.
Group
2007
RM’000
31,798
24,428
The nature of the relationship with the related parties are disclosed in Note 46.
interest capitalised during the financial year for the Group amounting to approximately RM9,609,000 (2007:
RM19,068,000) (Note 7).
INVESTMENT PROPERTIES
2008
RM’000
Group
2007
RM’000
At cost:
Freehold land
Leasehold land
Buildings
Reclassified as held for sale (Note 27)
Accumulated depreciation
Accumulated impairment losses
4,900
96,895
4,900
1,449
135,495
101,795
(279)
(17,000)
141,844
(40,049)
(173)
(17,000)
84,516
84,622
Investment properties have been charged for borrowings as disclosed in Note 33.
The directors did not conduct any valuation on the investment properties and as such, the directors are unable to determine
the fair value of the investment properties.
17. PREPAID LEASE PAYMENTS
2008
RM’000
Group
2007
RM’000
Transfer from property, plant and equipment
Less amortisation:
At beginning of year
Charge for the year
16,458
16,458
4,637
695
3,939
698
At end of year
(5,332)
(4,637)
Net
11,126
Prepaid lease payments have been charged for borrowings as disclosed in Note 33.
70
11,821
notes to the
18.
INVESTMENT IN SUBSIDIARIES
2008
RM’000
Company
2007
RM’000
Unquoted shares, at cost
Accumulated impairment losses
502,011
(157,210)
502,011
(157,210)
Net
344,801
344,801
Details of the subsidiaries are disclosed in Note 44.
(a)Amount owing by subsidiaries
2008
RM’000
Company
2007
RM’000
Amount owing by subsidiaries
Less: Allowance for doubtful receivables
561,532
(292,581)
606,845
(289,856)
Net
268,951
316,989
Amount owing by/(to) subsidiaries, which arose from non-trade transactions, are unsecured and have no fixed terms
of repayment.
(b)
Disposal and deconsolidation of subsidiaries in current year
On 28 February 2007, a subsidiary, Noble Rights Sdn Bhd, has been wound-up. As such, it has been deconsolidated
from the Group’s financial statements.
On 28 June 2007, a subsidiary, Larut Overseas Ventures Sdn Bhd disposed 1,515,000 ordinary shares of HK$1 each,
representing 50% equity interest, in Larut Leisure Enterprise (Hong Kong) Limited (“LLE”) for HK$1. LLE will ceased
to be a subsidiary of the Group and became a 49.99% owned associate company of the Group when the transfer of
shares was effected on 21 December 2007.
The effect of the disposal and deconsolidation on the financial results of the Group for the financial period up to the
date of disposal and deconsolidation are as follows:
RM’000
Interest income
Other operating expenses
Finance costs
*
(17)
5
Loss before tax
Income tax expense
(12)
**
(12)
Minority interests
11
Increase in Group loss attributable to shareholders
* ** (1)
Represents RM52
Represents RM14
ANNUAL REPORT 2008
71
notes to the
18.
INVESTMENT IN SUBSIDIARIES (Cont’d)
(b)
Disposal and deconsolidation of subsidiaries in current year (Cont’d)
The effect of the disposal and deconsolidation on the financial position of the Group as at 31 January 2008 are as
follows:
At disposal date
RM’000
Land held for property development (Note 15)
Property, plant and equipment (Note 14)
Inventories
Trade receivables
Other receivables, deposits and prepaid expenses
Tax recoverable
Fixed deposits
Trade payables
Other payables
Amount due to related companies
Provision for future costs to complete
Minority interests
Transfer from foreign exchange reserve
55,807
92
6,625
8,838
214
1,614
113
1,129
183
(8,495)
(30,817)
(26,483)
(5,242)
(2,481)
(13,196)
(6,375)
Fair value of total net liabilities
Gain on disposal to the Group
(18,474)
18,474
Proceeds from disposal
***
Less: Cash and cash equivalents of subsidiaries disposed and deconsolidated
(1,312)
Net cash outflow arising on disposal and deconsolidation,
representing cash and cash equivalents of subsidiaries disposed
and deconsolidated
(1,312)
*** Represents RM0.43
(c)
Acquisition of subsidiaries in the previous year
In the previous year,
(i)
a subsidiary, Europlus Corporation Sdn Bhd, acquired 2 ordinary shares of RM1.00 each representing 100%
of the issued and paid-up share capital of Mutual Prosperous Sdn Bhd (“MPSB”) for a cash consideration of
RM2.00. MPSB has two wholly-owned subsidiaries, Zhinmun Sdn Bhd and Untung Utama Sdn Bhd.
(ii)
MPSB acquired 2 ordinary shares of RM1.00 each representing 100% of the issued and paid-up share capital
of Envy Vista Sdn Bhd for a cash consideration of RM2.00.
72
notes to the
18.
INVESTMENT IN SUBSIDIARIES (CONT’D)
(c)
Acquisition of subsidiaries in the previous year (Cont’d)
The effect of the above mentioned acquisitions on the financial results of the Group from date of acquisition to 31
January 2007 were as follows:
RM’000
Interest income
12
(1,036)
Loss before tax
Income tax expense
(1,024)
-
Minority interest
(1,024)
-
(1,024)
The effect of these acquisitions on the financial position of the Group as at 31 January 2007 were as follows:
2007
RM’000
Current tax assets
Sundry receivables
Trade payables
Sundry payables
Borrowings
3
82,989
15
10,225
388
(487)
(50,932)
(42,479)
(278)
Net liabilities assumed
The fair value of the assets acquired and liabilities assumed from the acquisition of the subsidiaries were as
follows:
At
acquisition date
RM’000
Net assets acquired:
Property development cost
Current tax assets
Trade receivables
Trade payables
Other payables
Borrowings
20
7,604
75,020
15
152
9,598
889
(10,079)
(40,815)
(42,404)
*
Total consideration
Net cash outflow from acquisition:
Cash consideration of subsidiaries acquired
Less: Cash and cash equivalents of subsidiaries acquired
*
(889)
(889)
* Represents RM4
ANNUAL REPORT 2008
73
notes to the
18.
INVESTMENT IN SUBSIDIARIES (CONT’D)
(d)
Disposal of subsidiaries in the previous year
In the previous year,
(i)
the Company disposed of 51% equity interest in Master Waves Sdn. Bhd. (“Master Waves”). Master Waves
had a wholly-owned subsidiary, Mudi Angkasa Development Sdn Bhd. With the said disposal, Master Waves
and its subsidiary ceased to be subsidiaries of the Group.
(ii)
Larut Overseas Ventures Sdn Bhd, a subsidiary disposed of 100% equity interest in Birchwood Enterprises
Limited (“Birchwood”).
(iii)
Larut Consolidated (HK) Limited and Talam Corporation (HK) Limited, wholly-owned subsidiaries of the
Company, disposed of 22% and 78% equity interest respectively in HPC Development (HK) Limited (“HPC”).
The effect of these disposals on the financial results of the Group for the financial period up to the date of
disposal were as follows:
RM’000
Revenue
(36)
(9)
Loss before tax
Income tax expense
(45)
-
Minority interests
(45)
-
(45)
The effect of these disposals on the financial position of the Group as at 31 January 2007 were as follows:
At disposal date
RM’000
Property, plant and equipment (Note 14)
Trade receivables
Trade payables
Other payables
Borrowings
Current tax liabilities
Deferred tax liabilities
3
10,551
566
8,916
551
(7,268)
(8,588)
(3,114)
(3,226)
(1,194)
(508)
Fair value of total net assets
Gain on disposal to the Group
(3,311)
3,321
Proceeds from disposal
Less: Cash and cash equivalents of subsidiaries disposed
10
(551)
Net cash outflow arising on disposal, representing cash and
cash equivalents of subsidiaries disposed
(541)
74
notes to the
19.
INVESTMENT IN ASSOCIATES
Group
2008
RM’000
Share of post-acquisition reserves
7,695
(7,695)
2007
RM’000
7,219
(7,219)
(a)
-
Details of associates are as follows:
Financial
Year End
Effective Interest
2008
2007
%
%
Principal
Activities
31 January
30.60
30.60
Dormant
31 January
49.99
-
Investment
holding
31 December
29.99
-
Property
development
Name of Company
Incorporated in Malaysia
Beruntung Transport City Sdn. Bhd.
Incorporated in Hong Kong
* Larut Leisure Enterprise (Hong Kong) Limited
Incorporated in The People’s Republic of China
* Jilin Dingtai Enterprise Development Co. Limited
Incorporated in Cambodia
* # Cambodia Resources
Import-Export Company Limited
31 January
49
49
Dormant
* # Parkgrove (Cambodia) Pte. Ltd.
31 January
49
49
Dormant
* # Noble House Investment (Cambodia) Pte. Ltd.
31 January
49
49
Dormant
* Audited by a firm of auditors other than Deloitte KassimChan
The financial statements of the associates marked # are not available. The said investments have been fully written
down in prior years. In view of this, the effect of not equity accounting for investment in the associates is not material
to the Group.
(b)
The amount owing by associates, which arose from non-trade transactions, are unsecured and have no fixed terms
of repayment.
ANNUAL REPORT 2008
75
notes to the
20.
INTEREST IN JOINTLY CONTROLLED ENTITIES
2008
RM’000
Share of post-acquisition reserves
(a)
Group
2007
RM’000
10,500
(423)
10,000
(672)
10,077
9,328
Details of jointly controlled entities, which are incorporated in Malaysia, are as follows:
Financial
Year End
Name of Company
Effective Interest
2008
2007
%
%
Principal
Activities
* Astaka Tegas Sdn. Bhd.
31 March
50
50
Property
development
* Sierra Ukay Sdn. Bhd.
31 March
49.9995
49.9995
Property
development
* Good Debut Sdn. Bhd.
31 March
50
50
Property
development
* Cekap Tropikal Sdn. Bhd.
31 March
49.9995
-
Property
development
*Audited by a firm of auditors other than Deloitte KassimChan
(b)
The amount owing by/(to) jointly controlled entities, which arose from non-trade transactions, are unsecured and
have no fixed terms of repayment.
(c)
The Group’s aggregate share of the current assets, non-current assets, current liabilities, non-current liabilities,
income and expenses of the jointly controlled entities is as follows:
2008
RM’000
2007
RM’000
Non-current assets
Current assets
493
72,306
54
61,853
Total assets
72,799
61,907
Non-current liabilities
Current liabilities
(30,000)
(32,722)
(30,000)
(22,579)
Total liabilities
(62,722)
(52,579)
Assets and liabilities
Results
249
Expenses, including finance costs
76
(660)
notes to the
21.
OTHER INVESTMENT
At cost:
1% Irredeemable Convertible Unsecured Loan Stock (“ICULS”)
2008
RM’000
Group
2007
RM’000
76,332
76,332
The ICULS nominal value at RM1.00 each, are constituted by a Trust Deed dated 8 November 2003 between Venue Venture
Sdn. Bhd. (“VVSB”) and the trustee for the holders of ICULS.
The main features of the ICULS are as follows:
(a)
The ICULS shall be for a period of five years from the date of issue.
(b)
The ICULS shall not be redeemable for cash. All outstanding ICULS shall be converted into new VVSB Shares on
the maturity date.
(c)
The ICULS may, at the holder’s option, be converted into new VVSB Shares at the Conversion Price during the tenure
of ICULS. Upon maturity, any ICULS not converted shall be converted automatically into new VVSB Shares at the
conversion price.
(d)
The new VVSB Shares to be issued pursuant to the conversion of the ICULS shall, upon allotment and issue, rank
pari passu in all respects with the existing VVSB Shares except that they shall not be entitled to any dividends, rights,
allotments and/or other distributions the entitlement date of which precedes the date of allotment of the new VVSB
Shares.
22.
SINKING FUNDS HELD BY TRUSTEES
The sinking funds are held by trustees for the redemption and/or servicing of the following financing facilities:
Group
Murabahah Notes Issuance Facility (“MUNIF”) (Note 33(e))
Sukuk Al-Ijarah (Note 33(h))
ANNUAL REPORT 2008
77
2008
RM’000
2007
RM’000
22
9,779
22
6,788
9,801
6,810
notes to the
23.
INVENTORIES
2008
RM’000
Company
2007
RM’000
2008
RM’000
96,215
94,192
5,831
5,831
1,296
1,026
-
-
Less: Allowance for inventories writedown
97,511
(22,788)
95,218
(23,927)
5,831
(144)
5,831
(144)
Net
74,723
71,291
5,687
5,687
At cost:
Completed properties held for sale
Finished goods and
consumables
24.
Group
2007
RM’000
TRADE RECEIVABLES
2008
RM’000
Group
2007
RM’000
Trade receivables
97,424
(8,756)
109,325
(8,690)
Net
88,668
100,635
2008
RM’000
2007
RM’000
5,306
546
7,247
1,315
(a)Included in trade receivables are amounts due from related parties as follows:
KEB Group
The nature of the relationships with the above related parties are disclosed in Note 46.
(b)
The Group’s normal trade credit term ranges from 14 days to 60 days. Other credit terms are assessed and approved
on a case-by-case basis.
The Group has no significant concentration of credit risk that may arise from exposures to a single debtor or to
groups of debtors.
(c)Included in trade receivables of the Group are amounts of RM37,223,000 (2007: RM29,623,000) due from certain
contractors of the Group. The management is of the opinion that these receivables are fully recoverable.
78
notes to the
25.
OTHER RECEIVABLES, DEPOSITS AND PREPAID EXPENSES
2008
RM’000
Group
2007
RM’000
2008
RM’000
Company
2007
RM’000
Sundry receivables
281,095
(112,451)
418,909
(124,869)
31,023
(7,658)
23,521
(1,644)
Refundable deposits
Prepaid expenses
Tax recoverable
168,644
23,650
195
2,343
294,040
22,856
220
4,728
23,365
69
2,082
21,877
69
2,418
194,832
321,844
25,516
24,364
Included in sundry receivables of the Group are:
(a)An amount of RM42,071,200 (2007: RM42,071,200), representing deposit and instalment paid to a third party (“land
vendor”) for a proposed purchase of land by Maxisegar Sdn. Bhd. (“MSSB”), a wholly-owned subsidiary. MSSB has
filed a legal suit against the said land vendor to recover the amount as MSSB could not obtain a loan to complete
the Sale and Purchase Agreement due to frustrating events intervening.
Judgement was delivered in favour of the third party together with interest and cost. MSSB appealed to the Court of
Appeal against the said judgement and on 5 May 2005, the Court of Appeal has dismissed the Appeal.
On 24 May 2005, MSSB has instructed its solicitors to file the motion for leave to appeal to the Federal Court as
their solicitors have advised that the Company has a strong case in its appeal to the Federal Court. In the meantime,
MSSB has also filed an application for a stay of execution at the Court of Appeal. On 8 August 2005, the Court of
Appeal has granted the Order for stay of execution and the application for leave to appeal in the Federal Court was
fixed for hearing on 3 October 2005. The application for leave to appeal in the Federal Court has been dismissed by
the Federal Court on 1 March 2006. Pursuant to the Federal Court’s decision, MSSB has provided for the amount
in full in the previous financial year and a further provision for judgment sum of RM38,324,788 representing interest
and cost as disclosed in Note 38. Interest will be charged at the rate of 8% per annum on the judgment sum until
the date of full settlement.
(b)Amount owing by VVSB of RM50,087,000 (2007: RM46,359,000). The management is of the view that the amount
due from VVSB is supported by assets held by VVSB and is fully recoverable.
(c)Amount owing by a third party of RM28,369,000 (2007: RM27,818,000) pursuant to the issuance of Sukuk Al-Ijarah
which is secured by the said third party’s property.
ANNUAL REPORT 2008
79
notes to the
26.
CASH AND CASH EQUIVALENTS
2008
RM’000
Group
2007
RM’000
2008
RM’000
2007
RM’000
Housing development accounts
Cash on hand and bank balances
Deposits with:
Licensed banks
10,301
11,541
4,921
9,223
83
514
439
1,138
350
-
Less: Bank overdrafts (Note 33)
22,281
(7,512)
15,282
(11,184)
433
(5,714)
514
(9,215)
Cash and cash equivalents
14,769
4,098
(5,281)
(8,701)
(a)
The housing development accounts of the Group are maintained pursuant to Section 7A of the Housing Development
(Control and Licensing) Act, 1966. These accounts, which consist of monies received from purchasers, are for the
payment of property development expenditure incurred and are restricted from use in other operations. The surplus
monies, if any, will be released to the respective subsidiaries upon the completion of the property development
projects and after all property development expenditure have been fully settled. Housing development accounts of
the Group amounting to approximately RM8,887,000 (2007: RM2,619,000) have been pledged for financing facilities
as disclosed in Note 33.
(b)
The following are pledged to financial institutions for financing facilities granted to the Group as disclosed in Note
33:
2008
RM’000
Group
3,618
10
Bank balances
Deposits
27.
Company
2007
RM’000
389
1,138
NON-CURRENT ASSET CLASSIFIED AS HELD FOR SALE
2008
RM’000
Investment property (Note 16)
-
80
Group
2007
RM’000
40,049
notes to the
28.
SHARE CAPITAL
Group and Company
Number of Shares
2008
2007
2008
’000
’000
RM’000
Authorised
Ordinary shares of RM1.00 each
Redeemable convertible preference
shares (“RCPS”) of RM0.01 each
5% Irredeemable convertible preference
shares (“ICPS”) of RM0.10 each
Total
Issued and fully paid
Ordinary shares of RM1.00 each:
Conversion of ICULS 2003/2006
At end of year
5% Irredeemable convertible preference
shares (“ICPS”) of RM0.10 each:
At beginning and end of year
Total
Less: Liability component
of ICPS (Note 33)
Amount
2007
RM’000
939,000
939,000
939,000
939,000
100,000
100,000
1,000
1,000
600,000
600,000
60,000
60,000
1,639,000
1,639,000
1,000,000
1,000,000
629,183
-
628,498
685
629,183
-
628,498
685
629,183
629,183
629,183
629,183
143,963
143,963
14,397
14,397
773,146
773,146
643,580
643,580
(565)
Total
643,015
(1,157)
642,423
(a)In the previous year, the Company increased its issued and paid-up share capital from RM642,894,813 to
RM643,579,453 by way of issuance of 684,640 ordinary shares of RM1.00 each amounting to RM684,640 pursuant
to the conversion of 7% ICULS 2003/2006 as disclosed in Note 32;
The new ordinary shares rank pari passu in all respects with the existing ordinary shares of the Company except that
they are not entitled to any dividends, allotments and/or other distributions unless the allotment of the new ordinary
shares is made on or prior to the entitlement date of such dividends, right, allotments and/or other distributions.
(b)
The ICPS have been split between the liability component and the equity component, representing the fair value of
the conversion component. The main features of the ICPS are disclosed in Note 29.
29. 5-YEAR 5% IRREDEEMABLE CONVERTIBLE PREFERENCE SHARES
The main features of the 5-Year 5% Irredeemable Convertible Preference Shares of RM0.10 (“ICPS”) each are as follows:
(a)
The ICPS shall mature upon the expiry of the five year period from the date of issue.
(b)
The ICPS will not be redeemable for cash. All outstanding ICPS will be converted into new ordinary shares on the
Maturity Date.
ANNUAL REPORT 2008
81
notes to the
29. 5-YEAR 5% IRREDEEMABLE CONVERTIBLE PREFERENCE SHARES (CONT’D)
30.
(c)
The ICPS may be converted into new ordinary shares, at the holder’s option, at the Conversion Price during the
tenure of the ICPS. Upon maturity, any ICPS not converted shall automatically be converted into new ordinary
shares at the Conversion Price of RM1.00 per share of the Company.
(d)
Dividends payable to holder of ICPS shall rank in priority to all dividends payable to holders of RCPS and shareholders.
In the event of the winding up or liquidation of the Company, the ICPS shall rank ahead of ordinary shares but shall
rank pari passu in all respects with the RCPS.
(e)
The new ordinary shares to be issued pursuant to the conversion of the ICPS shall, upon allotment and issue, rank
pari passu in all respects with the ordinary shares then in issue except that they shall not be entitled to any dividends,
rights, allotments and/or other distributions the entitlement date of which precedes the date of allotment of the new
ordinary shares.
TREASURY SHARES
Group and Company
Number of
Ordinary Shares
of RM1.00 each
Amount
’000
RM’000
Balance as of 1 February 2006/31 January 2007/31 January 2008
31.
844
879
RESERVES
2008
RM’000
Capital Reserve:
Capitalisation of retained profits for bonus
issue of ordinary shares by
subsidiaries
Redemption of preference
shares to ordinary shares
Share Premium
Foreign exchange reserve
Accumulated losses
Group
Company
2007
RM’000
2008
RM’000
2007
RM’000
6,392
6,392
-
-
4,809
4,809
-
-
11,201
124,551
26,346
(459,809)
11,201
124,551
32,414
(463,229)
124,551
(446,527)
124,551
(423,049)
(297,711)
(295,063)
(321,976)
(298,498)
82
notes to the
32.
IRREDEEMABLE CONVERTIBLE UNSECURED LOAN STOCKS (“ICULS”)
Group and Company
2008
2007
RM’000
RM’000
7% ICULS 2003/2006
Less: Converted during the year
-
At end of year
-
-
TOTAL
Less : Equity component of ICULS
-
-
Liability component as at 31 January
-
-
685
(685)
RM690,640 7% Irredeemable Convertible Unsecured Loan Stock 2003/2006 (“7% ICULS 2003/2006”) issued at nominal
value for the acquisition of the Europlus Berhad’s (“Europlus”) RM690,640 7% Irredeemable Convertible Unsecured Loan
Stock 2001/2006.
The salient features of 7% ICULS 2003/2006 issued are as follows:
(a) The principal amount of the ICULS 2003/2006 which consist of unsecured notes of the Company in registered form
in multiples of RM1.00 each issued pursuant to acquisition of Europlus ICULS 2001/2006, bearing a coupon rate of
7% per annum on the principal amount. The Loan Stock is designated as “7% ICULS 2003/2006”.
(b)
The 7% ICULS 2003/2006 are constituted by a Trust Deed executed by the Company and a Trustee on 3 November
2003.
(c)
The 7% ICULS 2003/2006 will be irredeemable and shall be convertible into new ordinary shares, at the holder’s
option, at the conversion price during the tenure of the ICULS. All outstanding 7% ICULS 2003/2006 shall be
automatically converted into new ordinary shares of RM1.00 each on the maturity date, 19 April 2006.
(d)
The new ordinary shares of RM1.00 each to be issued pursuant to the conversion of the 7% 2003/2006 ICULS shall,
upon allotment and issue, rank pari passu in all respect with existing shares in issue at the conversion date, except
that they will not be entitled to any dividends, rights, allotments and/or other distributions the entitlement date of
which precedes the date of allotment of the new ordinary shares.
(e)
On its maturity date on 19 April 2006, all remaining outstanding 7% 2003/2006 ICULS of RM684,640 have been
converted into fully paid ordinary shares of RM1.00 each of the Company on the basis of RM1.00 nominal value of
ICULS 2003/2006 for every one (1) new ordinary share in accordance with the terms of the Trust Deed.
The ICULS have been split between the liability component and the equity component, representing the fair value of the
conversion option.
ANNUAL REPORT 2008
83
notes to the
33.
BORROWINGS
Group
Company
2008
RM’000
2007
RM’000
2008
RM’000
2007
RM’000
30,285
86,778
19,023
92,149
46,871
36,400
117,063
111,172
46,871
36,400
7,512
11,184
5,714
9,215
21,151
-
10,350
21,151
-
8,161
145,726
132,706
73,736
53,776
130,000
190,000
262,882
1,207
130,000
190,000
237,144
4,000
14,512
-
4,575
-
584,089
561,144
14,512
4,575
16
400
-
-
729,831
694,250
88,248
58,351
(a) Current
(i) Secured:
Revolving credits
- Related party (Note 46)
- Financial institutions
Unsecured:
Bank overdrafts (Note 26)
Revolving credits
- Related party (Note 46)
- Financial institutions
(ii) Non-current due within 12 months
Secured:
BaIDS
MuNIF
Term and bridging loans
Sukuk Al-Ijarah
(iii) Hire purchase payables (Note 34)
Total
84
notes to the
33.
BORROWINGS (Cont’D)
2008
RM’000
Group
2007
RM’000
2008
RM’000
Company
2007
RM’000
(b) Non-current
Secured:
BaIDS
Due within 12 months
130,000
(130,000)
130,000
(130,000)
190,000
(190,000)
MuNIF
190,000
(190,000)
262,882
(262,882)
237,144
(237,144)
Sukuk Al-Ijarah
Unsecured:
Liability component of ICPS (Note 28)
-
-
-
-
-
-
-
-
-
14,512
(14,512)
4,575
(4,575)
-
-
88,272
(1,207)
147,500
(4,000)
-
-
87,065
143,500
-
-
565
1,157
565
1,157
-
119
-
-
87,630
144,776
565
1,157
Hire purchase
payables (Note 34)
Total
(c)
The range of effective interest rates or purchase yield during the financial year for borrowings are as follows:
2008
%
7.95 - 9.75
8.70 - 9.00
7.00 - 7.50
5.00
7.25 - 12.00
5.84 - 9.00
Revolving credits
Bank overdrafts
BaIDS
MuNIF
Sukuk Al-Ijarah
Group
2007
%
2008
%
6.60 - 13.50
7.75 - 9.00
7.00 - 7.50
5.75
8.00 - 16.00
5.20 - 9.30
9.00 - 9.75
9.00
7.25 - 9.00
-
Company
2007
%
6.60 - 8.50
7.75 - 8.00
8.00
-
(d)
The Company has provided corporate guarantees for unsecured bank overdrafts and revolving credits of the
subsidiaries.
The secured revolving credits of the Group and of the Company are secured by fixed and floating charges over
certain assets of the Group and of the Company as disclosed in Notes 14 and 15.
ANNUAL REPORT 2008
85
notes to the
33.
BORROWINGS (Cont’d)
(e)
The MuNIF of the Group was originally repayable during the previous financial year. Pursuant to the approval from
the authorities on 29 December 2004, the facility tenure of the MuNIF has been extended to 3 October 2006.
The MuNIF of the Group is secured by the following:
(i)Memorandum of Charge over the operating accounts (including Housing Development Accounts) of certain
subsidiaries;
(ii)Assignment of proceeds from sale of the development properties of certain subsidiaries;
(iii)
Debentures creating a fixed and floating charge over assets of certain subsidiaries; and
(iv)
Third party first legal charge on certain subsidiaries’ operating accounts (including Housing Development
Accounts) as referred to in Note 26.
On 11 October 2006, a subsidiary, Europlus Corporation Sdn. Bhd. (“ECSB”) received a written notice from ABB
Trustee Berhad (“Trustee”) informing that the Noteholders of ECSB’s Murabahah Notes Issuance Facility (“MuNIF”)
had approved and passed a resolution in writing on 25 September 2006 on the Company’s restructuring proposal of
the MuNIF. ECSB has undertaken an issuance of the above MuNIF of RM350.0 million constituted by a Trust Deed
dated 19 September 2000 (as supplemented and amended by a Supplemental Trust Deed dated 3 July 2003).
As at the date of approval, RM196.0 million under the MuNIF remain outstanding. ECSB and the Company had
requested the Trustee and Abrar Discounts Berhad to agree to a settlement of ECSB’s obligations to the Trustee of
the remaining outstanding MuNIF in the following manner:
(a)
the settlement of RM6.0 million in cash by applying the monies available in the Sinking Fund Account.
(b)
the settlement of the balance of RM190.0 million by the issuance of Redeemable Convertible Secured Loan
Stocks (“RCSLS”) by the Company. The RCSLS will be secured against properties with a total forced sale
value of not less than RM190.0 million.
On 15 February 2007, the Securities Commission had approved the proposed variation to the Revised Principal
Terms and Conditions of the MuNIF. The restructuring proposal of the MuNIF is part and parcel of the Regularisation
Plan (Note 43).
An amount of RM22,000 (2007: RM22,000) has been maintained in the sinking fund held by trustees in accordance
with the MuNIF granted to a subsidiary as disclosed in Note 22. The amount is deposited to meet the redemption of
maturing notes.
(f)
The term and bridging loans are secured by the following:
(i)
First and third legal charge over the freehold land, leasehold land and buildings of certain subsidiaries as
disclosed in Notes 14 and 15;
(ii)
Subordination deed executed by a subsidiary;
(iii)
Fixed and floating charge over all the assets, revenue, rights and benefits on the property development
properties of certain subsidiaries; and
(iv)
Corporate guarantee by the Company.
86
notes to the
33.
(g)In the financial year ended 31 January 2005, a subsidiary, Maxisegar Sdn. Bhd. (“MSSB”) issued RM140,000,000
nominal value of BaIDS.
The BaIDS is secured inter-alia by the following:
(i)
Charges over all the operating accounts phases involved of MSSB (including Housing Development
Accounts);
(ii)Assignments of sale proceeds from certain development phases of MSSB;
(iii)A charge over certain development properties of MSSB;
(iv)
Specific debenture covering fixed and floating charge on all assets of MSSB related to the project; and
(v)A corporate guarantee from the Company.
On 15 November 2006, the Company had submitted a restructuring proposal to the sole MSSB BaIDS holder,
Abrar Discounts Berhad (“ADB”), for the full and final settlement of the outstanding RM130 million nominal value of
MSSB BaIDS and waiver of all existing and future profits. Subsequently, on 9 January 2007, ADB gave its approval
for the redemption of the MSSB BaIDS through the issuance of up to RM130 million nominal value of Redeemable
Convertible Secured Loan Stocks by the Company and waiver of all existing and future profits.
On 25 May 2007, the Securities Commission had approved the proposed variation to the Revised Principal Terms
and Conditions of the MSSB BaIDS. The restructuring proposal of the MSSB BaIDS is part and parcel of the
Regularisation Plan (Note 43).
(h)In the financial year ended 31 January 2005, a subsidiary, Ample Zone Berhad (“Ample Zone”) issued RM150,000,000
nominal value of Sukuk Al-Ijarah (“Sukuk”).
The Sukuk is secured inter-alia by the following:
(i)
Debenture over the fixed and floating charge over all assets and properties and undertakings both present and
future of Ample Zone; and
(ii)
Principal charge on various designated accounts.
On 18 January 2008, the Facility Agent for the Sukuk has utilised partial sale proceeds from the disposal of investment
property to redeem RM58,020,800 face value of Primary Sukuk.
An amount of RM9,779,000 (2007: RM6,788,000) has been maintained in the bank account held by trustees in
accordance with the requirement of Sukuk granted to Ample Zone as disclosed in Note 22. The amount is deposited
for the profit servicing requirement.
The Sukuk shall be payable upon maturity as follows:
2008
RM’000
Financial year ending 31 January
2008
2009
2010
2011
2012
ANNUAL REPORT 2008
87
Group
2007
RM’000
1,207
1,207
1,207
84,651
4,000
4,500
4,500
4,500
130,000
88,272
147,500
notes to the
33.
34.
(i)
The Group and the Company have not met their obligation in certain loan repayments and interest payments and
have breached their borrowing facilities agreements. Accordingly, the said outstanding borrowings of the Group and
the Company were classified as current liabilities.
The Group and the Company with their financial advisors have formulated a Regularisation Plan (“RP”), which
salient points are as disclosed in Note 43, and have completed negotiations and discussions with its lenders for
the adoption and implementation of the RP. The RP has been submitted to the relevant authorities on 30 April 2007
and the Securities Commission vide its letter dated 29 April 2008, has approved the RP (Note 43). The directors are
confident that the Group will be able to successfully implement the RP.
HIRE-PURCHASE PAYABLES
2008
RM’000
2008
RM’000
Company
2007
RM’000
16
-
555
(36)
-
-
Principal outstanding
16
519
-
-
Less: Portion due within the
next 12 months shown
under current
liabilities (Note 33)
(16)
(400)
-
-
119
-
-
2007
RM’000
2008
RM’000
119
-
-
The non-current portion is repayable as follows:
2008
RM’000
-
Within 1 to 2 years
2007
RM’000
Total outstanding
Less: Interest-in-suspense
Non-current portion (Note 33)
Group
Group
The hire-purchase payables of the Group bear interest at 3.8% (2007: 7.07% to 12.18%) per annum.
88
Company
2007
RM’000
-
notes to the
35.
DEFERRED PROGRESS BILLINGS
Group
Less : Billed
Discount on deferred progress billings
Less: Discount capitalised in property development costs
Amortisation charged to income statement
2008
RM’000
2007
RM’000
1,091,692
(620,640)
1,091,692
(620,640)
471,052
471,052
172,461
(15,686)
(130,643)
172,461
(15,686)
(130,643)
(26,132)
(26,132)
Deferred progress billings, net of discount
444,920
444,920
Represented by:
Amount due in next 12 months
444,920
444,920
(a)
Deferred progress billings relates to an Islamic Assets Backed Securitisation (“ABS”) arranged by a subsidiary. The
ABS arrangement encompasses the sale of the subsidiary’s right to bill under certain Sale and Purchase Agreements
of certain phases of two development projects to a special purpose vehicle for a net cash purchase consideration of
approximately RM919,231,000.
(b)
The timing of the anticipated cash flows from the property development activities of the Group do not match the cash
flows required to meet the obligations under ABS in accordance with existing terms of repayment. The Securities
Commission had on 30 September 2005 approved the Group’s proposal to restructure and extend the remaining
tenure of the Islamic ABS by another year. Thus, the Group’s repayment obligations under ABS has similarly been
granted a deferment of 12 months.
(c)
On 28 July 2006, the Group has defaulted on its repayment obligations under ABS due on that date. Pursuant to the
said default, the obligation under ABS became immediately due and payable on that date.
On 5 October 2006, a subsidiary, Maxisegar Sdn. Bhd. (“MSSB”), and the Company entered into a settlement
agreement with Ambang Sentosa Sdn. Bhd. (“ASSB”) and PB Trustee Services Berhad (“Trustee”). ASSB had
purchased assets from MSSB under an Asset Sale Agreement and has undertaken an issuance of Al-Bai Bithaman
Ajil Islamic Debt Securities of RM986.0 million (“BaIDs”) constituted by a Trust Deed both dated 26 June 2003 (as
supplemented and amended by an Amendment and Restatement Agreement dated 28 July 2005) (“ASSB BaIDs
Trust Deed”).
As at 28 July 2006, RM498.0 million of Primary Notes and RM30.9 million of Secondary Notes in respect of the BaIDs
remain outstanding. ASSB, MSSB and the Company had requested the Trustee to agree to a settlement of ASSB’s
and MSSB’s respective obligations to the Trustee of the remaining outstanding BaIDs.
ANNUAL REPORT 2008
89
notes to the
35.
DEFERRED PROGRESS BILLINGS (Cont’D)
The settlement agreement encompasses the acceptance of RM503.8 million as full and final settlement towards the
remaining outstanding BaIDs with the following salient terms:
(i)
cash portion of RM67.8 million and all profits accruing thereon in the Escrow Accounts and the BaIDs
Redemption Account as at the Cash Portion Payment Date;
(ii)
secured Al-Bai Bithaman Ajil Islamic Debt Securities of up to an aggregate value of RMl50 million Settlement
BaIDs to be issued in one series by the Company with a tenure of 8 years and at the issuer’s option to extend
another 2 years;
(iii)RM286 million of Redeemable Convertible Preference Shares (“RCPS”) of par value RM0.20 per RCPS with a
maturity period of 5 years;
36.
On 22 December 2006, the Securities Commision had approved the proposed variation to the Revised Principal
Terms and Conditions of the BaIDs.
The settlement agreement forms part of the Regularisation Plan (“RP”) as disclosed in Note 43.
OTHER LONG TERM PAYABLES
Group
Amount payable for acquisition of land (Note (a))
Loan from a minority shareholder of a subsidiary (Note (b))
Amount payable for acquisition of building (Note (c))
Preference shareholders of a subsidiary
(a)
2008
RM’000
2007
RM’000
52,352
10,105
13,009
75
53,400
10,118
13,027
75
75,541
76,620
The amount payable for acquisition of land is payable in accordance with the terms and conditions of the Sale and
Purchase Agreements. The amounts are not repayable within 12 months from the end of the financial year.
(b)Loan from a minority shareholder of a subsidiary company is interest free, unsecured and has no fixed terms of
repayment.
(c)
The amount payable for acquisition of building is in relation to an agreement entered into with a third party in the year
1999 for sale of four floors of a building owned by a subsidiary. The agreement provides an option for the subsidiary
to re-acquire those floors within ten years from the date of agreement at the market value on the date of exercise of
the option. The directors have the intention to exercise the option and therefore the transaction was not recognised
as a disposal.
90
notes to the
37.
DEFERRED TAX LIABILITIES
2008
RM’000
At 1 February 2007/2006
Recognised in the income
statement (Note 11)
Reversal on disposal of subsidiaries
4,116
At 31 January
3,959
(157)
-
Tax effects of:
Temporary differences arising from:
Others
Tax losses
Unabsorbed capital allowances
2008
RM’000
2007
RM’000
12,365
-
279
(7,741)
(508)
-
(279)
-
4,116
-
2007
RM’000
2008
RM’000
-
Group
Company
2007
RM’000
5,871
11,029
(8,737)
(4,204)
8,887
11,404
(10,047)
(6,128)
-
-
3,959
4,116
-
-
Deferred tax assets have not been recognised in respect of the following items:
2008
RM’000
Unused tax losses
Unabsorbed capital allowances
Other deductible temporary differences
Company
2007
RM’000
The deferred tax liabilities are in respect of the following:
2008
RM’000
Group
Group
Company
2007
RM’000
2008
RM’000
2007
RM’000
152,784
3,766
30,875
172,811
7,542
6,273
21
20
187,425
186,626
21
20
The availability of the unused tax losses and unabsorbed capital allowances for offsetting against future taxable profits
of the subsidiaries in which those items arose are subject to no substantial changes in shareholdings of the subsidiaries
under Section 44(5A) & (5B) of the Income Tax Act, 1967. Deferred tax assets have not been recognised in respect of these
items as they may not be used to offset future taxable profits of other subsidiaries in the Group and they have arisen in
subsidiaries that does not have a recent history of profits.
ANNUAL REPORT 2008
91
notes to the
38.
PROVISION FOR LIABILITIES
Group
2008
RM’000
At 1 February 2007/2006
Provision during the year
Arising from disposal of subsidiaries
Reversal of provision during the year
Utilisation of provision during the year
At 31 January
2007
RM’000
130,172
8,912
(2,481)
(38,247)
(1,342)
136,067
(3,226)
(2,515)
(154)
97,014
130,172
58,689
38,325
91,847
38,325
97,014
130,172
Provision for liabilities comprise:
Provision for liquidated ascertained damages
Provision for compensation arising from a litigation
(a)Liquidated ascertained damages
39.
Provision for liquidated ascertained damages is in respect of projects undertaken by certain subsidiaries. The
provision is recognised for expected liquidated damages claims based on the terms of the applicable sale and
purchase agreements.
(b)
Compensation arising from a litigation
The details of provision for compensation arising from a litigation is further disclosed in Note 25(a).
TRADE PAYABLES
2008
RM’000
Trade payables
Progress billings in respect of
property development costs
Retention sum
Group
Company
2007
RM’000
2008
RM’000
2007
RM’000
158,324
82,766
2,590
2,848
46,042
36,921
136,111
59,558
-
-
241,287
278,435
2,590
2,848
(a)Included in trade payables and retention sum are amounts due to related parties as follows:
2008
RM’000
KEB Group
- Trade payables
- Retention sums
2,710
595
The nature of the relationship with the above related parties are disclosed in Note 46.
(b)
The normal trade credit terms granted to the Group ranges from 30 days to 90 days.
92
Group
2007
RM’000
7,461
2,155
notes to the
40.
OTHER PAYABLES
2008
RM’000
Amount payable for
acquisition of land
Obligation arising from
acquisition of land (Note (a))
Accruals
Sundry payables
(a)
Group
Company
2007
RM’000
2008
RM’000
2007
RM’000
60,648
60,648
-
-
136,735
310,862
353,567
147,259
307,271
422,673
13,901
58,033
9,331
44,143
861,812
937,851
71,934
53,474
The obligation arising from acquisition of land is in respect of obligations arising from the Universiti Industri Selangor
(“UNISEL”) project, whereby the Selangor State Government had alienated three parcels of land to the Group in
consideration for the development of UNISEL.
In 2001, Maxisegar Sdn. Bhd. (“MSSB”), a wholly owned subsidiary, entered into an agreement with the State
Government of Selangor for the financing and construction of the main campus of UNISEL on 572.16 acres of land
at Berjuntai Bestari, Selangor Darul Ehsan for a total value of RM750 million. In return, the State Government of
Selangor had alienated three parcels of leasehold land to MSSB as follows:
Batang Berjuntai
Taman Puncak Jalil
Saujana Damansara
Acres
RM’000
3,000
801
110
345,000
337,500
67,500
3,911
750,000
MSSB was unable to meet its financial obligation to bear the development and maintenance costs due of
approximately RM134,000,000 (“obligation due”) of UNISEL and as such, in the previous financial year, the long term
portion of MSSB’s obligation under the said agreement has been reclassified to current liabilities and it has entered
into an agreement with Kumpulan Darul Ehsan Berhad (“KDEB”) and Pendidikan Industri YS Sdn Bhd (“PIYS”) (both
of which acted as nominees of State Government of Selangor) whereby MSSB agreed to settle obligation due by
transferring 1,715.9 acres of Batang Berjuntai land which the parties have agreed shall be valued for the purpose of
settlement at RM80,000 per acre to KDEB and/or PIYS. The settlement agreement is pending fulfilment of certain
conditions precedent.
(b)Included in accruals of the Group and of the Company are:
(i)Accrued interest of RM118,642,000 (2007: RM92,301,000) and RM13,893,000 (2007: RM7,585,000)
respectively;
(ii)Amount payable to authorities and utility companies in relation to development projects of RM82,561,000
(2007: RM94,581,000) and RM30,000 (2007: RM148,000) respectively; and
(iii)
Progress billings billed in advance of RM78,102,000 (2007: RM104,239,000).
ANNUAL REPORT 2008
93
notes to the
40.
OTHER PAYABLES (CONT’D)
(c)Included in sundry payables of the Group are:
(i)Refundable deposits of RM13,742,000 (2007: RM12,515,000) received from purchasers of properties and
tenants of complexes;
(ii)Advances from minority shareholders of subsidiaries amounting to RM991,000 (2007: RM992,000), bearing
interest at the rate of 8% per annum. The advances are unsecured and have no fixed terms of repayment;
(iii)Renovation costs payable for a hotel building of approximately RM1,608,000 (2007: RM1,785,000); and
(iv)Amount owing to a corporate shareholder, Kumpulan Europlus Berhad and its subsidiaries, of approximately
RM47,550,000 (2007: RM34,091,000) which arose from payments made on behalf and is interest-free with no
fixed terms of repayment.
41.
CONTINGENT LIABILITIES/LOSSES (UNSECURED)
2008
RM’000
Company
2007
RM’000
(a) Guarantees
Guarantees given to financial institutions for
facilities granted to subsidiaries
159,577
159,481
Guarantees given to non-financial institutions for:
- facilities granted to subsidiaries
- purchase of land by subsidiaries
320,000
201,634
320,000
213,206
The Group and the Company with their financial advisors have formulated a Regularisation Plan (“RP”), which salient
points are disclosed in Note 43, and have completed negotiations and discussions with its lenders for the adoption
and implementation of the RP. The RP had been submitted to the relevant authorities on 30 April 2007 and the
Securities Commission vide its letter dated 29 April 2008 has approved the RP (Note 43). The directors are confident
that the Group will successfully implement the RP. In the event that the RP is not successfully implemented, a
contingent liability of RM479,481,000 may become enforceable on the Company. No provision for liabilities in respect
of the corporate guarantees has been made in the Company’s financial statements as the quantum of the shortfall of
which the Company is liable to make good cannot be presently determined.
(b)
On 14 July 2003, a third party, Perspektif Perkasa Sdn. Bhd. (“PPSB”) obtained Islamic financing in the form of a
Murabahah Notes Issuance Facility for a total amount of RM188 million (“PPSB MuNIF”). The PPSB MuNIF was
arranged by Abrar Discount Berhad (“ADB”), who also acted as the security agent. In connection with this matter,
the Company entered into an option agreement with ADB whereby the Company irrevocably and unconditionally
grants to ADB a right to require the Company at any time during the option period to acquire the entire issued and
paid-up share capital of PPSB at an option price equivalent to the total outstanding PPSB MuNIF. As at 31 January
2008, the total outstanding PPSB MuNIF was approximately RM163 million (2007: RM163 million) and on 6 February
2008, PPSB has settled its full obligations and liabilities under the PPSB MuNIF. Therefore, the option granted by the
Company shall automatically lapse and be of no further force. The management of the Group is of the opinion that it
is unlikely that there would be any liability arising from this matter.
94
notes to the
42.
COMMITMENTS
Ample Zone Berhad, a subsidiary of the Company, has entered into, inter-alia, an assets purchase agreement and a trust
deed under the issuance of SUKUK of RM150 million. It is a condition of the said trust deed that the Company grants
an option in favour of the security trustee for the benefit of the SUKUK holders. Pursuant to the option agreement, the
Company irrevocably and unconditionally grants to the security trustee a right to require the Company at any time during
the option period to purchase the assets at the exercise price upon or after the occurrence of a trigger event or an event
of default or upon or after failure of the sellers to honour their sale undertakings or purchase undertakings.
43.
REGULARISATION PLAN
The Company had on 1 September 2006 announced that it is an affected listed issuer pursuant to Practice Note No.
17/2005 of the Listing Requirements of Bursa Malaysia Securities Berhad.
In this regard, the Company’s advisor, RHB Investment Bank Berhad (formerly known as RHB Sakura Merchant Bankers
Berhad) had on 30 April 2007 on behalf of the Company’s Board of Directors submitted to the Securities Commission the
following proposals to regularise its financial condition:
(a)
proposed reduction in the share capital of the Company by the cancellation of RM0.30 of the par value of each
existing ordinary share of RM1.00 each in the Company (“Proposed Capital Reduction”);
(b)
proposed reduction of RM124,551,076.73 in the share premium account of the Company and the credit arising
therefrom to be set-off against the accumulated losses of the Company;
(c)
proposed share split involving the subdivision of every 1 existing ordinary share of RM0.70 each in the Company
after the Proposed Capital Reduction into 3.5 new ordinary shares of RM0.20 each;
(d)
proposed restructuring and settlement of debts due and owing to the lenders of the Group, which involves, inter-alia,
the:
(i)
proposed issuance of RM286,002,000 nominal value of 5-year redeemable convertible preference shares
(“RCPS”) at RM0.20 each (“Proposed RCPS Issue”);
(ii)
proposed issuance of up to a total of RM397,344,413 nominal value of 4 classes of zero coupon 5-year
redeemable convertible secured loan stocks (“RCSLS”) i.e. RCSLS-A, RCSLS-B, RCSLS-C and RCSLS-D, at
100% of their nominal values (“Proposed RCSLS Issue”);
(iii)
proposed issuance of up to RM150,000,000 nominal value of 10-year Al-Bai Bithaman Ajil Islamic Debt
Securities (“Settlement BaIDS”) at 100% of its nominal value (“Proposed Settlement BaIDS Issue”); and
(iv)
disposal of certain assets pursuant to the Proposed Divestment Programme (as defined in (e) below)
(e)
divestment programme of the Group’s assets, the proceeds of which shall be utilised to pare down the Group’s
borrowings and to raise funds for working capital purposes;
(f)
proposed assumption by the Company of the indebtedness from Ambang Sentosa Sdn Bhd (“ASSB”) in respect of
the outstanding RM498.0 million nominal value of Asset-Backed Al-Bai Bithaman Ajil Islamic Debt Securities;
ANNUAL REPORT 2008
95
notes to the
43.
REGULARISATION PLAN (Cont’d)
(g)
strategic alliance between the Company and IJM Corporation Berhad (“IJM”) vide:
(i)
the appointment of IJM Construction Sdn Bhd (“IJMC”), a wholly-owned subsidiary of IJM, as the principal
contractor to construct and complete a majority of the Group’s stalled property development projects; and
(ii)
the joint-venture with IJM Properties Sdn Bhd (“IJMP”), a wholly-owned subsidiary of IJM, in respect of
certain property development projects whereby IJMP will be the lead driver in terms of sales and project
implementation.
(h)
proposed appointment of Tan Sri Dato’ Hj Lamin Bin Hj Mohd Yunus, Mr. Loy Boon Chen, Mr. Lee Swee Seng and
Puan Sri Datin Thong Nyok Choo to the Board of Directors.
The proposed RCPS and Settlement BaIDS issuance would be used to settle the obligations to ASSB (Note 35(c)).
The proposed RCSLS issuance would be used to settle the obligations to MuNIF noteholders (Note 33(e)), Maxisegar
Sdn. Bhd. BaIDs holders and certain financial institutions.
The Securities Commission (“SC”), vide its letter dated 25 September 2007, did not approve the Regularisation Plan
based on the following factors:
(i)
The Company will not immediately turnaround post-restructuring based on the financial forecast and projections
submitted;
(ii)
substantial accumulated losses of RM156 million remain post restructuring;
(iii)
the proposals appear to benefit the creditors more than the minority shareholders of the Company as the
shareholders will be undergoing a capital reduction exercise whilst none of the creditors will be taking a ‘haircut’ on the amount owing to them by the Company;
(iv)
upon completion of the restructuring scheme, Abrar Discounts Berhad (“ADB”) will hold 36.3% equity interest
in the Company. There is uncertainty over the possible emergence of a new substantial shareholder which
would have an impact on the direction of the Company moving forward. At this juncture, it is not known if ADB
will dispose its interest in the Company or the identity of the potential buyer of the block of shares held by ADB;
and
(v)
there is no clear indication that IJM is acting as a “white-knight” to the Company’s restructuring scheme given
that, inter-alia,:
•IJM would not be a substantial shareholder in the Company pursuant to the restructuring scheme. IJM’s
effective interest in the Company, via its shareholding in Kumpulan Europlus Berhad, is minimal; and
•IJM is involved only in selected stalled projects of the Company.
The Board of Directors of the Company appealed on the SC’s decision based on an improved plan addressing
the above issues. On 25 October 2007, the Company had submitted an appeal against the SC’s rejection of the
Regularisation Plan.
96
notes to the
43.
On 21 November 2007, the Company had announced its proposal to the SC to address SC’s concerns of the above factors
as follows:(i)
revision to the Group’s financial forecast and projections to include certain events that occurred subsequent to the
application made to the SC in April 2007, such as an additional commercial, office cum residential development
project in China to be jointly developed with IJMP and project management fees in respect of the Canal City Project
as well as the lower interest expense to be charged pursuant to Financial Reporting Standard 132 as a result of the
lower number of debt securities to be issued pursuant to the Regularisation Plan. All these are expected to contribute
positively to the future financial position of the Group and will enable the Group to immediately turnaround post
restructuring;
(ii)
an additional 10% capital reduction resulting in a total capital reduction of 40% and a 10% debt waiver on the
amount owing to the creditors who will be receiving debt securities pursuant to the Regularisation Plan, which will
substantially reduce the Group’s accumulated losses. All approvals from the creditors for the 10% debt waiver have
been obtained in the period of 23 October 2007 to 21 November 2007;
(iii)
Kumpulan Europlus Berhad has undertaken to retain its controlling interest in the Company; and
(iv)IJMC has been appointed as the principal contractor for the remaining stalled projects of the Group as per the Letter
of Award dated 23 November 2007.
Subsequent to the year-end, the Securities Commission (“SC”), vide its letter dated 29 April 2008, approved the Revised
Regularisation Plan based on the following terms:
(i)
proposed reduction in the share capital of the Company pursuant to Section 64(1)(b) of the Companies Act 1965
(“Act”) involving the cancellation of RM0.40 of the par value of each existing ordinary share of RM1.00 each
(“Proposed Capital Reduction”);
(ii)
proposed reduction of Company’s entire share premium account pursuant to Sections 60(2) and 64(1)(b) of the Act
amounting to RM124,551,076.73 (based on the unaudited balance sheet of the Company as at 31 January 2007) and
the credit arising therefrom to be set-off against the accumulated losses of the Company;
(iii)
proposed share split involving the subdivision of every 1 existing ordinary share of RM0.60 each in the Company
after the Proposed Capital Reduction into 3 ordinary shares of RM0.20 each;
(iv)
proposed restructuring and settlement of debts due and owing to the lenders of the Group, which involves, inter-alia,
the following:
(v) (a)
proposed issuance of RM257,402,000 nominal value of zero dividend 5-year redeemable convertible preference
shares (“RCPS”) comprising 1,287,010,000 units of RCPS at RM0.20 each;
(b)
proposed issuance of up to a total of RM356,250,581 nominal value of 4 classes of zero coupon 5-year
redeemable convertible secured loan stocks (“RCSLS”) i.e. RCSLS-A, RCSLS-B, RCSLS-C and RCSLS-D,
at 100% of their nominal values. An additional RM2,000 nominal value of RCSLS will be issued for each of
RCSLS-B, RCSLS-C and RCSLS-D to selected investors to facilitate the listing of RCSLS-B, RCSLS-C and
RCSLS-D on the Main Board of Bursa Malaysia Securities Berhad; and
(c)
proposed issuance of up to RM134,213,337 nominal value of 10-year Al-Bai Bithaman Ajil Islamic Debt
Securities (“Settlement BaIDS”) at 100% of its nominal value; and
proposed assumption by the Company of the indebtedness from Ambang Sentosa Sdn Bhd in respect of the
outstanding Asset-Backed Al-Bai Bithaman Ajil Islamic Debt Securities;
ANNUAL REPORT 2008
97
notes to the
43.
subject to, inter-alia, the following conditions:
(i) nominees of IJM Corporation Berhad on the Board of Directors (“Board”) of the Company to be appointed as
Executive Directors of the Company;
(ii) further equity condition may be imposed on the Company after reviewing its equity structure 3 years from the date
of implementation of the proposed restructuring scheme. In this respect, RHB Investment Bank/the Company is
required to submit the effective equity structure of the Company 3 years after the date of completion of the proposed
restructuring scheme, together with the latest audited financial accounts of the Company;
(iii) applications for approval or notification, where applicable, be made under the Foreign Investment Committee (“FIC”)
Guidelines on the “Acquisition of Properties by Local and Foreign Interests” for the transactions under the proposed
divestment programme of the Group’s assets to the FIC Secretariat;
(iv) RHB Investment Bank and the Company to obtain the SC’s prior approval should there be any changes to the terms
and conditions of the RCSLS and Settlement BaIDS;
(v)
in relation to the non-investment grade rating assigned to the RCSLS and Settlement BaIDS, RHB Investment Bank
and the Company are to ensure that the extent of credit risk be disclosed to the investors and/or potential investors
and their advisers for the purpose of evaluating the risks relating to the RCSLS and Settlement BaIDS;
(vi)RHB Investment Bank to fully disclose to all prospective investors and relevant parties the following conflict and
potential conflict of interest:
(a) arising from the role undertaken by RHB Investment Bank in the Regularisation Plan; and
(b) all other conflict and potential conflict of interest arising from the Regularisation Plan;
together with relevant mitigating measures. RHB Investment Bank to also inform all prospective investors that the
Board of the Company is fully informed of and aware of the conflict and potential conflict of interest situations and is
agreeable to proceed with the present arrangement;
(vii) RHB Investment Bank to ensure that the selling restriction imposed on the RCSLS-A and Settlement BaIDS are fully
disclosed to all prospective investors and relevant parties, including making such information available on the Fully
Automated System for Issuing/Tendering (FAST);
(viii) Company shall obtain all necessary approvals from all relevant parties in relation to the proposed RCSLS and
Settlement BaIDS issues and RHB Investment Bank is to submit a written confirmation on the same to the SC prior
to the issue date of the RCSLS and Settlement BaIDS;
(ix) RHB Investment Bank and the Company to disclose in writing to potential investors that each RCSLS and Settlement
BaIDS issue will carry different risks and all potential investors are strongly encouraged to evaluate each RCSLS and
Settlement BaIDS issue on its own merit;
(x) RHB Investment Bank is required to remind all relevant parties including the Company of the need to observe and
fully comply with all statutory requirements, in particular, those set out in Division 4 of Part VI of the Capital Markets
& Services Act 2007;
(xi) RHB Investment Bank and the Company must fully comply with the relevant requirements relating to the implementation
of the proposals as stipulated in the Policies and Guidelines on Issue/Offer of Securities; and
(xii) RHB Investment Bank and the Company to inform the SC upon completion of the Regularisation Plan.
The SC had also vide the above said letter approved the Regularisation Plan under the Guidelines on the Acquisition of
Interests, Mergers and Take-Overs by Local and Foreign Interests issued by the FIC.
98
notes to the
44.
SUBSIDIARY COMPANIES
(a)
Details of the subsidiaries are as follows:
Effective Interest
2008
2007
%
%
Name of Company
Principal Activities
Abra Development Sdn. Bhd.+
100
100
Property development
and investment holding
Alam Johan Sdn. Bhd. ^
99.99
99.99
Ample Zone Berhad
99.99
99.99
Investment holding and
provision of asset
management services
Beautiful Peninsular Sdn. Bhd. ^
69.99
69.99
Biltradex Sdn. Bhd.
99.99
99.99
and investment
Bukit Beruntung Nurseries Sdn. Bhd. ^
99.99
99.99
Horticulturists,
agriculturists and
landscaping designers
and contractors and
agricultural
development
Capital Advance Corporation Sdn. Bhd.
99.99
99.99
Investment holding
Cekap Mesra Development Sdn. Bhd.
50.01
50.01
Classic Fortune Sdn. Bhd. ^
99.99
99.99
Daya Kreatif Sdn. Bhd. ^
99.99
99.99
Envy Vista Sdn. Bhd. *^
99.99
99.99
Dormant
100
100
Europlus Berhad +
99.99
99.99
Europlus Construction Sdn. Bhd.
99.99
99.99
Housing contractors
and property
development
Europlus Corporation Sdn. Bhd. +
99.99
99.99
Property development,
investment holding and
construction activities
100
100
Era-Casa Sdn. Bhd. ^
Expand Factor Sdn. Bhd.
ANNUAL REPORT 2008
99
Investment holding
notes to the
44.
SUBSIDIARY COMPANIES (CONT’D)
(a)
Details of the subsidiaries are as follows: (Cont’d)
Effective Interest
2008
2007
%
%
Name of Company
Galian Juta Sdn. Bhd. ^
100
100
and investment
Gemapantas Sdn. Bhd. ^
51
51
Investment holding
G.L. Development Sdn. Bhd.
100
100
Property investment
and development
Ideal Synergy Sdn. Bhd. ^
100
100
Property investment,
management and
property development
Inti Johan Sdn. Bhd. ^
100
100
Property investment
Izin Saga Sdn. Bhd. ^
99.99
99.99
100
100
Kenshine Corporation Sdn. Bhd. ^
99.99
99.99
Kolej Aman Bhd. ^
58.46
58.46
Dormant
Lambang Wira Sdn. Bhd. ^
99.99
99.99
Investment holding
Larut Leisure Enterprise Sdn. Bhd.^
99.99
99.99
Investment holding
Larut Management Services Sdn. Bhd.
99.99
99.99
Investment holding
Larut Overseas Ventures Sdn. Bhd.^
99.99
99.99
Investment holding
100
100
99.99
99.99
Layatama Sdn. Bhd. ^
100
100
Investment holding
Maxdale (M) Sdn. Bhd.
100
100
Investment holding
Maxisegar Construction Sdn. Bhd. ^
100
100
Property investment
and development
Maxisegar Education Sdn. Bhd. ^
60
60
Investment holding
Maxisegar Realty Sdn. Bhd. +
100
100
Dormant
Maxisegar Sdn. Bhd. +
100
100
and investment
holding
99.99
99.99
Juara Tiasa Sdn. Bhd. ^
L.C.B. Management Sdn. Bhd. ^
Lestari Puchong Sdn. Bhd.
Mutual Prosperous Sdn. Bhd. *^
100
Dormant
Property investment
Provision of
management services
Investment holding
notes to the
44.
(a)
Effective Interest
2008
2007
%
%
98.04
98.04
Dormant
100
100
Investment holding
-
60
Property investment
and development
100
100
and investment
holding
Peninsular Properties (M) Sdn. Bhd.
99.99
99.99
Peninsular Properties Management Sdn. Bhd.^
99.99
99.99
Provision of property
management services
Perwira Indra Sakti Management Services Sdn. Bhd.
99.99
99.99
Property management
P.I.S. Properties Management Services Sdn. Bhd.^
99.99
99.99
Property management
100
100
Seaview Plantations Sdn. Bhd. ^
99.99
99.99
Dormant
Sentosa Restu (M) Sdn. Bhd. +
99.99
99.99
90
90
Property investment
99.77
99.77
Investment holding
Talam General Foods Sdn. Bhd. ^
100
100
Dormant
Talam Industries Sdn. Bhd.
100
100
Talam Leisure Development Sdn. Bhd. ^
100
100
Talam Management Services Sdn. Bhd.
100
100
Dormant
Talam Manufacturing Sdn. Bhd.^
100
100
Investment holding and
provision of
management services
Talam Medical Centre Sdn. Bhd.
100
100
Dormant
Talam Plantations Sdn. Bhd.^
100
100
Investment holding
Talam Properties Sdn. Bhd. ^
100
100
99.77
99.77
100
100
Name of Company
New Court Properties Sdn. Bhd. ^
Noblepace (M) Sdn. Bhd. ^
Noble Rights Sdn. Bhd.
Pandan Indah Medical
Management Sdn. Bhd.
Regobase Sdn. Bhd.^
Star Base Sdn. Bhd. ^
Talam Beverage Sdn. Bhd.
Talam Refrigeration Sdn. Bhd. ^
Talam Premium Development Sdn. Bhd.^
ANNUAL REPORT 2008
101
Investment holding
Investment holding
Provision of secretarial
and other management
services
notes to the
44.
(a)
Effective Interest
2008
2007
%
%
Talam Tractors Sdn. Bhd.^
100
100
Dormant
TCB Resources Sdn. Bhd. ^
100
100
Investment holdings, provision
of management, consultancy
services and general trading
Terang Tanah Sdn. Bhd.^
99.99
99.99
Trans Liberty Sdn. Bhd.^
99.99
99.99
Ukay Land Sdn. Bhd. ^
99.99
99.99
60
60
United Axis Sdn. Bhd.
99.99
99.99
and investment
Untung Utama Sdn. Bhd. *
99.99
99.99
100
100
99.99
99.99
100
100
Agriresources International (HK) Limited *
64.99
64.99
Dormant
Larut Consolidated (HK) Limited #*^
99.99
99.99
Investment holding
-
99.99
Investment holding
99.88
99.88
Dormant
Malim Enterprise (HK) Limited *
100
100
Investment holding
Noble House Investments Limited *^
100
100
Investment holding
Parkgrove Limited *^
100
100
Investment holding
99.99
99.99
Talam Corporation (HK) Limited *^
100
100
Investment holding
Talam Resources (HK) Limited *
100
100
Investment holding
100
100
Dormant
Name of Company
Ulu Yam Golf And Country Club Sdn. Bhd.
Winax Engineering Sdn. Bhd. ^
Zhinmun Sdn. Bhd. *^
Zillion Development Sdn. Bhd. ^
Dormant
Investment holding
Property investment and
development
Incorporated in Hong Kong
Larut Leisure Enterprise (Hong Kong) Limited #*^
Larut Talam International Management
Services Limited *
PPB Investment (HK) Limited *
Dormant
Incorporated in Singapore
Crystal Ace Pte. Ltd. *^
102
notes to the
44.
(a)
Effective Interest
2008
2007
%
%
Name of Company
Incorporated in The People’s Republic of China
Jilin Province Maxcourt Hotel Limited *
Jilin Dingtai Enterprise Development Co. Limited *
85
85
-
59.99
Operating and managing
a hotel
*Audited by a firm of auditors other than Deloitte KassimChan
#
(b)
Certain shares of the companies are held in trust by certain directors for Larut Overseas Ventures Sdn. Bhd.
Details of qualification in the auditors’ report of the subsidiary companies are as follows:
(I)
Audit emphasis of matters
(i)
The audit reports of subsidiaries marked “^”contain an audit emphasis of matter relating to the
appropriateness of going concern basis of accounting used in the preparation of their financial
statements which presumes continued financial support to be given by the ultimate holding company,
Talam Corporation Berhad.
(ii)Ample Zone Berhad (“AZB”)
(II)
The ability of AZB to meet its obligation under the Sukuk al-Ijarah is dependent upon the timely rental
payments of its related companies and a third party.
(iii)
The audit reports of subsidiaries marked “+” contain an audit emphasis of matter relating to the
appropriateness of going concern basis of accounting used in the preparation of their financial statements
which presumes the successful implementation of the Regularisation Plan of the Group as explained in
Note 43 within the anticipated time frame and accordingly, do not include any adjustments relating to
the recoverability and classification of assets or the amounts and classification of liabilities that might be
necessary should the Group be unable to continue on a going concern.
Audit qualifications
(i)
The auditors of Expand Factor Sdn. Bhd. (“Expand”) and Lestari Puchong Sdn. Bhd. (“LPSB”) have
qualified their report on the appropriateness of preparing the financial statements on a going concern
basis in view of the significant capital deficiency positions.
(ii)
The auditors of Parkgrove Limited and Noble House Investments Limited reported a qualified opinion
in respect of the inavailability of the financial information on the investment in associate and there were
no other satisfactory audit procedures to satisfy themselves as to whether impairment losses on the
investment in and amount due from an associate made in the financial statements as at 31 January 2008
are appropriate.
(iii)
The auditors of Malim Enterprise (HK) Limited reported a qualified opinion in respect of the recoverability
of the amount due from a subsidiary of RM22,075,100 as of 31 January 2008 and whether any impairment
for the investment in the subsidiary of RM24,317,089 as at 31 January 2008 should be made in the
financial statements. Any adjustments to these figures might have a consequential effect on the results
for the year and net liabilites as at 31 January 2008. ANNUAL REPORT 2008
103
notes to the
45.
SIGNIFICANT EVENTS
Significant events during the financial year are as follows:
(a)
On 5 March 2007, a subsidiary, Mutual Prosperous Sdn Bhd (“MPSB”), entered into a Joint Venture/Shareholders’
Agreement with IJM Properties Sdn Bhd (“IJMP”) and Cekap Tropikal Sdn Bhd (“CTSB”) for IJMP and MPSB to
use CTSB as the 50:50 joint venture company to takeover the development of 204 acres of land located in Mukim
Batu, Daerah Gombak, Selangor Darul Ehsan known as Sierra Selayang. The proposed share capital of CTSB will be
RM520,000 comprising 500,000 ordinary shares of RMl each, 10,000 Class A redeemable preference shares (“RPS”)
of RM1 each and 10,000 Class B RPS of RM1 each. MPSB will subscribe to 50% of the ordinary shares of RM1 each
at par and 100% of Class B RPS at a premium of RM999. IJMP’s subscription to 100% of Class A RPS gives IJMP
the priority in the distribution of dividend by CTSB at an agreed formula.
(b)
On 30 April 2007, the Company had submitted its application for the Regularisation Plan of the Group (“Group RP”)
to the Securities Commission. Details of the Group RP and subsequent revision to the plan are more fully explained
in Note 43.
(c)
On 24 May 2007, the Kuala Lumpur High Court granted a further extension to the Restraining Order pursuant to
Section 176 of the Companies Act, 1965 granted to a subsidiary, Maxisegar on 28 March 2006 (“the Maxisegar RO”),
for a period of 180 days effective from 27 June 2007 to 26 December 2007.
On 12 December 2007, the Kuala Lumpur High Court granted a further extension to the Maxisegar RO for a period
of 180 days effective from 26 December 2007 to 26 June 2008.
(d)
On 4 October 2007, the Company announced that it had on 1 October 2007 received a letter from the SC pertaining to
the directive issued under Regulation 5 of the Securities Industry (Compliance With Approved Accounting Standards)
Regulations 1999 (“the Regulations”) and directed the Company to re-issue its 2006 and 2007 financial statements
by 31 October 2007 for failure to comply with Regulation 4 of the Regulations which requires every listed corporation
to ensure that the consolidated financial statements are to be made out in accordance with approved accounting
standards. The Company had re-issued its 2006 and 2007 financial statements on 31 October 2007 as directed.
(e)
On 23 October 2007, a subsidiary, Larut Leisure Enterprise (Hong Kong) Limited (“LLEHK”) had entered into a
Share Sale Agreement with Jilin Hua Tian Property Group Co. Ltd. (“Jilin Hua Tian”) to acquire 40% equity interest
in Jilin Dingtai Enterprise Development Company Limited (“Jilin Dingtai”) (“the Proposed Acquisition”) at a total
consideration of RMB45,000,000. Currently LLEHK owns a 60% equity interest in Jilin Dingtai. After the Proposed
Acquisition, Jilin Dingtai will be a wholly owned subsidiary of LLEHK. Jilin Dingtai is the beneficial and registered
owner of a piece of land measuring approximately 6,665 sq meter together with a proposed development known as
Yin Hai Complex, comprises of an incomplete structure of a proposed 35 storey commercial, office and residential
building together with 2 level basement car park located at No. 19, Xian Road, Changchun, Jilin Province, People’s
Republic of China. The transfer of shares was effected on 15 May 2008.
104
notes to the
46.
SIGNIFICANT RELATED PARTY TRANSACTIONS
During the financial year, significant related party transactions are as follows:
2008
RM’000
Company
2007
RM’000
2008
RM’000
938
31,798
24,428
-
-
Financing facilities obtained from the
following companies (Note 33):
- Pengurusan Projek Bersistem Sdn. Bhd.
- KEB Group
18,685
28,666
19,023
-
28,666
-
Rental income received and receivable from
the following companies:
- Agrocon (M) Sdn. Bhd.
- KEB Group
64
1,486
64
304
-
-
Interest expense paid and payable to the
following companies:
- Pengurusan Projek
Bersistem Sdn. Bhd.
- KEB Group
2,050
1,076
1,951
79
1,043
-
Construction costs incurred with the
following companies:
- Agrocon (M) Sdn. Bhd.
- KEB Group
Group
2007
RM’000
The nature of the relationship with the related parties is as follows:
Related Parties
Nature of Relationship
Pengurusan Projek Bersistem
Sdn. Bhd. (“PPBSB”)
Corporate shareholder
Tan Sri Dato’ (Dr.) Ir. Chan Ah Chye @ Chan Chong Yoon (“TSDCAC”), a
director and substantial shareholder of the Company, has substantial
financial interest in PPBSB.
(“AMSB”)
The sister of TSDCAC, a director and substantial shareholder of AMSB, has
substantial financial interest in AMSB.
Kumpulan Europlus Berhad and
its subsidiaries (“KEB Group”)
Kumpulan Europlus Berhad is a corporate shareholder.
TSDCAC, a director and substantial shareholder of the Company has
substantial financial interest in KEB Group.
The directors are of the opinion that all the transactions above have been entered into in the normal course of business and
have been determined on a basis negotiated between the parties.
ANNUAL REPORT 2008
105
notes to the
47.
FINANCIAL INSTRUMENTS
(a)
Financial Risk Management Objectives and Policies
The operations of the Group and of the Company are subject to a variety of financial risks, including foreign currency
risk, interest rate risk, credit risk, liquidity risk and cash flow risk. The Group and the Company have formulated
a financial risk management framework whose principal objective is to minimise the Group’s and the Company’s
exposure to risks and/or costs associated with the financing, investing and operating activities of the Group and of
the Company.
(b)
Foreign currency risk
The Group operates internationally and is exposed to foreign currency transactions in Chinese Renminbi and Hong
Kong Dollars. The Group’s policy is to minimise the exposure of overseas operating subsidiaries to transaction risk
by matching local currency income with local currency costs.
The net unhedged financial liabilities of the Group that are not denominated in their functional currencies are as
follows:
Short term borrowings
2008
RM’000
2007
RM’000
5,660
9,177
(c)
Interest Rate Risk
The Group’s policy is to borrow principally on a floating rate basis but retain a proportion of fixed rate debt. The
objectives for the mix between fixed and floating rate borrowings are set to reduce the impact of an upward change
in interest rates while enabling benefits to be enjoyed if interest rates fall.
(d)
Credit Risk
Credit risks are minimised and monitored via strictly limiting the Group’s associations to business partners with high
creditworthiness. Trade receivables mainly arises from development properties projects and are supported by endfinanciers.
The Group has no significant concentration of credit risk that may arise from exposures to a single debtor or to
groups of debtors other than those disclosed in Note 25.
(e)
Liquidity Risk
Since the financial year ended 31 January 2006, the Group and the Company have not met their obligations in certain
loan repayments and interest payments and have breached the borrowing facilities agreements as disclosed in Note
33. The Group and the Company are undertaking a debt restructuring exercise as disclosed in Note 43 to mitigate
the liquidity risk.
(f)
Cash flow risk
The Group and the Company review its cash flow position regularly to manage its exposure to fluctuations in future
cash flow associated with its monetary financial instruments.
106
notes to the
47.
FINANCIAL INSTRUMENTS (Cont’d)
(g)
Fair Values
The carrying amounts of the financial assets and financial liabilities approximate their fair values due to the relatively
short term maturities except for the following:
Note
At 31 January 2008
Financial Assets
Other investment
Financial Liabilities
Hire-purchase payables
Other non-current payables:
Amount payable for
acquisition of land
Amount payable for
acquisition of building
Loan from a minority
shareholder of a
subsidiary
Carrying
Amount
RM’000
Group
Fair
Value
RM’000
Carrying
Amount
RM’000
Company
Fair
Value
RM’000
21
76,332
*
-
-
34
36
16
16∆
-
-
52,352
***
-
-
13,009
***
-
-
10,105
**
-
-
21
76,332
*
-
-
34
36
519
530∆
-
-
53,400
***
-
-
13,027
***
-
-
10,118
**
-
-
At 31 January 2007
Financial Assets
Other investment
Financial Liabilities
Hire-purchase payables
Other non-current payables:
Amount payable for
acquisition of land
Amount payable for
acquisition of building
Loan from a minority
shareholder of a subsidiary
*It is not practical to estimate the fair values of the unquoted other investment because of the lack of quoted
market prices and the inability to estimate fair value without incurring excessive costs.
**
It is not practical to estimate the fair values of loan from a minority shareholder of a subsidiary due principally
to a lack of fixed repayment term entered into by the parties involved and without incurring excessive costs.
***
It is not practical to estimate the fair values of amount payable for acquisition of land and building due principally
to a lack of fixed payment terms (as terms of payment is subject to the timing of fulfilment of certain conditions
precedent) entered into by the parties involved and without incurring excessive costs.
∆
The fair value of hire-purchase is estimated by discounting the expected future cash flows using the current
interest rates for liabilities with similar risk profiles.
ANNUAL REPORT 2008
107
notes to the
48.
SEGMENTAL INFORMATION
(a)
Analysis by business segments
At 31 January 2008
Property
investment
and holding
RM’000
Revenue
External sales
Total revenue
Result
Segment results
controlled entities
Education
RM’000
Hotel &
recreation
RM’000
Total
before
elimination
RM’000
229,671
-
18,678
248,349
-
248,349
229,671
-
18,678
248,349
-
248,349
5,572
-
5,572
249
-
249
14,552
249
(1,456)
-
(7,524)
-
Elimination Consolidated
RM’000
RM’000
Profit before tax
Income tax expense
5,821
(2,273)
3,548
Other information
Segment assets
Investments in jointly
controlled entities
Unallocated assets
2,948,747
78
145,286
3,094,111
(34)
3,094,077
10,077
-
-
10,077
-
10,077
2,343
Total assets
Segment liabilities
Unallocated liabilities
3,106,497
2,498,263
1,505
126,143
2,625,911
(51,912)
Total liabilities
Capital expenditure
plant and equipment
lease payment
Non-cash expenses other
than depreciation and
amortisation
2,573,999
186,255
2,760,254
191
-
2,538
2,729
-
2,729
1,872
-
5,714
7,586
-
7,586
-
-
695
695
-
695
41,929
360
229
42,518
-
42,518
108
notes to the
48.
SEGMENTAL INFORMATION (CONT’D)
(a)
Analysis by business segments (Cont’d)
At 31 January 2007
Property
investment
and holding
RM’000
Education
RM’000
Revenue
External sales
Inter-segment sales
200,632
-
-
16,091
-
216,723
-
-
216,723
-
Total revenue
200,632
-
16,091
216,723
-
216,723
1,587
-
Result
Segment results
controlled entities
(660)
-
Hotel &
recreation
RM’000
(7,863)
-
Total
before
elimination
RM’000
Elimination Consolidated
RM’000
RM’000
(6,276)
-
(6,276)
(660)
-
(660)
Loss before tax
Income tax credit
(6,936)
7,918
982
Other information
Segment assets
Investments in jointly
controlled entities
Unallocated assets
3,096,754
237
149,612
3,246,603
9,328
-
-
9,328
(265)
-
Total assets
Segment liabilities
Unallocated liabilities
9,328
4,729
3,260,395
2,614,057
191
142,441
2,756,689
(42,785)
Total liabilities
Capital expenditure
plant and equipment
lease payment
Non-cash expenses
other than depreciation
and amortisation
3,246,338
2,713,904
185,225
2,899,129
21
-
304
325
-
325
2,072
-
5,637
7,709
-
7,709
-
-
698
698
-
698
39,964
-
48
40,012
-
40,012
ANNUAL REPORT 2008
109
notes to the
48.
SEGMENTAL INFORMATION (CONT’D)
(b) Analysis by geographical segments
Malaysia
RM’000
The People’s
Republic
of China
RM’000
Total
RM’000
Sales Revenue
At 31 January 2008
229,671
18,678
248,349
At 31 January 2007
200,632
16,091
216,723
Carrying Amount of Segment Assets
At 31 January 2008
2,961,211
145,286
3,106,497
At 31 January 2007
3,110,783
149,612
3,260,395
191
2,538
2,729
21
304
325
Additions to Property, Plant and Equipment
At 31 January 2008
At 31 January 2007
The directors are of the opinion that all inter-segment transactions have been entered into in the normal course of
business and have been established on terms and conditions that are not materially different from that obtainable in
transactions with unrelated parties.
110
statement by directors
pursuant to section 169 (15) of the companies act, 1965
The directors of TALAM CORPORATION BERHAD state that, in their opinion, the accompanying balance sheets and the related
statements of income, cash flows and changes in equity, are drawn up in accordance with the provisions of the Companies Act,
1965 and the applicable Malaysian Accounting Standards Board approved accounting standards in Malaysia so as to give a true
and fair view of the state of affairs of the Group and of the Company as of 31 January 2008 and of the results and the cash flows
of the Group and of the Company for the year ended on that date.
Signed in accordance with
a resolution of the directors,
__________________________
CHUA KIM LAN ____________________________
DATUK AB RAUF BIN YUSOH
Kuala Lumpur,
27 May 2008
declaration
BY THE OFFICER PRIMARILY RESPONSIBLE FOR THE FINANCIAL MANAGEMENT OF THE COMPANY
pursuant to section 169 (16) of the companies act, 1965
I, LEOW CHI LIH, the officer primarily responsible for the financial management of TALAM CORPORATION BERHAD, do
solemnly and sincerely declare that the accompanying balance sheets and the related statements of income, changes in equity
and cash flows, are, in my opinion, correct and I make this solemn declaration conscientiously believing the same to be true, and
by virtue of the provisions of the Statutory Declarations Act, 1960.
_____________________________________
LEOW CHI LIH
Subscribed and solemnly declared by the abovenamed LEOW CHI LIH
at KUALA LUMPUR this 27th day of May, 2008.
Before me,
_____________________________________
ZAINAL ABIDIN BIN NAN (W316)
COMMISSIONER FOR OATHS
ANNUAL REPORT 2008
111
LIST OF PROPERTIES
@ 31 January 2008
@ Joint Venture
+ Registered
# Beneficial
No. Owner
1
Europlus
Corporation
Sdn Bhd
Land/
Built up
area
+ 2,711.24
acres
Remaining
acreage
2,404.13
Description/
proposed
development
Title No.
G 45083 Lot 15071
HS(D) 18257 PT 771
HS(D) 27150 to HS(D) 27200,
HS(D) 27301 to HS(D) 27428,
PT 7335 to PT 7513
HS(D) 26268 to HS(D) 26325,
PT 6353 to PT 6410
HS(D) 26328 to HS(D) 26464,
PT 6413 to PT 6549
HS(D) 26001 to HS(D) 26075,
PT 6086 to PT 6160
HS(D) 26077 to HS(D) 26230,
PT 6162 to PT 6315
HS(D) 26232 to HS(D) 26267,
PT 6317 to PT 6352
HS(D) 26231 PT 6316
Part of G 45084 Lot 15070
HS(D) 27430 PT 7515
HS(D) 27431 PT 7516
HS(D) 27433 PT 7518
HS(D) 9203 PT 8356
HS(D) 27479 PT 7564
HS(D) 8246 to HS(D) 8249,
PT 7168 to PT 7171
HS(D) 8235 PT 7157
HS(D) 8544 PT 7697
HS(D) 9330 PT 8484
HS(D) 9329 PT 8483
HS(D) 9396 PT 8550
HS(D) 10570 PT 7230
HS(D) 10574 PT 7234
HS(D) 10690 PT 7350
HS(D) 9419 to HS(D) 9436,
PT 8573 to PT 8590
HS(D) 9437 PT 8591
HS(D) 9763 PT 8917
HS(D) 10155 PT 9309
HS(D) 9762 PT 8916
HS(D) 10154 PT 9308
HS(D) 35776 to HS(D) 35831,
PT 12640 to PT 12695
HS(D) 35744 to HS(D) 35775,
PT 12608 to PT 12639
HS(D) 35832 to HS(D) 35878,
PT 12696 to PT 12742
HS(D) 35689 to HS(D) 35739,
PT 12553 to PT 12603
HS(D) 35670 to HS(D) 35681,
PT 12534 to PT 12545
HS(D) 35683 to HS(D) 35688,
PT 12547 to PT 12552
HS(D) 36197 PT 13061
HS(D) 37008 to HS(D) 37037,
PT 11045 to PT 11074
112
Bukit
Beruntung
Town ship
development
Date of
Acquisition /
Joint Venture/
Completion Tenure
18/12/1991
Approximate
age of the
building
Expiry (Years)
Freehold N/A
N/A
Net book
value as at
31/01/2008
RM’000
656,545
LIST OF PROPERTIES
@ 31 January 2008
@ Joint Venture
+ Registered
# Beneficial
No. Owner
Land/
Built up
area
Remaining
acreage
Title No.
Description/
proposed
development
HS(D) 37748 to HS(D) 37785,
PT 11784 to PT 11821
HS(D) 37712 to HS(D) 37747,
PT 11748 to PT 11783
HS(D) 37040 to HS(D) 37060,
PT 11077 to PT 11097
HS(D) 38474 to HS(D) 38478,
PT 12510 to PT 12514
HS(D) 37378 to HS(D) 37469,
PT 11415 to PT 11506
HS(D) 37000 PT 11037
HS(D) 36999 PT 11036
HS(D) 37788 PT 11824
HS(D) 37038 PT 11075
G 54345 Lot 15753
G 54348 Lot 15590
G 54349 Lot 15206
HS(D) 30973 to HS(D) 31005,
PT 4527 to PT 4559
HS(D) 30803 to HS(D) 30852,
PT 4357 to PT 4406
HS(D) 7629 PT 2548
HS(D) 7831 PT 2750
HS(D) 7503 PT 2421
HS(D) 7405 PT 2322
HS(D) 7650 PT 2569
HS(D) 7969 PT 2888
HS(D) 31090 PT 5148 to
HS(D) 31098 PT 5156
HS(D) 31100 PT 5158 to
HS(D) 31113 PT 5171
HS(D) 31125 PT 5183,
HS(D) 31138 PT 5196
HS(D) 31140 PT 5198 to
HS(D) 31143 PT 5201
HS(D) 31160 PT 5218
HS(D) 31163 PT 5221 to
HS(D) 31165 PT 5223
HS(D) 31169 PT 5227,
HS(D) 31170 PT 5228
HS(D) 31175 PT 5233,
HS(D) 31205 PT 5263
HS(D) 31207 PT 5265,
HS(D) 31209 PT 5267
HS(D) 31211 PT 5269,
HS(D) 31213 PT 5271
HS(D) 31215 PT 5273,
HS(D) 31217 PT 5275
HS(D) 31219 PT 5277,
HS(D) 31226 PT 5279
HS(D) 31228 PT 5281,
HS(D) 31230 PT 5283
HS(D) 31232 PT 5285 to
HS(D) 31264 PT 5317
ANNUAL REPORT 2008
113
Date of
Acquisition /
Joint Venture/
Completion Tenure
Approximate
age of the
building
Expiry (Years)
Net book
value as at
31/01/2008
RM’000
LIST OF PROPERTIES
@ 31 January 2008
@ Joint Venture
+ Registered
# Beneficial
No. Owner
Land/
Built up
area
Remaining
acreage
Description/
proposed
development
Title No.
Date of
Acquisition /
Joint Venture/
Completion Tenure
Approximate
age of the
building
Expiry (Years)
HS(D) 31266 PT 5319 to
HS(D) 31269 PT 5322
HS(D) 31271 PT 5324 to
HS(D) 31274 PT 5327
HS(D) 31275 PT 6080,
HS(D) 31277 PT 6082
HS(D) 31281 PT 6050,
HS(D) 31282 PT 6051
HS(D) 31287 PT 6056,
HS(D) 31307 PT 61
HS(D) 31308 PT 62
HS(D) 31315 PT 69 to
HS(D) 31317 PT 71
HS(D) 31331 PT 5124 to
HS(D) 31343 PT 5136
HS(D) 31355 PT 5676 to
HS(D) 31419 PT 5740
HS(D) 31421 PT 5742 to
HS(D) 31495 PT 5816
HS(D) 31499 PT 5331 to
HS(D) 31501 PT 5333
HS(D) 31506 PT 5338,
HS(D) 31511 PT 5343
HS(D) 31517 PT 5349,
HS(D) 31518 PT 5350
HS(D) 31531 PT 5363,
HS(D) 31534 PT 5366
HS(D) 31536 PT 5368,
HS(D) 31542 PT 5374
HS(D) 31545 PT 5377,
HS(D) 31548 PT 5380
HS(D) 31555 PT 5387,
HS(D) 31561 PT 5393
HS(D) 31585 PT 5398 to
HS(D) 31640 PT 5453
HS(D) 31642 PT 5486 to
HS(D) 31646 PT 5490
HS(D) 31648 PT 5492,
HS(D) 31674 PT 5158
HS(D) 31650 PT 5494 to
HS(D) 31673 PT 5517
HS(D) 31675 PT 5519 to
HS(D) 31682 PT 5526
HS(D) 31686 PT 5530 to
HS(D) 31690 PT 5534
HS(D) 31693 PT 5555 to
HS(D) 31695 PT 5557
HS(D) 31696 PT 5535 to
HS(D) 31705 PT 5544
HS(D) 31711 PT 5550 to
HS(D) 31713 PT 5552
HS(D) 31714 PT 5558 to
HS(D) 31727 PT 5571
HS(D) 31728 PT 5913 to
HS(D) 31773 PT 5958
114
Net book
value as at
31/01/2008
RM’000
LIST OF PROPERTIES
@ 31 January 2008
@ Joint Venture
+ Registered
# Beneficial
No. Owner
Land/
Built up
area
Remaining
acreage
Title No.
Description/
proposed
development
Date of
Acquisition /
Joint Venture/
Completion Tenure
Approximate
age of the
building
Expiry (Years)
Net book
value as at
31/01/2008
RM’000
HS(D) 31774 PT 5961 to
HS(D) 31777 PT 5964
HS(D) 31778 PT 5959 to
HS(D) 31779 PT 5960
HS(D) 31780 PT 5965 to
HS(D) 31801 PT 5986
HS(D) 33749 PT 6003 to
HS(D) 33751 PT 6005
HS(D) 33752 PT 6047 to
HS(D) 33754 PT 6049
Lot 16532 Geran 56577
Lot 16531 Geran 56575
Lot 15754 Geran 54346
Lot 15207 Geran 54344
HS(D) 27434 PT 7519
HS(D) 27445 PT 7530
HS(D) 27477 PT 7562
HS(D) 27435 to 27444 &
HS(D) 27446 to 27475
PT 7520 to 7529 &
PT 7531 to 7560
CT 11502 Lot 1995
Geran 12274 Lot 2018
Geran 40124 Lot 2066 & 2073
PN 5282 Lot 2067
HS(D) 8160 Lot 3243
2
Talam
Corporation
Berhad
+ 993.99
acres
472.87
HS(D) 11254 PT 8557
HS(D) 13223 PT 12171
HS(D) 13455 PT 12403
HS(D) 13457 PT 12405
HS(D) 13792 PT 12740
HS(D) 14509 PT 13457
HS(D) 14810 PT 13758
HS(D) 29281 to HS(D) 29302,
PT 14914 to PT 14935
HS(D) 29818 PT 15451
HS(D) 28844 PT 14573
HS(D) 28845 PT 14574
HS(D) 29307 PT 14940
HS(D) 30174 PT 15791
HS(D) 30175 PT 15792
HS(D) 30355 PT 15972
HS(D) 30356 PT 15973
HS(D) 30358 PT 15975
HS(D) 30170 PT 15787
HS(D) 30171 PT 15788
HS(D) 30353 PT 15970
HS(D) 30354 PT 15971
HS(D) 30173 PT 15790
HS(D) 30066 to HS(D) 30169,
PT 15683 to PT 15786
HS(D) 34724 to HS(D) 34734,
PT 16948 to PT 16958
ANNUAL REPORT 2008
Bukit
29/10/1994
Sentosa III
Industrial,
residential and
commercial
development
115
Freehold N/A
N/A
269,369
LIST OF PROPERTIES
@ 31 January 2008
@ Joint Venture
+ Registered
# Beneficial
No. Owner
Land/
Built up
area
Remaining
acreage
Description/
proposed
development
Title No.
Date of
Acquisition /
Joint Venture/
Completion Tenure
Approximate
age of the
building
Expiry (Years)
Net book
value as at
31/01/2008
RM’000
HS(D) 34758 to HS(D) 34842,
PT 16986 to PT 17070
HS(D) 34735 to HS(D) 34757,
HS(D) 35619 to HS(D) 35622,
PT 16959 to PT 16985
HS(D) 34843 to HS(D) 35328,
PT 17071 to PT 17556
HS(D) 35343 to HS(D) 35589,
PT 17571 to PT 17817
HS(D) 35590 to HS(D) 35602,
PT 17818 to PT 17830
HS(D) 34039 to HS(D) 34378,
PT 16263 to PT 16602
HS(D) 35330 PT 17558
3
Europlus Berhad
+ 50.71 acres 35.00
HS(D) 33034 PT 4912
HS(D) 33035 to HS(D) 33038,
PT 4913 to PT 4916
HS(D) 33041 to HS(D) 33088,
PT 4920 to PT 4967
HS(D) 33124 to HS(D) 33177,
PT 5005 to PT 5058
HS(D) 33231 to HS(D) 33424,
PT 5112 to PT 5113
& PT 10034 to PT 10225
HS(D) 33427 to HS(D) 33525,
PT 10228 to PT 10326
HS(D) 33607 to HS(D) 33681,
PT 10409 to PT 10483
HS(D) 33682 to HS(D) 33707,
PT 10484 to PT 10509
HS(D) 33526 PT 10327
HS(D) 33530 PT 10331
HS(D) 33708 PT 10510
Prima
Beruntung
Town ship
development
14/05/1996
Freehold N/A
+ 717 acres 511.02
HS(D) 21938 to HS(D) 22089,
PT 7881 to PT 8032
HS(D) 22090 to HS(D) 22119,
PT 8033 to PT 8062
HS(D) 20331 PT 6274
HS(D) 20335 PT 6278
HS(D) 20472 PT 6415
HS(D) 20467 PT 6410
HS(D) 22129 PT 8072
HS(D) 21498 PT 7441
HS(D) 19594 to HS(D) 19694,
PT 5537 to PT 5637
HS(D) 19697 to HS(D) 20330,
PT 5640 to PT 6273
Bukit
Beruntung III
Residential,
industrial and
commercial
development
18/12/1991
Freehold N/A
116
N/A
208,157
LIST OF PROPERTIES
@ 31 January 2008
@ Joint Venture
+ Registered
# Beneficial
No. Owner
Land/
Built up
area
Remaining
acreage
Title No.
Description/
proposed
development
Date of
Acquisition /
Joint Venture/
Completion Tenure
Expiry
Approximate
age of the
building
(Years)
Net book
value as at
31/01/2008
RM’000
HS(D) 21505 to HS(D) 21858,
PT 7448 to PT 7801
HS(D) 22306 to HS(D) 22309,
PT 8249 to PT 8252
HS(D) 20942 to HS(D) 21497,
PT 6885 to PT 7440
HS(D) 21859 to HS(D) 21937,
PT 7802 to PT 7880
HS(D) 18440 to HS(D) 18442,
PT 4383 to PT 4385
HS(D) 18443 PT 4386
HS(D) 18438 PT 4381
HS(D) 18439 PT 4382
HS(D) 18284 PT 4227
HS(D) 20471 PT 6414
HS(D) 22128 PT 8071
HS(D) 18285 PT 4228 (Part)
4
Kenshine
Corporation
Sdn Bhd
@ 600 acres 184.40
HS(D) 2479 to 2484,
PT 6256 to 6261
Mukim Dengkil
Daerah Sepang
Putra Perdana 28/09/1995
Development of
residential and
commercial
properties
99 years 19/10/2093 N/A
Leasehold
195,651
5
Maxisegar
Sdn Bhd
+ 3,000 acres 1,284.10
HS(D) 5746 PT 836
Mukim Ulu Tinggi
Daerah Kuala Selangor
Batang
Berjuntai
17/01/2001
99 years 21/01/2101 N/A
Leasehold
163,701
Taman
17/01/2001
Puncak Jalil
Development of
residential and
commercial
properties
99 years 02/07/2100 N/A
Leasehold
158,345
HS(D) 5704 PT 5616
HS(D) 5706 to HS(D) 5707,
PT 5618 to PT 5619
HS(D) 5709 PT 5621
HS(D) 5713 to HS(D) 5718,
PT 5625 to PT 5630
Mukim Batang Berjuntai
Daerah Kuala Selangor
6
Maxisegar
Sdn Bhd
+ 801 acres 113.82
HS(D) 213918 to 213921
PT 62056 to 62059
HS(D) 213922 to 214182
PT 62358 to 62610,
PT 71773 to 71780
HS(D) 201972 PT 58673
HS(D) 201974 to 201975
PT 58490 to 58491
HS(D) 201976 PT 59170
HS(D) 201978 to 201979
PT 60227 & 61372
HS(D) 201980 to 201981
PT 62420 & 62421
HS(D) 201982 PT 62355
Mukim Petaling
Daerah Petaling
ANNUAL REPORT 2008
117
LIST OF PROPERTIES
@ 31 January 2008
@ Joint Venture
+ Registered
# Beneficial
No. Owner
Land/
Built up
area
Remaining
acreage
7
Lestari Puchong
Sdn Bhd
+ 496.731
acres
91.31
8
Jilin Province
Maxcourt Hotel
Limited
9
Galian Juta
Sdn Bhd
10
Abra Development + 0.96 acres/ N/A
Sdn Bhd
3,901.4
sq M
Title No.
Description/
proposed
development
Date of
Acquisition /
Joint Venture/
Completion Tenure
Expiry
Approximate
age of the
building
(Years)
Net book
value as at
31/01/2008
RM’000
HS(D) 50603 PT 142202
HS(D) 50606 PT 142206,
HS(D) 50607 PT 142205
HS(D) 186777 to 187184
PT 54005 to 54412
HS(D) 243405 to 243477
PT 78128 to 78200
HS(D) 243364 PT 78087
Mukim Petaling
Daerah Petaling
Lestari
24/07/2000
Puchong
Mix
development of
residential,
commercial and
corporate park.
99 years 12/06/2091 N/A
Leasehold
146,331
+ 5,995
N/A
sq m
41,584 sq m
No. 19, Xian Road
Changchun, Jilin Province
People’s Republic
A 4 star 24
storey hotel
building
30 years 29/12/2023 9
Leasehold
118,620
# 200 acres 99.62
&
@
PN 1211 Lot 20407
Mukim Tanjung 12
Daerah Kuala Langat
Saujana Putra 09/01/2001
Development of
residential and
commercial
buildings
99 years 05/02/2094 N/A
Leasehold
63,930
PM 3861 Lot 261
Bandar Ampang
Daerah Hulu Langat
22/06/1995
Menara
Maxisegar
24-storey commercial complex
99 years 03/04/2094 13
Leasehold
57,000
118
24/12/1999
statement on directors’ interests
As At 2 June 2008
A.
ORDINARY SHARES
(Based on Register of Directors’ shareholdings as at 2 June 2008)
Direct
Interest
The Company
1.
Tan Sri Dato’ (Dr) Ir Chan Ah Chye @
Chan Chong Yoon
2.
Y.A.M. Tengku Sulaiman
Shah Al-Haj Ibni Al-Marhum
Sultan Salahuddin Abdul
Aziz Shah Al-Haj
3.
Chua Kim Lan
4.
Loy Boon Chen
No. of Ordinary Shares of RM1.00 each
Deemed
%*4
Interest
42,366,739
6.74
500
*2
74,006
0.012
803,300
0.13
288,837,177*1
-
7,500*3
-
%*4
45.97
-
0.001
-
Notes:
*1
Deemed interest through his spouse, PSDTNC, his daughter, Chan Siu Wei and by virtue of his interest in Pengurusan
Projek Bersistem Sdn Bhd, Prosperous Inn Sdn Bhd, Sze Choon Holdings Sdn Bhd and Kumpulan Europlus Berhad
pursuant to Section 6A of the Companies Act, 1965.
Less than 0.005%.
*2
Deemed interest through her spouse, Chin Chee Meng.
% shareholding based on voting share capital as at 2 June 2008 of 628,304,570.
*3
*4
Tan Sri Dato’ (Dr) Ir Chan Ah Chye @ Chan Chong Yoon, by virtue of his interest in the shares of the Company is also
deemed interested in the shares of all the Company’s subsidiaries to the extent the Company has an interest.
B.
IRREDEEMABLE CONVERTIBLE PREFERENCE SHARES (“ICPS”)
(Based on Register of Directors’ shareholdings as at 2 June 2008)
Direct
Interest
The Company
1.
Tan Sri Dato’ (Dr) Ir Chan Ah Chye @
Chan Chong Yoon
2.
Chua Kim Lan
3.
Loy Boon Chen
No. of ICPS of RM0.10 each
Deemed
%*4
Interest
%*4
12,231,250
8.50
37*1
*2
65
*2
18,750*3
0.013
10,000
-
-
-
Notes:
*1
*2
Less than 0.005%.
*3
*4
Deemed interest by virtue of his interest in Sze Choon Holdings Sdn Bhd pursuant to Section 6A of the Companies Act,
1965.
Deemed interest through her spouse, Chin Chee Meng.
% shareholding based on outstanding ICPS as at 2 June 2008 of 143,962,746.
Save as disclosed above, none of the other Directors of the Company have any interests in the shares of the Company and
its related corporations as at 2 June 2008.
ANNUAL REPORT 2008
119
analysis of ordinary shareholdings
As At 2 June 2008
SHARE CAPITAL
Authorised share capital
:
RM1,000,000,000.00 divided into 939,000,000 ordinary shares of RM1.00 each,
100,000,000 redeemable convertible preference shares of RM0.01 each and 600,000,000
irredeemable convertible preference shares of RM0.10 each.
Issued and paid-up capital
:
RM643,579,453 divided into 629,183,170 ordinary shares of RM1.00 each and
143,962,746 irredeemable convertible preference shares of RM0.10 each.
Voting Rights
:
There is only one class of ordinary shares with voting rights in the paid-up share capital of
the Company. Each share entitles the holder to one vote.
Shares Buy Back
:
The Company had purchased 878,600 ordinary shares and the shares purchased were
retained as treasury shares.
DISTRIBUTION OF ORDINARY SHAREHOLDINGS
(Based on Record of Depositors as at 2 June 2008)
Size of Holdings
No. of
Ordinary
Shareholders
% of
Ordinary
Shareholders
No. of
Ordinary
Shares Held
% of
Ordinary
Shares Held
1,150
5,635
5,537
1,955
402
2
7.83
38.38
37.72
13.32
2.74
0.01
44,758
3,582,564
23,856,867
69,559,940
289,987,341
241,273,100
0.01
0.57
3.80
11.07
46.15
38.40
14,681
100.00
628,304,570
100.00
No. of Ordinary
Shares Held
%
1 - 99
100 - 1,000
1,001 - 10,000
10,001 - 100,000
100,001 - 31,415,227*1
31,415,228 and above *2
TOTAL
NOTES:
*1
*2
Less than 5% of the voting share capital
5% and above of the voting share capital
THIRTY LARGEST ORDINARY SHAREHOLDERS
(Based on Record of Depositors as at 2 June 2008)
Name
1)
EB NOMINEES (TEMPATAN) SENDIRIAN BERHAD
Pledged Securities Account for Kumpulan Europlus Berhad (JTR)
137,000,000
21.80
2)
CIMSEC NOMINEES (TEMPATAN) SDN BHD
CIMB Bank for Kumpulan Europlus Berhad (Banking)
104,273,100
16.60
3)
TASEC NOMINEES (TEMPATAN) SDN BHD
TA First Credit Sdn Bhd for Kumpulan Europlus Berhad
20,000,000
3.18
4)
CHAN AH CHYE @ CHAN CHONG YOON
13,301,562
2.12
5)
PENGURUSAN PROJEK BERSISTEM SDN BHD
8,902,468
1.42
6)
TA NOMINEES (TEMPATAN) SDN BHD
Pledged Securities Account for Chan Ah Chye @ Chan Chong Yoon
8,655,277
1.38
120
As At 2 June 2008
Name
No. of Ordinary
Shares Held
%
7)
M & A NOMINEE (TEMPATAN) SDN BHD
Insas Credit & Leasing Sdn Bhd for Chan Ah Chye @ Chan Chong Yoon
7,364,821
1.17
8)
CITIGROUP NOMINEES (ASING) SDN BHD
Exempt an for Mellon Bank (Abnamro Mellon)
7,319,900
1.17
9)
PUBLIC NOMINEES (TEMPATAN) SDN BHD
Pledged Securities Account for Chan Ah Chye @ Chan Chong Yoon (JHL)
7,158,377
1.14
10)
CARTABAN NOMINEES (TEMPATAN) SDN BHD
DBS Vickers (Hong Kong) Limited for Chai Yet Lee
7,010,000
1.12
11)
TA First Credit Sdn Bhd for Pengurusan Projek Bersistem Sdn Bhd
6,800,000
1.08
12)
CHAI YUNE LOONG
6,000,000
0.95
13)
CBNY for DFA Emerging Markets Fund
5,944,350
0.95
14)
JF APEX NOMINEES (TEMPATAN) SDN BHD
Pledged securities account for Tan Meng Khong (Margin)
4,829,100
0.77
15)
EB NOMINEES (TEMPATAN) SENDIRIAN BERHAD
Pledged Securities Account for Chan Ah Chye @ Chan Chong Yoon (BB)
4,339,362
0.69
16)
MINISTER OF FINANCE
Akaun Jaminan Pinjaman Kerajaan Persekutuan
4,300,000
0.68
17)
TA First Credit Sdn Bhd for Kumpulan Europlus Bhd (A/C No. 2)
4,291,389
0.68
18)
POS MALAYSIA BERHAD
3,879,000
0.62
19)
CIMSEC NOMINEES (TEMPATAN) SDN BHD
CIMB Bank for Intelbest Corporation Sdn Bhd (Banking)
3,453,471
0.55
20)
HDM NOMINEES (TEMPATAN) SDN BHD
UOB Kay Hian Pte Ltd for Teh Kee Hong
3,300,000
0.53
21)
HDM NOMINEES (TEMPATAN) SDN BHD
UOB Kay Hian Pte Ltd for Michael Koh Kow Tee
3,210,000
0.51
22)
TAN SUAN HUAT
3,026,100
0.48
23)
JURUTAMA HOLDINGS SDN BHD
3,025,609
0.48
24)
LEE KIM POH
3,000,000
0.48
25)
M & A NOMINEE (ASING) SDN BHD
CIMB-GK Securities Pte Ltd for Hi-Way Investments Limited (38/207620)
3,000,000
0.48
26)
OLIVE LIM SWEE LIAN
2,600,000
0.41
27)
OSK NOMINEES (ASING) SDN BERHAD
DBS Vickers Secs (S) Pte Ltd
2,223,000
0.35
ANNUAL REPORT 2008
121
As At 2 June 2008
Name
No. of Ordinary
Shares Held
%
28)
CNBY for DFA Emerging Markets Small Cap Series
2,096,350
0.33
29)
KUMPULAN EUROPLUS BERHAD
2,066,700
0.33
30)
MOHAMAD YUNUS BIN MOHAMED SHARIFF
2,000,000
0.32
394,369,936
62.77
SUBSTANTIAL SHAREHOLDERS
(Based on Register of Substantial Shareholders as at 2 June 2008)
Name of substantial shareholders
1. Tan Sri Dato’ (Dr) Ir Chan Ah Chye @
Chan ChongYoon (“TSDCAC”)
2. Puan Sri Datin Thong Nyok Choo (“PSDTNC”)
3. Kumpulan Europlus Berhad
No. of Ordinary
Shares
Direct Interest
%*3
Deemed Interest
No. of Ordinary
Shares
%*3
42,366,739
6.74
288,837,177*1
45.97
481,315
0.08
330,722,601*2
52.63
269,821,689
42.94
-
-
-
-
269,821,689
42.94
4.IJM Corporation Berhad
NOTES:-
*1 Deemed interest through his spouse, PSDTNC, his daughter, Chan Siu Wei and by virtue of his interest in Pengurusan Projek
Bersistem Sdn Bhd, Prosperous Inn Sdn Bhd, Sze Choon Holdings Sdn Bhd and Kumpulan Europlus Berhad pursuant to
Section 6A of the Companies Act, 1965 (“the Act”).
*2 Deemed interest through her spouse, TSDCAC, her daughter, Chan Siu Wei and by virtue of her interest in Pengurusan Projek
Bersistem Sdn Bhd, Prosperous Inn Sdn Bhd, Sze Choon Holdings Sdn Bhd and Kumpulan Europlus Berhad pursuant to Section
6A of the Act.
*3 % shareholding based on voting share capital as at 2 June 2008 of 628,304,570.
122
analysis of irredeemable
convertible preference shareholdings
As At 2 June 2008
No. of ICPS Issued
:
591,867,978
No. of ICPS Outstanding
:
143,962,746
Conversion Period
:
12 January 2004 to 2 January 2009
Conversion Rights
:
Each registered holder of Irredeemable Convertible Preference Shares (“ICPS”) shall be
entitled to convert the ICPS held into new shares of RM1.00 each in the Company at the
ICPS Conversion Price of RM1.00. For the avoidance of any doubt, the ICPS Conversion
Price shall be deemed to be satisfied by tendering and surrendering the ICPS with an
aggregate par value equivalent to the ICPS Conversion Price and no cash monies shall
be payable for the ICPS conversion.
DISTRIBUTION OF ICPS HOLDINGS
No. of ICPS
Holders
% of ICPS
Holders
No. of ICPS
Held
% of ICPS
Held
1 - 99
100 - 1,000
1,001 - 10,000
10,001 - 100,000
100,001 - 7,198,136*1
7,198,137 and above*2
479
412
3,424
1,141
194
1
8.48
7.29
60.59
20.19
3.43
0.02
21,245
364,312
14,498,761
38,259,353
78,587,825
12,231,250
0.01
0.25
10.07
26.58
54.59
8.50
TOTAL
5,651
100.00
143,962,746
100.00
No. of ICPS
%
12,231,250
8.50
Size of Holdings
NOTES:
-Less than 5% of outstanding ICPS
- 5% and above of outstanding ICPS
*1
*2
THIRTY LARGEST ICPS HOLDERS
Name
1)
CHAN AH CHYE @ CHAN CHONG YOON
2)
JASVINDER SINGH A/L GURBAKHES SINGH
3,700,000
2.57
3)
GOOI SEOK CHING
3,340,000
2.32
4)
JESSICE SIEW SHWU HUEY
2,760,000
1.92
5)
CITIGROUP NOMINEES (TEMPATAN) SDN BHD
Pledged securities account for Tan Kim Foh @ Tan Kim Fok (470276)
2,382,000
1.65
6)
CHAN SAM MENG
2,160,600
1.50
7)
JASVINDER SINGH A/L GURBAKHES SINGH
2,000,000
1.39
8)
TA NOMINEES (TEMPATAN) SDN BHD
Pledged securities account for Intelbest Corporation Sdn Bhd
1,980,000
1.38
9)
HOR SIEW THYE
1,800,000
1.25
ANNUAL REPORT 2008
123
analysis of irredeemable
convertible preference shareholdings
As At 2 June 2008
Name
No. of ICPS
%
10)
P.I.S. HOLDINGS SDN BHD
1,553,341
1.08
11)
OOI BENG HENG
1,500,000
1.04
12)
JF APEX NOMINEES (TEMPATAN) SDN BHD
Pledged securities account for Yap Hon Kong (Margin)
1,500,000
1.04
13)
MOHAMAD YUNUS BIN MOHAMED SHARIFF
1,493,000
1.04
14)
LIM KEW @ LIM KON FOONG
1,335,022
0.93
15)
YAP CHUN FATT
1,330,500
0.92
16)
JOGINDER SINGH A/L GURBAKHES SINGH
1,200,000
0.83
17)
CHOO SOOK MEI
1,146,400
0.80
18)
LEE SOO HAR
974,800
0.68
19)
MAYBAN NOMINEES (TEMPATAN) SDN BHD
Pledged securities account for Chan Sam Meng
951,900
0.66
20)
HLB NOMINEES (TEMPATAN) SDN BHD
Pledged securities account for Chong Kah Fung
925,000
0.64
21)
DATO’ NG TIONG SENG @ NG BA
700,000
0.49
22)
GOH CHIEW AI
678,900
0.47
23)
EU KIM PENG
664,400
0.46
24)
UNG KAH CHIN
660,400
0.46
25)
WONG SIN KIEW
648,500
0.45
26)
GO SUU KEN
607,400
0.42
27)
CHOO CHEN HIN
603,000
0.42
28)
CYNTHIA HAWKINS
600,000
0.42
29)
HLG NOMINEE (TEMPATAN) SDN BHD
Hong Leong Bank Bhd for Tan Ah Heng
600,000
0.42
30)
SAI YEE @ SIA SAY YEE
588,000
0.41
52,614,413
36.55
124
notice of 83rd
annual general meeting
NOTICE IS HEREBY GIVEN THAT the 83rd Annual General Meeting of Talam Corporation Berhad will
be held at Perdana Ballroom, Pandan Lake Club, Lot 28, Jalan Perdana 3/8, Pandan Perdana, 55300 Kuala
Lumpur on Tuesday, 29 July 2008 at 10.30 a.m. for the following purposes:AGENDA
1. To re-table and re-adopt the Reissued Audited Financial Statements of the Company for the year ended
31 January 2006 and the Reports of the Directors and Auditors thereon pursuant to the technical issue of
the Companies Act, 1965 arising from the directive from the Securities Commission which required the
adoption of the same at the extraordinary general meeting held on 15 November 2007.
2. To re-table and re-adopt the Reissued Audited Financial Statements of the Company for the year ended
31 January 2007 and the Reports of the Directors and Auditors thereon pursuant to the technical issue of
the Companies Act, 1965 arising from the directive from the Securities Commission which required the
adoption of the same at the extraordinary general meeting held on 15 November 2007.
(Resolution 2)
3. To receive and adopt the Audited Financial Statements of the Company for the year ended 31 January
2008 and the Reports of the Directors and Auditors thereon.
(Resolution 3)
4. To approve the payment of Directors’ fees of RM25,000 for each Director for the year ended 31 January
2008.
(Resolution 4)
5. To re-elect Tan Sri Dato’ (Dr) Ir Chan Ah Chye @ Chan Chong Yoon who retire in accordance with Article
97 of the Articles of Association of the Company.
(Resolution 5)
(Resolution 1)
6. To re-elect the following Directors who retire in accordance with Article 81 of the Articles of Association of
the Company:(Resolution 6)
(Resolution 7)
(Resolution 8)
(Resolution 9)
6.1Dato’ Kamaruddin Bin Mat Desa
6.2Chua Kim Lan
6.3Loy Boon Chen
6.4Lee Swee Seng
7. To re-appoint Messrs Deloitte KassimChan as Auditors and to authorise the Directors to fix their
remuneration.
(Resolution 10)
AS SPECIAL BUSINESSES
8. To consider and if thought fit to pass the following Ordinary Resolutions:
8.1
Ordinary Resolution
Authority to allot and issue 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
authorised to issue shares in the Company at any time until the conclusion of the next Annual
General Meeting and upon such terms and conditions and for such purposes as the Directors may
in their absolute discretion deem fit, provided that the aggregate number of shares to be issued
does not exceed 10 percent of the issued share capital of the Company for the time being, subject
always to the approval of all the relevant regulatory bodies being obtained for such allotments and
issues.”
ANNUAL REPORT 2008
125
(Resolution 11)
notice of 83rd
8.2
Ordinary Resolution
Proposed shareholders’ mandate for Talam Corporation Berhad and its subsidiaries (“Talam
Group”) to enter into recurrent transactions of a revenue or trading nature with related
parties (“Proposed Shareholders’ Mandate I”)
“THAT, the Talam Group be and is hereby authorised to enter into all arrangements and/or transactions
with Agrocon (M) Sdn Bhd and Pengurusan Projek Bersistem Sdn Bhd (“Related Parties”), the nature
of which is set out in Section 2.2 of the Circular to Shareholders dated 7 July 2008 provided that such
arrangements and/or transactions are:(i)
recurrent transactions of a revenue or trading nature;
(ii) necessary for the day-to-day operations;
(iii) carried out in the ordinary course of business on normal commercial terms which are not
more favourable to the Related Parties than those generally available to the public (where
applicable); and
(iv) are not to the detriment of the minority shareholders;
AND THAT such approval shall continue to be in force until:(i)
the conclusion of the next Annual General Meeting (“AGM”) of the Company (and will be
subject to annual renewal) unless by a resolution passed at an AGM whereby the authority
is renewed;
(ii) the expiration of the period within which the next AGM of the Company subsequent to the
date it is required to be held pursuant to Section 143(1) of the Companies Act, 1965 (“Act”)
(but shall not extend to such extension as may be allowed pursuant to Section 143(2) of
the Act); or
(iii) revoked or varied by resolution passed by the shareholders in an AGM or extraordinary
general meeting;
whichever is earlier;
AND THAT the breakdown of the aggregate value of the transactions of the Proposed Shareholders’
Mandate I conducted during the financial year will be disclosed in the Annual Report of the
Company on the information of the type of the recurrent related party transactions made and the
names of the related parties involved in each type of the recurrent related party transactions made
and their relationship with the Company for the said financial year;
AND THAT the Directors of the Company be and are hereby authorised to complete and take all
such steps and do all acts and things in such manner as the Directors of the Company may deem
fit or expedient or necessary to give effect to the Proposed Shareholders’ Mandate I.”
126
(Resolution 12)
notice of 83rd
8.3
Ordinary Resolution
parties (“Proposed Shareholders’ Mandate II”)
“THAT, the Talam Group be and is hereby authorised to enter into all arrangements and/or
transactions with KEB Builders Sdn Bhd, KEB Management Sdn Bhd, KEURO Leasing Sdn Bhd,
KEURO Trading Sdn Bhd and Konsortium LPB Sdn Bhd (“Related Parties”), the nature of which
is set out in Section 2.2 of the Circular to Shareholders dated 7 July 2008 provided that such
arrangements and/or transactions are:(i)
applicable); and
is renewed;
the Act); or
general meeting;
Mandate II conducted during the financial year will be disclosed in the Annual Report of the
fit or expedient or necessary to give effect to the Proposed Shareholders’ Mandate II.”
ANNUAL REPORT 2008
127
(Resolution 13)
notice of 83rd
8.4
Ordinary Resolution
parties (“Proposed Shareholders’ Mandate III”)
“THAT, the Talam Group be and is hereby authorised to enter into all arrangements and/or
transactions with Cekap Tropikal Sdn Bhd, GR Commerce Sdn Bhd, IJM Construction Sdn Bhd,
Radiant Pillar Sdn Bhd and Sierra Ukay Sdn Bhd (“Related Parties”), the nature of which is set out
in Section 2.2 of the Circular to Shareholders dated 7 July 2008 provided that such arrangements
and/or transactions are:(i)
applicable); and
is renewed;
the Act); or
general meeting;
Mandate III conducted during the financial year will be disclosed in the Annual Report of the
fit or expedient or necessary to give effect to the Proposed Shareholders’ Mandate III.”
128
(Resolution 14)
notice of 83rd
8.5
Ordinary Resolution
Authority pursuant to Section 132E of the Companies Act, 1965
“THAT pursuant to Section 132E of the Companies Act, 1965, authority be and is hereby given for
the Company and each of its subsidiaries to enter into any arrangement or transaction with any
Director of the Company or any person connected with such Director to acquire from or dispose
to such Director or person connected with such Director any non-cash assets of requisite value
that is less than 5% of the total net tangible assets of the Group at the time of such acquisition or
disposal.
AND THAT such authority shall continue to be in force until:(i)
the conclusion of the next Annual General Meeting of the Company; or
(ii)
the expiration of the period within which the next Annual General Meeting of the Company is
required to be tabled pursuant to Section 143(1) of the Companies Act, 1965 (but shall not
extend to such extension as may be allowed pursuant to Section 143(2) of the Companies
Act, 1965); or
(iii)
revoked or varied by resolution passed by the shareholders in a general meeting;
whichever is earlier.”
9.
To transact any ordinary business which due notice shall have been given.
(Resolution 15)
BY ORDER OF THE BOARD
TING KOK KEONG
Secretary
Kuala Lumpur
7 July 2008
NOTES:
1. A member of the Company entitled to attend and vote at the meeting may
appoint one (1) proxy to attend and vote instead of him. A proxy need not
be a member of the Company and the provision of Section 149(1)(b) of the
Companies Act, 1965 shall not apply to the Company.
2. The instrument appointing a proxy shall be in writing under the hand of the
appointer or his attorney duly authorised in writing or if the appointer is a
corporation under its common seal or the hand of its attorney.
3. All forms of proxy should be deposited at the Company’s Registered Office
at Suite 2.05, Level 2, Menara Maxisegar, Jalan Pandan Indah 4/2, Pandan
Indah, 55100 Kuala Lumpur not less than forty-eight (48) hours before the
time appointed for holding the meeting or any adjournment thereof.
4. The Reissued Audited Financial Statements for the years ended 31
January 2006 and 31 January 2007 (“Reissued AFS”) have been received
and adopted by the shareholders of the Company at the Extraordinary
General Meeting held on 15 November 2007 pursuant to the directive
from the Securities Commission (“SC”) under Regulation 5 of the
Securities Industry (Compliance with Approved Accounting Standards)
Regulation 1999 via SC’s letter dated 1 October 2007.The Companies
Commission of Malaysia has rejected the filing of the Reissued AFS due
to the technical issue pursuant to Section 169(1) of the Companies Act,
1965, which states that the audited financial statements must be tabled
at an Annual General Meeting and the SC have agreed for the Reissued
AFS to be re-tabled and re-adopted by the shareholders of the Company
at this Annual General Meeting.
6. 7.
EXPLANATORY NOTES TO THE SPECIAL BUSINESSES
5. The Ordinary Resolution no. 11 if passed, will give the Directors of the
ANNUAL REPORT 2008
129
Company the authority 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 costs involved in convening
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.
The detailed information on the Ordinary Resolution nos. 12, 13 and 14
pertaining to the Proposed Shareholders’ Mandate for Recurrent Related
Party Transactions of a Revenue or Trading Nature, is set out in the Circular
to Shareholders dated 7 July 2008 which is enclosed together with the
Company’s Annual Report 2008.
Resolution pursuant to Section 132E of the Companies Act, 1965
Section 132E of the Companies Act, 1965 prohibits a company or its
subsidiaries from entering into any arrangement or transaction with its
directors or persons connected with such directors in respect of the
acquisition from or disposal to such directors or connected persons of
any non-cash assets of the requisite value without prior approval of the
Company in general meeting. According to the Companies Act, 1965, a
non-cash asset is considered to be of the requisite value, if at the time of
arrangement or transaction, its value is greater than RM250,000.00 or 10%
of the Company’s net assets, whichever is the lesser, subject to a minimum
of RM10,000.00.
The proposed Ordinary Resolution no. 15, if passed, will authorise the
Company and each of its subsidiaries to enter into any arrangement or
transaction with a Director of the Company or with a person connected
with such a Director to acquire from or dispose to such a Director or person
connected with such a Director any non-cash assets of the requisite value
that is less than 5% of the total net tangible assets of the Group at the time
of such acquisition or disposal.
STATEMENT ACCOMPANYING NOTICE
OF ANNUAL GENERAL MEETING
Directors standing for re-election at the 83rd Annual General Meeting of the Company
The Director retiring by rotation and standing for re-election pursuant to Article 97 of the Articles of Association of the
Company is Tan Sri Dato’ (Dr) Ir Chan Ah Chye @ Chan Chong Yoon.
The Directors retiring by rotation and standing for re-election pursuant to Article 81 of the Articles of Association of the Company
are as follows:* Dato’ Kamaruddin Bin Mat Desa
* Chua Kim Lan
* Loy Boon Chen
* Lee Swee Seng
The profile of each of the above-named Directors is set out in the section entitled “Profile of Board of Directors” on pages 6 to 9 of
this Annual Report.
Their securities holdings in the Company and its related corporations are set out in the section entitled “Statement on Directors’
Interests” on pages 119 of this Annual Report.
130
NO. OF SHARES HELD
FORM OF PROXY
I/We ___________________________________________________________________________________ (NRIC No. __________________________________)
(Name in full and in block letter)
of __________________________________________________________________________________________________________________________________
(Full address)
being a member/members of TALAM CORPORATION BERHAD (1120-H) hereby appoint __________________________________________________
of _______________________________________________________________________________ (NRIC No. _________________________________________)
of __________________________________________________________________________________________________________________________________
(Full address)
or failing him, the Chairman of the Meeting as my/our proxy to vote on my/our behalf at the 83rd Annual General Meeting of the Company to be held at
the Perdana Ballroom, Pandan Lake Club, Lot 28, Jalan Perdana 3/8, Pandan Perdana, 55300 Kuala Lumpur on Tuesday, 29 July 2008 at 10.30 a.m.
and at any adjournment thereof, on the following resolutions referred to in the notice of the Annual General Meeting.
My/Our proxy is to vote as indicated below:
NO. RESOLUTIONS
FOR
1
To re-table and re-adopt the Reissued Audited Financial Statements of the Company for the year ended 31 January
2006 and the Reports of the Directors and Auditors thereon pursuant to the technical issue of the Companies Act,
1965 arising from the directive from the Securities Commission which required the adoption of the same at the
extraordinary general meeting held on 15 November 2007.
2
To re-table and re-adopt the Reissued Audited Financial Statements of the Company for the year ended 31 January
2007 and the Reports of the Directors and Auditors thereon pursuant to the technical issue of the Companies Act,
1965 arising from the directive from the Securities Commission which required the adoption of the same at the
extraordinary general meeting held on 15 November 2007.
3
To receive and adopt the Audited Financial Statements of the Company for the year ended 31 January 2008 and the
Reports of the Directors and Auditors thereon.
4
To approve the payment of Directors’ Fees of RM25,000 for each Director for the year ended 31 January 2008.
5
To re-elect the Director, Tan Sri Dato’ (Dr) Ir Chan Ah Chye @ Chan Chong Yoon who retire in accordance with Article
97 of the Articles of Association of the Company.
6
To re-elect the Director, Dato’ Kamaruddin Bin Mat Desa who retire in accordance with Article 81 of the Articles of
Association of the Company.
7
To re-elect the Director, Chua Kim Lan who retire in accordance with Article 81 of the Articles of Association of the
Company.
8
To re-elect the Director, Loy Boon Chen who retire in accordance with Article 81 of the Articles of Association of the
Company.
9
To re-elect the Director, Lee Swee Seng who retire in accordance with Article 81 of the Articles of Association of the
Company.
AGAINST
10 To re-appoint Messrs Deloitte KassimChan as Auditors and to authorise the Directors to fix their remuneration.
As Special Businesses
11 Ordinary Resolution
Authority to allot and issue shares pursuant to Section 132D of the Companies Act, 1965.
Proposed shareholders’ mandate for Talam Corporation Berhad and its subsidiaries to enter into recurrent
transactions of a revenue or trading nature with related parties (“Proposed Shareholders’ Mandate I”).
transactions of a revenue or trading nature with related parties (“Proposed Shareholders’ Mandate II”).
transactions of a revenue or trading nature with related parties (“Proposed Shareholders’ Mandate III”).
Authority pursuant to Section 132E of the Companies Act, 1965.
(Please indicate with an “X” in the appropriate spaces how you wish your vote to be casted. If you do not indicate how you wish your proxy to vote on
any resolution, the proxy shall vote as he thinks fit, or at his discretion, abstains from voting).
Signed this ________________ day of ________________ 2008.
______________________________________
Signature/Common Seal of Shareholder(s)
NOTES:
1. A member of the Company entitled to attend and vote at the meeting may appoint a proxy to attend and vote instead of him. A proxy need not be a member of the
Company and the provision of Section 149(1)(b) of the Companies Act, 1965 shall not apply to the Company.
2. The instrument appointing a proxy shall be in writing under the hand of the appointer or his attorney duly authorised in writing or if the appointer is a corporation
under its common seal or the hand of its attorney.
3. All forms of proxy must be deposited at the Registered Office of the Company situated at Suite 2.05, Level 2 Menara Maxisegar, Jalan Pandan Indah 4/2, Pandan Indah,
55100 Kuala Lumpur not less than 48 hours before the time appointed for holding the meeting or any adjournment thereof.
Please fold here
STAMP
The Company Secretary
Suite 2.05, Level 2, Menara Maxisegar
Jalan Pandan Indah 4/2
Pandan Indah
55100 Kuala Lumpur
Please fold here

talam corporation berhad 1120-h

Transcription

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