- Investor Relations

Transcription

TIME Engineering Berhad
Annual Report 2012
TEB12_corpXXX_Layout 1 5/13/13 3:47 PM Page b
(continued)
STEPPING UP
TO THE
CHALLENGE
COVER
RATIONALE
The peak is high up ahead and we know the climb will not be easy. It will put our
determination and our collective resolve to the test. We know it is a matter of time we
will reach our goal. We will double our efforts and triple our determination, for the end
is there and our job is to rise to the challenge.
Vision
A world-class IT infrastructure service provider
Mission
•
•
Enable our clients to operate with maximum efficiency and reliability
A trusted and loyal business partner
TEB12_corpXXX_Layout 1 5/13/13 3:47 PM Page 1
A TRUE BELIEVER OF
BUSINESS-EFFICIENT TECHNOLOGIES
At TIME Engineering Berhad (TEB), we develop and provide mission-critical IT solutions for government agencies, multinationals
and top-drawer institutions locally and regionally. Our solutions enhance our clients’ operational efficiency and reliability by
leveraging on our significant expertise and experience in Cybersecurity, Data Hosting, Enterprise Applications, Asset Maintenance,
Systems Integration and eCommerce.
Incorporated in 1970 and converted to a public company in 1983, TEB played a proactive role in nation-building by developing
IT solutions. Today, TEB has established its presence in the local IT sector where we continue to create and innovate our IT
infrastructure, content and applications for the betterment of the nation.
CORPORATE
STRUCTURE
As at 30 April 2013
KHAZANAH NASIONAL BERHAD
TIME ENGINEERING BERHAD
45.03%
Dagang Net Technologies Sdn Bhd
TEB Systems Integrators Sdn Bhd
71.25%
100%
Principal Activity
Development, management and provision of B2B
e-commerce and computerised transaction
facilitation services.
Principal Activity
Providing expertise in IT project management and
consultancy, supply of ICT hardware equipment,
maintenance and asset management.
TIME
Quantum
Technology
Sdn
Bhd
TEB
Quantum
Technology
Sdn
Bhd
(100%)
100%
Principal Activity
Providing IT solutions, cybersecurity, managed
services and supply of computer hardware,
software and peripherals.
CORPORATE
HISTORY
1983
1970
TIME Engineering
Sdn Bhd was listed
on the Main Board of
Bursa Malaysia
Securities Berhad
(then known as
KLSE) and was
renamed TIME
Engineering Berhad
(“TEB”).
HOTO
TIME Engineering Berhad | Annual Report 2012
TIME Engineering
Sdn Bhd was
incorporated on
12 October as a
trading company
distributing
welding products.
PAGE
2
1989
TEB created its Engineering &
Manufacturing Division and
was actively involved in the
North-South Expressway project,
railway construction, signaling
and trackworks.
2004
2009
TEB was designated as the Information and
Communications Technology (“ICT”) flagship
of UEM Group and embarked to become a
technology-based business leader in ICT.
In the first quarter of 2009, TEB was
restructured to focus on becoming a world-class
IT Infrastructure service provider. Its operations
were streamlined into two (2) Divisions i.e.
eCommerce led by Dagang Net Technologies
Sdn Bhd (“DNT”) and IT Infrastructure led by
TEB Quantum Technology Sdn Bhd and TEB
Systems Technology Sdn Bhd.
TEB’s subsidiary, Dagang Net Technologies
Sdn Bhd was awarded a 5-year Government
contract to operate the electronic customs
declaration value-added network and
electronic permits for other government
agencies.
TEB’s wholly-owned subsidiary, TIME Quantum
Technology Sdn Bhd (now known as TEB
Quantum Technology Sdn Bhd) strengthened
and expanded its managed security services
business under the FORTRESS brand name.
In September, DNT was awarded a 5-year
contract for the implementation of Malaysia’s
National Single Window.
CORPORATE
HISTORY
1994
In September, TEB
became part of the
Renong Group of
Companies, a
dynamic
conglomerate.
TEB underwent a fundamental shift in
direction from a project engineering
company and restructured into five (5)
Divisions i.e. Telecommunications, Power,
Information Technology, Media, and
Engineering & Manufacturing. During this
time, TEB made several notable
achievements including operating a
gas-fired power plant, launching the first
private radio station in Malaysia; and
establishing a telecommunications system
along the North-South Expressway and
successfully launching the first phase of the
Port Klang Community System.
On 28 October, Renong Berhad transferred its
ownership in TEB to United Engineers (Malaysia)
Berhad (now known as UEM Group Berhad, a
wholly-owned subsidiary of the Government
investment arm Khazanah Nasional Berhad). By
virtue of this new ownership, TEB became a
Government-linked company.
The Ministry of Education awarded TEB the
contract to supply hardware and equipment for
the Teaching and Learning of Mathematics &
Science in English (“PPSMI”) project.
Our Journey...
2011
2012
On 2 August, TEB raised RM331.9
million from the disposal of its entire
equity stake in TIME dotCom Berhad
and used the proceeds to fully settle
its borrowings.
Effective 29 October, TEB’s stock
was reclassified from the
Trading/Services Sector to the
Technology Sector.
In September, the Integrated
Enterprise Centre which is located at
Cyberjaya began operations.
On 20 November, UEM Group
Berhad transferred its ownership in
TEB to Khazanah Nasional Berhad
(“KNB”) and thereafter on 17
December, KNB announced its
intention to divest the entire equity
interest of 45.03% in TEB via a
tender process to a qualified
Bumiputera entrepreneur.
1990
2003
PAGE
3
Heads Up High
In the face of challenges,
we keep our eyes on what matters.
If we were to sum up 2012 into one word, it would be:
“challenging”. It was a time of trials and tribulations;
a trying year for the team at TEB.
But it is easy to forget what matters if we keep looking down. That
is why we endeavoured to always keep our heads up high - so we
can find success when others see failure, so we can find
optimism when others see pessimism, so we can see hope when
others see hopelessness.
For we know that the true success of TEB is in the grit, the
determination and the perseverance of the entire team. And as a
team, we give strength to each other, a helping hand when asked,
encouragement when needed. Success is not a single point in the
future, but a frontier. And as a team, we will reach that frontier.
We held our heads high in 2012.
Above everything else, that was all that really mattered.
CONTENTS
06
5-Year Financial Highlights
08
Chairman’s Statement
14
Operational Review
18
Core Service Offerings
22
Nurturing Talent
26
Profile of the Board of Directors
32
Corporate Information
34
Financial Diary / Corporate Announcements
36
Corporate Governance Statement
43
Audit Committee Report
47
Risk Management and Internal Control Statement
50
Share Performance Chart
51
Financial Statements
114
Analysis of Shareholdings
116
Notice of Forty Third Annual General Meeting
119
Statement Accompanying Notice of
Forty Third Annual General Meeting
120
Administrative Details
Form of Proxy
5-YEAR
FINANCIAL HIGHLIGHTS
2008
2009
2010
2011
151,040
2012
144,594
124,109
87,693
65,340
REVENUE
(RM’000)
95,909
30,490
20,998
PROFIT/(LOSS)
BEFORE TAXATION
(RM’000)
114
(15,128)
11.29
3.05
1.06
PAGE
6
NET EARNINGS/(LOSS)
PER SHARE
(SEN)
(4.82)
(1.00)
0.43
0.18
0.15
0.17
0.13
NET ASSETS
PER SHARE
(RM)
Consolidated Statements of Financial Position (RM’000)
2008
2009
Investments
Other Assets
348,599
207,706
348,599
148,292
Total Assets
556,305
Share Capital
Reserves
As at 31 December
2010
2011
2012
497,846
136,777
—
185,681
—
241.916
496,891
634,623
185,681
241,916
775,245
(656,683)
155,049
(12,862)
155,049
174,822
155,049
(20,810)
155,049
(51,846)
Equity Attributable to Shareholders of the Company
Non-Controlling Interests
Borrowings
Other Liabilities
118,562
19,008
335,474
83,261
142,187
21,457
303,561
29,686
329,871
18,239
263,334
23,179
134,239
18,396
—
33,046
103,203
11,845
67,386
59,482
Total Equity and Liabilities
556,305
496,891
634,623
185,681
241,916
2008
2009
2011
2012
Revenue
151,040
124,109
87,693
65,340
144,594
Results from Operating Activities
Finance Costs
Gain/(loss) on Disposal of Investment
Impairment Loss in Investments
Finance Income
Provision for Legal Claim
51,811
(29,454)
9,382
(50,561)
3,694
—
34,063
(5,499)
—
—
1,926
—
19,963
(20,481)
19,637
—
1,879
—
2,343
(1,517)
91,927
—
3,156
—
2,494
(538)
—
—
2,658
(4,500)
Profit/(Loss) before Taxation
Zakat
Taxation
(15,128)
(200)
(15,168)
30,490
(335)
147
20,998
(269)
(7,064)
95,909
(295)
(4,488)
114
(281)
(2,999)
Profit/(Loss) for the Year
(30,496)
30,302
13,665
91,126
(3,166)
Attributable to:
Owners of the Company
Non-Controlling Interests
(37,381)
6,885
23,625
6,677
8,189
5,476
87,490
3,636
(7,779)
4,613
Profit/(Loss) For the Year
(30,496)
30,302
13,665
91,126
(3,166)
Consolidated Statements of Comprehensive Income (RM’000)
Financial Highlights
2008
RM’000
RM’000
RM’000
RM’000
Financial Ratios
Debt/Equity Ratio
Net Earnings/(Loss) per Share
Gross Dividend per Share
Net Assets per Share
Closing Price
Price Earnings Ratio
As at 31 December
2010
2011
2012
151,040
(15,128)
(30,496)
(37,381)
124,109
30,490
30,302
23,625
87,693
20,998
13,665
8,189
65,340
95,909
91,126
87,490
144,594
114
(3,166)
(7,779)
times
sen
sen
RM
2.4
(4.82)
—
0.15
1.9
3.05
1.33
0.18
0.8
1.06
1.33
0.43
—
11.29
6.66
0.17
0.6
(1.00)
4.00
0.13
sen
times
9.5
N/A
43.0
14.1
45.0
42.6
26.0
2.3
30.0
N/A
PAGE
Revenue
Profit/(Loss) before Taxation
Profit/(Loss) for the Year After Taxation
Profit/(Loss) Attributable to Owners of the Company
2009
As at 31 December
2010
5-YEAR
FINANCIAL HIGHLIGHTS
7
CHAIRMAN’S
STATEMENT
“
… our operations
remained solid and
flawless execution
remained a top
priority.
”
PAGE
8
DATUK HAJI MOHD KHALIL DATO’ HAJI MOHD NOOR
Chairman
CHAIRMAN’S
STATEMENT
Dear Valued Shareholders,
On behalf of the Board of Directors of TIME
Engineering Berhad (TEB), I have the pleasure in
presenting the Annual Report and Audited Financial
Statements of the Company and the Group for the
financial year ended 31 December 2012.
2012 OVERVIEW
For the fiscal year 2012, the Group recorded a revenue of RM144.59 million
compared to RM65.3 million in the preceding year. This increase in revenue was
credited to works related to the supply, delivery, installation, testing, commission of
ICT equipment and their subsequent usage support to local polytechnics and
community colleges.
However, due to a one-off provision for claims made against a subsidiary company
by a subcontractor and higher depreciation charges on the Group's investment in
the Integrated Enterprise Centre and the hardware refresh for trade facilitation
assets, the Group reported a net loss of RM3.17 million.
In the effort to remain competitive, the Group faced uphill challenges in managing
our cost structures within the dynamic landscape of the systems integration
business and managed services offerings, where emerging innovative players were
undercutting prices, resulting thereby in only marginal operating profits.
In anticipation of the expiry of the five-year government contract to operate the
country’s National Single Window in September 2014, the Group’s operation will
further leverage on the existing client-base and established presence in the trade
facilitation business and network where we shall continue to enhance our services
and broaden our product range.
At the operational level, the Group remains profitable, recording earnings before
interests, taxes, depreciation and amortisation (EBITDA) and legal provisions at
RM12.36 million, compared to RM7.98 million in the preceding year.
PAGE
9
CHAIRMAN’S
STATEMENT
“
...(we) will further
leverage on the
existing client-base...
and enhance our
services and broaden
our product range.
”
CORPORATE DEVELOPMENTS
Several important corporate developments are worth noting.
The former major shareholder, UEM Group Berhad has
divested its shareholding to Khazanah Nasional Berhad on
21 November 2012. Khazanah Nasional Berhad, as the
largest institutional shareholder of TEB with a 45.03%
stakehold, has subsequently announced that it plans to divest
its entire interest in the Company to a qualified Bumiputra
entrepreneur.
An Executive Committee was formed to oversee the day-today operations of the Group, following the resignation of the
Chief Executive Officer effective 28 November 2012.
Business remains as usual and this interim arrangement is
expected to cease upon the completion of the intended
divestment exercise by Khazanah Nasional Berhad.
DIVIDEND ANNOUNCEMENTS
The current developments affecting the Group
notwithstanding, the Board of Directors has taken the
decision that our shareholders should be rewarded; and
utilising the Group’s available cash reserve of RM78.76
million, the Board has recommended a final gross dividend of
4.0 sen less 25% tax per ordinary share for the financial year
ended 31 December 2012, subject to your approval at the
forthcoming Annual General Meeting.
CHAIRMAN’S
STATEMENT
APPRECIATION
A warm welcome is extended to Zaiviji Ismail Abdullah who was appointed as Non-Independent
Director on 28 November 2012. I would also like to record our heartfelt gratitude to Zaiviji Ismail,
who had undertaken the responsibility as Chair of the Executive Committee upon his
appointment to the Board.
Last but not least, the continuous support received from our business partners, clients, the
Malaysian Government and regulatory authorities, particularly the Ministry of Finance, the
Ministry of International Trade and Industry and Royal Malaysian Customs Department is truly
appreciated. The excellent working relationship would continue to sustain.
Thank you.
PAGE
DATUK HAJI MOHD KHALIL DATO’ HAJI MOHD NOOR
Chairman
30 April 2013
I would like to express my deep appreciation to my fellow colleagues on the Board for their
invaluable support, insights and excellent cooperation.
11
(continued)
(continued)
OPERATIONAL
REVIEW
2012 AT A GLANCE
DELIGHTING CUSTOMERS
CUSTOMS
BANKS
OGAs
USERS OUTSIDE MALAYSIA
NSW ENVIRONMENT
myTRADELINK
(Official Portal for Malaysia’s National
Single Window for Trade Facilitation)
Large scale IT Upgrading and
Enhancement
eDeclare
ePayment
eManifest
ePermit
ePCO & eDeclare
ePCO
ePermitSTA
WEB BROWSER
myTRADELINK
NON-WEB SYSTEM
Port Operator | Shipping Agent | Forwarding Agent | Importer / Exporter | Others
TRADE COMMUNITY
Developed and operated by Dagang Net,
myTRADELINK portal was officially
launched in September 2012. This portal
offers a one-stop point for secure and
efficient exchange of trade documents
between the public and private sectors of
the trade and logistics community.
It now features value-added content on the
trade facilitation industry e.g. directory of
industry players and agencies, regulations
on trade and Permit Issuing Agencies.
Dagang Net embarked on a large-scale IT
upgrading and enhancement to support
continuous improvements to trade
facilitation assets and services, and to
enhance customer experience.
Leveraging on our integrated operations in
Cyberjaya, our customers are assured of
transacting speedily and securedly.
EXPANDING REACH
increase in
new user
registration
increase
in transactions
17%
30%
PAGE
14
Prepare & submit electronic
Customs Declarations online
eDeclare is now available at
98.8% of electronic Customs
Declaration system (167 out of
169 Custom stations
nationwide).
nationwide
expansion
Apply for permits from relevant
Permit-Issuing Agencies &
obtain approval online
ePermit was implemented for
the Forestry Department of
Sarawak, increasing coverage
to 26 agencies nationwide.
increase in
transactions
65%
Apply for Preferential Certificate
of Origin from Ministry of
International Trade and Industry
(MITI) & obtain approval online
Prepare & submit Customs
Duties payments via Electronic
Funds Transfer, Duty Net &
FPX
With the new Scheme
implemented effective 26
January 2012, ePCO
transactions increased in line
with number of customers.
ePayment was implemented in
Terengganu, increasing
coverage from 4 states to 5.
STRENGTHENING PRESENCE
Dagang Net signed an MOU with the Islamic Centre For Development
of Trade (ICDT), a subsidiary body of Organisation of Islamic
Cooperation (OIC) entrusted with trade promotion and investment
among the OIC member Countries. Dagang Net and ICDT will
undertake technical cooperation and partnership in areas of trade
facilitation, e-commerce and Global Halal Exchange.
Dagang Net signed an MOU with the Federation of Malaysian Freight
Forwarders (FMFF) in efforts to boost effectiveness of Electronic Trade
Facilitation in Malaysia. Under the MoU, the two parties will collaborate
in undertaking initiatives to improve ease of doing business and
creating overall effectiveness and competitiveness among players in
the logistics industry.
OPERATIONAL
REVIEW
2013 FOCUS
Results for FY12 reflect a difficult year for the
Group, but we feel strongly that we have the
right leadership to navigate the Group in facing
the challenges. The immediate priority for the
Company is to improve financial performance
and profitability, without losing sight of its
longer-term aspirations.
Today, as we work towards these objectives,
we continue to refine and validate our
business strategies, align operating model and
place the right resources to execute them. As
our approach evolves and as we finalise the
much broader strategy, several core principles
guide our analysis and execution.
KEY PRIORITIES
Improve Profitability. Our immediate focus is
to improve operating income and profitability,
which essentially means prudent spending
and being cost-efficient. We have embarked
on an aggressive cost and expense takeout
programme that should bring about significant
savings.
Simplify the Operating Model. By simplifying
our operating model, we are able to better
align resources, reduce fragmentation so that
we respond to our clients and market changes
in a timely manner. Selecting the right leaders
in place and clarifying lines of accountability
will also help us execute and deliver faster. To
do that, we recently endorsed a pay-forperformance programme, which is intended
to boost the company’s profitability results and
the creation of shareholder value.
Innovate and Grow. Cloud, big data and
industry-specific business services in
particular are poised to deliver the next great
leaps in client productivity and innovation.
Speed is crucial in order to offer commoditised
services into high-value solutions, particularly
integrated and total IT solutions comprising
virtualised offerings, business services and
applications.
It is critical to realign our solution development
processes, expose and scale under-leveraged
assets and building new capabilities to deliver
greater value for clients. We must take a
product-oriented approach, transform our
most innovative ideas into focused solutions to
help clients reduce costs, encourage
innovation and improve performance.
Enhance Client Delight. Client satisfaction is
an important barometer for the Group. Client
relationships are not measured in
transactions, but in the years of collaborative
partnerships and shared achievements. With
straight
talk,
streamlined
account
management, exceptional service and a focus
on results, TEB is poised to deliver greater
client and shareholder value over time.
Talent Management. Our talented resources
have an appetite for change and will drive the
Company forward. By supporting and
engaging everyone in the Company
throughout this turnaround, I believe we will
nurture a new sense of pride that will translate
to greater commitment and improved
customer service.
PROSPECTS & OUTLOOK
With our 25-year experience within the trade
facilitation space, the Group is hopeful to be a
key player in the modernisation efforts
undertaken by the Royal Malaysian Customs
Department. We are embarking on strategic
initiatives to make ready new facilities which
will smoothen current processes, and these
are expected to deliver positive financial
impact in 2013 and beyond.
HAJI ZAIVIJI ISMAIL ABDULLAH
Chairman of Executive Committee
30 April 2013
Since the inception of the Executive
Committee (“the EXCO”), the EXCO has had
the invaluable opportunity to working closely
with our employees, listening to clients’
perspectives and concerns, and having gained
insightful knowledge of where we are today,
we are confident of what it will take to move
TEB forward to better serve the needs of every
stakeholder.
PAGE
15
(continued)
(continued)
CORE SERVICE
OFFERINGS
TOMORROW’S
SOLUTIONS. TODAY.
At TEB, we leverage our
accumulated expertise and
experience in IT to develop
and deliver solutions
through our subsidiaries:
TEB Quantum Technology
Sdn Bhd (TQT), TEB
Systems Integrators Sdn
Bhd (TSI) and Dagang Net
Technologies Sdn Bhd
(Dagang Net).
PAGE
18
Our array of products and services has been
applied to IT infrastructure, Cybersecurity and
eCommerce projects around the world ranging
from the supply of educational peripherals for
the Ministry of Education’s Teaching of
Science and Mathematics in English (PPSMI)
to the development of an interregional network
link to facilitate paperless trade between
Africa-Asia-Europe for the Government of
Senegal.
But whatever product or service TEB delivers,
there is a common thread that runs through
them: the fulfillment of our promise to always
deliver reliability, integrity and quality to our
clients.
CORE SERVICE
OFFERINGS
TEB QUANTUM TECHNOLOGY SDN BHD (TQT)
CYBERSECURITY SERVICES
DATA CENTRE SERVICES
DATABASE AS A SERVICE (DBaaS)
FORTRESSTM is TQT’s comprehensive suite of
enterprise security solutions that addresses
our clients’ security concerns and keeps their
information safe all year round. Supported by
our team of qualified, experienced security
consultants, FORTRESSTM builds reliable
defences for reduced costs and operational
efficiency by streamlining complex security
management into a cohesive system.
TQT offers a data centre through the IEC that
provides our clients with a secure, reliable and
responsive network infrastructure for
uninterrupted 24/7 access to their assets. In
addition, the Virtual Private Network (VPN) is
based on the Internet Protocol Security
(IPSec) Network-to-Network configuration so
that only authorised users can access the
network and private data cannot be
intercepted.
DBaaS is an architectural and operational
approach to business applications that
enables TQT to deliver database functionality
to its clients. At TQT, our DBaaS architecture
provides customisable database instances
based on usage demand and enables showback reporting or charge-back functionality.
Through FORTRESSTM, TQT's Security
Operations Centre (SOC) provides monitoring,
management and integration as well as
identity access management. TQT is also
qualified to serve our clients in an advisory
capacity on areas such as security and
resiliency management, cyber-forensics and
IT governance & compliance.
The data centre also provides managed
services for networks such as monitoring and
configuring network connectivity at an
acceptable level; security services like
integrating application servers with database
servers; and on-site forensics investigation as
well as operation and support services by
monitoring disk utilisation and memory
capacity, providing pre-defined activities that
clients can perform on their own systems.
Additionally, our DBaaS architecture naturally
support granular service elasticity and secure
multi-tenancy while providing access through
a variety of devices and mechanisms for
resource management and capacity planning.
Our clients also benefits from our DBaaSspecific services that includes a health-check
review, 24-hour technical phone support and
performance tuning twice a year.
Built on top-of-the-line hardware, we offer
extreme performance and storage efficiency
that allows clients to make real-time decisions,
streamline processes for better productivity
and by cutting their time-to-market and costs,
they achieve a return on their investment
faster too.
TQT takes the lead as a one-stop centre offering a complete set of IT business
solutions including services in enterprise-class infrastructure, business
application and managed security.
PAGE
19
CORE SERVICE
OFFERINGS
TEB SYSTEMS INTEGRATORS SDN BHD (TSI)
TSI provides expertise in the management of large IT projects,
specifically to advise clients on computing and networking
solutions, developing maintenance and application services for the
public sector.
IT CONSULTANCY SERVICES
PAGE
20
TSI specialises in full project management, from design and build right through to
installation and commissioning. With a cumulative experience spanning more than
a decade, our solutions encompass enterprise network, which includes WAN &
LAN implementation, and designing and deployment of highly reliable wireless
solutions to keep people and businesses seamlessly connected. For secure,
reliable, cost-effective solutions, we are able to undertake installation and
maintenance of structured cabling system (SCS), retro-fitting existing networks or
implementing new networks to meet latest standards and specifications.
Our IT management and consultation approach emphasises a Standard Operation
Procedure (SOP) that includes designing, developing, improving, adopting and
maintaining infrastructure to suit our clients’ needs.
TSI also provides a range of services in the procurement, delivery, installation,
testing and commissioning of IT equipment in large and nationwide ICT rollout while
our maintenance coverage encompasses technical support via on-site support from
our technicians. TSI’s technicians are authorised and certified by multinational
vendors and our strategic partners.
CORE SERVICE
OFFERINGS
DAGANG NET TECHNOLOGIES SDN BHD (DAGANG
NET)
eSIJIL 3P
In 2009, Dagang Net was contracted by the Government
of Malaysia to develop and operate the Malaysia’s NSW.
This is a national initiative that provides a one-stop trade
facilitation system linking government agencies with
trading businesses to improve cost and operational
efficiencies as well as to promote Malaysia as a global
trading hub.
A unique and innovative web-based solution, the eSijil
3P expedites the process of product compliance and
clearance for the agro-based business community. It was
developed to ensure all agricultural products are given
proper grading, packaging, labeling and supervision - in
line with the requirements of the 3P system
(Penggredan, Pembungkusan, Pelabelan).
The NSW consists of six core products to provide ease of
submission and documentation online. Traders use
eDeclare to submit their Customs declarations while
those docking at Malaysia’s ports may use eManifest to
submit their vessel arrival notification and cargo
manifests. ePermit allows traders to apply for permits,
and ePermit STA enables application and approval of
pre-registration and permits under the purview of the
Strategic Trade Act 2010. ePCO serves as an online
certification for products’ country of origin satisfying
Customs and trade requirements and finally, ePayment
allows for the submission of duty payment to Customs.
As an online service for FAMA applications and
approvals, eSijil 3P has demonstrated excellent growth
potential with over 2,000 user registrations so far. Within
two months of going ‘live’ in October 2011, the system
recorded more than 7,000 transactions a month. To
date, eSijil 3P handles approximately 13,000
transactions daily, amounting to more than 4 million
transactions a year. These encouraging figures indicate
increasing acceptance and Dagang Net is confident that
numbers will climb much further when more importers
and exporters fully realise its benefits.
At present, the NSW has more than 15,000 users
performing 50 million transactions annually.
PAGE
NATIONAL SINGLE WINDOW (NSW)
Dagang Net offers eCommerce services to facilitate
electronic trade including developing web-based
applications for B2B commerce. Dagang Net is both a
pioneer and a leader in the trade facilitation business in
Malaysia.
21
NURTURING
TALENT
“
For we know success
belongs to those dynamic
and driven enough to
achieve it...
”
Truly, our people are our greatest asset. Diversity is what makes us
unique, and empowering people allows them to realise their full
potential. The difference between a good company and a great
company is in its people. Companies who succeed are those who
embrace creativity, knowledge, skills and competencies of its talent
pool.
Here at TEB, nurturing talent is an actual corporate strategy. It is not
left alone; rather, it is carefully cultivated with a tangible objective as
an end-result. For we know success belongs to those dynamic and
driven enough to achieve it, that having integrity and being trustworthy
makes good business sense, and the key that unlocks the future is
innovation.
PAGE
22
Our culture encourages high performance which energises every single
person who works at TEB. We build this culture to attract the best
talents who are yearning for a place where open communication,
entrepreneurial thinking, strong leadership and centralised support are
commonplace. We understand what motivates employees is a sense of
accomplishment and the recognition of that accomplishment. That is
why we go to great lengths to reward high performance and effort.
Hence, this is our ultimate goal: to build a workplace our employees
can be proud of.
NURTURING
TALENT
Exchanging thoughts and sharing knowledge is how we gather
the brightest ideas and turn them into tangible plans. At TEB,
we practice open communication by providing a platform for
ideas to be generated, exchanged and implemented.
LAOS SECURITY FORUM, VIENTIANE, LAOS
– MARCH 2012
Security is an issue we at TEB are passionate about. In March 2012,
a forum was organised to share TEB’s thoughts in a forum attended
by major players from the Indo-China region. The forum provided
TEB an opportunity to share our knowledge as well as the depth of
technology capabilities, which leverages on the strategic alliances
established with key technology companies.
We took a paradigm shift and moved away from a product-centric
pitch and instead showcased realities with clear directions. This
builds trust and confidence in TEB as a reliable enterprise partner
within the key service areas related to information security. Using a
In all, the forum succeeded in showcasing TEB’s capabilities and
expertise to further cement TEB’s leadership as a regional thought leader
in security issues.
combination of intellectual discourse and networking sessions, the forum
was themed “Braving the Storm”. We set expectations with key
stakeholders, gained status update on what each country is embarking
on especially towards achieving SMART status via enabling of
eGovernment services and streamlining processes to make it more
efficient and productive.
PAGE
23
NURTURING
TALENT
Investing in ourselves is important, but investing in our future is
equally important. For the future lies in the hands of children, and
the right upbringing is vital to create a wholesome society. At TEB,
we care passionately about ensuring every child receives the best
education they can.
READ TODAY WITH TEB – READING CAMPAIGN
PAGE
24
60 needy children of SK Ulu Semenyih, including several Orang
Asli children, under the school “Rancangan Makanan Tambahan”
(RMT) programme were rewarded with brand new bags. The
school bags and stationery contributions were pledged from the
TEB running team who participated in the NIKE WeRunKL 10KM
event. The runners braved the wet roads and completed the run
within the qualifying time, with the company channelling the
RM2,500 pledge money to our CSR allocation budget. This prize
money was channelled to the “Read today with TEB” campaign,
which contributes educational reading material to the school
library.
Children are our future and good nurturing and cultivation is vital.
The objective of this campaign is to fill the school library with
excellent content and to encourage students to inculcate good
reading habits. It is our sincere hope our small efforts will generate
a ripple effect to encourage more people to invest in the next
generation.
NURTURING
TALENT
At TEB, we believe that business goes hand in hand with
conscience. We actively advocate activities for the
underprivileged community for we believe in a society that
helps one another and one that leaves no one behind.
These programmes aim to establish the spirit of
volunteerism among employees by creating opportunities to
interact, grow, learn and love. It allows our employees to
experience helping the underprivileged community to
integrate and flourish in society.
SUPPORTING THE UNDERPRIVILEGED
In conjunction with the fasting month, together with Pertubuhan Kebajikan Anak Yatim &
Miskin Sabak Bernam Selangor (PAYSA), TEB spreaded cheers during this festive season.
While most families were celebrating Hari Raya, many were not as fortunate enough to
share this joy. They were treated to an Aidilfitri shopping spree in Sekinchan. It gave them
an opportunity to experience Aidilfitri shopping with a family they never had. The
programme was organised by volunteers from TIME Engineering Berhad and Persatuan
Usahanita Putrajaya and Kelab Skuter Malaysia with the aim of bringing Aidildfitri joy to
these unfortunate children.
Every year, the finale of our CSR programme is the ‘Back to School Programme’ where we
continue to work with Badan Kebajikan Islam Kastam (BAKISKA) since 2007. This
programme has so far benefited 500 children with new school supplies such as school
uniforms, bags and stationeries. This community programme generates awareness among
employees to instil in them the importance of helping the underprivileged community for
them to achieve their dreams.
A 2-day programme was organised by Dagang Net Technologies Sdn Bhd to help Rumah
Amal Ummul Qura Selangor, Sekolah Agama Rakyat (Kafa Integrasi) Darul Muhajirin and
Yayasan Sofa Negeri Sembilan. The programme began with a charity bazaar held at the
office compound where proceeds and zakat contribution from the company were
presented to the selected schools.
PAGE
25
BOARD OF
DIRECTORS
PAGE
26
DATO’ MOHD IZZADDIN IDRIS
Non-Independent Non-Executive Director
ELAKUMARI KANTILAL
DATUK HAJI MOHD KHALIL
DATO’ HAJI MOHD NOOR
Chairman/
Independent Non-Executive Director
BOARD OF
DIRECTORS
PAGE
ROSNAH KAMARUL ZAMAN
HAJI ABDULLAH YUSOF
27
PROFILE OF THE
BOARD OF DIRECTORS
DATO’ MOHD IZZADDIN IDRIS, aged 51,
Malaysian, was appointed as a NonIndependent Non-Executive Director of the
Company on 4 August 2009 and a member of
the Executive Committee on 28 November
2012.
He holds a Bachelor of Commerce from the
University of New South Wales, Australia. He
is a member of the CPA Australia and the
Malaysian Institute of Accountants.
Dato’ Mohd Izzaddin has over 20 years of
experience in investment banking, financial
and general management. Some of the
positions he held were Chief Financial
Officer/Senior Vice President (Group Finance)
ELAKUMARI KANTILAL, aged 56, Malaysian,
was appointed as a Non-Independent NonExecutive Director on 22 October 2001 and a
member of the Executive Committee on 28
November 2012. She is also a member of the
Audit Committee of the Company.
She holds a Master of Science in Accounting
and Finance from University of East Anglia
and a Bachelor of Accounting from University
Kebangsaan Malaysia. She is a member of the
Malaysian Institute of Accountants.
PAGE
28
DATUK HAJI MOHD KHALIL DATO’ HAJI
MOHD NOOR, aged 72, Malaysian, was
appointed as the Chairman of the Company
on 31 October 2001 following his appointment
as an Independent Non-Executive Director on
22 October 2001. He is also the member of
the Audit Committee and Chairman of the
Nomination and Remuneration Committee of
the Company.
He holds a B.A. (Honours) Degree in
Economics and Islamic Studies from
University of Malaya and Diploma in
Commercial Policy from Geneva.
of Tenaga Nasional Berhad, Senior Vice
President (Corporate Finance) of Southern
Bank Berhad, Chief Financial Officer of
Ranhill Berhad and Chief Operating Officer of
Malaysian Resources Corporation Berhad.
He was voted as 2nd best CFO in Malaysia by
Finance Asia in 2007.
Dato’ Mohd Izzaddin is currently the Group
Managing Director/Chief Executive Officer of
UEM Group Berhad and also a Non-Executive
Deputy Chairman of PLUS International
Expressways Berhad. He holds directorships
in Faber Group Berhad, Cement Industries of
Malaysia Berhad, Opus Group Berhad, UEM
Builders Berhad, UEM Land Holdings Berhad,
She started her career in the government
sector in 1981 and held various positions
within the sector namely the Accountant
General’s Office, Ministry of Agriculture and
Ministry of Finance. She is currently the
Director of Investments in Khazanah Nasional
Berhad.
Elakumari also sits on the Board of TIME
dotCom Berhad, Faber Group Berhad and
several private limited companies.
He is a former public servant and his last
position in the public service was Auditor
General of Malaysia from 1994 to 2000. Some
of the other positions he held during his 36
years of distinguished service in the public
sector were Secretary Foreign Investment
Committee in the Prime Minister’s
Department, Secretary Finance Division in the
Ministry of Finance, Deputy Secretary General
in the Ministry of Trade and Industry and
Secretary General of the Ministry of Works.
Datuk Haji Mohd Khalil also sits on the Board
of IOI Corporation Berhad, MNRB Holdings
Projek Lebuhraya Utara-Selatan Berhad,
Projek Lebuhraya Usahasama Berhad, PLUS
Malaysia Berhad and several private limited
companies.
He has no family relationship with any Director
and/or major shareholder of the Company, no
conflict of interest with the Company, never
been charged for any offence in the past 10
years and does not hold any shares in the
Company and its subsidiaries.
Dato’ Mohd Izzaddin attended 5 out of the 6
Board Meetings of the Company held in the
She has no family relationship with any
Director and/or major shareholder of the
Company, no conflict of interest with the
Company, never been charged for any offence
in the past 10 years and does not hold any
shares in the Company and its subsidiaries.
Puan Elakumari attended 4 out of the 6 Board
Meetings of the Company held in the financial
year ended 31 December 2012.
Berhad, Malaysian Reinsurance Berhad,
MNRB Retakaful Berhad, and is a Trustee of
Yayasan Tan Sri Dato’ Lee Shin Cheng.
conflict of interest with the Company and
never been charged for any offence in the past
10 years.
Datuk Haji Mohd Khalil attended all of the 6
PROFILE OF THE
BOARD OF DIRECTORS
ROSNAH KAMARUL ZAMAN, aged 57,
Malaysian, was appointed as an Independent
Non-Executive Director of the Company on 16
December 2011. She is a member of the
Audit Committee and the Nomination and
Remuneration Committee of the Company.
banking and finance, covering the
full spectrum of services which includes
consumer, commercial and corporate
banking, as well as the non-banking functions
which include policy and control, human
resources, corporate planning and finance.
She has no family relationship with any
Director and/or major shareholder of the
Company, no conflict of interest with the
Company, never been charged for any offence
in the past 10 years and does not hold any
shares in the Company and its subsidiaries.
Puan Rosnah holds a Bachelor of Arts in
Economics (Honours) from University of
Manchester, United Kingdom.
Rosnah also sits on the Board of CIMB Bank
Berhad and a member of the Risk Committee
of CIMB Bank Berhad and the Board of
Trustees of CIMB Foundation.
Rosnah attended 4 out of the 6 Board
Meetings of the Company held in the financial
Institute of Materials, Minerals and Mining,
United Kingdom and Fellow of the Institution
of Mineral Engineers Malaysia. He is also a
registered Professional Engineer (Mining) with
the Board of Engineers Malaysia.
She has more than 25 years of experience in
He graduated in mining engineering from the
Camborne School of Metalliferous Mining,
United Kingdom in 1961. He has over 35
years of experience in the tin mining industry
and related activities. He is a Fellow of the
HAJI ZAIVIJI ISMAIL ABDULLAH aged 57,
Malaysian, was appointed as a NonIndependent Non-Executive Director of the
Company and Chairman of the Executive
Committee on 28 November 2012 and a
member of the Nomination and Remuneration
Committee on 25 March 2013.
Haji Zaiviji holds a Master of Business
Administration from Cranfield Institute of
Technology, England. He has vast
management experience providing fiscal,
strategic and operational leadership in
challenging situations.
General Manager of the Retail Business in
Shell Oman Marketing in October 2001 to
January 2004. In February 2004, he was
again cross-posted to Pakistan to be the
General Manager of the Retail Business in
Shell Pakistan Limited before taking on the
Cluster General Manager's role for both Oman
and Pakistan. In August 2006, he was
appointed Managing Director of Shell Pakistan
Limited and at the same time was named the
Chairman of Shell Companies in Pakistan.
From August 2006 and July 2011, Haji Zaiviji
sat on various Boards in Pakistan and one in
Oman covering the energy, health and
education sectors. This includes 4 public
listed companies. Haji Zaiviji also served as
the President of the Petroleum Institute of
Pakistan from 2010 to June 2011.
In October 2010, Haji Zaiviji won Pakistan's
Haji Abdullah Yusof attended all of the 6
1st Global CEO Excellence Award.
Haji Zaiviji also sits on the Board of UEM
Group Berhad, Cement Industries of Malaysia
Berhad and PLUS International Expressways
Berhad and the Chairman of Uniquest Infra
Ventures Private Limited, a Joint Venture
Company between Khazanah Nasional
Berhad and IDFC of India.
Haji Zaiviji attended one (1) Board Meeting of
the Company during the financial year ended
31 December 2012 since his appointment on
28 November 2012.
PAGE
He started his career with Bank Negara
Malaysia from 1979 to 1983 and later joined
Malaysia Building Society Berhad in 1984 to
1989. He joined Shell Malaysia and had
served in various positions from 1990 to 2001.
He was then cross-posted to Oman to be the
Haji Abdullah Yusof is currently the Executive
Chairman of Osborne & Chappel International
Sdn Bhd and a Non-Executive Chairman of
Ireka Corporation Berhad. He also sits on the
Board of Gopeng Berhad and several private
limited companies.
HAJI ABDULLAH YUSOF, aged 77,
Malaysian, was appointed as an Independent
Non-Executive Director on 22 October 2001.
He is also the Chairman of the Audit
Committee and a member of the Nomination
and Remuneration Committee of the
Company.
29
(continued)
(continued)
CORPORATE
INFORMATION
As at 30 April 2013
BOARD OF
DIRECTORS
Chairman/
HAJI ABDULLAH YUSOF
SENIOR INDEPENDENT
NON-EXECUTIVE
DIRECTOR
HAJI ABDULLAH YUSOF
T : (03) 2730 0300
F : (03) 2713 3131 / (03) 2713 2660
E : abdullah.yusof@teb.com.my
BOARD
COMMITTEES
HAJI ABDULLAH YUSOF
Chairman/
Audit Committee
DATUK HAJI MOHD KHALIL DATO’ HAJI
MOHD NOOR
Chairman/
Nomination and
Remuneration Committee
PAGE
32
ELAKUMARI KANTILAL
Note: Non-Independent Non-Executive Directors are
nominees of Khazanah Nasional Berhad
ELAKUMARI KANTILAL
HAJI ABDULLAH YUSOF
Chairman/
Executive Committee
ELAKUMARI KANTILAL
Note: Executive Committee was formed on 28 November
2012
COMPANY
SECRETARIES
SAPIAH JAMALUDIN
MAICSA 0807355
KEH CHING TYNG
MAICSA 7050134
T : (03) 2730 0429 / 2730 0433
F : (03) 2713 3131 / 2713 2660
E : sapiah.jamaludin@teb.com.my
E : ching.tyng.keh@teb.com.my
REGISTERED
OFFICE &
HEAD OFFICE
Tower 3, Avenue 5
The Horizon, Bangsar South
No. 8 Jalan Kerinchi
59200 Kuala Lumpur
T : (03) 2730 0300
F : (03) 2713 3131 / 2713 2660
E : info@teb.com.my
W : www.teb.com.my
COPORATE
INFORMATION
SHARE
REGISTRAR
Mega Corporate Services Sdn Bhd
Level 15-2, Bangunan Faber Imperial Court
Jalan Sultan Ismail
50250 Kuala Lumpur
T : (03) 2692 4271
F : (03) 2732 5399 / (03) 2732 5388
AUDITORS
MESSRS KPMG (AF0758)
(Chartered Accountants)
Level 10, KPMG Tower
8 First Avenue, Bandar Utama
47800 Petaling Jaya
Selangor Darul Ehsan
T : (03) 7721 3388
F : (03) 7721 3399
STOCK EXCHANGE
LISTING
Main Market of the
Bursa Malaysia Securities Berhad
[Listed since 12 September 1983]
(Reclassified from Trading/Services Sector
to Technology Sector effective 29 October
2012)
PRINCIPAL BANKERS
AmIslamic Bank Berhad
AmBank (M) Berhad
Bank Muamalat Malaysia Berhad
Bank Kerjasama Rakyat Malaysia Berhad
CIMB Bank Berhad
Public Bank Berhad
HEAD OFFICE OF
SUBSIDIARIES
DAGANG NET TECHNOLOGIES SDN BHD
Tower 3, Avenue 5
59200 Kuala Lumpur
T : (03) 2730 0200
F : (03) 2713 2121
E : info@dagangnet.com
W : www.dagangnet.com
Careline : 1300 133 133 or
careline@dagangnet.com
TEB QUANTUM TECHNOLOGY SDN BHD
Block 2280 Jalan Usahawan 2
Cyber 6, Cyberjaya
63000 Selangor
T
F
E
W
: (03) 8687 6688
: (03) 8687 6699
: info@teb.com.my
: www.teb.com.my
TEB SYSTEMS INTEGRATORS SDN BHD
Block 2280 Jalan Usahawan 2
Cyber 6, Cyberjaya
63000 Selangor
T
F
E
W
: (03) 8687 6688
: (03) 8687 6699
: info@teb.com.my
: www.teb.com.my
As at 30 April 2013
PAGE
33
FINANCIAL DIARY/
CORPORATE ANNOUNCEMENTS
During the Financial Year 2012
and up to 30 April 2013
FINANCIAL RESULTS
AND ITS RELATED
MATTERS
23 May 2012
Announcement of the Unaudited
Financial Results of TEB Group for the
first quarter ended 31 March 2012.
PAGE
34
27 February 2012
Announcement of the Quarterly
fourth quarter and year ended
31
December
2011
and
recommendation of Final Gross
Dividend of 4 sen less 25% tax (net
dividend of 3 sen) per ordinary share
of RM0.20 each for the financial year
ended 31 December 2011.
6 March 2012
Submission of the Audited Financial
Results of the Company and the
Group for the year ended 31
December 2011.
15 August 2012
second quarter ended 30 June 2012.
28 November 2012
third quarter ended 30 September
2012.
28 February 2013
Announcement of the Quarterly Financial Results of TEB Group for the fourth quarter
and year ended 31 December 2012 and recommendation of Final Gross Dividend of
4 sen less 25% tax (net dividend of 3 sen) per ordinary share of RM0.20 each for the
GENERAL
ANNOUNCEMENT
6 April 2012
Announcement of Notice of 42nd
Annual General Meeting (“AGM”) of
the Company and Notice of Dividend
Entitlement and Payment. The Final
Dividend was paid on 1 June 2012.
6 March 2013
Submission of the Audited Financial
Results of the Company and the
Group for the year ended 31
December 2012.
2 May 2012
Announcement on outcome of the 42nd
AGM held on 2 May 2012 based on
voting by a show of hands as follows:•
•
Except for Special Resolution 2, all of
the Ordinary Resolutions and Special
Resolution 1 under ordinary business
were unanimously approved.
Special Resolution 3 under special
business was unanimously approved.
FINANCIAL DIARY/
CORPORATE ANNOUNCEMENTS
23 October 2012
Announcement on reclassification of
TIME’s shares from the “Trading
Services” sector to the “Technology”
sector with effect from 9.00 a.m.,
Monday, 29 October 2012.
28 November 2012
Announcement on the formation of an Interim Executive Committee to oversee the dayto-day operations and management of the Company. The Executive Committee (“EXCO”)
is chaired by Haji Zaiviji Ismail Abdullah. Dato’ Mohd Izzaddin Idris and Puan Elakumari
Kantilal have been named as members of the EXCO. All three (3) are Non-Independent
Non-Executive Directors of the Company.
CHANGES IN
CORPORATE
INFORMATION
2 February 2012
Announcement on the resignation of
Dato’ Dr Gan Khuan Poh as an
and Audit Committee Member of the
Company effective 31 January 2012.
29 February 2012
Announcement on the appointment of
Puan Rosnah Kamarul Zaman as an
Audit Committee Member of the
Company effective 1 March 2012.
15 October 2012
Announcement on the appointment of
Miss Keh Ching Tyng as Joint
Secretary of the Company effective 15
October 2012.
20 November 2012
Announcement on UEM Group
Berhad ceasing to become a
substantial shareholder of the
Company effective 20 November
2012.
22 November 2012
Announcement on the change in
substantial shareholder’s interest from
UEM Group Berhad to Khazanah
Nasional Berhad effective 20
November 2012.
23 November 2012
Encik Annuar Marzuki Abdul Aziz
as Non-Independent Non-Executive
Director of the Company effective 23
November 2012.
28 November 2012
Announcement on the appointment
of Haji Zaiviji Ismail Abdullah
as Non-Independent Non-Executive
Director of the Company effective 28
November 2012.
28 November 2012
Mr. Steven Lim Kee Seng as Chief
Executive Officer of the Company
effective 28 November 2012.
During the Financial Year 2012
and up to 30 April 2013
PAGE
35
CORPORATE GOVERNANCE
STATEMENT
The Board of Directors of the Company (“the Board”) is pleased to report on the manner the Group has applied the principles of corporate
governance and the extent of compliance with the relevant Principles and Recommendations by the Malaysian Code on Corporate Governance
2012 (“MCCG 2012”) and the Main Market Listing Requirements of Bursa Malaysia Securities Berhad (“Bursa Securities”) during the financial
year ended 31 December 2012 and up to the date of this Statement:-
1.
THE BOARD AND ITS TERMS OF REFERENCE
The Board is responsible for oversight and overall management of the Group. To ensure the effective discharge of its functions and
responsibilities, the Board had adopted its Terms of Reference. The Board’s Terms of Reference provide the guidance and scope and
responsibilities of the Board Members in leading and managing the affairs of the Company in an effective and responsible manner and ensure
that all Board Members are aware of the various rules and regulations affecting their conduct and obligations to the shareholders and
stakeholders.
In line with the Recommendation 1.7 of the MCCG 2012, the Board would enhance its Terms of Reference for adoption as the Board Charter.
The salient terms of the Board Charter would be disclosed in the Company’s Annual Report for the year ending 31 December 2013.
2.
BOARD COMPOSITION
There were changes in the composition of the Board during the financial year 2012 as follows:(i) Dato’ Dr Gan Khuan Poh, an Independent Non-Executive Director, resigned on 31 January 2012.
(ii) Encik Annuar Marzuki Abdul Aziz, a Non-Independent Non-Executive Director, resigned on 23 November 2012.
(iii) Haji Zaiviji Ismail Abdullah was appointed as a Non-Independent Non-Executive Director on 28 November 2012.
In addition, two (2) Non-Independent Non-Executive Directors namely Dato’ Mohd Izzaddin Idris and Puan Elakumari Kantilal had been
re-designated as Nominee Directors of Khazanah Nasional Berhad (“KNB”) following the change of the substantial shareholder of the
Company from UEM Group Berhad to KNB which is the ultimate holding company on 20 November 2012. Together with the new
appointment, KNB is represented by three (3) Nominee Directors on the Board of the Company.
PAGE
36
With the above changes, the Board has six (6) members; comprising three (3) Independent Non-Executive Directors including the Chairman;
and three (3) Non-Independent Non-Executive Directors who are the Nominee Directors of KNB. With two (2) female Board Members,
there is a fair representation of both genders on the Board.
Collectively, the Directors have a wide range of business, financial and technical expertise. They possess the necessary qualifications,
experience and qualities that enable them to perform their duties effectively. Haji Abdullah Yusof continues to act as the Senior Independent
Non-Executive Director of the Company to whom any concerns concerning the Group may be conveyed.
The profile of the Board Members are set out on pages 28 and 29 of this Annual Report.
None of the Directors has any convictions for any offences within the past ten (10) years (other than traffic offences, if any) or has any conflict
of interest with the Company or has any family relationship with any Director and/or major shareholder of the Company.
3.
TENURE OF INDEPENDENT DIRECTORS
The Board had deliberated on the need to appoint additional Independent Non-Executive Directors to fill the number of Independent NonExecutive Directors required to ensure that it would comprise a majority of Independent Non-Executive Directors. This was communicated
by the Board Chairman to the shareholders during the 42nd AGM on 2 May 2012 in responding to the corporate governance question
raised by the Minority Shareholders Watchdog Group in its letter dated 24 April 2012.
STATEMENT
(continued)
Two (2) Independent Non-Executive Directors of the Company namely the Board Chairman and the Audit Committee Chairman have
exceeded the nine (9) years term limit and accordingly pursuant to the Recommendation 3.2 of the MCCG 2012 they would be re-designated
as Non-Independent Non-Executive Directors effective from 31 December 2012.
However, the Board had decided that the Board Chairman and the Audit Committee Chairman shall continue in office and serve on the Board
of TIME Engineering Berhad (“TEB”) as Independent Non-Executive Directors in view of the proposal on the Divestment by KNB of its entire
equity interest of 45.03% in TEB via a tender process to a qualified Bumiputera entrepreneur announced on 17 December 2012. Their term
of office would end upon the conclusion of the next Annual General Meeting (“AGM”) or the appointment of new Independent Non-Executive
Directors upon the conclusion of the Divestment by KNB, whichever is earlier. Henceforth, the Board Chairman and the Audit Committee
Chairman who would retire pursuant to Section 129(2) of the Companies Act 1965 would seek re-appointment at the 43rd AGM of the
Company to hold office until the conclusion of the next AGM and both of them shall continue to serve as Independent Non-Executive
Directors notwithstanding that they have exceeded a cumulative term of nine (9) years under the Recommendation 3.2 of the MCCG 2012.
Details of the special resolutions seeking the re-appointment of these two (2) Independent Non-Executive Directors are set out in the notice
of the 43rd AGM of the Company.
After the completion of the Divestment Plan, the Company is expected to announce the changes in the composition of the Board of Directors,
the Audit Committee and the Nomination and Remuneration Committee and accordingly these would comply with paragraph 15.02 of the
Main Market Listing Requirements of Bursa Malaysia Securities Berhad (“Bursa Securities”) and the recommendations of the MCCG 2012
and also paragraphs 15.09 and 15.10 of the Main Market Listing Requirements in term of the composition of the members of the Audit
Committee.
4.
ESTABLISHMENT OF EXECUTIVE COMMITTEE
Following his appointment as the Chairman of the EXCO, Haji Zaiviji Ismail Abdullah met with the employees of TEB Group at the Townhall
Meeting on 30 November 2012 and had a series of meetings with the Head of Subsidiary Companies and Head of Departments primarily
to engage them in the business and financial operations of the Group. A Leadership Team (“LT”) comprising the senior executive leaders
of TEB Group was formed in early December 2012 under the stewardship of the EXCO Chairman to focus on business growth, financial
performance, people and internal control measures. Any decisions made and/or issues deliberated at meetings of the LT were thereafter
communicated to the Board of Directors.
5.
APPOINTMENT OF DIRECTORS
All Board appointments are approved by the Board upon recommendation by the Nomination and Remuneration Committee (“NRC”). The
Board, through the NRC, has established a formal and transparent procedure in relation to the assessment of candidates for Board
appointments as well as assessing the effectiveness of the Board as a whole, the Committees of the Board and the contributions of each
individual Director.
During the financial year, the major shareholder, KNB had nominated Haji Zaiviji Ismail Abdullah for appointment to the Board as a NonIndependent Non-Executive Director. Haji Zaiviji Ismail who had an extensive work experience in Malaysia and internationally was also
appointed as the Chairman of the EXCO pending the appointment of a new CEO.
On 28 November 2012, the Company announced the resignation of Mr. Steven Lim Kee Seng as Chief Executive Officer (“CEO”). An
Executive Committee (“EXCO”) was formed in the interim to oversee the day-to-day operations and management of the Company. The EXCO
was entrusted by the Board to report regularly on the operations, financial performance and progress of key projects. The EXCO comprised
three (3) Board Members who are Non-Independent Non-Executive Directors and is chaired by Haji Zaiviji Ismail Abdullah. The EXCO is
governed by its terms of reference which were approved by the Board on 16 January 2013.
PAGE
37
STATEMENT
(continued)
6.
RE-APPOINTMENT AND RE-ELECTION OF DIRECTORS
Based on the current position and the seniority of the Company’s Directors since the date of their appointment or election, the following
Directors will be seeking re-election or re-appointment at the 43rd AGM of the Company:(i) Haji Zaiviji Ismail Abdullah, retiring pursuant to Article 99 of the Company’s Articles of Association;
(ii) Puan Elakumari Kantilal, retiring by rotation pursuant to Article 94 of the Company’s Articles of Association; and
(iii) Datuk Haji Mohd Khalil Dato’ Haji Mohd Noor and Haji Abdullah Yusof who are over the age of 70 years, vacating their term of office
pursuant to Section 129(2) of the Companies Act 1965.
7.
BOARD COMMITTEES
The Board has delegated specific responsibilities to the Board Committees namely the Audit Committee, the NRC and recently the EXCO
whose functions and authorities are spelt out in their respective terms of reference. The Board Committees will observe the same rules of
conduct and procedures as the Board, unless otherwise determined by the Board.
During the financial year, there were changes in the composition of the Audit Committee and the NRC as follows:(i)
(ii)
(iii)
(iv)
Dato’ Dr. Gan Khuan Poh resigned from the Audit Committee on 31 January 2012;
Puan Rosnah Kamarul Zaman was appointed as a member of the Audit Committee on 1 March 2012;
Encik Annuar Marzuki Abdul Aziz resigned from the NRC following his resignation from the Board on 23 November 2012; and
Haji Zaiviji Ismail Abdullah was appointed as a member of the NRC on 25 March 2013.
As mentioned under section 2, there would be changes in the composition of the Audit Committee and the NRC in tandem with the
appointment of new Directors subsequent to the completion of the Divestment Plan.
8.
PAGE
38
BOARD MEETINGS AND BOARD COMMITTEE MEETINGS
The Board has adopted a formal schedule of matters specifically reserved for the Board’s discussion and/or approval. During the year, the
Board met six (6) times (including one emergency board meeting), all at the Boardroom on Level 9, Tower 3, Avenue 5, The Horizon,
Bangsar South, No. 8 Jalan Kerinchi, Kuala Lumpur. The Board Committees also convened their respective meetings in accordance with
their terms of reference.
Details of the Board meetings and Board Committee meetings convened during the year and the attendance of the members were as
follows:Name of Director
Board Meeting
Meeting of Audit Committee
Meeting of NRC
Datuk Haji Mohd Khalil Dato’ Haji Mohd Noor
6/6
4/4
4/4
Haji Abdullah Yusof
6/6
4/4
4/4
Rosnah Kamarul Zaman
4/6
3/3
4/4
Dato’ Mohd Izzaddin Idris
5/6
N/A
N/A
Elakumari Kantilal
4/6
4/4
N/A
Annuar Marzuki Abdul Aziz
4/5
N/A
3/3
Haji Zaiviji Ismail Abdullah
1/1
N/A
N/A
Notes:•
Attendance of Puan Rosnah Kamarul Zaman at the Audit Committee Meeting was from the date of her appointment on 1 March 2012.
•
Attendance of Encik Annuar Marzuki Abdul Aziz at the meetings was until the date of his resignation on 23 November 2012.
•
Attendance of Haji Zaiviji Ismail Abdullah at the Board Meeting was from the date of his appointment on 28 November 2012.
STATEMENT
(continued)
The then CEO, Mr. Steven Lim Kee Seng and the senior management staff of the Company were also in attendance at the meetings on an
invitation basis.
In between Board Meetings, approvals on matters requiring the sanction of the Board are sought by way of circular resolutions which contain
all relevant information to enable the Board to make informed decisions. All circular resolutions that are approved by the Board are tabled
for notation and confirmation at the subsequent Board Meetings.
9.
SUPPLY OF INFORMATION AND ACCESS TO ADVICE
The Directors are familiar and aware of their duties and responsibilities as well as the implementation of good corporate governance and
compliance practices in the Group.
The Board Members are supplied with the relevant information on a timely basis to enable them to effectively discharge their duties and
responsibilities. The Board papers were circulated to the Board Members at least three (3) working days prior to the date of the Meeting to
facilitate the Directors to peruse the Board Papers and to review the issues to be deliberated at the Board Meeting. Where necessary, the
Company’s personnel were called by the Board during the Board Meetings to present and to clarify any Board papers presented.
The Directors were kept informed on a quarterly basis on the restriction in dealing with the securities of the Company during the Closed Period
and the internal process for compliance when dealing in securities within and outside the Closed Period as set out in Chapter 14 of the Main
Market Listing Requirements. In addition, the Directors were given the updates issued by the various regulatory authorities which may affect
the Group and the Company.
The Board had unrestricted and constant access to and interaction with the Senior Management of the Group and the Company. In line with
this practice, the Board Members together with the Management Team of TEB Group attended a Board Workshop on 26 June 2012. The
Workshop was intended to have a closer interaction between the Board Members and Management Team Members and to have an insight
of the TEB Group’s operations primarily focusing on business direction and examining the strength and weakness and the problem areas.
The Non-Executive Directors (“NEDs”) are paid annual fees in consideration of their service as members of the Board and the Audit
Committee. In addition, the NEDs are paid attendance allowance for each Board meeting and Board Committee meeting. The NEDs including
the Non-Executive Chairman are also entitled to medical and hospitalization coverage.
At last year’s AGM, the shareholders approved that the Directors’ Fees at the existing fees structure for the financial year ending 31 December
2012 be paid on a quarterly basis after the end of each quarter. The Directors’ Fees which amounted to RM365,260.00 were paid to the
NEDs who served on the Board according to their tenure of office during the financial year 2012. Details are shown in the table below.
Non-Executive Directors
Directors’ Fees
(RM)
Other Emoluments
(RM)
Benefits in kind
(RM)
Total Remuneration
(RM)
365,260
47,500
-
412,760
10. DIRECTORS’ REMUNERATION
PAGE
39
STATEMENT
(continued)
The number of NEDs of the Company who served during the financial year ended 31 December 2012 and whose remuneration fall under
each successive band of RM50,000 are as follows:Less than
RM10,000
RM10,000
to RM50,000
RM50,001
to RM100,000
RM100,001
and above
1
2
4
1
Number of Non-Executive Directors
For this year’s AGM, the Company would seek the mandate from the shareholders to allow the Company to pay Directors’ Fees at the existing
fees structure to the NEDs for the financial year ending 31 December 2013 on a quarterly year basis after the end of each quarter.
11. TRAINING AND DEVELOPMENT OF DIRECTORS
The Directors keep themselves abreast with the latest regulatory and corporate governance developments, besides enhancing professionalism
and knowledge to enable them to discharge their duties effectively.
For the financial year ended 31 December 2012, the Directors have attended training programmes, seminars and conferences organized
by the various training providers. The training programmes attended by the Directors include the following:External Training
Key Area
Title
Organiser
Corporate Governance
and Board Effectiveness
UEM Group Directors’ Gathering
UEM Group Berhad
Directors and Management Retreat
Cement Industries of Malaysia Berhad
Mandatory Accreditation Programme
Bursatra Sdn Bhd
Workshop of the Board Effectiveness Assessment Exercise
Faber Group Berhad
Financial
PAGE
40
Economy and Investment
Taxation
th
6 IFRS Regional Policy Forum
Malaysian Accounting Standards
Board (MASB)
Anti-Money Laundering Act: Financial Crime Risks
CIMB Bank Berhad
Financial Institutions Directors Education Programme Module A
Bank Negara Malaysia
Khazanah Megatrends Forum 2012
Khazanah Nasional Berhad
International Directors Summit 2012 “Awakening The Corporate
Entrepreneurship for High Income Economy”
Malaysian Directors Academy
(MINDA) & Asian Strategy &
Leadership Incorporated Sdn Bhd
(ASLI)
National Tax Conference
Inland Revenue Board of Malaysia
STATEMENT
(continued)
12. STRENGTHENING RELATIONSHIP BETWEEN COMPANY AND SHAREHOLDERS
The Board acknowledges the need for the Company’s shareholders and investors to be informed of all material business and corporate
developments concerning the Group in a timely manner. In accordance with the Policy on Investor Relations and Communication with
Shareholders, the Company publishes all material information as required by the regulators via the Bursa Malaysia link as well as other
publications such as the annual report, quarterly financial reports and press announcements. In addition, the Company maintains regular
and effective communication with its shareholders and stakeholders through attending to shareholders’ and investors’ emails and phone calls
enquiries, Company General Meetings and other Company events. Another communication tool to reach shareholders and investors is via
our corporate website www.teb.com.my and with a direct link to a subsidiary’s website, Dagang Net Technologies Sdn Bhd at
www.dagangnet.com.
Pursuant to the amendments to the Company’s Articles of Association as approved by the shareholders at the 42nd AGM held on 2 May
2012, the Company had removed the limit on the number of proxies to be appointed by an exempt authorised nominee with shares in the
Company for multiple beneficial owners in one securities account to allow greater participation of the beneficial owners of shares at general
meetings of the Company. To further promote participation through proxy(ies), a new Article 69A had been included in the Company’s
Articles of Association that confers a proxy the same rights as an individual member to speak at the meeting.
On another related matter, the Company’s stock had been reclassified from the Trading/Services Sector to the Technology Sector effective
29 October 2012. This Sector Re-Classification was in line with the TEB Group’s principal business in e-commerce and IT Infrastructure
solutions.
13. ACCOUNTABILITY AND AUDIT
13.1
Financial Reporting
The Board is committed to continuously provide and present a clear, balanced and comprehensive assessment of the Group’s
financial performance and prospects. In order to fulfill the commitments to stakeholders, the Company ensures that the recording
and reporting of financial and business information is as fair and accurate as determinable.
13.2
Statement of Directors’ Responsibility in respect of the preparation of the Audited Financial Statements
The Directors are responsible in ensuring that the Company and its subsidiaries maintain and properly keep their accounting records,
the register books and other statutory documents to enable the preparation of the Audited Financial Statements with reasonable
accuracy in compliance with the provisions of the Companies Act, 1965. The financial statements have been prepared in accordance
with Malaysia Financial Reporting Standards, International Financial Reporting Standards and generally accepted accounting
principles and the Companies Act, 1965.
The Directors also have a general responsibility to take steps to safeguard the assets of the Group and to prevent and detect fraud
and other irregularities.
The Statement of Directors’ Responsibility in respect of the preparation of the Annual Audited Financial Statement of the Group
pursuant to Section 169 of the Companies Act, 1965 is set out from pages 52 to 55 of this Annual Report.
The Board is responsible for the quality and completeness of publicly disclosed financial reports. This ensures that shareholders are
provided with a balanced and meaningful evaluation of the Company’s financial performance, its position and its future prospects,
through the issuance of Annual Audited Financial Statements and quarterly financial reports and corporate announcements on
significant developments affecting the Company in accordance with the Main Market Listing Requirements of Bursa Securities.
PAGE
41
STATEMENT
(continued)
13.3
Statement on Risk Management and Internal Control
The Board acknowledges its responsibility for maintaining a sound system of internal control which provides reasonable assurance in
ensuring the effectiveness and efficiency of the Group’s operations and to safeguard shareholders’ investment and its assets and interests
in compliance with the relevant laws and regulations as well as the Group’s internal financial administration procedures and guidelines.
The Risk Management and Internal Control Statement furnished on pages 47 to 49 of this Annual Report provides an overview on
the state of internal controls and level of risks and the effectiveness of risks mitigation plans within the TEB Group.
13.4
Relationship With Auditors
The Board maintains a transparent and professional relationship with the Company’s Auditors, both external and internal. The
external auditors, Messrs KPMG, provide an independent opinion, based on audit performed on the financial statements of the
Group and report the same to the shareholders of the Company in accordance with Section 174 of the Companies Act 1965. The
external auditors also attend each AGM in order to assist in giving clarifications to shareholders on the audited financial statements.
The internal auditors attended the Audit Committee meetings of the Company held during the financial year.
14. OTHER INFORMATION OF COMPLIANCE
14.1
Non-Audit Fees
Non-Audit fees of RM33,000 paid to the external auditors, Messrs KPMG relate to the review of the following:•
Risk Management and Internal Control Statement;
•
First adoption of Malaysian Financial Reporting Standards (MFRS); and
•
The breakdown of the retained earnings of the Group and the Company as at 31 December 2012 into realised and unrealised profits
pursuant to the directive issued by Bursa Securities on 25 March 2010 and 20 December 2010.
14.2
Sanctions and/or Penalties
The Company and its subsidiaries, Directors and the Management have not been imposed with any sanctions and/or penalties by
the relevant regulatory bodies during the financial year ended 31 December 2012.
PAGE
42
14.3
Recurrent Related Party Transactions
During the financial year 2012, the Company did not enter into any recurrent related party transaction that requires the shareholders’
mandate.
14.4
Material Contracts involving Directors and Major Shareholders
Save as disclosed in the Audited Financial Statements for the year ended 31 December 2012, none of the Directors and major
shareholders has any material contract with the Company and/or its subsidiaries during the financial year under review.
14.5
Dealing in Securities
The Company has in place the Guidelines for Dealings in Securities for Directors and Principal Officers which sets out the internal
process for compliance by Directors and Principal Officers when dealing in securities during and outside the closed periods, in
accordance with the relevant provisions of the Main Market Listing Requirements of Bursa Securities.
COMPLIANCE STATEMENT
The Board is committed to achieving a high standard of Corporate Governance throughout the organization and would endeavour to apply the
recommendations of the MCCG 2012.
This Corporate Governance Statement has been approved by the Board of TEB on 27 March 2013.
AUDIT COMMITEE
REPORT
The Audit Committee has pleasure in submitting its report for the financial year ended 31 December 2012.
1.
MEMBERSHIP
During the financial year, Puan Rosnah Kamarul Zaman, an Independent Non-Executive Director, was appointed to the Audit Committee
on 1 March 2012 to replace Dato’ Dr Gan Khuan Poh who resigned on 31 January 2012. With this change, the members of the Audit
Committee are as follows:-
Chairman :
Haji Abdullah Yusof
Members :
•
•
•
Elakumari Kantilal
(member of the Malaysian Institute of Accountants)
Pursuant to the Malaysian Code on Corporate Governance 2012, two (2) of the members of the Audit Committee, namely Haji Abdullah Yusof
and Datuk Haji Mohd Khalil Dato' Haji Mohd Noor, have exceeded a cumulative term of nine (9) years as Independent Non-Executive
Director. Based on the justification as stated in the explanatory note to Agenda 5 in the notice of the 43rd Annual General Meeting (“AGM”),
they would seek for re-appointment to continue in office as Independent Non-Executive Directors and their term of office would end until
the conclusion of the next AGM or the appointment of new Independent Non-Executive Directors, whichever is earlier.
MEETINGS
There were four (4) meetings held during the financial year 2012. The details of attendance of each member at the Audit Committee
Meetings are as follows:Attendance
Haji Abdullah Yusof, Chairman
4/4
4/4
Elakumari Kantilal
4/4
Rosnah Kamarul Zaman (from the date of her appointment)
3/3
The Chief Executive Officer and other members of Senior Management of the Company and its subsidiaries, representatives of the External
Auditors, Messrs KPMG and Internal Auditors were also in attendance by invitation.
2.
PAGE
43
AUDIT COMMITEE
REPORT
(continued)
3.
SUMMARY OF ACTIVITIES
The Audit Committee carried out its duties in accordance with its terms of reference as set out in Appendix 1. The following were the activities
carried out during the financial year 2012:(i)
Financial Reporting
(a) Reviewed the TEB Group’s quarterly unaudited financial results prior to recommending for approval by the Board of Directors for
release to Bursa Malaysia Securities Berhad.
(b) Reviewed the annual audited financial statements of the Group and of the Company and the significant risk audit areas highlighted
by the External Auditors. In the review of the annual audited financial statements, the Audit Committee discussed with the
Management the accounting principles and standards that were applied and the impact of the items to the financial statements.
(c) Reviewed the contingent liability of RM4.2 million in relation to the legal action brought by a sub-contractor against a subsidiary company.
(d) Reviewed and approved the Report of the Audit Committee for inclusion in the Company’s Annual Report.
(ii) External Audit
(a) Reviewed the External Auditors’ Audit Plan, Audit Strategy and Scope of Audit Work for the year.
(b) Met with the External Auditors without the presence of management to discuss issues on strengthening internal control and
process improvement.
(iii) Internal Audit
(a) Reviewed and approved the Internal Audit Plan to ensure adequate scope and comprehensiveness of the activities and coverage
on auditable entities with significant high risks.
(b) Reviewed the progress of audit assignments carried out in accordance with the Internal Audit Plan for the year 2012.
(c) Reviewed the Internal Audit Reports issued during the year 2012 as follows:-
1.
2.
3.
PAGE
44
Project Management and Product Implementation of Dagang Net Technologies Sdn Bhd dated 9 February 2012.
Corporate Governance and Related Party Transactions of TIME Engineering Berhad dated 17 February 2012.
Status updates on the Management Corrective Actions from the audit on
•
•
•
4.
IT System, Security Controls and Infrastructure Review.
Customer Relationship Management and Follow-up on Control Self-Assessment on Careline Management.
Product Implementation, Contract Management and Customer Relationship Management.
Special Review Report dated 20 November 2012 in relation to the Project Procurement & Compliance with the existing
Discretionary Authority Limits of TEB Quantum Technology Sdn Bhd and TEB Systems Integrators Sdn Bhd.
(d) Reviewed the assessment of Internal Audit Function performed by the Internal Audit Division of UEM Group Management Sdn Bhd
(“UEM Group Internal Audit”) by completing the Audit Committee Satisfaction Survey. The UEM Group Internal Audit took note of
the survey results and feedback from the members of the Audit Committee and aim for improvement and better rating in coming years.
(iv) Risk Management
(a) Reviewed the Risk Register of the Company and the Group and the risks mitigation action plans on a quarterly basis.
(b) Reviewed the Revised Risk Management Framework which incorporated the latest regulations governing the risk management.
(v) Related Party Transactions
Reviewed the related party transactions and recurrent related party transactions entered into by the Company and its subsidiaries on
a quarterly basis.
AUDIT COMMITEE
REPORT
(continued)
INTERNAL AUDIT FUNCTION
The internal audit function is carried out by the Internal Audit Division of UEM Group Management Sdn Bhd (“UEM Group Internal Audit”)
since 1 October 2008. UEM Group Management Sdn Bhd is a wholly-owned subsidiary of UEM Group Berhad which in turn is a wholly
owned subsidiary of Khazanah Nasional Berhad, a major shareholder of the Company. Based on this shareholding relationship, UEM Group
Internal Audit is a party related to the Company.
UEM Group Internal Audit reports directly to the Audit Committee and assists the Audit Committee in discharging its duties and
responsibilities. In addition, UEM Group Internal Audit works collaboratively with the Risk Management Committee of TEB Group in drawing
up the Annual Internal Audit Plan and reviewing the adequacy and effectiveness of the risks management processes and risks mitigation plans.
The UEM Group Internal Audit undertakes the internal audit activities in conformance with the International Standards for the Professional
Practice of Internal Auditing issued by the Institute of Internal Auditors.
As set out in Section 3 above, the Audit Committee deliberated on the internal audit reports and ensured that all recommendations were
duly acted upon by the Management.
As at 31 December 2012, the total cost incurred for the internal audit function was RM232,066 which relates to personnel cost on audit
assignments (excluding out-of-pocket expenses).
4.
PAGE
45
AUDIT COMMITEE
REPORT
(continued)
TERMS OF REFERENCE
APPENDIX 1
In performing its duties and discharging its responsibilities, the Audit Committee is guided by the Terms of Reference as follows:1.
Composition of the Audit Committee
The Audit Committee shall have a minimum of three (3) members, of which a majority must be independent directors. All members of the
Audit Committee shall be non-executive directors and at least one (1) member of the Audit Committee must be a member of the Malaysian
Institute of Accountants (MIA) or have equivalent qualifications recognised by the MIA. The Chairman of the Audit Committee must be an
independent director.
The Chairman of the Audit Committee will maintain continuous engagement with the Board Members and Senior Management of the
Company and external auditors in order to keep abreast of matters affecting the Company.
All members of the Audit Committee, including the Chairman, shall hold office only so long as they serve as Directors of the Company.
Should any member of the Audit Committee cease to be a Director of the Company, his or her membership in the Audit Committee would
cease forthwith. Alternate directors are not eligible to become members of the Audit Committee.
2.
Powers of the Audit Committee
The Audit Committee is vested with the following authority in carrying out its duties and responsibilities:(i) Have explicit authority to investigate any matter within its Terms of Reference.
(ii) Have the resources required to perform its duties.
(iii) Have full, free and unrestricted access to any information, records, personnel and properties of the Company and any other companies
in the Group.
(iv) Have direct communication channels with the external auditors and persons carrying out the internal audit function or activity. Head
of Internal Audit should report directly to the Audit Committee.
(v) Have authority to obtain external professional advice and secure the attendance of outside parties with relevant experience and expertise,
if deemed necessary.
(vi) Have authority to convene meetings with external auditors, internal auditors or both without the presence of Management, whenever
deemed necessary.
3.
Functions of the Audit Committee
The following are the main functions of the Audit Committee:To review the quarterly, half yearly and year-end financial statements of the Company and its subsidiaries (“the Group”) for
recommendation to the Board for approval, focusing on compliance with accounting standards and legal requirements, changes in
accounting policies and practices and major potential risk issues.
(ii) Assist the Board of Directors in ensuring that there exists adequate and effective systems of governance, control and risk management.
(iii) To consider the appointment of the external auditors, the audit fee and any questions of their resignation or dismissal.
(iv) To review the external auditors' nature and scope of the audit before commencement of the audit, review the external auditors’ audit
report, management letter and responses thereto.
(v) To review with the external auditors their evaluation of the systems and control and any comments they may have with respect to
improving the system for internal control.
(vi) To review the adequacy of the scope, functions and resources of the internal audit department, and ascertain that it has the necessary
authority to carry out its work.
(vii) To review the internal audit plan and results of the internal audit process and ensure that appropriate action is taken on the
recommendations of the internal audit department.
(viii) To consider any related party transactions that may arise within the Group.
(ix) To consider the major findings of internal investigations and the Management’s responses, and direct the Management to take
appropriate actions.
(i)
4.
Frequency and Attendance at Audit Committee Meetings
PAGE
The Audit Committee shall convene meetings as and when required. The quorum for each meeting shall be a majority of Independent Directors.
46
The Head of Finance, the Head of Internal Audit and or his/her representatives and representatives of the external auditors, the Heads of
subsidiary companies and their Management teams are to be in attendance at meetings, if their presence is required.
The Chairman of the Audit Committee shall report on each meeting to the Board. The Secretary to the Audit Committee shall be the
Company Secretary.
RISK MANAGEMENT &
INTERNAL CONTROL STATEMENT
Paragraph 15.26(b) of the Listing Requirements of Bursa Malaysia requires the Board of Directors of public listed companies to include in its
Annual Report a “statement about the state of risk management and internal control of the listed issuer as a group”. The Board is committed in
maintaining a sound system of internal control in the Group and is pleased to present the following statement, which provides the overview of
the Company’s state of risk management and internal control for the financial year ended 31 December 2012.
Internal controls
As in any business, TEB faces risk and uncertainty in everything it does. The corporate strategy, which is reviewed on a bi-annual basis, seeks
to capitalise on identified opportunities while mitigating known downside risks. Where material risks have been identified within our business,
we implemented an appropriate internal control environment to protect shareholders’ interests. The Board is ultimately responsible for the Group’s
system of risk management and internal control, and it discharges its duties in this area by:
•
•
•
Determining TEB’s risk appetite (the risk exposure our strategy requires us to consider in the expectation of an economic return) and risk
tolerance (the risk we are prepared to face in achieving our strategic goals);
Overseeing the risk management strategy; and
Ensuring management implement effective systems of risk identification, assessment, mitigation and internal control. These systems are
designed to manage, rather than eliminate the risk of failure to achieve business objectives and cannot provide absolute assurance against
material misstatement or loss.
Key features of TEB’s internal control framework include:
CLEAR DELEGATION OF POWER
Schedule of Matters reserved
for the Board’s decision
Remit and terms of reference
of Board Committees
Delegation of authority
to each level of management
Group Strategy, supported
by Business Plan,
resource database and model
Annual financial and budgets
Risk tolerance /
appetite clearly defined
AGREED WAYS OF WORKING
Charter, values
and Code of
Business Conduct
Documented policies,
procedures, processes
and standards
Risk management
policy and procedures
TRANSPARENCY
Management reporting against
budgets, plans and forecasts
Internal audit and other
in-house review processes
PAGE
Clear accountability
AGREED OBJECTIVES
47
RISK MANAGEMENT &
(continued)
Responsibility for reviewing the effectiveness of the internal control has been delegated to the Board Audit Committee. The Committee uses
information drawn from a number of different sources to carry out this review:
•
Internal Audit provides objective assurance – their annual work plan is developed in conjunction with management and focuses on key risks
and internal controls. In the light of Internal Audit’s recommendations, management develops and implements corrective action plans,
which are tracked to completion by Internal Audit, with the results reported to executive management and the Board Audit Committee; and
•
During 2012, internal audit have reviewed and concluded that the Company has generally complied with the Malaysian Code of Corporate
Governance 2012 guidelines.
Financial reporting
Management is responsible for establishing and maintaining adequate internal controls over financial reporting and the Group’s consolidation
process. A strategic planning, budgeting and forecasting system is in place. Quarterly financial information including operating results and cash
flow statements are reported to the Board. Both the Chief Executive Officer and Head of Business Units meet quarterly to review performance
against budget and forecast, whilst senior financial managers carry out reviews of group results and analysis of material variances.
Internal controls over financial reporting are designed to provide reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external reporting purposes.
Risk management
TEB has an approach to risk management and internal control to ensure that its results are incorporated into the internal audit process and the
design of internal controls. The risk management process, which has been in place throughout the year has identified, evaluated, managed and
monitored the risks facing the business. Risks which have been identified as significant and their associated mitigating controls, are reviewed
quarterly by the Chief Executive Officer and Board Audit Committee. In line with the guidance appended to the listing requirements, the Board
Audit Committee reviews on a quarterly basis the effectiveness of the risk identification process and the methodology used to evaluate and
quantify risks.
PAGE
48
“Top-down” and “bottom-up” risk reviews are carried out in each area of the business by the Board, Chief Executive Officer, operational and middle
managers respectively. All senior managers are responsible for managing and monitoring risks in their area of responsibility and recording these
risks in the risk register. It is mandatory for this process to take place at least once a year but in practice, the reviews often take place on a
quarterly basis. For each risk identified, management assesses the root causes, probability of risk occurring, impact and mitigating controls. Each
of the business areas are supported by an Operational Risk Champion who co-ordinates risk management activities and ensures that actions are
implemented appropriately. This process ensures risks are measured, monitored and reported on a consistent basis.
A significant portion of TEB’s risks relate to its ability to secure recurring long term revenue streams. Each of the business areas has a dedicated
team of personnel which is responsible for managing and monitoring action plans. In this way TEB ensures accountability remains with operational
management. These risks are also reviewed by the Chief Executive Officer and the Board.
Risk tolerance
Risk tolerance is an indication of the amount of risk a company is willing to accept in order to meet its strategic objectives. This is reflected in a
company’s capacity to sustain losses and its ability to continue to meet its obligations under different trading conditions. TEB has a matrix scoring
system which takes into consideration financial, stakeholder and legal criterias. Risks are then rated based on their likelihood and potential
severity. These scores are then used to escalate risks within the organisation for prompt mitigating actions to be taken.
RISK MANAGEMENT &
(continued)
Other risks and control processes
Apart from the internal audit and risk management, the Board has put in place an organisational structure with formally defined lines of
responsibility and discretionary authority limit (DAL). The procedures include establishing limits of authority and publication of Employees Code
of Conduct Handbook, highlighting amongst others, policies and procedures on health and safety, training and development, staff performance
and handling of misconduct. There are also procedures and DAL for human resource planning, capital expenditure and monitoring of the Group’s
business and performance.
These procedures are relevant across Group operations and provide assurance to Senior Management and the Board. The processes are reviewed
by internal audit, which provides a degree of assurance on the operations and effectiveness of the system of internal control. Planned corrective
actions are independently monitored to ensure timely completion.
The Group’s Chief Executive Officer reports to the Board on significant changes to the Group’s business, if any. Performance information is
presented to the Board using the balanced scorecard approach. The Chief Executive Officer provides the Board with quarterly financial
information, which includes key financial indicators. This includes inter-alia the monitoring of results against budget and prior years and
management actions taken on variances noted. Where areas of improvement in the system are identified, the Board considers the
recommendation made by both Audit Committee and Management.
On 28 November 2012, the Company announced the resignation of Chief Executive Officer and with immediate effect, an interim Executive
Committee (“EXCO”) was formed to oversee the day-to-day operations and management of the Company. The EXCO was entrusted by the Board
to report on the operations, financial performance and progress of key projects.
The Board’s commitment
The Board remains committed towards maintaining a sound system of internal control and believe that a balanced achievement of the Group’s
business objectives and operational efficiency can be attained. The Board is of the view that there were no material weaknesses in internal
control. The Group continues to take measures to strengthen the internal control environment.
The review was performed in accordance with Recommended Practice Guide (“RPG”) 5 issued by the Malaysian Institute of Accountants. RPG
5 does not require the External Auditors to and they did not consider whether this Statement covers all risks and controls, or to form an opinion
on the effectiveness of the Group’s risk and control procedures.
Apart from the risk management and internal audit, the Board has put in place an organisational structure with formally defined lines of
responsibility and discretionary authority.
Pursuant to paragraph 15.23 of the Listing Requirement of Bursa Malaysia, the external auditor has reviewed this statement for inclusion in the
Annual Report of the Group for the year ended 31 December 2012 and reported to the Board that nothing has come their attention that causes
them to believe that the statement is inconsistent with their understanding of the process adopted by the Board in reviewing the adequacy and
integrity of the system of internal control.
PAGE
49
SHARE
PERFORMANCE CHART
Volume
(Millions)
Price
(RM)
100
0.540
0.520
90
0.500
0.480
80
0.460
0.440
0.420
70
0.400
0.380
60
0.360
0.340
50
0.320
0.300
0.280
40
0.260
0.27
0.240
30
0.220
0.200
20
0.180
0.160
10
0.140
0.120
-
0.100
Jan-12
Jan-12
Feb-12
Mar-12
Mar-12
Apr-12 May-12 May-12
Jun-12
Jul-12
Jul-12
Aug-12
Volume
PAGE
50
Sep-12
Oct-12
Price
Oct-12
Nov-12
Dec-12
Dec-12
Jan-13
Feb-13
Feb-13
Mar-13
Apr-13
Apr-13
TEB12_fin_Layout 1 5/13/13 3:49 PM Page 51
FINANCIAL
STATEMENTS
51
114
116
119
120
Financial Statements
Analysis of Shareholdings
Notice of Forty Third Annual General Meeting
Statement Accompanying Notice of Forty
Third Annual General Meeting
Administrative Details
Form of Proxy
DIRECTORS’
REPORT
for the year ended 31 December 2012
The Directors have pleasure in submitting their report and the audited financial statements of the Group and of the Company for the financial
PRINCIPAL ACTIVITIES
The principal activity of the Company is that of investment holding whilst the principal activities of the subsidiaries are as stated in Note 6 to the
financial statements. There has been no significant change in the nature of these activities during the financial year.
RESULTS
Group
RM’000
(Loss)/Profit for the year attributable to:
Shareholders of the Company
Non-controlling interests
Company
RM’000
(7,779)
4,613
27,389
-
(3,166)
27,389
RESERVES AND PROVISIONS
There were no material transfers to or from reserves and provisions during the financial year under review.
DIVIDENDS
Since the end of the previous financial year, the Company paid a final dividend of 4.0 sen per ordinary share less tax at 25% totalling
RM23,257,340 (3.0 sen net per ordinary share) in respect of the financial year ended 31 December 2011 on 1 June 2012.
PAGE
52
The final dividend recommended by the Directors in respect of the financial year ended 31 December 2012 is 4.0 sen per ordinary share less
tax at 25% totalling RM23,257,340 (3.0 sen net per ordinary share).
DIRECTORS OF THE COMPANY
Directors who served since the date of the last report are:
Datuk Haji Mohd Khalil Dato’ Haji Mohd Noor (Chairman)
Haji Abdullah Yusof
Elakumari Kantilal
Dato’ Mohd Izzaddin Idris
Haji Zaiviji Ismail Abdullah (appointed on 28 November 2012)
Dato’ Dr Gan Khuan Poh (resigned on 31 January 2012)
Annuar Marzuki Abdul Aziz (resigned on 23 November 2012)
DIRECTORS’
REPORT
(continued)
DIRECTORS’ INTERESTS
The interests and deemed interests in the ordinary shares and options over shares of the Company and of its related corporations (other than
wholly-owned subsidiaries) of those who were Directors at year end (including the interests of the spouses or children of the Directors who
themselves are not Directors of the Company) as recorded in the Register of Directors’ Shareholdings are as follows:
Number of ordinary shares of RM0.20 each
At
At
1.1.2012
Bought
Sold 31.12.2012
Interests in the Company:
Interest in the Company:
- own
5,000
-
-
5,000
None of the other Directors holding office at 31 December 2012 had any interest in the ordinary shares and options over shares of the Company
and of its related corporations during the financial year.
DIRECTORS’ BENEFITS
Since the end of the previous financial year, no Director of the Company has received nor become entitled to receive any benefit (other than a
benefit included in the aggregate amount of emoluments received or due and receivable by Directors as shown in the financial statements or the
fixed salary of a full time employee of the Company or of related corporations) 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.
There were no arrangements during and at the end of the financial year which had the object of enabling Directors of the Company to acquire
benefits by means of the acquisition of shares in or debentures of the Company or any other body corporate.
There were no changes in the authorised, issued and paid-up capital of the Company during the financial year. There were no debentures issued
during the financial year.
OPTIONS GRANTED OVER UNISSUED SHARES
No options were granted to any person to take up unissued shares of the Company during the financial year.
OTHER STATUTORY INFORMATION
Before the financial statements of the Group and of the Company were made out, the Directors took reasonable steps to ascertain that:
all known bad debts have been written off and adequate allowance made for doubtful debts, and
ii)
any current assets which were unlikely to be realised in the ordinary course of business have been written down to an amount which they
might be expected so to realise.
PAGE
i)
ISSUE OF SHARES AND DEBENTURES
53
DIRECTORS’
REPORT
(continued)
OTHER STATUTORY INFORMATION (continued)
At the date of this report, the Directors are not aware of any circumstances:
i)
that would render the amount written off for bad debts, or the amount of the allowance for doubtful debts in the Group and in the Company
inadequate to any substantial extent, or
ii)
that would render the value attributed to the current assets in the Group and in the Company’s financial statements misleading, or
iii)
which have arisen which render adherence to the existing method of valuation of assets or liabilities of the Group and of the Company
misleading or inappropriate, or
iv)
not otherwise dealt with in this report or in the financial statements, that would render any amount stated in the financial statements of the
Group and of the Company misleading.
At the date of this report, there does not exist:
i)
any charge on the assets of the Group or of the Company that has arisen since the end of the financial year and which secures the liabilities
of any other person, or
ii)
any contingent liability in respect of the Group or of the Company that has arisen since the end of the financial year.
No contingent liability or other liability of any company in the Group has become enforceable, or is likely to become enforceable within the period
of twelve months after the end of the financial year which, in the opinion of the Directors, will or may substantially affect the ability of the Group
and of the Company to meet their obligations as and when they fall due.
In the opinion of the Directors, the financial performance of the operations of the Group and of the Company for the financial year ended 31
December 2012 have not been substantially affected by any item, transaction or event of a material and unusual nature nor has any such item,
transaction or event occurred in the interval between the end of that financial year and the date of this report.
PAGE
54
DIRECTORS’
REPORT
(continued)
AUDITORS
The auditors, Messrs KPMG, have indicated their willingness to accept re-appointment.
Signed on behalf of the Board of Directors in accordance with a resolution of the Directors:
Haji Abdullah Yusof
Kuala Lumpur,
Date: 28 February 2013
PAGE
55
STATEMENTS OF
FINANCIAL POSITION
at 31 December 2012
31.12.2012
RM’000
Group
31.12.2011
RM’000
1.1.2011
RM’000
31.12.2012
RM’000
Company
31.12.2011
RM’000
1.1.2011
RM’000
34,606
3,313
73,157
27,540
4,697
303
-
7,746
3,954
303
497,846
-
23
5
70,045
-
49
2
75,045
-
80
75,045
497,814
-
111,076
32,540
509,849
70,073
75,096
572,939
48,548
1,808
1,723
78,761
16,058
331
1,370
135,382
21,894
9
654
102,217
1,494
62,251
21,715
1,773
26,622
150
69,358
2,870
12,818
150
25,432
Total current assets
130,840
153,141
124,774
85,460
97,903
41,270
Total assets
241,916
185,681
634,623
155,533
172,999
614,209
155,049
(51,846)
155,049
(20,810)
155,049
174,822
155,049
(1,754)
155,049
(5,886)
155,049
184,356
103,203
11,845
134,239
18,396
329,871
18,239
153,295
-
149,163
-
339,405
-
115,048
152,635
348,110
153,295
149,163
339,405
Note
Assets
Plant and equipment
Intangible assets
Investment property
Investments in subsidiaries
Other investments
Trade and other receivables
3
4
5
6
7
8
Total non-current assets
Amount due from subsidiaries
Inventories
Tax recoverable
Cash and cash equivalents
Equity
Share capital
Reserves
Total equity attributable to
shareholders of the Company
PAGE
56
Total equity
8
9
10
11
12
13
TEB12_fin(BU)_Layout 1 5/13/13 5:03 PM Page 57
STATEMENTS OF
FINANCIAL POSITION
at 31 December 2012
(continued)
31.12.2012
RM’000
Group
31.12.2011
RM’000
1.1.2011
RM’000
31.12.2012
RM’000
Company
31.12.2011
RM’000
1.1.2011
RM’000
14
2,598
1,334
1,522
-
-
-
15
16
17
48,886
12,169
-
263,334
-
-
-
263,334
-
63,653
1,334
264,856
-
-
263,334
44,710
18,500
5
14,731
15,505
1,476
18,910
2,747
1,927
311
-
2,578
5,753
15,505
-
6,150
5,320
-
63,215
31,712
21,657
2,238
23,836
11,470
Total liabilities
126,868
33,046
286,513
2,238
23,836
274,804
Total equity and liabilities
241,916
185,681
634,623
155,533
172,999
614,209
Note
Liabilities
Deferred tax liabilities
Redeemable Secured
Loan Stocks (“RSLS”)
Borrowing
Deferred income
Total non-current liabilities
Trade and other payables
Borrowing
Amount due to subsidiaries
Dividend payable
Tax payable
Total current liabilities
18
16
9
PAGE
57
The notes on pages 63 to 109 are an integral part of these financial statements.
STATEMENTS OF PROFIT OR LOSS AND
OTHER COMPREHENSIVE INCOME
Group
Continuing operations
Revenue
Cost of goods sold
Gross profit
Sales and marketing expenses
Administrative expenses
Other operating expenses
Other operating income
Gain on disposal of available-for-sale financial assets
Results from operating activities
Finance costs
Finance income
Profit before tax
Zakat
Tax expense
Note
2012
RM’000
2011
RM’000
Company
2012
2011
RM’000
RM’000
19
144,594
(90,393)
65,340
(15,886)
32,768
(81)
9,423
(439)
54,201
(3,631)
(10,763)
(43,569)
1,756
-
49,454
(2,843)
(9,518)
(35,446)
696
91,927
32,687
(2,210)
(11,359)
7,410
-
8,984
(2,302)
(7,591)
2,226
91,927
(2,006)
(538)
2,658
94,270
(1,517)
3,156
26,528
861
93,244
(1,495)
1,131
114
(281)
(2,999)
95,909
(295)
(4,488)
27,389
-
92,880
-
(3,166)
91,126
27,389
92,880
20
21
22
23
(Loss)/Profit for the year
Other comprehensive income, net of tax
Loss arising during the year
Less: Reversal of gain on fair value of available-for-sale
financial assets upon disposal
-
(62,618)
-
(62,618)
-
(197,247)
-
(197,247)
Other comprehensive loss for the year
-
(259,865)
-
(259,865)
Total comprehensive (loss)/income for the year
(3,166)
(168,739)
27,389
(166,985)
(Loss)/Profit attributable to:
(7,779)
4,613
87,490
3,636
27,389
-
92,880
-
(Loss)/Profit for the year
(3,166)
91,126
27,389
92,880
Total comprehensive (loss)/income attributable to:
(7,779)
4,613
(172,375)
3,636
27,389
-
(166,985)
-
Total comprehensive (loss)/income for the year
(3,166)
(168,739)
27,389
(166,985)
PAGE
58
Basic (loss)/profit per ordinary share (sen)
24
(1.00)
11.29
3.53
11.98
STATEMENTS OF
CHANGES IN EQUITY
Group
Note
At 1 January 2011
Attributable to the owners of the Company
Non-distributable
AvailableShare
for-sale Accumulated
capital
reserve
losses
Total
RM’000
RM’000
RM’000
RM’000
155,049
259,865
(85,043)
329,871
Noncontrolling
interests
RM’000
Total
equity
RM’000
18,239
348,110
Reversal of gain on fair value of
available-for-sale financial assets
upon disposal
-
(62,618)
-
(62,618)
-
(62,618)
-
(197,247)
-
(197,247)
-
(197,247)
Profit for the year
-
Total comprehensive income/
(loss) for the year
-
Dividends to owners of the Company
Dividend paid by a subsidiary to
non-controlling interests
25
-
(259,865)
87,490
87,490
3,636
91,126
87,490
(172,375)
3,636
(168,739)
(23,257)
-
(23,257)
-
-
(23,257)
-
-
-
-
-
(23,257)
155,049
-
155,049
Loss for the year
Total comprehensive income/(loss)
for the year
Total distribution to owners
At 31 December 2011
At 1 January 2012
Dividend paid/payable by a subsidiary to
non-controlling interests
At 31 December 2012
25
-
(3,479)
(3,479)
(23,257)
(3,479)
(26,736)
(20,810)
134,239
18,396
152,635
-
(20,810)
134,239
18,396
152,635
-
-
(7,779)
(7,779)
4,613
(3,166)
-
-
(7,779)
(7,779)
4,613
(3,166)
-
-
(23,257)
(23,257)
-
(23,257)
-
-
-
-
-
(23,257)
(23,257)
155,049
-
(51,846)
103,203
Note 12
Note 12
-
(11,164)
(11,164)
(11,164)
(34,421)
11,845
Note 13
115,048
PAGE
59
STATEMENTS OF
CHANGES IN EQUITY
(continued)
Company
Note
At 1 January 2011
Attributable to the owners of the Company
Non-distributable
AvailableShare
for-sale Accumulated
capital
reserve
losses
RM’000
RM’000
RM’000
155,049
259,865
(75,509)
Total
equity
RM’000
339,405
Reversal of gain on fair value of available-for-sale
financial assets upon disposal
-
(62,618)
-
(62,618)
-
(197,247)
-
(197,247)
Profit for the year
-
Total comprehensive income/(loss) for the year
-
25
(259,865)
92,880
92,880
92,880
(166,985)
-
-
(23,257)
(23,257)
-
-
(23,257)
(23,257)
155,049
-
(5,886)
Profit for the year
-
-
27,389
27,389
Total comprehensive income for the year
-
-
27,389
27,389
-
-
(23,257)
(23,257)
-
-
(23,257)
(23,257)
155,049
-
(1,754)
Note 12
Note 12
At 31 December 2011/1 January 2012
25
At 31 December 2012
PAGE
60
149,163
153,295
STATEMENTS OF
CASH FLOWS
Group
2011
RM’000
Company
2012
2011
RM’000
RM’000
76,481
(101,550)
(40,194)
76,793
(10,339)
(54,191)
11,510
244
(6,750)
13,621
1,831
(1,082)
(10,301)
Cash flows (used in)/generated from operating activities
Taxation (paid)/refunded
Interest and other income received
Zakat paid
(65,263)
(3,559)
(281)
12,263
(6,663)
(295)
5,004
150
861
-
4,069
1,131
-
Net cash (used in)/generated from operating activities
(69,103)
5,305
6,015
5,200
Cash flows from investing activities
Advances to subsidiaries
Interest received
Net proceeds from disposal of available-for-sale financial assets
Proceeds from disposal of plant and equipment
Purchase of plant and equipment, and intangible assets
2,658
2
(16,093)
3,156
329,876
10
(26,221)
(16,568)
2
(9)
(18,798)
329,876
1
(28)
Net cash (used in)/generated from investing activities
(13,433)
306,821
(16,575)
311,051
Cash flows from financing activities
Dividend paid by a subsidiary to non-controlling interests
Dividend paid to owners of the Company
Interest paid
(Increase)/Decrease in deposits pledged
Payment from subsidiary companies
Repayment of borrowings
Drawndown of term loan
(2,625)
(38,762)
(84)
(1,177)
67,386
(3,479)
(7,752)
(6,370)
1,251
(261,360)
-
(38,762)
1,679
-
(7,752)
(6,370)
3,157
(261,360)
-
24,738
(277,710)
(37,083)
(272,325)
2012
RM’000
Cash flows from operating activities
Dividends received from investees
Cash receipts from customers
Cash payments to suppliers
Cash payments to employees and for expenses
Net cash generated from/(used in) financing activities
PAGE
61
STATEMENTS OF
CASH FLOWS
(continued)
Group
Note
Company
2012
2011
RM’000
RM’000
2012
RM’000
2011
RM’000
Net change in cash and cash equivalents
(57,798)
34,416
(47,643)
43,926
Cash and cash equivalents at 1 January
133,505
99,089
69,358
25,432
75,707
133,505
21,715
69,358
Cash and cash equivalents at 31 December
(i)
Notes to the statements of cash flows
i)
Cash and cash equivalents included in the statements of cash flows comprise the following statements of financial position amounts:
Group
Current
Restricted and pledged
- Cash and bank balances
- Deposits with licensed banks
Unrestricted
- Cash and bank balances
- Deposits with licensed banks
Less: Cash and cash equivalents pledged as security
PAGE
62
Company
2012
2011
RM’000
RM’000
2012
RM’000
2011
RM’000
1,247
1,807
1,877
-
-
3,054
1,877
-
-
4,791
70,916
8,204
125,301
1,228
20,487
3,910
65,448
75,707
133,505
21,715
69,358
78,761
(3,054)
135,382
(1,877)
21,715
-
69,358
-
75,707
133,505
21,715
69,358
NOTES TO THE
FINANCIAL STATEMENTS
TIME Engineering Berhad is a public limited liability company, incorporated and domiciled in Malaysia and is listed on the Main Market of the
Bursa Malaysia Securities Berhad. The address of its registered office and principal place of business is as follows:
Registered office and principal place of business
Tower 3, Avenue 5
No. 8, Jalan Kerinchi
59200 Kuala Lumpur
The consolidated financial statements as at 31 December 2012 comprise the Company and its subsidiaries (together referred to as the Group).
The Company is principally engaged in investment holding whilst the principal activities of the subsidiaries are as stated in Note 6 to the financial
statements.
The financial statements were authorised for issue by the Board of Directors on 28 February 2013.
BASIS OF PREPARATION
(a) Statement of compliance
The financial statements of the Group and of the Company have been prepared in accordance with Malaysian Financial Reporting
Standards (“MFRSs”), International Financial Reporting Standards and the requirements of the Companies Act, 1965 in Malaysia.
These are the Group and the Company’s first financial statements prepared in accordance with MFRSs and MFRS 1, First-time Adoption
of Malaysian Financial Reporting Standards has been applied.
In the previous years, the financial statements of the Group and of the Company were prepared in accordance with Financial Reporting
Standards (“FRSs”) in Malaysia.
The Group and the Company have early adopted the amendments to MFRS 101, Presentation of Financial Statements which are
effective for annual periods beginning on or after 1 July 2012. The early adoption of the amendments to MFRS 101 has no impact on
the financial statements other than the presentation format of the statement of profit or loss and other comprehensive income.
The following are accounting standards, amendments and interpretations of the MFRS framework that have been issued by the
Malaysian Accounting Standards Board (“MASB”) but have not been adopted by the Group and the Company:
PAGE
MFRSs, Interpretations and amendments effective for annual periods beginning on or after 1 January 2013
•
MFRS 10, Consolidated Financial Statements
•
MFRS 11, Joint Arrangements
•
MFRS 12, Disclosure of Interests in Other Entities
•
MFRS 13, Fair Value Measurement
•
MFRS 119, Employee Benefits (2011)
•
MFRS 127, Separate Financial Statements (2011)
•
MFRS 128, Investments in Associates and Joint Ventures (2011)
•
IC Interpretation 20, Stripping Costs in the Production Phase of a Surface Mine
•
Amendments to MFRS 7, Financial Instruments: Disclosures – Offsetting Financial Assets and Financial Liabilities
•
Amendments to MFRS 1, First-time Adoption of Malaysian Financial Reporting Standards – Government Loans
•
Amendments to MFRS 1, First-time Adoption of Malaysian Financial Reporting Standards (Annual Improvements 2009-2011 Cycle)
•
Amendments to MFRS 101, Presentation of Financial Statements (Annual Improvements 2009-2011 Cycle)
•
Amendments to MFRS 116, Property, Plant and Equipment (Annual Improvements 2009-2011 Cycle)
•
Amendments to MFRS 132, Financial Instruments: Presentation (Annual Improvements 2009-2011 Cycle)
•
Amendments to MFRS 134, Interim Financial Reporting (Annual Improvements 2009-2011 Cycle)
•
Amendments to MFRS 10, Consolidated Financial Statements: Transition Guidance
•
Amendments to MFRS 11, Joint Arrangements: Transition Guidance
•
Amendments to MFRS 12, Disclosure of Interests in Other Entities: Transition Guidance
1.
63
NOTES TO THE
(continued)
1.
BASIS OF PREPARATION (continued)
(a) Statement of compliance (continued)
•
Amendments to MFRS 132, Financial Instruments: Presentation – Offsetting Financial Assets and Financial Liabilities
•
MFRS 9, Financial Instruments (2009)
•
MFRS 9, Financial Instruments (2010)
•
Amendments to MFRS 7, Financial Instruments: Disclosures – Mandatory Effective Date of MFRS 9 and Transition Disclosures
The Group and the Company plan to apply the abovementioned standards, amendments and interpretations:
•
from the annual period beginning on 1 January 2013 for those standards, amendments or interpretations that are effective for
annual periods beginning on or after 1 January 2013, except for MFRS 11, MFRS 127, MFRS 128, IC Interpretation 20 and
Amendments to MFRS 12 which are not applicable to the Group and the Company.
•
annual periods beginning on or after 1 January 2014.
•
annual periods beginning on or after 1 January 2015.
Material impacts of initial application of a standard, an amendment or an interpretation are discussed below:
MFRS 9, Financial Instruments
MFRS 9 replaces the guidance in MFRS 139, Financial Instruments: Recognition and Measurement on the classification and
measurement of financial assets. Upon adoption of MFRS 9, financial assets will be measured at either fair value or amortised cost.
The adoption of MFRS 9 will result in a change in accounting policy. The Group is currently assessing the financial impact of adopting
MFRS 9.
The initial application of other standards, amendments and interpretations is not expected to have any material financial impacts to the
current and prior periods financial statements upon their first adoption.
(b) Basis of measurement
The financial statements have been prepared on the historical cost basis other than as disclosed in Note 2(c).
(c) Functional and presentation currency
These financial statements are presented in Ringgit Malaysia (“RM”), which is the Company’s functional currency. All financial
information presented in RM and has been rounded to the nearest thousand, unless otherwise stated.
(d) Use of estimates and judgements
PAGE
The preparation of the financial statements in conformity with MFRSs requires management to make judgements, estimates and
assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses.
Actual results may differ from these estimates.
64
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the
period in which the estimates are revised and in any future periods affected.
NOTES TO THE
(continued)
1.
BASIS OF PREPARATION (continued)
(d) Use of estimates and judgements (continued)
There are no significant areas of estimation uncertainty and critical judgements in applying accounting policies that have significant effect
on the amounts recognised in the financial statements.
SIGNIFICANT ACCOUNTING POLICIES
The accounting policies set out below have been applied consistently to the periods presented in these financial statements and in preparing
the opening MFRS statements of financial position of the Group and of the Company at 1 January 2011 (the transition date to MFRS
Framework), unless otherwise stated.
(a) Basis of consolidation
(i)
Subsidiaries
Subsidiaries are entities, including unincorporated entities, controlled by the Company. The financial statements of subsidiaries are
included in the consolidated financial statements from the date that control commences until the date that control ceases. Control
exists when the Company has the ability to exercise its power to govern the financial and operating policies of an entity so as to
obtain benefits from its activities. In assessing control, potential voting rights that presently are exercisable are taken into account.
Investments in subsidiaries are measured in the Company’s statement of financial position at cost less any impairment losses, unless
the investment is classified as held for sale or distribution. The cost of investments includes transaction costs.
(ii) Business combinations
Business combinations are accounted for using the acquisition method from the acquisition date, which is the date on which
control is transferred to the Group.
Acquisitions on or after 1 January 2011
For acquisitions on or after 1 January 2011, the Group measures the cost of goodwill at the acquisition date as:
•
•
•
•
the fair value of the consideration transferred; plus
the recognised amount of any non-controlling interests in the acquiree; plus
if the business combination is achieved in stages, the fair value of the existing equity interest in the acquiree; less
the net recognised amount (generally fair value) of the identifiable assets acquired and liabilities assumed.
When the excess is negative, a bargain purchase gain is recognised immediately in profit or loss.
For each business combination, the Group elects whether it measures the non-controlling interests in the acquiree either at fair
value or at the proportionate share of the acquiree’s identifiable net assets at the acquisition date.
Transaction cost, other than those associated with the issue of debt or equity securities, that the Group incurs in connection with
a business combination are expensed as incurred.
2.
Acquisition before 1 January 2011
PAGE
As part of its transition to MFRS, the Group elected not to restate those business combinations that occurred before the date of
transition to MFRSs, i.e. 1 January 2011. Goodwill arising from acquisition before 1 January 2011 has been carried forward from
the previous FRS Framework as at the date of transition.
65
NOTES TO THE
(continued)
2.
SIGNIFICANT ACCOUNTING POLICIES (continued)
(a) Basis of consolidation (continued)
(iii) Accounting for acquisitions of non-controlling interests
The Group treats all changes in its ownership interest in a subsidiary that do not result in a loss of control as equity transactions
between the Group and its non-controlling interest holders. Any difference between the Group’s share of net assets before and after
the change, and any consideration received or paid, is adjusted to or against Group reserves.
(iv) Loss of control
Upon the loss of control of a subsidiary, the Group derecognises the assets and liabilities of the subsidiary, any non-controlling
interests and the other components of equity related to the subsidiary. Any surplus or deficit arising on the loss of control is
recognised in profit or loss. If the Group retains any interest in the previous subsidiary, then such interest is measured at fair value
at the date that control is lost. Subsequently it is accounted for as an equity accounted investee or as an available-for-sale financial
asset depending on the level of influence retained.
(v) Non-controlling interests
Non-controlling interests at the end of the reporting period, being the equity in a subsidiary not attributable directly or indirectly to
the equity holders of the Company, are presented in the consolidated statement of financial position and statement of changes in
equity within equity, separately from equity attributable to the owners of the Company. Non-controlling interests in the results of
the Group is presented in the consolidated statement of profit or loss and other comprehensive income as an allocation of the profit
or loss and the comprehensive income for the year between non-controlling interests and owners of the Company.
Losses applicable to the non-controlling interests in a subsidiary are allocated to the non-controlling interests even if doing so
causes the non-controlling interests to have a deficit balance.
(vi) Transactions eliminated on consolidation
PAGE
66
Intra-group balances and transactions, and any unrealised income and expenses arising from intra-group transactions, are
eliminated in preparing the consolidated financial statements.
(b) Foreign currency transactions
Transactions in foreign currencies are translated to the respective functional currencies of Group entities at exchange rates at the dates
of the transactions.
Monetary assets and liabilities denominated in foreign currencies at the end of the reporting period are retranslated to the functional
currency at the exchange rate at that date.
Non-monetary assets and liabilities denominated in foreign currencies are not retranslated at the end of the reporting date, except for
those that are measured at fair value are retranslated to the functional currency at the exchange rate at the date that the fair value was
determined.
Foreign currency differences arising on retranslation are recognised in profit or loss, except for differences arising on the retranslation
of available-for-sale equity instruments or a financial instrument designated as a cash flow hedge of currency risk, which are recognised
in other comprehensive income.
NOTES TO THE
(continued)
(c) Financial instruments
(i)
Initial recognition and measurement
A financial asset or a financial liability is recognised in the statement of financial position when, and only when, the Group or the
Company becomes a party to the contractual provisions of the instrument.
A financial instrument is recognised initially, at its fair value plus, in the case of a financial instrument not at fair value through profit
or loss, transaction costs that are directly attributable to the acquisition or issue of the financial instrument.
An embedded derivative is recognised separately from the host contract and accounted for as a derivative if, and only if, it is not
closely related to the economic characteristics and risks of the host contract and the host contract is not categorised at fair value
through profit or loss. The host contract, in the event an embedded derivative is recognised separately, is accounted for in
accordance with policy applicable to the nature of the host contract.
(ii) Financial instrument categories and subsequent measurement
The Group and the Company categorise financial instruments as follows:
Financial assets
(a) Financial assets at fair value through profit or loss
Fair value through profit or loss category comprises financial assets that are held for trading, including derivatives (except for
a derivative that is a financial guarantee contract or a designated and effective hedging instrument) or financial assets that
are specifically designated into this category upon initial recognition.
Derivatives that are linked to and must be settled by delivery of unquoted equity instruments whose fair values cannot be
reliably measured are measured at cost.
Other financial assets categorised as fair value through profit or loss are subsequently measured at their fair values with the
gain or loss recognised in profit or loss.
(b) Loans and receivables
Loans and receivables category comprises debt instruments that are not quoted in an active market.
Financial assets categorised as loans and receivables are subsequently measured at amortised cost using the effective interest
method.
(c) Available-for-sale financial assets
Available-for-sale category comprises investment in equity and debt securities instruments that are not held for trading.
PAGE
Investments in equity instruments that do not have a quoted market price in an active market and whose fair value cannot
be reliably measured are measured at cost. Other financial assets categorised as available-for-sale are subsequently measured
at their fair values with the gain or loss recognised in other comprehensive income, except for impairment losses, foreign
exchange gains and losses arising from monetary items and gains and losses of hedged items attributable to hedge risks of
fair value hedges which are recognised in profit or loss. On derecognition, the cumulative gain or loss recognised in other
comprehensive income is reclassified from equity into profit or loss. Interest calculated for a debt instrument using the effective
interest method is recognised in profit or loss.
2.
67
NOTES TO THE
(continued)
2.
(c) Financial instruments (continued)
(ii) Financial instrument categories and subsequent measurement (continued)
Financial assets (continued)
All financial assets, except for those measured at fair value through profit or loss, are subject to review for impairment (see Note
2(j)(i)).
Financial liabilities
All financial liabilities are subsequently measured at amortised cost other than those categorised as fair value through profit or loss.
Fair value through profit or loss category comprises financial liabilities that are derivatives (except for a derivative that is a financial
guarantee contract or a designated and effective hedging instrument) or financial liabilities that are specifically designated into this
category upon initial recognition.
Derivatives that are linked to and must be settled by delivery of unquoted equity instruments whose fair values cannot be reliably
measured are measured at cost.
Other financial liabilities categorised as fair value through profit or loss are subsequently measured at their fair values with the gain
or loss recognised in profit or loss.
(iii) Derecognition
A financial asset or part of it is derecognised when, and only when the contractual rights to the cash flows from the financial asset
expire or the financial asset is transferred to another party without retaining control or substantially transferring all risks and rewards
of the asset. On derecognition of a financial asset, the difference between the carrying amount and the sum of the consideration
received (including any new asset obtained less any new liability assumed) and any cumulative gain or loss that had been
recognised in equity is recognised in profit or loss.
PAGE
68
A financial liability or a part of it is derecognised when, and only when, the obligation specified in the contract is discharged or
cancelled or expires. On derecognition of a financial liability, the difference between the carrying amount of the financial liability
extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities
assumed, is recognised in profit or loss.
(d) Plant and equipment
(i)
Recognition and measurement
Items of plant and equipment are measured at cost less any accumulated depreciation and any accumulated impairment losses.
Cost includes expenditures that are directly attributable to the acquisition of the asset and any other costs directly attributable to
bringing the asset to working condition for its intended use, and the costs of dismantling and removing the items and restoring the
site on which they are located. The cost of self-constructed assets also includes the cost of materials and direct labour. For
qualifying assets, borrowing costs are capitalised in accordance with the accounting policy on borrowing costs. Purchased software
that is integral to the functionality of the related equipment is capitalised as part of that equipment.
When significant parts of an item of plant and equipment have different useful lives, they are accounted for as separate items (major
components) of plant and equipment.
NOTES TO THE
(continued)
(d) Plant and equipment (continued)
(i)
Recognition and measurement (continued)
The gain or loss on disposal of an item of plant and equipment is determined by comparing the proceeds from disposal with the
carrying amount of plant and equipment and is recognised net within “other operating income” or “other operating expenses”
respectively in profit or loss.
(ii) Subsequent costs
The cost of replacing part of an item of plant and equipment is recognised in the carrying amount of the item if it is probable that
the future economic benefits embodied within the component will flow to the Group or the Company and its cost can be measured
reliably. The carrying amount of the replaced component is derecognised to profit or loss. The costs of day-to-day servicing of plant
and equipment are recognised in profit or loss as incurred.
(iii) Depreciation
Depreciation is based on the cost of an asset less its residual value. Significant components of individual assets are assessed, and
if a component has a useful life that is different from the remainder of that asset, then that component is depreciated separately.
Depreciation is recognised in profit or loss on a straight-line basis over the estimated useful lives of each component of an item of
plant and equipment. Leased assets are depreciated over the shorter of the lease term and their useful lives unless it is reasonably
certain that the Group will obtain ownership by the end of the lease term. Plant and equipment under construction are not
depreciated until the assets are ready for their intended use.
The estimated useful lives for the current and comparative periods are as follows:
•
•
•
•
Office renovations
Plant and machinery
Office equipment, furniture and fittings
Computer equipment
5 years
3 - 5 years
5 - 10 years
3 years
Depreciation methods, useful lives and residual values are reviewed at end of the reporting period, and adjusted as appropriate.
(e) Leased assets
Operating lease
Leases, where the Group or the Company does not assume substantially all the risks and rewards of the ownership are classified as
operating leases and, except for property interest held under operating lease, the leased assets are not recognised in the statement of
financial position. Property interest held under an operating lease, which is held to earn rental income or for capital appreciation or both,
is classified as investment property and measured using fair value model.
Payments made under operating leases are recognised in profit or loss on a straight-line basis over the term of the lease. Lease incentives
received are recognised in profit or loss as an integral part of the total lease expense, over the term of the lease. Contingent rentals are
charged to profit or loss in the reporting period in which they are incurred.
2.
PAGE
69
NOTES TO THE
(continued)
2.
(f)
Intangible assets
(i)
Goodwill
Goodwill arises on business combinations and is measured at cost less any accumulated impairment losses.
(ii) Research and development
Expenditure on research activities, undertaken with the prospect of gaining new scientific or technical knowledge and
understanding, is recognised in profit or loss as incurred.
Expenditure on development activities, whereby the application of research findings are applied to a plan or design for the
production of new or substantially improved products and processes, is capitalised only if development costs can be measured
reliably, the product or process is technically and commercially feasible, future economic benefits are probable and the Group
intends to and has sufficient resources to complete development and to use or sell the asset.
The expenditure capitalised includes the cost of materials, direct labour and overheads costs that are directly attributable to
preparing the asset for its intended use. For qualifying assets, borrowing costs are capitalised in accordance with the accounting
policy on borrowing costs. Other development expenditure is recognised in profit or loss as incurred.
Capitalised development expenditure is measured at cost less any accumulated amortisation and any accumulated impairment
losses.
(iii) Other intangible assets
Intangible assets, other than goodwill, that are acquired by the Group, which have finite useful lives, are measured at cost less any
accumulated amortisation and any accumulated impairment losses.
(iv) Subsequent expenditure
Subsequent expenditure is capitalised only when it increases the future economic benefits embodied in the specific asset to which
it relates. All other expenditure is recognised in profit or loss as incurred.
(v) Amortisation
Amortisation is based on the cost of an asset less its residual value.
Goodwill and intangible assets with indefinite useful lives are not amortised but are tested for impairment annually and whenever
there is an indication that they may be impaired.
Other intangible assets are amortised from the date that they are available for use.
Amortisation is recognised in profit or loss on a straight-line basis over the estimated useful lives of intangible assets from the date
that they are available for use.
The estimated useful live of capitalised development costs and software is 3 years respectively.
PAGE
70
NOTES TO THE
(continued)
(g) Investment property
Investment property carried at cost
Investment properties are properties which are owned or held under a leasehold interest to earn rental income or for capital appreciation
or for both, but not for sale in the ordinary course of business, use in the production or supply of goods or services or for administrative
purposes. These include land held for a currently undetermined future use. Properties that are occupied by the companies in the
Group are accounted for as owner-occupied rather than as investment properties. Investment properties are stated at cost less
accumulated depreciation and impairment losses, consistent with the accounting policy for plant and equipment as stated in accounting
policy Note 2(d).
Depreciation is charged to profit or loss on a straight-line basis over the estimated useful lives of 25 to 50 years for buildings. Freehold
land is not depreciated.
(h) Inventories
Inventories are measured at the lower of cost and net realisable value.
The cost of inventories is measured based on weighted average cost formula, and includes expenditure incurred in acquiring the
inventories, production or conversion costs and other costs incurred in bringing them to their existing location and condition.
Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and the
estimated costs necessary to make the sale.
(i)
Cash and cash equivalents consist of cash on hand, balances and deposits with banks and highly liquid investments which have an
insignificant risk of changes in value. For the purpose of the statement of cash flows, cash and cash equivalents are presented net of
pledged deposits and restricted cash.
(j)
Impairment
(i)
Financial assets
All financial assets (except for investments in subsidiaries) are assessed at each reporting date whether there is any objective
evidence of impairment as a result of one or more events having an impact on the estimated future cash flows of the asset. Losses
expected as a result of future events, no matter how likely, are not recognised. For an investment in equity instrument, a significant
or prolonged decline in the fair value below its cost is an objective evidence of impairment. If any such objective evidence exists,
then the financial asset’s recoverable amount is estimated.
An impairment loss in respect of loans and receivables and held-to-maturity investments is recognised in profit or loss and is
measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted
at the asset’s original effective interest rate. The carrying amount of the asset is reduced through the use of an allowance account.
PAGE
An impairment loss in respect of available-for-sale financial assets is recognised in profit or loss and is measured as the difference
between the asset’s acquisition cost (net of any principal repayment and amortisation) and the asset’s current fair value, less any
impairment loss previously recognised. Where a decline in the fair value of an available-for-sale financial asset has been recognised
in other comprehensive income, the cumulative loss in other comprehensive income is reclassified from equity to profit or loss.
2.
71
NOTES TO THE
(continued)
2.
(j)
Impairment (continued)
(i)
Financial assets (continued)
An impairment loss in respect of unquoted equity instrument that is carried at cost is recognised in profit or loss and is measured
as the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at the
current market rate of return for a similar financial asset.
Impairment losses recognised in profit or loss for an investment in an equity instrument classified as available for sale is not
reversed through profit or loss.
If, in a subsequent period, the fair value of a debt instrument increases and the increase can be objectively related to an event
occurring after the impairment loss was recognised in profit or loss, the impairment loss is reversed, to the extent that the asset’s
carrying amount does not exceed what the carrying amount would have been had the impairment not been recognised at the date
the impairment is reversed. The amount of the reversal is recognised in profit or loss.
(ii) Other assets
The carrying amounts of other assets (except for inventories) are reviewed at the end of each reporting period to determine whether
there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated. For goodwill
and intangible assets that have indefinite useful lives or that are not yet available for use, the recoverable amount is estimated at
each period at the same time.
For the purpose of impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows
from continuing use that are largely independent of the cash inflows of other assets or cash-generating units. Subject to an operating
segment ceiling test, for the purpose of goodwill impairment testing, cash-generating units to which goodwill has been allocated
are aggregated so that the level at which impairment testing is performed reflects the lowest level at which goodwill is monitored
for internal reporting purposes. The goodwill acquired in a business combination, for the purpose of impairment testing, is allocated
to group of cash-generating units that are expected to benefit from the synergies of the combination.
PAGE
72
The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs to sell. 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 or cash-generating unit.
An impairment loss is recognised if the carrying amount of an asset or its related cash-generating unit exceeds its estimated
recoverable amount.
Impairment losses are recognised in profit or loss. Impairment losses recognised in respect of cash-generating units are allocated
first to reduce the carrying amount of any goodwill allocated to the cash-generating unit (group of cash-generating units) and then
to reduce the carrying amounts of the other assets in the cash-generating unit (groups of cash-generating units) on a pro rata basis.
An impairment loss in respect of goodwill is not reversed. In respect of other assets, impairment losses recognised in prior periods
are assessed at the end of each reporting date for any indications that the loss has decreased or no longer exists. An impairment
loss is reversed if there has been a change in the estimates used to determine the recoverable amount since the last impairment
loss was recognised. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying
amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised. Reversals
of impairment losses are credited to profit or loss in the year in which the reversals are recognised.
NOTES TO THE
(continued)
(k) Borrowings and Redeemable Secured Loan Stocks (“RSLS”)
Loans, borrowings and RSLS are stated at amortised cost with any difference between cost and redemption value being recognised in
profit or loss over the period of the loans and borrowings using the effective interest method in accordance with Note 2(c).
(l)
Equity instruments
Instruments classified as equity are measured at cost on initial recognition and are not remeasured subsequently.
(m) Employee benefits
(i)
Short-term employee benefits
Short-term employee benefit obligations in respect of salaries, annual bonuses, paid annual leave and sick leave are measured on
an undiscounted basis and are expensed as the related service is provided.
A liability is recognised for the amount expected to be paid under short-term cash bonus or profit-sharing plans if the Group has
a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation
can be estimated reliably.
(ii) State plans
The Group’s contributions to the statutory pension funds are charged to profit or loss in the financial year to which they relate. Once
the contributions have been paid, the Group has no further payment obligations.
(n) Provisions
A provision is recognised if, as a result of a past event, the Group has a present legal or constructive obligation that can be estimated
reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by
discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and
the risks specific to the liability. The unwinding of the discount is recognised as finance cost.
(o) Revenue recognition
(i)
Goods sold
Revenue from sale of goods in the course of ordinary activities is measured at the fair value of the consideration received or
receivable, net of returns and allowances, trade discounts and volume rebates. Revenue is recognised when the significant risks
and rewards of ownership have been transferred to the buyer, recovery of the consideration is probable, the associated costs and
possible return of goods can be estimated reliably, and there is no continuing management involvement with the goods and the
revenue can be measured reliably.
(ii) Services
Revenue from services rendered is recognised in profit or loss in proportion to the stage of completion of the transaction at the end
of the reporting period. The stage of completion is assessed by reference to surveys of work performed.
2.
PAGE
73
NOTES TO THE
(continued)
2.
(o) Revenue recognition (continued)
(iii) Contracts
Revenue from fixed price contracts is recognised on the percentage of completion method, measured by reference to surveys of
work performed. When the outcome of a contract cannot be estimated reliably, revenue is recognised only to the extent of contract
costs that are probable to be recoverable. An expected loss on a contract is recognised immediately in profit or loss.
(iv) Dividend income
Dividend income is recognised in profit or loss on the date that the Group’s or the Company’s right to receive payment is established,
which in the case of quoted securities is the ex-dividend date.
(v) Interest income
Interest income is recognised as it accrues using the effective interest method in profit or loss except for interest income arising
from temporary investment of borrowings taken specifically for the purpose of obtaining a qualifying asset which is accounted for
in accordance with the accounting policy on borrowing costs.
(p) Borrowing costs
Borrowing costs that are not directly attributable to the acquisition, construction or production of a qualifying asset are recognised in
profit or loss using the effective interest method.
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.
PAGE
74
The capitalisation of borrowing costs as part of the cost of a qualifying asset commences when expenditure for the asset is being
incurred, borrowing costs are being incurred and activities that are necessary to prepare the asset for its intended use or sale are in
progress. Capitalisation of borrowing costs is suspended or ceases when substantially all the activities necessary to prepare the qualifying
asset for its intended use or sale are interrupted or completed.
Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is
deducted from the borrowing costs eligible for capitalisation.
(q) Income tax
Income tax expense comprises current and deferred tax. Current tax and deferred tax are recognised in profit or loss except to the extent
that it relates to items recognised directly in equity or other comprehensive income.
Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates enacted or substantially
enacted by the end of the reporting period, and any adjustment to tax payable in respect of previous financial years.
Deferred tax is recognised using the liability method, providing for temporary differences between the carrying amounts of assets and
liabilities in the statement of financial position and their tax bases. Deferred tax is not recognised for the following temporary differences:
the initial recognition of goodwill, the initial recognition of assets or liabilities in a transaction that is not a business combination and that
affects neither accounting nor taxable profit or loss. Deferred tax is measured at the tax rates that are expected to apply to the temporary
differences when they reverse, based on the laws that have been enacted or substantively enacted by the end of the reporting period.
NOTES TO THE
(continued)
(q) Income tax (continued)
The amount of deferred tax recognised is measured based on the expected manner of realisation or settlement of the carrying amount
of the assets and liabilities, using tax rates enacted or substantively enacted at the reporting date. Deferred tax assets and liabilities are
not discounted.
Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they
relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle
current tax liabilities and assets on a net basis or their tax assets and liabilities will be realised simultaneously.
A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be available against which temporary
difference can be utilised. Deferred tax assets are reviewed at the end of each reporting period and are reduced to the extent that it is
no longer probable that the related tax benefit will be realised.
Unutilised reinvestment allowance and investment tax allowance, being tax incentives that is not a tax base of an asset, is recognised
as a deferred tax asset to the extent that it is probable that the future taxable profits will be available against the unutilised tax incentive
can be utilised.
(r)
Earnings per share
The Group presents basic earnings per share data for its ordinary shares (“EPS”).
Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by the weighted average
number of ordinary shares outstanding during the period, adjusted for own shares held.
(s) Operating segments
An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur
expenses, including revenues and expenses that relate to transactions with any of the Group’s other components. All operating segments’
operating results are reviewed regularly by the chief operating decision maker, which in this case is the Chairman of Executive Committee
of the Group, to make decisions about resources to be allocated to the segment and assess its performance, and for which discrete
financial information is available.
(t)
Contingent liabilities
Where it is not probable that an outflow of economic benefits will be required, or the amount cannot be estimated reliably, the obligation
is not recognised in the statement of financial position and is disclosed as a contingent liability, unless the probability of outflow of
economic benefits is remote. Possible obligations, whose existence will only be confirmed by the occurrence or non-occurrence of one
or more future events, are also disclosed as contingent liabilities unless the probability of outflow of economic benefits is remote.
2.
PAGE
75
NOTES TO THE
(continued)
3.
PLANT AND EQUIPMENT
Group
Cost
Office
renovations
RM’000
Plant and
machinery
RM’000
Office
equipment,
furniture
and fittings
RM’000
Computer
equipment
RM’000
Capital
work-inprogress
RM’000
Total
RM’000
PAGE
At 1 January 2011
Additions
Disposals
Written off
Reclassifications
3,872
30
(131)
271
4,596
20,784
-
2,379
91
(17)
(94)
63
29,571
1,421
(15)
(758)
952
580
1,689
(1,286)
40,998
24,015
(32)
(983)
-
Additions
Disposals
Written off
Reclassifications
4,042
77
23
25,380
96
-
2,422
159
(7)
(11)
58
31,171
1,549
(49)
8,436
983
13,404
(8,517)
63,998
15,285
(56)
(11)
-
At 31 December 2012
4,142
25,476
2,621
41,107
5,870
79,216
Accumulated depreciation and impairment loss
At 1 January 2011
Accumulated depreciation
1,492
Accumulated impairment loss
-
2,586
1,702
1,389
-
26,083
-
-
31,550
1,702
1,492
870
(128)
4,288
416
-
1,389
198
(9)
(76)
26,083
2,693
(9)
(749)
-
33,252
4,177
(18)
(953)
2,234
-
3,002
1,702
1,502
-
28,018
-
-
34,756
1,702
2,234
911
-
4,704
4,257
-
1,502
191
(8)
28,018
2,846
(45)
-
36,458
8,205
(53)
3,145
-
7,259
1,702
1,685
-
30,819
-
-
42,908
1,702
3,145
8,961
1,685
30,819
-
44,610
Carrying amounts
At 1 January 2011
2,380
308
990
3,488
580
7,746
1,808
20,676
920
3,153
983
27,540
997
16,515
936
10,288
5,870
34,606
Depreciation charge
Disposals
Written off
Depreciation charge
Disposals
At 31 December 2012
76
At 31 December 2012
NOTES TO THE
(continued)
PLANT AND EQUIPMENT (continued)
Company
Cost
Office
renovations
RM’000
Office
equipment,
furniture
and fittings
RM’000
Computer
equipment
RM’000
Total
RM’000
At 1 January 2011
Additions
Disposals
13
-
117
5
(7)
287
19
-
417
24
(7)
Additions
Disposals
13
-
115
3
(7)
306
(5)
434
3
(12)
At 31 December 2012
13
111
301
425
At 1 January 2011
Depreciation charge
Disposals
3
3
-
71
23
(8)
263
30
-
337
56
(8)
Depreciation charge
Disposals
6
7
-
86
11
(5)
293
5
(1)
385
23
(6)
At 31 December 2012
13
92
297
402
Carrying amounts
At 1 January 2011
10
46
24
80
7
29
13
49
At 31 December 2012
-
19
4
23
3.
PAGE
77
NOTES TO THE
(continued)
4.
INTANGIBLE ASSETS
Software
RM’000
Development
expenditure
RM’000
Total
RM’000
1,684
1,981
(82)
17,438
225
82
315
-
19,437
2,206
-
3,583
508
(2,289)
(530)
17,745
300
2,289
-
315
-
21,643
808
(530)
1,272
20,334
315
21,921
Accumulated amortisation and impairment loss
At 1 January 2011
Accumulated amortisation
-
14,976
192
315
-
15,291
192
Amortisation for the year
-
1,463
-
1,463
-
16,439
192
315
-
16,754
192
-
1,662
-
1,662
At 31 December 2012
-
18,101
192
315
-
18,416
192
Carrying amounts
At 1 January 2011
1,684
2,270
-
3,954
3,583
1,114
-
4,697
At 31 December 2012
1,272
2,041
-
3,313
Group
Cost
At 1 January 2011
Additions
Reclassification
Additions
Reclassification
Written off
At 31 December 2012
PAGE
78
Software
in progress
RM’000
NOTES TO THE
(continued)
INTANGIBLE ASSETS (continued)
Company
Cost
Software
RM’000
At 1 January 2011
Additions
438
4
Additions
442
6
At 31 December 2012
448
At 1 January 2011
438
2
440
3
At 31 December 2012
443
Carrying amount
At 1 January 2011
-
2
At 31 December 2012
5
4.
PAGE
79
NOTES TO THE
(continued)
5.
INVESTMENT PROPERTY
Group
Cost
At 1 January 2011/31 December 2011/1 January 2012
Disposals
At 31 December 2012
Accumulated amortisation and impairment loss
Accumulated impairment
Disposals
At 31 December 2012
Carrying amounts
At 31 December 2012
Freehold
land
RM’000
397
(397)
Building
RM’000
217
(217)
Total
RM’000
614
(614)
-
-
-
94
37
180
37
274
94
(94)
217
(217)
311
(311)
-
-
-
303
-
303
-
-
-
In the prior year, the title of the building and a freehold land had not been issued to the Group as the master title had not been sub-divided.
PAGE
80
6.
INVESTMENTS IN SUBSIDIARIES
31.12.2012
RM’000
Unquoted shares
At cost
Less: Impairment loss
Company
31.12.2011
RM’000
1.1.2011
RM’000
110,045
(40,000)
115,145
(40,100)
115,145
(40,100)
70,045
75,045
75,045
During the year, the investments in subsidiaries with a carrying amount of RM5,000,000 (net of impairment loss) has been written off to profit
or loss.
NOTES TO THE
(continued)
INVESTMENTS IN SUBSIDIARIES (continued)
The principal activities of the companies in the Group, all incorporated in Malaysia and the interests of TIME Engineering Berhad are shown
below:
Name of subsidiary
Principal activities
Effective ownership interest
31.12.2012 31.12.2011
1.1.2011
%
%
%
Information Communication
Technology
Dagang Net Technologies
Sdn. Bhd. (“DNT”)
Development, management and provision of
business to business (B2B) e-commerce and
computerised transaction facilitation services.
71.25
71.25
71.25
TEB Systems Integrators
Sdn. Bhd.
Providing expertise in IT project management and
consultancy, supply of ICT hardware equipment,
maintenance and asset management.
100
100
100
TEB Quantum Technology
Sdn. Bhd.
Providing IT solutions, cybersecurity, managed
services and supply of computer hardware,
software and peripherals.
100
100
100
Toplink Advisory and
Management Services
Sdn. Bhd. **
Dormant.
-
100
100
TIME Automation and
Management Services
Sdn. Bhd. and its subsidiary **
Dormant.
-
100
100
TIME Spectrum
Communication Sdn. Bhd. **
(Indirect subsidiary company)
Dormant.
-
100
100
**
These companies have been placed under members’ voluntary liquidation during the year and no audit reports were issued for these
companies for financial year ended 31 December 2012. The results of these companies (prior to liquidation) are consolidated using
management accounts.
6.
PAGE
81
NOTES TO THE
(continued)
7.
OTHER INVESTMENTS
Group
31 December 2012
Non-current
Available-for-sale financial assets
- at fair value
31 December 2011
Non-current
- at fair value
Less: Disposal
Less: Written off
1 January 2011
Non-current
- at fair value
Quoted
shares
RM’000
Quoted
unit trust
RM’000
Total
RM’000
-
-
-
497,832
(497,814)
(18)
14
(14)
497,846
(497,814)
(32)
-
-
-
497,832
14
497,846
-
-
-
Company
PAGE
82
31 December 2012
Non-current
- at fair value
31 December 2011
Non-current
- at fair value
Less: Disposal
1 January 2011
Non-current
- at fair value
497,814
(497,814)
-
497,814
(497,814)
-
-
-
497,814
-
497,814
NOTES TO THE
(continued)
7.
OTHER INVESTMENTS (continued)
Other investments comprise mainly investment in TIME dotCom Berhad which is incorporated in Malaysia is as follows:
Name of subsidiary
Principal activities
Effective ownership interest
31.12.2012 31.12.2011
1.1.2011
%
%
%
TIME dotCom Berhad
(“TdC”)
Investment holding in telecommunication
companies providing communication and
internet services (including wireless transmission)
through its established domestic and
international network.
-
-
24.74
On 2 August 2011, the Company disposed off 626,181,720 ordinary shares of RM1.00 each (representing 24.74%) in TdC representing
its entire shareholding in TdC by way of offer for sale to its shareholders for a total consideration of RM331,876,000.
In the prior years, the Company’s quoted shares were pledged with the development bank (Note 15) as security for credit facilities granted
to the Company. The carrying values of the pledged quoted shares were as follows:
Group & Company
31.12.2012 31.12.2011
RM’000
RM’000
Pledged with development bank
-
-
497,814
TRADE AND OTHER RECEIVABLES
Note
Non-current
Trade
Trade receivables
Less: Fair value loss
on receivables
8.1
Prepayments
8.2
31.12.2012
RM’000
Group
31.12.2011
RM’000
1.1.2011
RM’000
31.12.2012
RM’000
Company
31.12.2011
RM’000
1.1.2011
RM’000
67,228
-
-
-
-
-
(5,300)
-
-
-
-
-
61,928
11,229
-
-
-
-
-
73,157
-
-
-
-
-
8.
1.1.2011
RM’000
PAGE
83
NOTES TO THE
(continued)
8.
TRADE AND OTHER RECEIVABLES (continued)
Note
Current
Trade
Trade receivables
Less: Fair value loss
on receivables
Prepayments
8.1
8.2
Non-trade
Other receivables
Prepayments
PAGE
84
8.2
31.12.2012
RM’000
Group
31.12.2011
RM’000
1.1.2011
RM’000
31.12.2012
RM’000
Company
31.12.2011
RM’000
1.1.2011
RM’000
39,480
11,928
17,510
-
-
-
(409)
(1,173)
(2,735)
(3,158)
-
-
-
37,898
3,743
9,193
-
14,352
-
-
-
-
41,641
9,193
14,352
-
-
-
5,775
(1,293)
5,088
(813)
6,061
(886)
1,895
(623)
1,655
(109)
2,838
(220)
4,482
2,425
4,275
2,590
5,175
2,367
1,272
222
1,546
227
2,618
252
6,907
6,865
7,542
1,494
1,773
2,870
48,548
16,058
21,894
1,494
1,773
2,870
121,705
16,058
21,894
1,494
1,773
2,870
8.1 Included in trade receivables of the Group is an amount of RM92,206,904 (31.12.2011: Nil; 1.1.2011: Nil) owing by a receivable that
will be collected over 48 months.
During the year, the Group has written off trade receivables of RM1,993,000 (31.12.2011: RM588,479; 1.1.2011: RM817,092) against
impairment loss.
8.2 Included in prepayments is an amount of RM14,971,963 (31.12.2011: Nil; 1.1.2011: Nil) for future services that was billed in advance
by a supplier. The current portion and non-current portion is RM3,742,991 and RM11,228,972 respectively.
NOTES TO THE
(continued)
9.
AMOUNT DUE FROM/(TO) SUBSIDIARIES
The amount due from/(to) subsidiaries consist of the following:
- Non-trade
- Trade
- Non-trade
31.12.2012
RM’000
Company
31.12.2011
RM’000
1.1.2011
RM’000
62,251
26,622
12,818
(311)
-
(492)
(5,261)
(52)
(5,268)
(311)
(5,753)
(5,320)
Certain inter-company advances bear interest at 4% (31.12.2011: 4%; 1.1.2011: 4%) per annum and repayable on demand.
At cost:
Finished goods - prepaid stock
Finished goods - computer equipment
Finished goods - smart cards and smartcard readers
31.12.2012
RM’000
Group
31.12.2011
RM’000
1.1.2011
RM’000
270
1,538
-
331
-
9
1,808
331
9
11. CASH AND CASH EQUIVALENTS
Current
Deposits with licensed banks
Cash and bank balances
31.12.2012
RM’000
Group
31.12.2011
RM’000
1.1.2011
RM’000
31.12.2012
RM’000
Company
31.12.2011
RM’000
1.1.2011
RM’000
72,723
6,038
127,178
8,204
94,043
8,174
20,487
1,228
65,448
3,910
21,028
4,404
78,761
135,382
102,217
21,715
69,358
25,432
PAGE
Included in cash and bank balances and deposits with licensed banks of the Group is a sum of RM3,054,000 (31.12.2011: RM1,877,000;
1.1.2011: RM3,128,000) restricted and pledged to banks during the year for credit facilities granted to subsidiaries.
10. INVENTORIES
85
NOTES TO THE
(continued)
12. SHARE CAPITAL
Group and Company
Number
Amount
of shares
31.12.2011 31.12.2011
RM’000
’000
Amount
31.12.2012
RM’000
Number
of shares
31.12.2012
’000
Authorised:
Ordinary shares of RM0.20 each
2,000,000
10,000,000
2,000,000
Issued and fully paid:
Ordinary shares of RM0.20 each
155,049
775,245
155,049
Amount
1.1.2011
RM’000
Number
of shares
1.1.2011
’000
10,000,000
2,000,000
10,000,000
775,245
155,049
775,245
Ordinary shares
The holders of ordinary shares are entitled to receive dividends as declared from time to time, and are entitled to one vote per share at
meetings of the Company.
Available-for-sale reserve
The reserve comprises the cumulative net change in the fair value of available-for-sale financial assets until the investments are derecognised
or impaired.
13. NON-CONTROLLING SHAREHOLDERS’ INTERESTS
This consists of the non-controlling shareholders’ proportion of share capital and reserves of subsidiaries.
PAGE
86
14. DEFERRED TAX LIABILITIES
Recognised deferred tax assets/(liabilities)
Deferred tax assets/(liabilities) of the Group are attributable to the following:
Group
31.12.2012
RM’000
Assets
31.12.2011
RM’000
1.1.2011
RM’000
Plant and
equipment
Provisions
239
245
310
(2,837)
-
(1,579)
-
(1,832)
-
(2,837)
239
(1,579)
245
(1,832)
310
Net deferred tax
assets/(liabilities)
239
245
310
(2,837)
(1,579)
(1,832)
(2,598)
(1,334)
(1,522)
31.12.2012
RM’000
Liabilities
31.12.2011
RM’000
1.1.2011
RM’000
Net
31.12.2012 31.12.2011 1.1.2011
RM’000
RM’000 RM’000
NOTES TO THE
(continued)
14. DEFERRED TAX LIABILITIES (continued)
Movement in temporary differences during the year
At
1.1.2011
RM’000
Group
Plant and equipment
Provisions
Recognised
in profit
or loss
(Note 23)
RM’000
At
31.12.2011
RM’000
Recognised
in profit
or loss
At
(Note 23) 31.12.2012
RM’000
RM’000
(1,832)
310
253
(65)
(1,579)
245
(1,258)
(6)
(2,837)
239
(1,522)
188
(1,334)
(1,264)
(2,598)
Unrecognised deferred tax assets
Deferred tax assets have not been recognised in respect of the following items:
Plant and equipment
Provisions
Unabsorbed capital allowances
Unutilised tax losses
Unrecognised deferred tax assets
Group
31.12.2011
RM’000
1.1.2011
RM’000
31.12.2012
RM’000
Company
31.12.2011
RM’000
1.1.2011
RM’000
(9,884)
240
20,517
64,603
(7,017)
776
21,394
54,474
(654)
240
6,285
62,054
3
240
204
43,149
(8)
240
53
41,084
(9)
240
44,704
75,476
69,627
67,925
43,596
41,369
44,935
18,869
17,407
16,981
10,899
10,342
11,234
The unabsorbed capital allowances and unutilised tax losses do not expire under current tax legislation. Deferred tax assets have not been
recognised in respect of these items because it is not probable that future taxable profits will be available against which the Group and the
Company can utilise the benefits. The unabsorbed capital allowances and unutilised tax losses are subject to the agreement of the tax
authorities.
15. REDEEMABLE SECURED LOAN STOCKS (“RSLS”)
Group and Company
31.12.2012 31.12.2011
1.1.2011
RM’000
RM’000
RM’000
-
-
287,760
(24,426)
-
-
263,334
PAGE
RSLS - Nominal Value
Less: Discount
31.12.2012
RM’000
87
NOTES TO THE
(continued)
15. REDEEMABLE SECURED LOAN STOCKS (“RSLS”) (continued)
RM342 million of the RSLS (712,500,000 number of RSLS at RM0.48 each) was issued on 11 June 2009 and matures on 31 December
2015. It bears interest at 2% per annum from the date of issuance until 31 December 2012 and 3% per annum from 1 January 2012 until
maturity. The RSLS was secured against TIME dotCom shares (Note 7).
On 8 August 2011, the Company partially utilised its proceeds from the disposal of investment to fully redeem its outstanding RSLS and
accrued interest totalling RM261,975,000.
16. BORROWING
31.12.2012
RM’000
Group
31.12.2011
RM’000
1.1.2011
RM’000
Non-current
Term loan
48,886
-
-
Current
Term loan
18,500
-
-
67,386
-
-
The term loan is secured, repayable in equal installments over a period of 48 months and subject to interest rate of 1% per annum above
the cost of funds.
The term loan is secured by way of a charge over all monies in a designated Escrow Account maintained by a receivable and a corporate
guarantee by the Company.
PAGE
88
17. DEFERRED INCOME
Note
Non-current
Deferred income
Current
Deferred income
18
31.12.2012
RM’000
Group
31.12.2011
RM’000
1.1.2011
RM’000
12,169
-
-
4,097
-
-
16,266
-
-
The contract pursuant to the supply, delivery, installation, testing, commissioning, maintenance and support of ICT equipment to the local
polytechnics and community colleges undertaken by the Group in 2012 includes the maintenance of equipment for a period of four years
from the date of commissioning. A certain portion of the contract value in relation to the maintenance service is recognised as deferred income
and amortised over the contractual period of 48 months which will end by 2016.
NOTES TO THE
(continued)
18. TRADE AND OTHER PAYABLES
31.12.2012
RM’000
Group
31.12.2011
RM’000
1.1.2011
RM’000
31.12.2012
RM’000
Company
31.12.2011
RM’000
1.1.2011
RM’000
9,755
1,374
1,482
-
-
-
18.1
21,728
13,357
14,527
1,927
2,578
3,249
18.2
188
4,500
-
2,901
-
-
-
2,901
-
8,539
-
-
-
-
-
34,955
13,357
17,428
1,927
2,578
6,150
44,710
14,731
18,910
1,927
2,578
6,150
Note
Trade
Trade payables
Non-trade
Other payables and
accrued expenses
Interest payable
– Borrowing
– RSLS
Provision
Amount due to
non-controlling
interest
18.1 Included in other payables is a deferred income of RM4,097,043 (Note 17) (31.12.2011: Nil; 1.1.2011: Nil) that was billed in advance
to a customer.
18.2 The provision relates to an estimated cost of legal claim arising from an action brought by a sub-contractor.
Group
Sale of goods
Rendering of services
Gross dividend income from:
- Subsidiary company
Company
2012
2011
RM’000
RM’000
2012
RM’000
2011
RM’000
76,367
68,227
5,001
60,339
97
802
-
-
32,671
8,621
144,594
65,340
32,768
9,423
19. REVENUE
PAGE
89
NOTES TO THE
(continued)
20. OTHER OPERATING INCOME
Included in other operating income are the following:
Group
Bad debts recovered
Gain on disposal of plant and equipment
Management fee
Waiver of debts on liquidation of subsidiaries
Reversal of impairment loss on investment in subsidiaries
Reversal of impairment loss:
- Trade receivables
- Other receivables
Company
2012
2011
RM’000
RM’000
2012
RM’000
2011
RM’000
193
-
106
1
-
2,223
4,840
100
1
2,019
-
109
70
151
70
151
21. FINANCE COSTS
Group
Company
2012
2011
RM’000
RM’000
2012
RM’000
2011
RM’000
275
263
1,495
22
-
-
1,495
-
538
1,517
-
1,495
Finance charges/interest expense on:
RSLS
Revolving credit
Interest on borrowing
Others
PAGE
90
NOTES TO THE
(continued)
22. PROFIT BEFORE TAX
Group
Company
2012
2011
RM’000
RM’000
2012
RM’000
2011
RM’000
1,662
1,463
3
2
166
142
58
58
33
8,205
570
-
88
4,177
626
-
540
550
530
1
165
78
4
584
5,000
4
40
-
2,237
19,030
4,500
2,648
21,042
30
-
283
2,740
-
378
2,944
-
3,494
958
75
-
2,727
717
1,264
32
636
449
48
-
513
172
390
734
-
Profit before tax is arrived at after charging:-
33
23
413
(468)
88
56
441
-
Amortisation of intangible assets
Auditors’ remuneration
- Audit fees
KPMG Malaysia
- Non-audit fees
KPMG Malaysia
Depreciation of plant and equipment
Directors’ remuneration
Gain on liquidation of subsidiaries
Impairment loss of
- Trade receivables
- Other receivables
Intangible assets written off
Investments in subsidiaries written off (net of impairment)
Loss on disposal of plant and equipment
Personnel expenses
- Contributions to Employees Provident Fund
- Wages, salaries and others
Plant and equipment written off
Provision for legal claim
Rental of premises payable to:
- Related company
- Others
Rental of site and equipment
Rental of storage and others
Voluntary separation scheme and other related compensation cost
Write off of available-for-sale financial assets
PAGE
91
NOTES TO THE
(continued)
23. TAX EXPENSE
Group
2012
RM’000
2011
RM’000
Company
2012
2011
RM’000
RM’000
Recognised in profit or loss
Current tax expense
- Current year
- Over provision in prior year
2,439
(704)
5,304
(628)
-
-
Total current tax expense
1,735
4,676
-
-
Deferred tax expense
- Current year
- Under provision in prior year
1,195
69
(486)
298
-
-
Total deferred tax expense
1,264
(188)
-
-
Total tax expense
2,999
4,488
-
-
(3,166)
2,999
281
91,126
4,488
295
27,389
-
92,880
-
114
95,909
27,389
92,880
Income tax using Malaysian tax rate of 25% (2011: 25%)
Income not subject to tax
Expenses not deductible for tax purposes
Effect of unrecognised/(recognised) deferred tax assets
29
(59)
2,202
1,462
23,977
(23,035)
3,450
426
Over provision of tax expense in prior year
Under provision of deferred tax expense in prior year
3,634
(704)
69
4,818
(628)
298
-
-
Total tax expense
2,999
4,488
-
-
Reconciliation of effective tax expense
Net (loss)/profit after tax
Total tax expense
Zakat payment
Net profit excluding tax and zakat
PAGE
92
6,847
(9,453)
2,049
557
23,220
(25,189)
2,143
(174)
NOTES TO THE
(continued)
24. BASIC (LOSS)/PROFIT PER ORDINARY SHARE
a)
Basic (loss)/profit per ordinary share
The calculation of basic earnings per share at 31 December 2012 was based on the profit attributable to ordinary shareholders and
the weighted average number of ordinary shares outstanding calculated as follows:
Group
2012
RM’000
(Loss)/Profit for the year attributable to shareholders
2011
RM’000
(7,779)
87,490
Company
2012
2011
RM’000
RM’000
27,389
Group
Weighted average number of ordinary shares at 31 December
2012
’000
2011
’000
775,245
775,245
Company
2012
2011
’000
’000
775,245
Group
Basic (loss)/profit per ordinary share from continuing operations
2012
Sen
2011
Sen
(1.00)
11.29
92,880
775,245
Company
2012
2011
Sen
Sen
3.53
11.98
2012
Final 2011 ordinary
Sen
per share
(net of tax)
Total
amount
RM’000
Date of
payment
3.0
23,257
1 June 2012
1.0
2.0
7,752
15,505
6 July 2011
16 February 2012
2011
Final 2010 ordinary
Interim 2011 ordinary
23,257
After the reporting period, a final dividend in respect of the financial year ended 31 December 2012 of 4.0 sen per ordinary share less tax
at 25% totalling RM23,257,340 (3.0 sen net per ordinary share) was proposed by the Directors. The dividend will be recognised in
subsequent financial period upon approval by the owners of the Company.
25. DIVIDENDS
PAGE
93
NOTES TO THE
(continued)
26. OPERATING SEGMENTS
The Group has two reportable segments, as described below, which represent the Group’s strategic business units. The strategic business
units offer different services and are managed separately because they require different technical expertise and marketing strategies. For
each of the strategic business unit, the Chairman of the Executive Committee reviews internal management report on at least a quarterly
basis. The following summary describes the operations in each of the Group’s reportable segments:
Corporate
The Company is an investment holding company. The segment is in provision of corporate services to the entities within the Group.
Information communication technology
Supply, delivery, installation, testing, commissioning and maintenance of IT hardware, development, management and provision of business
to business (B2B) e-commerce and computerised transaction facilitation services, providing of cybersecurity solutions, managed services,
project fulfilment, assets maintenance and contact centres.
Segment assets
The total of segment assets is measured based on all assets (including goodwill) of a segment, as included in the internal management reports
that are reviewed by the Chairman of the Executive Committee. Segment total assets is used to measure the return of assets of each segment.
Segment liabilities
The total of segment liabilities is measured based on all liabilities of a segment, as included in the internal management reports that are
reviewed by the Chairman of the Executive Committee.
Segment capital expenditure
Segment capital expenditure is the total cost incurred during the financial year to acquire plant and equipment and intangible assets other
than goodwill.
PAGE
94
NOTES TO THE
(continued)
26. OPERATING SEGMENTS (continued)
Information
communication
technology
RM’000
Corporate
RM’000
Revenue from external customers
Inter-segment revenue
144,497
10,825
97
32,671
(43,496)
144,594
-
Total revenue
155,322
32,768
(43,496)
144,594
2012
Business segments
Segment result
Profit/(Loss) from operations
6,154
(8,160)
Eliminations
RM’000
Consolidated
RM’000
-
(2,006)
Finance costs
Interest income
(538)
2,658
Profit before tax
Zakat
Tax expense
114
(281)
(2,999)
Net loss after tax
(3,166)
Attributable to:
(7,779)
4,613
Net loss for the year
(3,166)
Segment assets
232,126
155,533
(145,743)
241,916
Segment liabilities
200,328
2,238
(75,698)
126,868
16,084
9,841
9
26
Capital expenditure
Depreciation and amortisation
-
Geographical segment
No geographical segment information has been prepared as all the business operations of the Group are located in Malaysia.
16,093
9,867
Business segment
PAGE
95
NOTES TO THE
(continued)
26. OPERATING SEGMENTS (continued)
Business segment
Information
communication
technology
RM’000
Corporate
RM’000
Revenue from external customers
Inter-segment revenue
64,538
1,877
802
8,621
(10,498)
65,340
-
Total revenue
66,415
9,423
(10,498)
65,340
Segment result
Profit/(Loss) from operations
11,266
(8,923)
-
2,343
(1,495)
1,131
91,927
-
(1,517)
3,156
91,927
2011
Business segments
Finance costs
Interest income
Gain on disposal of available-for-sale financial assets
(22)
2,025
-
Eliminations
RM’000
Consolidated
RM’000
Profit before tax
Zakat
Tax expense
95,909
(295)
(4,488)
Net profit after tax
91,126
Attributable to:
87,490
3,636
Net profit for the year
91,126
Segment assets
125,155
178,766
(118,240)
185,681
Segment liabilities
52,316
23,925
(43,195)
33,046
Capital expenditure
Depreciation and amortisation
26,193
5,582
28
58
-
Geographical segment
No geographical segment information has been prepared as all the business operations of the Group are located in Malaysia.
PAGE
96
26,221
5,640
NOTES TO THE
(continued)
27. FINANCIAL INSTRUMENTS
Categories of financial instruments
The table below provides an analysis of financial instruments categorised as follows:
(a) Loans and receivables (“L&R”);
(b) Available-for-sale financial assets (“AFS”); and
(c) Other liabilities (“OL”).
Financial assets
Group
31 December 2012
Trade and other receivables (excluding prepayments)
31 December 2011
1 January 2011
Other investments
Company
31 December 2012
Carrying
amount
RM’000
L&R
RM’000
AFS
RM’000
104,308
78,761
104,308
78,761
-
183,069
183,069
-
13,468
135,382
13,468
135,382
-
148,850
148,850
-
497,846
19,527
102,217
19,527
102,217
497,846
-
619,590
121,744
497,846
1,272
62,251
21,715
1,272
62,251
21,715
-
85,238
85,238
-
27.1
PAGE
97
NOTES TO THE
(continued)
27. FINANCIAL INSTRUMENTS (continued)
27.1
Categories of financial instruments (continued)
Carrying
amount
RM’000
L&R
RM’000
AFS
RM’000
1,546
26,622
69,358
1,546
26,622
69,358
-
97,526
97,526
-
497,814
-
497,814
2,618
12,818
25,432
2,618
12,818
25,432
-
538,682
40,868
497,814
Carrying
amount
RM’000
OL
RM’000
Group
31 December 2012
Borrowing
40,613
67,386
40,613
67,386
107,999
107,999
14,731
15,505
14,731
15,505
30,236
30,236
263,334
18,910
263,334
18,910
282,244
282,244
Financial assets
Company
31 December 2011
(excluding prepayments)
1 January 2011
Other investments
(excluding prepayments)
31 December 2011
Dividend payable
PAGE
1 January 2011
Redeemable Secured Loan Stocks (“RSLS”)
98
NOTES TO THE
(continued)
Categories of financial instruments (continued)
Company
31 December 2012
31 December 2011
Dividend payable
1 January 2011
RSLS
27.2
Carrying
amount
RM’000
OL
RM’000
1,927
311
1,927
311
2,238
2,238
2,578
5,753
15,505
2,578
5,753
15,505
23,836
23,836
263,334
6,150
5,320
263,334
6,150
5,320
274,804
274,804
Net gains and losses arising from financial instruments
Group
2012
RM’000
- (reversal) from/recognised in other comprehensive income
- reclassified from equity to profit or loss
2011
RM’000
Company
2012
2011
RM’000
RM’000
-
(259,865)
91,927
-
(259,865)
91,927
-
(167,938)
-
(167,938)
27.1
PAGE
99
NOTES TO THE
(continued)
27.3
Financial risk management
The Group has exposure to the following risks from its use of financial instruments:
•
•
•
27.4
Credit risk
Liquidity risk
Market risk
Credit risk
Credit risk is the risk of a financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual
obligations. The Group’s exposure to credit risk arises principally from its receivables from customers. The Company’s exposure to credit risk
arises principally from loans and advances to subsidiaries and financial guarantees given to banks for credit facilities granted to subsidiaries.
Receivables
Risk management objectives, policies and processes for managing the risk
Management has a credit policy in place and the exposure to credit risk is monitored on an ongoing basis. Normally financial
guarantees given by banks, shareholders or directors of customers are obtained, and credit evaluations are performed on customers
requiring credit over a certain amount.
Exposure to credit risk, credit quality and collateral
As at the end of the reporting period, the maximum exposure to credit risk arising from receivables is represented by the carrying
amounts in the statement of financial position.
Management has taken reasonable steps to ensure that receivables that are neither past due nor impaired are measured at their
realisable values. A significant portion of these receivables are regular customers that have been transacting with the Group. The
Group uses ageing analysis to monitor the credit quality of the receivables. Any receivables having significant balances past due more
than 120 days, which are deemed to have higher credit risk, are monitored individually.
Impairment losses
The ageing of receivables (excluding prepayments) as at the end of the reporting period was:
Group
Not past due
Past due 0 - 30 days
Past due 31 - 120 days
Past due more than 121 days
Net
31.12.2011
RM’000
1.1.2011
RM’000
99,919
2,092
995
1,302
8,368
1,947
747
2,406
10,364
3,990
2,935
2,238
104,308
13,468
19,527
62,251
28,168
15,436
PAGE
31.12.2012
RM’000
100
Company
Not past due
NOTES TO THE
(continued)
27.4
Credit risk (continued)
Receivables (continued)
Impairment losses (continued)
The movements in the allowance for impairment losses of receivables during the financial year were:
31.12.2012
RM’000
At 1 January
Impairment loss recognised
Impairment loss reversed
Impairment loss written off
At 31 December
Group
31.12.2011
RM’000
3,548
1,090
(179)
(1,993)
4,044
243
(151)
(588)
2,466
3,548
1.1.2011
RM’000
7,373
1,185
(3,697)
(817)
4,044
31.12.2012
RM’000
Company
31.12.2011
RM’000
109
584
(70)
-
220
40
(151)
-
623
109
1.1.2011
RM’000
3,890
(3,670)
220
Inter company balances
The Company provides unsecured loans and advances to subsidiaries. The Company monitors the results of the subsidiaries
regularly.
Exposure to credit risk, credit quality and collateral
Loans and advances are only provided to subsidiaries which are wholly owned by the Company.
Impairment losses
As at the end of the reporting period, there was no indication that the loans and advances to the subsidiaries are not recoverable.
The Company does not specifically monitor the ageing of the advances to the subsidiaries. Nevertheless, these advances have been
overdue for less than a year. Non-current loans to subsidiaries are not overdue.
27.5
Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group’s exposure to
liquidity risk arises principally from its various payables, loans and borrowings.
The Group maintains a level of cash and cash equivalents and bank facilities deemed adequate by the management to ensure, as
far as possible, that it will have sufficient liquidity to meet its liabilities when they fall due.
As at the end of the reporting period, the maximum exposure to credit risk is represented by their carrying amounts in the statement
of financial position.
Maturity analysis
PAGE
The table below summarises the maturity profile of the Group’s and the Company’s financial liabilities as at the end of the reporting
period based on undiscounted contractual payments:
101
NOTES TO THE
(continued)
27.5
Liquidity risk (continued)
Group
Carrying
amount
RM’000
Contractual
interest rate
%
Contractual
cash flows
RM’000
Under
1 year
RM’000
1-2
years
RM’000
2-5
years
RM’000
31 December 2012
Borrowing
40,613
67,386
4.70 - 5.08
40,613
67,386
40,613
18,500
18,500
30,386
107,999
59,113
18,500
30,386
14,731
15,505
14,731
15,505
-
-
30,236
30,236
-
-
263,334
18,910
18,910
-
263,334
-
282,244
18,910
-
263,334
1,927
311
1,927
311
-
-
2,238
2,238
-
-
2,578
5,753
15,505
2,578
5,753
15,505
-
-
23,836
23,836
-
-
263,334
6,150
5,320
6,150
5,320
-
263,334
-
274,804
11,470
-
263,334
107,999
31 December 2011
Dividend payable
14,731
15,505
-
30,236
1 January 2011
RSLS
263,334
18,910
-
282,244
PAGE
102
Company
31 December 2012
1,927
311
-
2,238
31 December 2011
Dividend payable
2,578
5,753
15,505
-
23,836
1 January 2011
RSLS
263,334
6,150
5,320
274,804
-
NOTES TO THE
(continued)
Market risk
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and other prices will affect the
Group’s financial position or cash flows.
27.6.1 Foreign currency risk
The Group is exposed to foreign currency risk on bank balance that is denominated in the currency other than the functional
currency, Ringgit Malaysia (RM). The currency giving rise to this risk is primarily US Dollar (USD).
The Group does not have a fixed policy to hedge its sales and purchases via forward contracts. However, the exposure to
foreign currency risk is monitored from time to time by management.
Exposure to foreign currency risk
The Group’s exposure to foreign currency risk, based on carrying amounts as at the end of the reporting period was:
Group
Denominated in
USD
31.12.2012 31.12.2011
RM’000
RM’000
202
239
1.1.2011
RM’000
452
Currency risk sensitivity analysis
A 10% (2011: 10%) strengthening of Ringgit Malaysia against the following currency at the end of the reporting period
would have decreased post-tax profit or loss by the amounts shown below. This analysis assumes that all other variables,
in particular interest rates, remained constant and ignores any impact of forecasted sales and purchases.
Profit or loss
2012
2011
RM’000
RM’000
USD
(15)
(18)
A 10% (2011: 10%) weakening of Ringgit Malaysia against the above currency at the end of the reporting period would
have had equal but opposite effect on the above currency to the amounts shown above, on the basis that all other variables
remained constant.
27.6
PAGE
103
NOTES TO THE
(continued)
27.6
Market risk (continued)
27.6.2 Interest rate risk
The Group’s and the Company’s significant interest-bearing financial assets and financial liabilities are mainly its deposit
placements and borrowing.
The deposit placements as of financial position date are short term and therefore exposure to the effects of future changes
in prevailing level of interest rates is limited.
Effective interest rates and repricing analysis
In respect of interest-earning financial assets and interest-bearing financial liabilities, the following table indicates their
effective interest rates as at the end of the reporting period and the periods in which they reprice or mature, whichever is
earlier.
Effective
interest
rate p.a.
%
Total
RM’000
Within
1 year
RM’000
1-5
years
RM’000
31 December 2012
Fixed rate instruments
Deposits placed with licensed banks
2.40 - 3.30
72,723
72,723
-
Floating rate instruments
Borrowing
4.70 - 5.08
(67,386)
(18,500)
(48,886)
5,337
54,223
(48,886)
Group
PAGE
104
31 December 2011
2.53 - 3.25
127,178
127,178
1 January 2011
RSLS
4.80
1.95 - 2.90
(263,334)
94,043
94,043
(263,334)
-
(169,291)
94,043
(263,334)
-
NOTES TO THE
(continued)
Market risk (continued)
27.6.2 Interest rate risk (continued)
Effective
interest
rate p.a.
%
Total
RM’000
Within
1 year
RM’000
1-5
years
RM’000
31 December 2012
2.50 - 3.30
20,487
20,487
-
31 December 2011
2.40 - 3.25
65,448
65,448
-
1 January 2011
RSLS
4.80
2.00 - 2.85
(263,334)
21,028
21,028
(263,334)
-
(242,306)
21,028
(263,334)
Company
Fair value sensitivity analysis for fixed rate instruments
The Group does not account for any fixed rate financial assets and liabilities at fair value through profit or loss, and the Group
does not designate derivatives as hedging instruments under a fair value hedged accounting model. Therefore, a change
in interest rates at the end of the reporting period would not affect profit or loss.
27.6.3 Other price risk
Equity price risk arises from the Group’s investments in equity securities.
Management of the Group monitors the equity investments on a portfolio basis. Material investments within the portfolio
are managed on an individual basis and all buy and sell decisions are approved by the Board of Directors.
Equity price risk sensitivity analysis
Arising from the disposal of the Group’s equity instruments in 2011 the Group does not have investments in equity securities
at the end of the reporting date.
27.6
PAGE
105
NOTES TO THE
(continued)
27.7
Fair value of financial instruments
The fair values of quoted securities are their quoted market prices at the end of the reporting period. The fair values of other
investments are disclosed in Note 7.
The carrying amounts of short term receivables and payables and cash and cash equivalents approximate fair values due to the
relatively short term nature of these financial instruments.
In the previous financial year, it was not practicable to estimate the fair value of the Group’s and the Company’s RSLS due to the
lack of comparable quoted market prices and the inability to estimate fair value without incurring excessive costs. The Directors
estimate the market interest rate for a comparable instrument to be approximately 4% to 8% per annum.
The fair values of other non-current financial assets and borrowing, together with the carrying amounts shown in the statement of
financial position, are as follows:
Group
Note
Trade receivables
Borrowing
8
31.12.2012
Carrying
Fair
amount
value
RM’000
RM’000
67,228
(48,886)
61,928
(48,886)
31.12.2011
Carrying
Fair
amount
value
RM’000
RM’000
-
-
1.1.2011
Carrying
Fair
amount
value
RM’000
RM’000
-
-
For non-current financial assets of RM67,228,000, it was not practicable to estimate the fair value of the Group’s receivables due
to the lack of comparable quoted market prices and the inability to estimate fair value without incurring excessive costs. The Directors
estimate the market interest rate for a comparable instrument to be approximately 3% to 4% per annum.
27.7.1 Fair value hierarchy
PAGE
106
Fair values recognised in the statement of financial position are measured using the following fair value hierarchy:
Group
Available-for-sale equity
securities
31.12.2012
Carrying
amount
Level 1
RM’000
RM’000
-
-
31.12.2011
Carrying
amount
Level 1
RM’000
RM’000
-
-
1.1.2011
Carrying
amount
Level 1
RM’000
RM’000
497,814
497,814
28. CAPITAL MANAGEMENT
The Group’s objectives when managing capital is to maintain a strong capital base and safeguard the Group’s ability to continue as a going
concern, so as to maintain investor, creditor and market confidence and to sustain future development of the business. The Directors monitor
and are determined to maintain an optimal debt-to-equity ratio that complies with debt covenants and regulatory requirements.
NOTES TO THE
(continued)
28. CAPITAL MANAGEMENT (continued)
The debt-to-equity ratios are as follows:
31.12.2012
RM’000
Group
31.12.2011
RM’000
1.1.2011
RM’000
Total borrowing
Less: Cash and cash equivalents (Note 11)
67,386
(78,761)
-
263,334
(102,217)
Net (cash)/debt
(11,375)
-
161,117
Total equity
115,048
-
348,110
-
0.46
Debt-to-equity ratio
(0.09)
There were no changes in the Group’s approach to capital management during the financial year.
Under the requirement of Bursa Malaysia Practice Note No. 17/2005, the Company is required to maintain a consolidated shareholders’
equity equal to or not less than the 25 percent of the issued and paid-up capital (excluding treasury shares) and such shareholders’ equity
is not less than RM40 million. The Company has complied with this requirement.
Capital commitments:
Plant and equipment
Authorised and contracted for Within one year
31.12.2012
RM’000
Group
31.12.2011
RM’000
1.1.2011
RM’000
138
389
7
30. RELATED PARTIES
Identity of related parties
For the purposes of these financial statements, parties are considered to be related to the Group if the Group or the Company has the ability,
directly or indirectly, to control the party or exercise significant influence over the party in making financial and operating decisions, or vice
versa, or where the Group or the Company and the party are subject to common control or common significant influence. Related parties
may be individuals or other entities.
PAGE
Key management personnel are defined as those persons having authority and responsibility for planning, directing and controlling the
activities of the Group either directly or indirectly. The key management personnel include all the Directors of the Group, and certain members
of senior management of the Group.
29. COMMITMENTS
107
NOTES TO THE
(continued)
30. RELATED PARTIES (continued)
Identity of related parties (continued)
The significant related party transactions of the Group and the Company are as follows:
Group
2012
RM’000
2011
RM’000
-
-
Subsidiary companies
Management fee income
Dividend income
Rental of premises
Facilities services
Purchase of IT products and services
Related companies
Sale of IT products & services
Management fee
Purchase of access system
Other related parties*
Lease line, phone and utilities charges
Maintenance and facility charges
Payment for multimedia and ISDN
Insurance
*
PAGE
108
Company
2012
2011
RM’000
RM’000
2,223
32,671
(636)
(369)
(288)
2,019
8,621
513
447
(424)
1,442
(264)
-
74
(264)
(99)
(264)
-
(264)
(99)
(976)
(1,361)
(327)
(291)
(63)
(1,365)
(895)
(154)
(75)
(160)
(63)
(126)
The related parties and the Group are subject to common significant influence.
The terms and conditions for the above transactions are based on negotiated basis. Significant related party balances of the Group and the
Company are disclosed in Note 9.
Other key management personnel comprise persons other than the Directors of Group entities, having authority and responsibility for
planning, directing and controlling the activities of the entity either directly or indirectly.
In addition to their salaries, the Group also voluntarily provided additional Employees Provident Fund (EPF) contributions over the statutory
requirement for a significant number of employees.
There are no significant related party transactions of the Group and the Company and its key management personnel of the Group and
holding company, other than key management personnel compensation as disclosed below:
NOTES TO THE
(continued)
30. RELATED PARTIES (continued)
Identity of related parties (continued)
Group
Company
2012
2011
RM’000
RM’000
2012
RM’000
2011
RM’000
Non-executive Directors
- Fees
- Remuneration
494
76
509
117
365
48
365
76
Total short-term employee benefits
570
626
413
441
3,682
2,475
1,330
827
535
479
458
666
189
137
194
333
4,696
3,599
1,656
1,354
5,266
4,225
2,069
1,795
Key management personnel compensation
Other key management personnel
- Remuneration
- Short-term employee benefits
- EPF
- Others
Total short-term employee benefits
31. CONTINGENT LIABILITY
32. EXPLANATION OF TRANSITION TO MFRSS
As stated in Note 1(a), these are the first financial statements of the Group and of the Company prepared in accordance with MFRSs.
The accounting policies set out in Note 2 have been applied in preparing the financial statements of the Group and of the Company for the
year ended 31 December 2012, the comparative information presented in these financial statements for the year ended 31 December 2011
and in the preparation of the opening MFRS statement of financial position at 1 January 2011 (the Group’s date of transition to MFRSs).
The transition to MFRSs does not have financial impact to the financial statements of the Group and of the Company.
The Company provided a corporate guarantee to a bank in relation to a term loan obtained by a subsidiary company.
PAGE
109
NOTES TO THE
(continued)
33. SUPPLEMENTARY INFORMATION ON THE BREAKDOWN OF REALISED AND UNREALISED PROFITS OR LOSSES
On 25 March 2010, Bursa Malaysia Securities Berhad (“Bursa Malaysia”) issued a directive to all listed issuers pursuant to Paragraphs 2.06
and 2.23 of Bursa Malaysia Main Market Listing Requirements. The directive requires all listed issuers to disclose the breakdown of the
unappropriated profits or accumulated losses as at the end of the reporting period, into realised and unrealised profits or losses.
On 20 December 2010, Bursa Malaysia further issued another directive on the disclosure and the prescribed format of presentation.
The breakdown of the retained earnings of the Group and of the Company as at 31 December 2012, into realised and unrealised profits,
pursuant to the directive, is as follows:
Group
2012
RM’000
Total retained earnings of the Company and its subsidiaries:
- realised
- unrealised
2011
RM’000
Company
2012
2011
RM’000
RM’000
(21,131)
(7,374)
9,504
(1,522)
(1,754)
-
(5,886)
-
(28,505)
7,982
(1,754)
(5,886)
Less: Consolidation adjustments
(23,341)
(28,792)
Total accumulated losses
(51,846)
(20,810)
(1,754)
(5,886)
The determination of realised and unrealised profits is based on the Guidance of Special Matter No.1, Determination of Realised and
Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, issued by
Malaysian Institute of Accountants on 20 December 2010.
PAGE
110
STATEMENT
BY DIRECTORS
pursuant to Section 169(15)
of the Companies Act, 1965
In the opinion of the Directors, the financial statements set out on pages 56 to 109 are drawn up in accordance with Malaysian Financial Reporting
Standards, International Financial Reporting Standards and the requirements of the Companies Act, 1965 in Malaysia so as to give a true and
fair view of the financial position of the Group and of the Company as of 31 December 2012 and of their financial performance and cash flows
for the year then ended.
In the opinion of the Directors, the information set out in Note 33 to the financial statements has been compiled in accordance with the Guidance
on Special Matter No.1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosures Pursuant to Bursa Malaysia
Securities Berhad Listing Requirements, issued by the Malaysian Institute of Accountants, and presented based on the format prescribed by Bursa
Malaysia Securities Berhad.
Signed on behalf of the Board of Directors in accordance with a resolution of the Directors:
Haji Abdullah Yusof
Kuala Lumpur,
STATUTORY
DECLARATION
I, Lim Kek Siang, the Officer primarily responsible for the financial management of TIME Engineering Berhad, do solemnly and sincerely declare
that the financial statements set out on pages 56 to 110 are, to the best of my knowledge and belief, correct and I make this solemn declaration
conscientiously believing the same to be true, and by virtue of the provisions of the Statutory Declarations Act, 1960.
Subscribed and solemnly declared by the abovenamed in Kuala Lumpur on 28 February 2013.
Lim Kek Siang
Before me:
PAGE
Fauzilawati Binti Ishak
License No.: W 561
Commissioner of Oaths
Kuala Lumpur
pursuant to Section 169(16)
of the Companies Act, 1965
111
INDEPENDENT
AUDITORS’ REPORT
to the members of
Report on the Financial Statements
We have audited the financial statements of TIME Engineering Berhad, which comprise the statements of financial position as at 31 December
2012 of the Group and of the Company, and the statements of profit or loss and other comprehensive income, changes in equity and cash flows
of the Group and of the Company for the year then ended, and a summary of significant accounting policies and other explanatory information,
as set out on pages 56 to 109.
Directors’ Responsibility for the Financial Statements
The Directors of the Company are responsible for the preparation of financial statements so as to give a true and fair view in accordance with
Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act, 1965 in
Malaysia. The Directors are also responsible for such internal control as the Directors determine is necessary to enable the preparation of financial
statements that are free from material misstatement, whether due to fraud or error.
Auditors’ Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with approved
standards on auditing in Malaysia. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures
selected depend on our judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to
fraud or error. In making those risk assessments, we consider internal control relevant to the entity’s preparation of the financial statements that
give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and
the reasonableness of accounting estimates made by the Directors, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
PAGE
112
In our opinion, the financial statements have been properly drawn up in accordance with Malaysian Financial Reporting Standards, International
Financial Reporting Standards and the requirements of the Companies Act, 1965 in Malaysia so as to give a true and fair view of the financial
position of the Group and of the Company as of 31 December 2012 and of their financial performance and cash flows for the year then ended.
Report on Other Legal and Regulatory Requirements
In accordance with the requirements of the Companies Act, 1965 in Malaysia, we also report the following:
a)
In our opinion, the accounting and other records and the registers required by the Act to be kept by the Company and its subsidiaries have
been properly kept in accordance with the provisions of the Act.
b)
We are satisfied that the accounts of the subsidiaries that have been consolidated with the Company’s financial statements are in form and
content appropriate for the purposes of the preparation of the financial statements of the Group and we have received satisfactory information
and explanations required by us for those purposes.
c)
Our audit reports on the accounts of the subsidiaries did not contain any qualification or any adverse comment made under Section 174(3)
of the Act.
INDEPENDENT
AUDITORS’ REPORT
to the members of
Other Reporting Responsibilities
Our audit was made for the purpose of forming an opinion on the financial statements taken as a whole. The information set out in Note 33 to
the financial statements has been compiled by the Company as required by the Bursa Malaysia Securities Berhad Listing Requirements and is
not required by the Malaysian Financial Reporting Standards or International Financial Reporting Standards. We have extended our audit
procedures to report on the process of compilation of such information. In our opinion, the information has been properly compiled, in all material
respects, in accordance with the Guidance of Special Matter No.1, Determination of Realised and Unrealised Profits or Losses in the Context of
Disclosures Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, issued by the Malaysian Institute of Accountants and presented
based on the format prescribed by Bursa Malaysia Securities Berhad.
Other Matters
This report is made solely to the members of the Company, as a body, in accordance with Section 174 of the Companies Act, 1965 in Malaysia
and for no other purpose. We do not assume responsibility to any other person for the content of this report.
KPMG
Firm Number: AF 0758
Chartered Accountants
Mok Wan Kong
Approval Number: 2877/12/14(J)
Chartered Accountant
Petaling Jaya,
PAGE
113
ANALYSIS OF
SHAREHOLDINGS
as at 30 April 2013
Authorised Share Capital
Issued and Fully Paid
Class of Shares
No. of Shareholders
Voting Right
:
:
:
:
:
RM2,000,000,000.00
RM155,048,937
Ordinary Shares of RM0.20 each
23,000
1 vote per Ordinary Share
ANALYSIS BY SIZES
Category
Less than 100 shares
100 to 1,000 shares
1,001 to 10,000 shares
10,001 to 100,000 shares
100,001 to less than 5% of issued shares
No. of Shareholders
Malaysian
Foreign
Percentage (%)
Malaysian
Foreign
486
3
7,653
20
0.00
0.00
4,908
61
4,635,819
59,036
0.60
0.01
11,595
216
57,122,975
1,137,533
7.37
0.15
4,985
135
165,050,578
5,227,800
21.29
0.67
574
36
177,414,931
15,475,607
22.88
2.00
1
0
349,112,731
0
45.03
0.00
22,549
451
753,344,687
21,899,996
97.17
2.83
Percentage
No. of
(%) Shareholders
Percentage
(%)
5% and above of issued shares
TOTAL
No. of Shares
Malaysian
Foreign
CLASSIFICATION OF SHAREHOLDERS
Category
No. of Shares
PAGE
114
Individuals
Nominee Companies
Industrial & Commercial Companies
Government Agencies
Banks/ Finance Companies
Foundation/ Investment Trusts/ Charities
TOTAL
310,178,909
100,899,536
12,741,007
349,226,731
1,252,500
946,000
40.01
13.02
1.64
45.05
0.16
0.12
19,909
2,920
143
4
16
8
86.56
12.70
0.62
0.02
0.07
0.03
775,244,683
100.00
23,000
100.00
No. of Shares
(Direct Interest)
Percentage
(%)
5,000
Negligible
DIRECTORS’ INTERESTS IN SHARES IN THE COMPANY
Name of Director
Datuk Haji Mohd Khalil bin Dato’ Haji Mohd Noor
ANALYSIS OF
SHAREHOLDINGS
as at 30 April 2013
(continued)
30 LARGEST SHAREHOLDERS AS AT 30 APRIL 2013
Name of Shareholders
1.
2.
3.
4.
5.
Tan Tiam Yee
Yeo Ann Seck
Wong Ah Chai
Cimsec Nominees (Tempatan) Sdn Bhd
- Pledged Securities Account For Tan Eng @ Tan Chin Huat
Apollo Food Holdings Berhad
SJ Sec Nominees (Tempatan) Sdn Bhd
- Pledged Securities Account For Seo Cheng Gaok
Tiong Ngee Min
Rescom International Limited
RHB Capital Nominees (Tempatan) Sdn Bhd
- Pledged Securities Account For Sor Ah Kee
Liang Chiang Heng
- CIMB Bank Berhad For Ng Chai Hock
Cartaban Nominees (Tempatan) Sdn Bhd
- DBS Vickers (Hong Kong) Limited For Teh Hong Eng
Yap Soo Yuet
Liew Fook Loy
Lim Lee Khen
Tang Chi Hoong Darren
Tan Siok Hoay @ Chen Chuan Liang
Cheah Song Kang @ Chiah Jee Ba
SAP Malaysia Sdn Bhd
Ng Teng Song
Tan Bee Huat
TA Nominees (Tempatan) Sdn Bhd
- Pledged Securities Account For Oh Kim Sun
- CIMB Bank Berhad For S.M Faisal Bin S.M Nasimuddin Kamal
Public Nominees (Tempatan) Sdn Bhd
- Pledged Securities Account For Oo Teck Yeon
Tan Ah Chong
HLB Nominees (Tempatan) Sdn Bhd
- Pledged Securities Account For Ang Piang Kok
ECML Nominees (Tempatan) Sdn. Bhd
- Pledged Securities Account For Ang Piang Kok
Chong Kok Lin
Nurul Jasminah Jaya Binti Abdullah
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
22.
23.
24.
25.
26.
27.
28.
29.
30.
TOTAL
No. of Shares
Percentage (%)
No
349,112,731
3,675,000
2,300,000
2,150,000
2,150,000
45.03
0.47
0.30
0.28
0.28
1.
2.
3.
4.
5.
2,000,000
2,000,000
0.26
0.26
6.
7.
1,998,000
1,583,000
1,490,000
0.26
0.20
0.19
8.
9.
10
1,443,700
1,320,000
0.19
0.17
11
12
1,300,000
0.17
13
1,250,000
1,200,000
1,191,000
1,174,500
1,150,000
1,040,000
1,021,331
1,012,000
1,008,000
1,000,000
0.16
0.15
0.15
0.15
0.15
0.13
0.13
0.13
0.13
0.13
14
15
16
17
18
19
20
21
22
23
1,000,000
0.13
1,000,000
0.13
1,000,000
1,000,000
0.13
0.13
1,000,000
0.13
994,600
960,000
0.13
0.12
390,523,862
50.37
No
30
24
25
26
27
28
29
30
SUBSTANTIAL SHAREHOLDER AS PER THE REGISTER OF SUBSTANTIAL SHAREHOLDERS, EXCLUDING BARE TRUSTEES AS AT 30
APRIL 2013
PAGE
SU
AP
No
Name of Shareholders
115
No
1.
No. of Shares (Direct Interest)
Percentage (%)
349,112,731
45.03
1.
NOTICE OF FORTY THIRD
ANNUAL GENERAL MEETING
NOTICE IS HEREBY GIVEN that the Forty Third Annual General Meeting (“43rd AGM”) of Members of TIME Engineering Berhad will be held
at the Ballroom 1, Level 1, Sime Darby Convention Centre, 1A, Jalan Bukit Kiara 1, 60000 Kuala Lumpur on Wednesday, 19 June 2013
at 10.30 am for the purpose of transacting the following businesses:AGENDA
1.
To receive the Audited Financial Statements for the financial year ended 31 December 2012 together with the
reports of the Directors and Auditors thereon.
AS ORDINARY BUSINESS
2.
To approve the payment of final gross dividend of 4.0 sen, less tax of 25% (net dividend of 3.0 sen) per ordinary
share for the financial year ended 31 December 2012 as recommended by the Directors.
Resolution 1
3.
To re-elect Haji Zaiviji Ismail Abdullah who retires in accordance with Article 99 of the Company’s Articles of
Association and who being eligible offers himself for re-election.
Resolution 2
4.
To re-elect Puan Elakumari Kantilal who retires by rotation in accordance with Article 94 of the Company’s Articles
of Association and who being eligible offers herself for re-election.
Resolution 3
5.
To separately re-appoint each of the following persons, who retires pursuant to Section 129(2) of the Companies
Act 1965 as a Director of the Company to hold office until the conclusion of the next Annual General Meeting of
the Company and each of whom shall continue to serve as an Independent Non-Executive Director of the Company
notwithstanding that he has exceeded a cumulative term of nine (9) years as a Director of the Company, as
recommended by the Malaysian Code on Corporate Governance 2012, and based on the justification provided in
the Explanatory Note to the Notice of this Annual General Meeting:-
(i) Datuk Haji Mohd Khalil Dato’ Haji Mohd Noor
(ii) Haji Abdullah Yusof
Special Resolution 1
6.
To approve the payment of Directors’ Fees for the financial year ending 31 December 2013 on a quarterly basis
after the end of each quarter.
Resolution 4
7.
To re-appoint Messrs KPMG as Auditors of the Company for the financial year ending 31 December 2013 and to
authorise the Board of Directors to determine their remuneration.
Resolution 5
8.
To transact any other business of which due notice shall have been given in accordance with the Companies Act
1965 and the Company’s Articles of Association.
FURTHER NOTICE IS HEREBY GIVEN THAT for the purpose of determining a member who shall be entitled to attend this 43rd AGM, the
Company shall be requesting Bursa Malaysia Depository Sdn Bhd in accordance with Article 55(b) of the Company’s Articles of Association and
Section 34(1) of the Securities Industry (Central Depositories) Act 1991, to issue a General Meeting Record of Depositors as at 11 June 2013.
Only a depositor whose name appears on the Record of Depositors as at 11 June 2013 shall be entitled to attend the said meeting or appoint
proxies to attend and/or vote on his/her behalf.
NOTICE OF DIVIDEND ENTITLEMENT AND PAYMENT
PAGE
116
NOTICE IS ALSO HEREBY GIVEN THAT subject to the approval of the shareholders for the payment of final gross dividend of 4.0 sen, less tax
of 25% (net dividend of 3.0 sen) per ordinary share in respect of the financial year ended 31 December 2012, the final dividend will be paid on
12 July 2013 to the shareholders registered in the Record of Depositors at the close of business on 20 June 2013.
(continued)
Shareholders of the Company will only be entitled to the final dividend in respect of:(a) securities transferred into their securities account before 4.00 pm on 20 June 2013 in respect of ordinary transfers; and
(b) securities bought on Bursa Malaysia Securities Berhad on a cum entitlement basis according to the Rules of Bursa Malaysia Securities
Berhad.
By Order of the Board
SAPIAH JAMALUDIN, MAICSA 0807355
KEH CHING TYNG, MAICSA 7050134
Company Secretaries
Kuala Lumpur
23 May 2013
1.
A proxy may but need not be a member of the Company and the provisions of Section 149(1)(b) of the Companies Act 1965 shall not apply
to the Company.
2.
The Proxy Form must be signed by the appointer or his attorney duly authorised in writing; and in the case of a corporation shall be either
under its common seal or signed by its attorney or by an officer on behalf of the corporation.
3.
A member of the Company holding 1,000 shares or less in the Company shall be entitled to appoint one (1) proxy to attend and vote at the
same meeting. A member holding more than 1,000 shares in the Company shall be entitled to appoint a maximum of two (2) proxies to attend
and vote at the same meeting and such appointment shall be invalid unless the member specifies the proportion of his/her shareholding to
be represented by each proxy.
4.
Where a member of the Company is an authorised nominee as defined under the Securities Industry (Central Depositories) Act 1991, it may
appoint at least one (1) proxy but not more than two (2) proxies in respect of each securities account it holds which is credited with ordinary
shares of the Company. The appointment of two (2) proxies in respect of any particular securities account shall be invalid unless the
authorised nominee specifies the proportion of its shareholding to be represented by each proxy.
5.
Where a member is an Exempt Authorised Nominee (“EAN”) as defined under the Securities Industry (Central Depositories) Act 1991 which
holds ordinary shares in the Company for multiple beneficial owners in one securities account (omnibus account), there is no limit to the
number of proxies which the EAN may appoint in respect of each omnibus account it holds.
6.
In the event the Member duly executes the Proxy Form but does not name any proxy, such Member shall be deemed to have appointed the
Chairman of the meeting as his proxy.
7.
Any alterations in the Proxy Form must be initialed. The Proxy Form duly completed must be deposited at the Company’s Share Registrar’s
Office, Mega Corporate Services Sdn Bhd at Level 15-2, Bangunan Faber Imperial Court, Jalan Sultan Ismail, 50250 Kuala Lumpur not less
than twenty four (24) hours before the time fixed for holding the Meeting or any adjournment thereof in the following manner:•
•
PAGE
By hand and post; and
By facsimile at 03-27325388 and to follow-up with the original Proxy Form, which the original form must also be deposited at the said
Company’s Share Registrar’s Office not less than the said 24 hours.
NOTES RELATING TO PROXY
117
(continued)
NOTES TO THE AGENDA
Agenda 1
This agenda item is meant for discussion only as the provisions of Section 169(1) of the Companies Act 1965 do not require shareholders to
approve annual audited financial statements and hence it is not put forward for voting.
Agenda 5
The re-appointment of Datuk Haji Mohd Khalil Dato’ Haji Mohd Noor and Tuan Haji Abdullah Yusof, the Board Chairman and the Audit Committee
Chairman respectively who have attained the age of 70 years to hold office as Independent Non-Executive Directors until the conclusion of the
next AGM of the Company shall take effect if the Proposed Special Resolutions 1 and 2 have been passed by a majority of not less than threefourths (3/4) of such members as being entitled to vote in person or where proxies are allowed, by proxy, at the 43rd AGM.
Due to the impending Divestment Plan as announced by Khazanah Nasional Berhad, the major shareholder of the Company, on 17 December
2012, the Board of Directors had decided that the Board Chairman and the Audit Committee Chairman shall continue in office and serve on the
Board of the Company as Independent Non-Executive Directors notwithstanding that they have exceeded the nine (9) years term limit under the
Recommendation 3.2 of the Malaysian Code on Corporate Governance 2012. This would allow the Board Chairman and the Audit Committee
Chairman to see to the Divestment Plan and ensure a smooth transition to the new Independent Directors who would be appointed after the
completion of the Divestment Plan.
Agenda 6
The Proposed Resolution 4 is intended to seek mandate from the shareholders to allow the Company to pay Directors’ Fees to the Non-Executive
Directors on a quarterly basis after the end of each quarter. The Directors’ Fees for the Non-Executive Directors are based on the existing rates
as approved by the shareholders during the 38th AGM held on 18 June 2008.
EXPLANATORY NOTES ON VOTING PROCEDURES
1.
2.
3.
4.
Pursuant to Article 63 of the Company’s Articles of Association, voting in respect of Resolutions 1 to 5, Special Resolutions 1 and 2 will be
a show of hands unless a poll is (before or on the declaration of the result of the show of hands) demanded by either:
•
the Chairman (being a person entitled to vote); or
•
not less than two (2) members present in person or by proxy and entitled to vote; or
•
a member present in person or by proxy and representing not less than one-tenth of the total voting rights of all the members having
the right to vote at the meeting; or
•
a member present in person or by proxy and holding shares in the Company conferring a right to vote at the meeting being shares on
which an aggregate sum has been paid up equal to not less than one-tenth of the total sum paid up on all the shares conferring that
right.
In accordance with Article 69 of the Company’s Articles of Association, the votes of members are calculated based on the voting method
where on a show of hands every person present who is a member or proxy of a member shall have one (1) vote, and on a poll every member
who is present or by proxy shall have one (1) vote for every share of which he is a holder.
Special Resolutions 1 and 2 shall be passed with a majority vote of not less than three-fourth (3/4) of such members as being entitled to
vote in person or by proxy.
A declaration by the Chairman of the Meeting that a resolution has on a show of hands or on a poll been carried either unanimously or by
a particular majority shall be conclusive evidence of the passing of the resolution. In the case of an equality of votes, whether on a show of
hands or on a poll, Article 66 of the Company’s Articles of Association provides that the Chairman of the Meeting at which the show of hands
takes place or at which the poll is demanded shall be entitled to a second or casting vote.
ABSTENTION FROM VOTING
PAGE
118
Datuk Haji Mohd Khalil Dato’ Haji Mohd Noor who is a shareholder of the Company will abstain from voting on Special Resolution 1 and Ordinary
Resolution 4 at the 43rd AGM.
STATEMENT ACCOMPANYING NOTICE
OF FORTY THIRD ANNUAL GENERAL
MEETING
Pursuant to Paragraph 8.27(2) of the Main
Market Listing Requirements of Bursa
Malaysia Securities Berhad
(I)
DETAILS OF INDIVIDUALS WHO ARE STANDING FOR ELECTION AS DIRECTORS
There is no individual standing for election as directors (excluding directors standing for re-election) at the 43rd AGM of the Company.
(II) DIRECTORS WHO ARE STANDING FOR RE-ELECTION OR RE-APPOINTMENT AT THE 43RD AGM OF THE COMPANY
The Director appointed during the financial year 2012, who retires in accordance with Article 99 of the Company’s Articles of Association
is:•
Haji Zaiviji Ismail Abdullah
The Director retiring and standing for re-election pursuant to Article 94 of the Company’s Articles of Association is:•
Puan Elakumari Kantilal
Directors who are over the age of 70 and standing for re-appointment pursuant to Section 129(2) of the Companies Act, 1965 are as follows:•
•
Haji Abdullah Yusof
The profiles of the above-named Directors are set out on pages 28 and 29 of this Annual Report. The interest in the securities of the Company
held by Datuk Haji Mohd Khalil Dato’ Haji Mohd Noor as at 30 April 2013 is set out in the Analysis of Shareholdings.
(III) DETAILS OF ATTENDANCE OF DIRECTORS AT BOARD MEETINGS
Six (6) Board Meetings were held during the financial year ended 31 December 2012. Details of attendance of the Directors at Board
Meetings are set out in the Corporate Governance Statement.
PAGE
119
ADMINISTRATIVE
DETAILS
Date
Time
Venue
19 June 2013
10.30 am
Ballroom 1, Level 1, Sime Darby Convention Centre,
1A, Jalan Bukit Kiara 1, 60000 Kuala Lumpur
REGISTRATION
1.
Registration starts from 8.30 am to 10.30 am.
2.
Please read the signage to ascertain where you should register
yourself for the meeting and join the queue accordingly.
3.
Please produce your original Identity Card (IC) to the registration
staff for verification.
4.
After the verification, you are required to write your name and sign
on the Attendance List placed on the Registration table.
If you have submitted your Form of Proxy prior to the meeting and
subsequently decided to attend the meeting yourself, please
proceed to the Help Desk to revoke the appointment of your proxy.
3.
If you wish to submit your Form of Proxy by fax, please fax to the
Company’s Share Registrar’s office, Mega Corporate Services Sdn
Bhd at Fax No. 03-2732 5388/03-2732 5399. Please also ensure
that the original Form of Proxy is deposited at the Company’s
Share Registrar’s office not less than 24 hours before the time
appointed for holding the meeting.
ANNUAL REPORT 2012
5.
You will also be given an identification tag. No person will be
allowed to enter the meeting room without the identification tag.
There will be no replacement in the event that you lose or misplace
the identification tag.
1.
The Annual Report 2012 is available on the Company’s website at
www.teb.com.my under Investor Relations and Bursa Malaysia’s
website
at
www.bursamalaysia.com
under
Company
Announcements.
6.
No person will be allowed to register on behalf of another person
even with the original IC of that other person.
2.
7.
The registration counter will handle only verification of identity and
registration. If you have any clarification or enquiry, please proceed
to the Help Desk.
If you wish to request for printed copy of the Annual Report 2012,
please forward your request by completing the Request Form
provided by us. We will send to you by ordinary post within four (4)
market days from the date of receipt of the Request Form.
HELP DESK
PAGE
120
2.
ENQUIRY
1.
Please proceed to Help Desk for any clarification or enquiry.
If you have any enquiry prior to the meeting, please contact the
following persons during office hours or e-mail us at
secretarial@teb.com.my :
2.
The Help Desk will also handle revocation of proxy’s appointment.
1.
GENERAL MEETING RECORD OF DEPOSITORS
For the purpose of determining a member who shall be entitled to
attend the 43rd AGM, the Company shall be requesting Bursa Malaysia
Depository Sdn. Bhd. in accordance with Article 55(b) of the
Company’s Articles of Association and Section 34(1) of the Securities
Industry (Central Depositories) Act, 1991 to issue a General Meeting
Record of Depositors as at 11 June 2013. Only the depositor whose
name appears in the Record of Depositors as at 11 June 2013 shall be
entitled to attend the said meeting or appoint proxies to attend and/or
vote on his/her behalf.
PROXY
1.
A member entitled to attend and vote is entitled to appoint
proxy/proxies, to attend and vote instead of him. If you are unable
to attend the meeting and wish to appoint a proxy to vote on your
behalf, please submit your Form of Proxy in accordance with the
notes and instructions printed therein.
2.
Tower 3, Avenue 5
59200 Kuala Lumpur
Telephone Number
Fax Number
03-2730 0300
03-2713 3131 / 03-2713 2660
(i)
03-2730 0432
Noryusnaidah Yusof
Jalan Sultan Ismail
50250 Kuala Lumpur
Telephone Number
Fax Number
(i) Zakaria Ali
(ii) Alfred John
03-2692 4271
03-2732 5399/
03-2732 5388
FORM OF PROXY
(Before completing this form please refer to the notes below)
No. of shares held
CDS Account No.
Telephone No.
I / We .............……………………………………………………..….....................................................................................................................
(Full name as per NRIC/Certificate of incorporation in CAPITAL letters)
of ....…………………………………………………………………………………………………………………...........................………………….
(full address)
....…………………………………………………………………………………………………………………………………………………………...
(full address)
being a member of TIME ENGINEERING BERHAD hereby appoint: ……………….………………………………………………………............…
NRIC No. (new) ……………………..................................(old)…………...................................... or failing him/her ..........................................
………………….................……............……… NRIC No. (new) …………….......…………………. (old)…………………........………………..
or failing him/her, the Chairman of the Meeting as my/our proxy, to vote for me/us on my/our behalf at the Forty Third Annual General Meeting
of the Company to be held at Ballroom 1, Level 1, Sime Darby Convention Centre, 1A, Jalan Bukit Kiara 1, 60000 Kuala Lumpur on
Wednesday, 19 June 2013 at 10.30 am and at any adjournment thereof, in the manner indicated below. Please indicate with an “X” in the boxes
provided below how you wish your vote to be cast. If you do not do so, the proxy shall vote as he thinks fit, or at his discretion, abstain from voting.
AS ORDINARY BUSINESS
FOR
1.
To approve the payment of final gross dividend of 4.0 sen, less tax of 25% (net dividend
of 3.0 sen) per ordinary share for the financial year ended 31 December 2012 as
recommended by the Directors.
Resolution 1
2.
To re-elect Haji Zaiviji Ismail Abdullah who retires in accordance with Article 99 of the
Company’s Articles of Association and who being eligible offers himself for re-election.
Resolution 2
3.
To re-elect Puan Elakumari Kantilal who retires by rotation in accordance with Article
94 of the Company’s Articles of Association and who being eligible offers herself for
re-election.
Resolution 3
4.
To separately re-appoint each of the following persons, who retires pursuant to Section
129(2) of the Companies Act 1965 as a Director of the Company to hold office until the
conclusion of the next Annual General Meeting of the Company and each of whom
shall continue to serve as an Independent Non-Executive Director of the Company
notwithstanding that he has exceeded a cumulative term of nine (9) years as a Director
of the Company, as recommended by the Malaysian Code on Corporate Governance
2012, and based on the justification provided in the Explanatory Note to the Notice of
this Annual General Meeting:(i) Datuk Haji Mohd Khalil Dato’ Haji Mohd Noor
(ii) Haji Abdullah Yusof
5.
To approve the payment of Directors’ Fees for the financial year ending 31 December
2013 on a quarterly basis after the end of each quarter.
Resolution 4
6.
To re-appoint Messrs KPMG as Auditors of the Company for the financial year ending
31 December 2013 and to authorise the Board of Directors to determine their
remuneration.
Resolution 5
AGAINST
Dated this ……….. day of …………………….. 2013
For appointment of two proxies, percentage of
shareholdings to be represented by the proxies:
No. of shares
_____________________________________________
Signature(s) of Shareholder(s) / Seal
Percentage
Proxy 1
Proxy 2
Total
100 %
NOTES ON PROXY
(i) Applicable to shares held through a nominee account.
(ii) A proxy may but need not be a member of the Company and the provisions of Section
149(1)(b) of the Companies Act 1965 shall not apply to the Company.
(iii) In the case of corporate member, the instrument appointing a proxy shall be (a) under
its Common Seal or (b) under the hand of duly authorised officer or attorney and in the
case of (b), be supported by a certified true copy of the resolution appointing such officer
or certified true copy of the power of attorney.
(iv) A member of the Company holding 1,000 shares or less in the Company shall be entitled
to appoint one (1) proxy to attend and vote at the same meeting. A member holding
more than 1,000 shares in the Company shall be entitled to appoint a maximum of two
(2) proxies to attend and vote at the same meeting and such appointment shall be invalid
unless the member specifies the proportion of his/her shareholding to be represented by
each proxy.
(v) Where a member is an authorised nominee, as defined under the Securities Industry
(Central Depositories) Act 1991, it may appoint at least one (1) proxy but not more than
two (2) proxies in respect of each securities account it holds which is credited with
ordinary shares of the Company. The appointment of two (2) proxies in respect of any
particular securities account shall be invalid unless the authorised nominee specifies
the proportion of its shareholding to be represented by each proxy.
(vi) Where a member is an exempt authorised nominee (EAN) as defined under the
Securities Industry (Central Depositories) Act 1991 which holds ordinary shares in the
Company for multiple beneficial owners in one securities account (omnibus account),
there is no limit to the number of proxies which the EAN may appoint in respect of each
omnibus account it holds. EAN is advised to list down the name of proxies and the
particulars of their NRIC No. (both new and old) and attach it to this Proxy Form.
(vii) Any alteration to the instrument appointing a proxy must be initialised. The instrument
appointing a proxy must be deposited at the office of the Share Registrar, Mega Corporate
Services Sdn Bhd at Level 15-2, Bangunan Faber Imperial Court, Jalan Sultan Ismail,
50250 Kuala Lumpur not less than 24 hours before the time appointed for holding the
meeting.
(viii)For the purpose of determining a member who shall be entitled to attend this 43rd AGM,
the Company shall be requesting Bursa Malaysia Depository Sdn Bhd in accordance
with Article 55(b) of the Company’s Articles of Association and Section 34(1) of the
Securities Industry (Central Depositories) Act 1991, to issue a General Meeting Record
of Depositors as at 11 June 2013. Only a depositor whose name appears on the Record
of Depositors as at 11 June 2013 shall be entitled to attend the said meeting or appoint
proxies to attend and/or vote on his/her behalf.
1st Fold here
Affix
Stamp
Jalan Sultan Ismail
50250 Kuala Lumpur
Then fold here
Fold this flap for sealing
(10039-P)
Tower 3, Avenue 5, The Horizon, Bangsar South
No. 8, Jalan Kerinchi
59200 Kuala Lumpur, Malaysia
T +603 2730 0300 F +603 2713 3131
www.teb.com.my

- Investor Relations

Transcription

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