TOB-Annual Report 2014 - Tanjung Offshore Berhad

Transcription

TANJUNG OFFSHORE BERHAD
(Company No.: 662315-U)
annual
report
2014
contents
annual report 2014
2
CORPORATE INFORMATION
5
CORPORATE STRUCTURE
6
7
TANJUNG OFFSHORE SERVICES SDN BHD
8
GAS GENERATORS (M) SDN BHD
UNIVERSAL GAS GENERATORS SDN BHD
9
TANJUNG NEWENERGY SERVICES SDN BHD
TANJUNG PETROCONSULT SDN BHD
TANJUNG CSI SDN BHD
10 MANAGEMENT TEAM
11 VISION, MISSION & PHILOSOPHY
12 FIVE (5) YEARS GROUP FINANCIAL HIGHLIGHTS
14
NOTICE OF ANNUAL GENERAL MEETING
16
DIRECTORS’ PROFILE
20 CHAIRMAN’S STATEMENT
23 AUDIT COMMITTEE REPORT
27 STATEMENT ON RISK MANAGEMENT AND
INTERNAL CONTROL
29 STATEMENT OF CORPORATE GOVERNANCE
37 OTHER INFORMATION
38 FINANCIAL STATEMENTS
111 LIST OF PROPERTIES OWNED BY THE GROUP
113
ANALYSIS OF SHAREHOLDINGS
116
ANALYSIS OF WARRANT
•
FORM OF PROXY
2
TANJUNG OFFSHORE BERHAD (662315-U)
ANNUAL REPORT 2014
Board Of Directors
Standing From Left
Datuk Dr Nik Norzrul Thani bin N. Hassan Thani
(Non Independent Non-Executive Director)
Datuk Mohd Hafarizam bin Harun
(Independent Non Executive/Chairman)
Dato’ Dr. (H) Ab Wahab Bin Haji Ibrahim
(Independent Non-Executive Director)
Tan Sri Datuk Tan Kean Soon
(Executive Director/ Executive Deputy Chairman)
Dato’ Maheran binti Mohd Salleh
Tan Sam Eng
Rahmandin @ Rahmanudin bin Md. Shamsudin
(Executive Director/Group Chief Executive Officer)
Datuk Suraj Singh Gill
Datuk Syed Hussian bin Syed Junid
(Independent Non Executive Director)
ANNUAL REPORT 2014
AUDIT COMMITTEE
AUDITORS / REPORTING ACCOUNTANTS
Chairman
Member
Datuk Dr. Nik Norzrul bin N. Hassan Thani
Tan Sam Eng
AljeffriDean (Firm No.: AF 1366)
Chartered Accountants
2-5-13, 5th Floor, Menara KLH
(Business Centre)
No. 2, Jalan Kasipillay
51200 Kuala Lumpur
Tel : 03-2381 1170
NOMINATING COMMITTEE
PRINCIPAL BANKERS
Chairperson
Malayan Banking Berhad
(Company No. 3813-K)
Setapak Business Centre
2nd Floor, Maybank Setapak
343 Jalan Pahang
53000 Kuala Lumpur
Tel : 03-4022 0784
Member
REMUNERATION COMMITTEE
Chairman
Member
Dato’ Ab Wahab bin Haji Ibrahim
AmInvestment Bank Berhad
(Company No. 23742-V)
Level 15, Bangunan AmBank Group
55 Jalan Raja Chulan
50200 Kuala Lumpur
Tel : 03-2078 2633
REGISTRAR
SHARE ISSUANCE SCHEME COMMITTEE
Member
Rahmandin @ Rahmanudin bin Md Shamsudin
COMPANY SECRETARIES
Kang Shew Meng (MAICSA 0778565)
Seow Fei San (MAICSA7009732)
REGISTERED OFFICE
802, 8th Floor, Block C
Kelana Square, 17 Jalan SS7/26
47301 Petaling Jaya
Selangor Darul Ehsan
Tel : 03-7803 1126
Fax : 03-7806 1387
HEAD / MANAGEMENT OFFICE
Suite 5-1, Level 5,
Wisma UOA Damansara II
No. 6, Changkat Semantan
Damansara Heights
50490 Kuala Lumpur
Tricor Investor Services Sdn. Bhd.
(Company No. 118401-V)
Level 17, The Gardens North Tower
Mid Valley City
Lingkaran Syed Putra
59200 Kuala Lumpur
Tel : 03-2264 3883
Fax : 03-2282 1886
STOCK EXCHANGE LISTING
Main Market of Bursa Malaysia SecuritiesBerhad
STOCK INFORMATION
Stock Name: TGOFFS, TGOFFS-WA
Stock Code: 7228, 7228-WA,
Bloomberg Code: TOFF MK
3
4
ANNUAL REPORT 2014
No 399, Lot 405A Parkcity Commercial Square,
Phase 5, Jalan Kembar Budin,
97000 Bintulu, Sarawak
Tel
: 086-337698
TANJUNG NEWENERGY SERVICES SDN BHD
Kuala Lumpur (Head Office)
Suite 5-1 , Level 5
Wisma UOA Damansara II
No. 6 Changkat Semantan
Damansara Heights
50490 Kuala Lumpur.
Tel
: 03-2087 7000
Fax : 03-2087 7040 / 7041
Pasir Gudang (Operation Office)
No 38A, Jalan 9/17 Perjiranan 9,
81700, Pasir Gudang, Johor Darul Takzim.
Tel : +607 255 2886
Fax : +607 255 2986
Email : tospg@tanjungoffshore.com.my
Lot 993, Off Jalan Balakong, Balakong, Seri Kembangan,
43300 Selangor.
Tel : +603 8961 3390
Fax : +603 8962 3390
Email : eric@gastec.com.my
www.gastec.com.my
ANNUAL REPORT 2014
GROUP CORPORATE STRUCTURE
TANJUNG CITECH UK LIMITED
100%
CITECH ENERGY RECOVERY
SYSTEMS UK LIMITED
100%
7 NEWMARKET STREET
HOLDINGS LIMITED
(Formerly known as
Wavenet Investments Limited)
100%
7 NEWMARKET STREET LIMITED
(Formerly known as
Sparkling Light Investments Limited)
100%
TANJUNG CSI SDN BHD
100%
TANJUNG OFFSHORE MARINE
SERVICES SDN BHD
100%
TANJUNG CITECH
SDN BHD
100%
TANJUNG OFFSHORE RESOURCES
SDN BHD
100%
TANJUNG HMS PETROLEUM
SDN BHD
51%
UNIVERSAL GAS GENERATORS (M)
SDN BHD
GAS GENERATORS (MALAYSIA)
SDN BHD
100%
100%
GAS GENERATORS
INTERNATIONAL LTD
100%
TANJUNG PETROCONSULT
SDN BHD
100%
TANJUNG NEWENERGY SERVICES
SDN BHD
TANJUNG OFFSHORE SERVICES
SDN BHD
100%
100%
TANJUNG DRILLTECH
SDN BHD
51%
FIRCROFT TANJUNG
SDN BHD
51%
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ANNUAL REPORT 2014
Tanjung Offshore Berhad (Tanjung) was incorporated in
Malaysia on 11 August 2004 and its shares are currently
listed on the Main Market of Bursa Malaysia Securities
Berhad. Tanjung is principally an investment holding
company, whilst its subsidiaries and associated companies
are principally involved in the provision of engineering
equipment packages, equipment maintenance services and
spares to the oil and gas and related industries in Malaysia
and the region.
Tanjung’s main operating subsidiary, Tanjung Offshore
Services Sdn Bhd (TOS) commenced operations in March
1990. TOS is involved in providing comprehensive services
to the oil and gas industry and holds various exclusive
agencies for a wide range of engineering equipment and
parts in Malaysia.
In 2013, Tanjung acquired the remaining 49% equity in
Gas Generators (M) Sdn Bhd (Gastec) resulting in Gastec
becoming a wholly owned subsidiary of Tanjung. Gastec is
principally involved in the manufacturing and marketing of
gas generators in both the industrial and offshore oil and
gas markets.
Various other subsidiaries and associated companies were
set up to further enhance the provision of integrated support
services to the oil majors such as Tanjung NewEnergy
Services Sdn Bhd (TNE), Tanjung Petroconsult Sdn Bhd
(TPC) and Tanjung CSI Sdn Bhd.
Tanjung Group is actively involved in both the upstream and
downstream markets within the oil and gas industry and
participates in all stages of the life cycle of the Production
Sharing Contracts as follows:-
EXPLORATION
Surface Geochemistry
Seismic activities
Drilling services
DEVELOPMENT
Hookup & commissioning
Drilling services
Structure & construction
Engineering Equipment
PRODUCTION
Flow of oil & gas to onshore plants
Power generation
Systems application
Engineering equipment
Maintenance services
MAINTENANCE
Retrofitting
Structural strength & corrosion assessment
Engineering equipment maintenance
ABANDONMENT
Dismantling of structures
Decommissioning of machinery & equipment
Pollution control exercise and assessment
ANNUAL REPORT 2014
7
Maintenance services
Tanjung Offshore Services Sdn Bhd (TOS) is a wholly owned
subsidiary of Tanjung Offshore Berhad (Tanjung). TOS
commenced business in mid 1990s and has since grown into a
reputable integrated service provider for the oil and gas industry.
With years of experience in the oil & gas industry, TOS offers
services such as customised engineered equipment packages,
drilling & platform services, project management of contracts,
spares and parts for equipment and other related services.
TOS is one of the main operating companies within the Tanjung
Group of companies which offers a diverse range of product and
services to the oil majors.
Having obtained various Petronas licences for various categories
of products and services, TOS is also the exclusive agent
in Malaysia for various world-renowned Original Equipment
Manufacturers (OEM) such as pumps, control systems,
switchgears, instrumentations and valves that are widely used
in the upstream and downstream activities of the oil and gas
industry.
Drilling services
Engineering equipment
Gas generation packages
TOS has a full package of supplies and services which entails
the initial engineering design layout, project management &
planning, implementation, installation, commissioning followed
by scheduled maintenance, troubleshooting and reliable aftersales services. TOS identifi es the requirement of each client, and
assist in the front-end engineering design (FEED). Throughout
this phase, constant and comprehensive technical discussions
with our prospective clients as part of our value added services
in developing innovative ideas in the exploration, production,
maintenance and abandonment stages of fi elds’ development.
Together with our clients, we continue to closely monitor the
progress of projects undertaken to ensure various process
methods are in compliance to the approved design and specifi
cations. TOS is continuously increasing its range of products
and services to meet the stringent requirements of the industry.
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ANNUAL REPORT 2014
UNIVERSAL GAS GENERATORS SDN BHD
In 2013, Tanjung Offshore Berhad acquired the remaining
49% equity interest in Gas Generators (Malaysia) Sdn Bhd
(Gastec) and its subsidiaries (Gastec Group), thus making
it a wholly owned subsidiary of Tanjung. Gastec Group is
principally involved in the manufacturing and marketing of
gas generators in both the industrial and offshore oil and
gas markets.
Nitrogen is an inert gas used primarily for purging of tanks
and pipelines to enhance overall plant safety. The generator
produces nitrogen from compressed air thereby eliminating
the cost and hazard associated with transporting of nitrogen
gas cylinders offshore.
Gastec Group has operations in the ASEAN region with
active presence in Kuala Lumpur, Bangkok, Jakarta and
Manila.
The Gastec Group also design and manufactures nitrogen
gas generators for on-site gas production facilities on long
term “built, operate and transfer” and “built, operate and
own” contracts to both industrial and oil and gas industries.
ANNUAL REPORT 2014
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TANJUNG NEW ENERGY SERVICES SDN BHD
TANJUNG PETROCONSULT SDN BHD
Tanjung NewEnergy Services Sdn Bhd (TNE) and Tanjung Petroconsult Sdn Bhd were established to provide a wide range
of energy related products and services which are cost effi cient solutions to the oil majors. Our power generation systems
are also environmentally friendly through better use and management of energy resources.
Our main engineering products are as follows:•
Centrifugal Pumps;
•
Nitrogen Gas Generator;
•
Dynamic Position System;
•
CCTV Surveillance System for Oil and Gas;
•
Umbilical Subsea Cables;
•
Solar Power Panels; and
•
Self Priming Marine Pumps.
TNE and TPC has total commitment to engineering excellence,
fitness for purpose, design and an uncompromising
approach to quality. TNE and TPC recognize the benefits of
an effective quality assurance programme in promoting and
achieving high standards of service and minimizing costs
and delay to project programmes.
TANJUNG CSI SDN BHD
Tanjung CSI Sdn Bhd (Tanjung CSI) is a wholly-owned subsidiary of Tanjung Offshore Berhad. In the area of industrial field
instrumentation and automation, Tanjung CSI represents and provide services amongst others as follows:
•
Process & safety automation, measurement, analytical, actuation instrumentations and wet gas metering system;
•
Fire & gas integrated security systems and field detectors;
•
Gas analyzers for moisture, H2S and CO measurements;
•
Liquid & gas metering solutions for custody transfer/allocation and pipe line detection system or PLDS;
•
PQE – power quality consultancy services;
•
Multiphase Flow Metering Solutions; and
•
Rotating machineries engineering solutions focuses on supplying high quality and innovative control solutions for
turbines and compressors.
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ANNUAL REPORT 2014
Management Team
ANNUAL REPORT 2014
OUR VISION
To be the preferred
service provider to the
oil majors in Malaysia
and the region.
MISSION &
PHILOSOPHY
To support the oil and gas industry as a “one stop solutions
provider” through:-
• Providing Quality Products
& Services;
• Optimising Resources;
• New Technologies;
• Enhancing Technical Competencies; and
• Full Compliance to Health, Safety
and Environmental regulations.
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ANNUAL REPORT 2014
FIVE (5) YEARS GROUP FINANCIAL HIGHLIGHTS
Group
2010
RM’000
2011
RM’000
2012
RM’000
2013
RM’000
2014
RM’000
Revenue
541,807
334,437*
263,707*
327,791
107,345*
EBITDA
76,690
(47,869)*
(20,752)*
16,148
6,604*
Net Profit / (Loss) before tax
8,014
(56,168)
(25,718)
12,739
205*
Net Profit / (Loss) after tax
7,588
(55,396)
(11,585)
10,909
1,061*
Pre - tax Margin / (Loss) (%)
1.48
(16.79)
(9.75)
3.89
0.19
Net Margin / (Loss) (%)
1.40
(16.56)
(4.39)
3.33
0.99
Basic Earnings / (Loss) per share (sen)
2.55
(19.14)
(3.99)
3.52
0.28
* Excludes discontinued operations.
Revenue (RM’000)
650,000 600,000 550,000 -
‘10
‘11
‘12
‘13
Net Profit / (Loss) After Tax (RM’000)
‘14
300,000 -
20 10 -
334,437
263,707
0-
‘13
‘14
10,909
7,588
1,061
0-
327,791
-10 -20 -
200,000 -
100,000 -
‘12
30 -
250,000 -
150,000 -
‘11
40 -
450,000 -
350,000 -
‘10
50 -
541,807
500,000 -
400,000 -
60 -
107,345
(11,585)
-30 -40 -50 -60 -
(55,396)
ANNUAL REPORT 2014
FIVE (5) YEARS GROUP FINANCIAL HIGHLIGHTS
Revenue Breakdown for the year ended 2012
Revenue Breakdown for the year ended 2014
Products & Services
46.29%
RM49.69mil
Maintenance
Services
22.55%
RM24.20mil
Engineering
Equipment Services
31.16%
RM33.45mil
373,185,828
2012 = 166,275,581
‘11
2014 = 190,578,052
‘12
166,275,581
‘13
184,547,505
323,287,445
‘14
250 -
200 -
150 -
100 -
50 -
(million)
190,578,092
0-
2013 = 184,547,505
400 -
2011 = 323,287,445
‘10
350 -
2010 = 373,185,828
300 -
Shareholders’ funds
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ANNUAL REPORT 2014
NOTICE IS HEREBY GIVEN THAT the Eleventh Annual General Meeting of the Company will be held at Kristal Ballroom 1, 1st
Floor, West Wing, PJ Hilton, No. 2, Jalan Barat, 46200 Petaling Jaya, Selangor Darul Ehsan on 25 June 2015 at 10.00 a.m.
to transact the following businesses:AGENDA
1.
To receive the Audited Financial Statements for the financial year ended 31 December 2014 and
the Reports of Directors and Auditors thereon.
2.
To re-elect the following Directors retiring in accordance with Article 109 of the Company’s Articles
of Association:-
Resolution 1
i)
Resolution 2
ii)
Resolution 3
iii)
Resolution 4
iv) Datuk Dr. Nik Norzrul bin N. Hassan Thani
Resolution 5
v)
Resolution 6
Dato’ Maheran bte Mohd Salleh
vi) Tan Sam Eng
Resolution 7
vii) Datuk Syed Hussian bin Syed Junid
Resolution 8
viii) Datuk Suraj Singh Gill
Resolution 9
3.
To appoint Messrs. AljeffriDean as Auditors of the Company and authorize the Directors to determine their remuneration.
4.
As Special Business to consider and if thought fit, to pass the following Ordinary Resolution, with
or without modifications:-
Resolution 10
ORDINARY RESOLUTION
AUTHORITY TO ISSUE SHARES
“THAT pursuant to Section 132D of the Companies Act, 1965, the Directors be and are hereby
authorized to issue shares in the Company at any time until the conclusion of the next Annual
General Meeting and under such terms and conditions and for such purposes as the Directors
may, in their absolute discretion, deem fit provided that the aggregate number of shares to be
issued does not exceed 10 per centum of the issue share capital of the Company for the time
being, subject always to the approval of all relevant regulatory bodies being obtained for such
issue and allotment.”
5.
To transact any other business of which due notice shall have been given.
BY ORDER OF THE BOARD
SEOW FEI SAN
KANG SHEW MENG
Secretaries
29 May 2015
Petaling Jaya
Resolution 11
ANNUAL REPORT 2014
15
Notes:
1.
Only depositors whose names appear on the Record of Depositors as at 19 June 2015 shall be entitled to attend, speak
and vote at the said meeting or appoint proxies to attend, speak and vote on his/her behalf.
2.
A member entitled to attend and vote at the meeting shall not be entitled to appoint more than two (2) proxies to attend
and vote in his/her stead. 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.
3.
Where a member appoints two (2) proxies, the appointment shall be invalid unless he/she specifies the proportions of
his/her shareholding to be represented by each proxy.
4.
Where a Member is an authorized nominee as defined under the Central Depositories Act, it may appoint one (1) proxy
in respect of each Securities Account it holds with ordinary shares of the Company standing to the credit of the said
Securities Account.
5.
Where a Member of the Company is an Exempt Authorized Nominee which holds ordinary shares in the Company for
multiple beneficial owners in one securities account known as an omnibus account, there is no limit to the number of
proxies which the Exempt Authorized Nominee may appoint in respect of each omnibus account its holds.
6.
The instrument appointing a proxy shall be in writing under the hand of the appointer or of his/her attorney duly authorized
in writing or, if the appointer is a corporation, either under its Common Seal or under the hand of its officer or attorney
duly authorized.
7.
The instrument appointing a proxy and the power of attorney or other authority (if any), under which it is signed or a
notarially certified copy thereof, must be deposited at the Company’s Share Registrar’s Office at Tricor Investor Services
Sdn. Bhd., Level 17, The Gardens North Tower, Mid Valley City, Lingkaran Syed Putra, 59200 Kuala Lumpur, not less than
forty eight hours (48) hours before the time appointed for holding the meeting or any adjournment thereof.
Explanatory notes on Special Business:
Resolution 11 - Authority to Issue Shares
At last year’s Tenth Annual General Meeting held on 20 June 2014, authority was given to Directors to allot and issue no
more than 10% of the issued share capital of the Company. As at the date of this notice, no new shares in the Company were
issued pursuant to the authority granted, accordingly the mandate will lapse at the conclusion of the Eleventh Annual General
Meeting. As such, the Board would like to seek for a renewal of the mandate.
The proposed Resolution 11, if passed, will give the Directors of the Company, from the date of the above Annual General
Meeting, authority to allot and issue shares from the unissued capital of the Company for such purposes as the Directors may
deem fit and in the interest of the Company. The authority will provide flexibility to the Company for any possible fund raising
activities, including but not limited to further placing of shares for purpose of funding future investment project(s), working
capital and/or acquisitions.
The authority, unless revoked or varied by the Company in general meeting, will expire at the conclusion of the next Annual
General Meeting of the Company.
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ANNUAL REPORT 2014
1
2
3
4
5
6
7
8
9
1. Datuk Mohd Hafarizam bin Harun
2. Tan Sri Datuk Tan Kean Soon
3. Rahmandin @ Rahmanudin bin Md. Shamsudin
4. Dato’ Dr. (H) Ab Wahab Bin Haji Ibrahim
5. Dato’ Maheran binti Mohd Salleh
6. Datuk Syed Hussian bin Syed Junid
7. Datuk Suraj Singh Gill
8. Tan Sam Eng
9. Datuk Dr Nik Norzrul Thani bin N. Hassan Thani
ANNUAL REPORT 2014
17
(“Datuk Hafarizam”)
(“Tan Sri Tan”)
Malaysian • aged 42
Appointed on 23 March 2015
Chairman
Appointed on 23 June 2014
Executive Director & Executive Deputy Chairman
Datuk Hafarizam is the chairman of the Remuneration
Committee. Datuk Mohd Hafarizam is a lawyer by
profession. He holds an LLM in Law in Development from
University of Warwick, United Kingdom and LLB (Honors)
from International Islamic University of Malaysia. He was
admitted as an Advocate & Solicitor of the High Court of
Malaya in 1997.
He began his career as a Legal Assistant at Messrs Rashid
& Lee in 1993 and moved to Senior Associate at Messrs
Shahrizat Rashid & Lee in 2004. He is currently the Managing
Partner at Messrs Hafarizam Wan & Aisha Mubarak.
Datuk Hafarizam also sits on the Board of Felda Holdings
Berhad and Felda Global Ventures Sugar Sdn Bhd, a whollyowned subsidiary of Felda Global Ventures Holdings Berhad.
He also sits on the Boards of KUB Berhad and on boards of
several subsidiary companies within KUB Berhad.
(“En Rahman”)
Appointed on 12 February 2015
Executive Director & Chief Executive Officer
En Rahman is a member of the Share Issuance Scheme
(SIS) Committee. He holds a Bachelor of Economics (Hons)
from the Loughborough University of Technology, United
Kingdom.
He started his career in the banking industry as Credit Officer
for Malayan Banking Berhad in 1977, responsible mainly
for loan processing, documentation and disbursement. In
1982, he joined Esso Production (M) Inc., Kuala Lumpur as
Management Accountant responsible for the internal control
& audit of the company. During the course of his service with
Esso Production (M) Inc., he had also worked as Purchasing
Analyst responsible for the procurement of products and
services for the company in the upstream Oil & Gas sector.
Since then he has ventured into businesses providing services
to the hospitality, education and oil and gas industries. En
Rahman have also previously ventured into the construction
industry specialising in marine engineering works. Given
his good business acumen and corporate experiences, his
services shall be invaluable to Tanjung Offshore Berhad and
its subsidiaries (“Group”) in driving the Group to achieve
new heights and consolidating the workforce and members
of the Board of Directors in the near term. Tan Sri is a member of the Remuneration Committee and SIS
Committee. Tan Sri Tan also holds directorships in various
subsidiaries within the Tanjung Group.
He has more than 30 years of experience leading various
projects within the upstream and downstream sectors of
the oil and gas industry. He is also Chairman, advisor, Chief
Executive Officer and directors of local and foreign oil and
gas companies.
Tan Sri Tan holds a Master in Business Administration. He
is the Chairman of Malaysian Chinese Oil & Gas Alliance, a
member of Malaysian Oil & Gas Services Council since 2008
and Malaysian Petroleum Club since 2008.
(“Dato’ Ab Wahab”)
Independent Non-Executive Director
Dato’ Ab Wahab is the chairman of the Audit Committee
and member of Remuneration Committee. He is a Chartered
Accountant and also a member of the Malaysian Institute of
Accountants. He holds a Diploma and Advanced Diploma
in Accounting from University Technology Mara and his
experience spans over 27 years in the area of finance and
accounting. He began his career in the Corporate Finance
Division at PETRONAS in 1978 and later assumed the role
of Finance Manager for PETRONAS Gas Berhad (“PGB”), a
subsidiary of PETRONAS. He was also appointed as Joint
Company Secretary and was a member of the Management
Committee for PGB.
Following the successful implementation of the listing of
PETRONAS Gas Berhad, he was further reassigned as Head
of the Finance and IT Division of OGP Technical Services Sdn.
Bhd., another subsidiary of PETRONAS in 1996, a position he
held until 2004.In 2007, he obtained his Master of Business
Administration (Management Studies) from University of
Rockhampton and in the same year was honored with the
Honorary Doctorate Degree in Public Service by the Irish
International University, Ireland. He is also an independent
non-executive Director of Uzma Berhad and Alam Maritim
Resources Berhad. He also serves as the Chairman of Alam
Maritim Resources Berhad’s Audit Committee.
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ANNUAL REPORT 2014
(“Dato’ Maheran”)
Independent Non Executive Director
Dato’ Maheran is the chairperson of the Nominating
Committee. Dato’ Maheran has more than 20 years of
local and global experience in corporate affairs and public
relations. Dato’ Maheran was one of the senior management
in charge of Corporate Affairs in Standard Chartered
Bank and also for Standard Chartered’s Saadiq. She was
responsible for the formulation and implementation of SCB
Saadiq’s local CA governance and strategies and was the
instrumental person in positioning Standard Chartered Bank
Malaysia as the primary conventional and Islamic financial
institution in Malaysia. Prior to that, she was the Economic
Editor with the Radio and Television Malaysia (RTM) and
Media Prima Berhad (TV3), focusing in broadcasting,
journalism and presenting. Dato’ Maheran currently sits on the Boards of non-listed
companies as Executive Director, such as LeMana Holdings
Sdn Bhd, LeMana Petrol Sdn Bhd and Perlombongan Anak
Sungai, among others. She develops and leads various
strategic interests focusing in mining-related, downstream
oil and gas activities and finance. She is one of the leading
Bumiputra female mining developer and pioneering the
involvement of female to be competing in a male-dominated
environment.
Dato’ Maheran holds an LLB (Hons) from University of
Buckingham, UK. She dedicates her intervals commendably
in associating with various non-government organizations
and also has a keen interest in strategically influencing to
future of Bumiputra talent development whereby she holds
a position as a life member in few organizations, such as
PENIAGAWATI (Malaysia based Women Entrepreneur
Association), Arab Business Club Dubai UAE and Malaysia
National Press Association. DatUK Syed Hussian bin Syed Junid
(“DatUK Syed Hussian”)
Datuk Syed Hussian is a member of the Audit Committee
and Nominating Committee. He started his career with
The American Malaysian Insurance Sdn Bhd as a Trainee
Executive in 1982. In 1986, he was promoted as the
Penang Branch Manager. Later in 1989, he was promoted
as the Regional Manager covering Penang, Perlis, Kedah
and Perak. He is currently the Senior Director of Business
Operations & Sales Support for Asia at Western Digital Sdn
Bhd, a company involved in the manufacture of hard-disc
drives.
Datuk Syed Hussian is also an Independent Non Executive
Director of AWC Berhad. He also serves on the boards
of various other private limited companies. Datuk Syed
Hussian holds a Diploma in Insurance from The Association
for Overseas Scholarship Tokyo in 1988 and a Certificate in
Insurance from Institute Teknologi MARA in 1982.
(“Datuk Suraj”)
Datuk Suraj is a member of Nominating Committee. Datuk
Suraj read law at the University of Leicester, England and
graduated with an LL.B (Hons) Degree in 1994. He received
his Certificate in Legal Practice from the Legal Profession
Qualifying Board, Malaysia in 1995 and was called to the
Malaysian Bar and admitted as an Advocate & Solicitor of
the High Court of Malaya in 1997.
Datuk Suraj commenced his legal career as a Corporate
Lawyer in 1997 with Messrs Rashid & Lee. In the year
2000, Datuk Suraj co-founded Deol & Gill, a mid-sized full
service law firm in Kuala Lumpur. Datuk Suraj advises public
listed companies, government linked corporations and
multinational corporations.
Tan Sam Eng
(“Ms Tan”)
Ms Tan is a member of the Audit Committee. Ms. Tan is a
Chartered Accountant and a Chartered Secretary. She is
a member of the Malaysian Institute of Accountants (MIA),
a Fellow Member of the Association of Chartered Certified
Accountants (ACCA), a Fellow Member of the Malaysian
Institute of Chartered Secretaries and Administrators
(MAICSA) and also a Member of the Chartered Tax Institute
of Malaysia (MIT).
Ms. Tan has more than 30 years of professional experience
and was involved in all aspects of financial practice such
as auditing, taxation and corporate finance & advisory
works. Her auditing experience covers practically the
whole spectrum of Malaysian business environment
including insurance, property development, engineering,
communications, transportation, plantations, manufacturing
and trading.
ANNUAL REPORT 2014
19
Datuk Dr. Nik Norzrul Thani Bin Nik Hassan Thani
(“Datuk Dr. Nik”)
Non Independent Non Executive Director
Datuk Dr. Nik is a member of the Audit Committee. Datuk
Dr. Nik holds a Ph.D. in Law from the School of Oriental and
African Studies, University of London and a Masters in Law
from Queen Mary College, University of London. He read law
at the University of Buckingham, United Kingdom.
Datuk Dr. Nik also holds a Post-Graduate Diploma in Syariah
Law and Practice (with Distinction) from the International
Islamic University of Malaysia. He is a Barrister of Lincoln’s
Inn and an Advocate & Solicitor of the High Court of Malaya.
He was called to the Bar of England and Wales in 1985 and
to the Malaysian Bar in 1986. He was at one time a Visiting
Fulbright Scholar at Harvard Law School and a Chevening
Fellow at the Oxford Centre of Islamic Studies. He was also
formerly the Acting Dean/Deputy Dean of the Faculty of
Laws, International Islamic University Malaysia.
Datuk Dr. Nik is a director of UWM Holdings Berhad, Manulife
Holdings Berhad, Al Rajhi Banking & Investment Corporation
(M) Berhad, MSIG Insurance (M) Bhd and several non-listed
companies. Currently, Datuk Dr. Nik is a practising lawyer
with Zaid Ibrahim & Co. Prior to joining Zaid Ibrahim & Co.,
Datuk Dr. Nik was with Baker & McKenzie (International
Lawyers), Singapore.
Attendance of Board of Directors Meeting
The Directors’ attendance of Board of Directors Meeting can be found in the Statement of Corporate Governance in this
Annual Report.
Family relationship with any director and/or major shareholder
Family relationship with any director and/or major shareholder
None of the Directors has any family relationship with any director and/or major shareholder of the Company.
Conflict of interest
None of the Directors has any conflict of interest with the Company.
Conviction of Offence
None of the Directors has been convicted of any offence within the past ten (10) years other than traffic offences.
20
ANNUAL REPORT 2014
CHAIRMAN’S STATEMENT
DATUK MOHD HAFARIZAM BIN HARUN
Independent Non Executive Chairman
Dear Shareholders,
The last year must have been worrying for you as Tanjung Offshore went through a tumultuous period that saw
directors being suspended, resignations and reinstatements of board members, capped by investigations by the
authorities and the Malaysian Anti-Corruption Commission.
Meanwhile, minority shareholders were increasingly concerned about the company’s wellbeing, to the point of reporting
what they believed were wrongdoings to the police.
All this took place against a backdrop of declining oil prices and the oil and gas industry experiencing unparalleled volatility,
making the last year extremely challenging for the Tanjung Group. The year 2014 ended with significant uncertainties.
Recently a former executive director of Tanjung Offshore was arrested by MACC while three other former directors were
questioned extensively as part of a widening investigation into several questionable deals undertaken by the company over
the previous few years. The current board is cooperating fully with the authorities.
To put the company back on track to profitability and greater transparency, a new board of directors was reconstituted in
April and resulting from this board change, I have been appointed chairman.
Since my appointment, I am pleased to report to you that the company has moved forward in a positive manner.
Forensic Audit
To help us understand TOB’s corporate weaknesses, we have engaged special auditor Ferrier Hodgson MH Sdn Bhd
(“Ferrier Hodgson”) to conduct a forensic audit especially in relation to several contentious transactions.
These forensic audit results point to shortcuts taken and a sequence of shortcomings which gave way to corporate
weaknesses.
ANNUAL REPORT 2014
21
Implementing Greater Corporate Governance
Arising from these shortcomings, we have strengthened corporate governance by ensuring processes and procedures that
fall in line with best practices.
We are implementing the recommendations, establishing a powerful safety and operational risk function, and enhancing risk
management through the restructuring of Tanjung Group.
We are also conducting a thorough review of Tanjung Group’s standard operating procedures, guidelines and internal
systems to put right any shortcomings.
There is much to be done and the board is working closely with the executive management team to ensure the successful
implementation of a refocused strategy recommended to us by Ferrier Hodgson and our internal auditor.
The Board will maintain close oversight of matters related to corporate governance, especially to ensure the right checks and
balances are in place across Tanjung Group.
Working With The Authorities
The Tanjung Group is also working closely with the authorities to purge the company of any wrongdoings and to set us back
on the right footing.
Financial Performance
For the FYE 2014, Tanjung Group registered total revenue of RM107.22 million and a profit after taxation of approximately
RM1.06million. Total revenue for the year registered a decrease of approximately 67.29% as compared to total revenue of
RM327.79 million registered in FYE 2013. In line with the decrease in revenue, total net profit after tax for the year registered
a decrease from RM14.03 million in FYE 2013 to RM1.06 million registered in FYE 2014. The reduction in revenue and
profitability is mainly due to the completion of large engineering packages in FYE 2013 and the disposal of the Group’s
maintenance division in FYE 2014.
Revenue (RM’000)
650,000 600,000 550,000 -
‘10
‘11
‘12
‘13
Net Profit / (Loss) After Tax (RM’000)
‘14
300,000 -
20 10 -
334,437
263,707
0-
‘13
‘14
10,909
7,588
1,061
0-
327,791
-10 -20 -
200,000 -
100,000 -
‘12
30 -
250,000 -
150,000 -
‘11
40 -
450,000 -
350,000 -
‘10
50 -
541,807
500,000 -
400,000 -
60 -
107,345
(11,585)
-30 -40 -50 -60 -
(55,396)
22
ANNUAL REPORT 2014
As at 31 December 2014, the Group’s shareholders funds stood at RM190.58 million as compared to RM184.55 million as
at FYE 2013. The increases in the Group’s shareholders’ funds are mainly due to the conversion of share options and the
profits generated during the FYE 2014.
Company Prospect
We recognize the current decline in commodity prices, though we are of the view that the lower price levels are not
sustainable in the long term. Looking ahead, we believe that a growing population and rising levels of prosperity will create
strong demand and an increase in energy consumption. Tanjung Group is able to help meet the world’s growing need for
energy, but we can only do this if we have the trust of our shareholders. We expect to commit significant improvements in
both effectiveness and efficiency in the near-term and will continue to seek out technologies that allow us to keep costs low.
Products & Services
During the year, our main operating subsidiary, Tanjung Offshore Services SdnBhd (“TOS”) registered total revenue of
RM49.78 million. Total revenue declined at TOS as compared to FYE 2013 due to completion of various contracts in
FYE 2013. TOS remains committed to spearhead new projects within the oil and gas industry and is looking to add new
principals and products to further enhance our services via reputable principals and products within the industry.
Engineering Equipment Services
In FYE 2014, the Group registered total revenue of RM33.45 million from the engineering equipment division which are
mainly derived from its wholly owned subsidiary, Gas Generators (M) SdnBhd (“Gastec”). Notwithstanding the reduction
in revenue due to the completion of certain engineering contracts which were trading in nature in FYE 2013, Gastec has
maintained its profitability given its focus on international markets with niche gas generation products and packages which
caters for the oil and gas, power generation and healthcare industries.
Maintenance Services
The maintenance division registered total revenue of RM24.20 million via Tanjung Maintenance Services SdnBhd (“TMS”). During the year, we have disposed off TMS as profitability has not been encouraging in recent years.
Our People
We continue to invest and maintain our human capital, which is an important aspect of the Group. We continue to provide
various training programmes at all levels within the Group. During the year, we have sent various engineering teams
for complete technical training at our principals’ centers, both local and overseas for in-depth exposures on the latest
technological advances in the oil and gas industry.
Conclusion
While I am unable to paint a rosy picture of the company, I am happy to say that improvements are already being instituted
and are beginning to take root.
In the meantime, I am deeply grateful to all shareholders for their support, as you have been steadfast through one of the
most testing periods in Tanjung’s long history. The lessons learnt today will never be forgotten.
ANNUAL REPORT 2014
23
AUDIT COMMITTEE REPORT
The primary objective of the Audit Committee is to assist the Board of Directors in discharging its statutory duties and
responsibilities relating to accounting and reporting practices and to ensure the adequacy and effectiveness of the Group’s
internal control measures.
COMPOSITION OF THE AUDIT COMMITTEE
The members of the Audit Committee and their respective designations who have served during the financial year ended 31
December 2014 are as follows:Member
Designation
Chairman
(Appointed on 31 March 2015)
Member
Member
Tan Sam Eng
Member
George William Warren Jr
(Ceased office on 23 March 2015)
Member
Shahrizal Hisham bin Abdul Halim
Member
SUMMARY OF THE TERMS OF REFERENCE OF THE AUDIT COMMITTEE
•
Membership
The Audit Committee must fulfill the following requirements:(a) The Audit Committee must be composed of not less than three (3) members;
(b) A majority of the members must be independent directors and all members must be non-executive; and
(c) At least one member of the Audit Committee must fulfill the requirements as prescribed or approved by the
Exchange.
(d) The Chairman shall be an Independent, Non-Executive Director. No alternate director is appointed as a member
of the Audit Committee;
(e) In the event that any vacancy in the Audit Committee results in the non-compliance of the above requirements, the
Company must fill the vacancy within three (3) months; and
(f)
•
The Company Secretary shall act as Secretary to the Audit Committee.
Terms of Reference
(a) The Audit Committee shall be granted the authority to investigate any activity of the Company and its subsidiaries,
and all employees shall be directed to co-operate as requested by members of the Committee;
(b) The Audit Committee shall be empowered to retain persons having special competence as necessary to assist the
Committee in fulfilling its responsibilities;
(c) The Audit Committee shall provide assistance to the Board in fulfilling its fiduciary responsibilities particularly
relating to business ethics, policies and financial management control;
(d) The Audit Committee shall maintain a direct line of communication between the Board, External Auditors, Internal
Auditors and Management through regularly scheduled meetings;
24
ANNUAL REPORT 2014
SUMMARY OF THE TERMS OF REFERENCE OF THE AUDIT COMMITTEE (cont’d)
•
Terms of Reference (cont’d)
(e) The Audit Committee shall provide greater emphasis on the audit functions by increasing the objectivity and
independence of External and Internal Auditors and providing a forum for discussion that is independent of the
Management;
(f) The Audit Committee may invite any person to the meeting to assist the Audit Committee in decision-making
process and that the Audit Committee may meet exclusively as and when necessary; and
(g) Serious allegations that have financial implications against any employee of the Company shall be referred to the
Audit Committee for investigation to be conducted.
•
Authority
The Audit Committee shall have the following authority as empowered by the Board of Directors:(a) The authority to investigate any matter within its terms of reference;
(b) The resources which are required to perform its duties;
(c) Full, free and unrestricted access to any information, records, properties and personnel of the Company and any
other subsidiaries (if any) or sister companies;
(d) Direct communication channels with the External Auditors and person(s) carrying out the internal audit function or
activity (if any);
(e) Able to obtain independent professional or other advice; and
(f) Able to convene meetings with the External Auditors and Internal Auditors together with other independent nonexecutive members of the Board, excluding the attendance of any Executive Directors, at least once a year or
whenever deemed necessary.
•
Meetings
(a) The Audit Committee shall meet at least four (4) times in a year to discuss any matters raised by the Auditors in
discharging their functions. The quorum for a meeting of the Audit Committee shall be two (2); and
(b) At least once a year, the whole Board shall meet with the External Auditors without the presence of any executive
Board member/Managing Director or Senior Management.
•
Duties and responsibilities
The duties and responsibilities of the Audit Committee will be as follows:(i) To obtain satisfactory response from Management on reports issued by External and Internal Auditors;
(ii) To oversee the function of the Internal Audit Department;
(iii) To review arrangements established by Management for compliance with any regulatory or other external reporting
requirements, by-laws and regulations related to the Company’s operations;
(iv) To consider the appointment of the External Auditor, the audit fee and any questions of resignation or dismissal, to
discuss with the External Auditor before the audit commences, the nature and scope of the audit, and ensure coordination where more than one audit firm is involved, their audit report and evaluation of the system of the internal
controls and review the quarterly and year-end financial statements of the Company;
(v) To discuss problems and reservations arising from the external audits, and any matter the auditor may wish to
discuss and to oversee the internal audit function; and
(vi) To consider any related party transactions that may arise within the Company including any transaction, procedure
or course of conduct that raises questions of Management’s integrity.
ANNUAL REPORT 2014
25
SUMMARY OF THE TERMS OF REFERENCE OF THE AUDIT COMMITTEE (cont’d)
•
Duties and responsibilities (cont’d)
During the financial year ended 31 December 2014, the Audit Committee held a total of four (4) meetings, the details of
attendance of which are as follows:Member
No. of meetings attended
4 of 4
-
-
Tan Sam Eng
-
4 of 4
Shahrizal Hisham bin Abdul Halim
(Appointed on 9 May 2014 and ceased office on 31 March 2015)
3 of 3
SUMMARY OF ACTIVITIES DURING THE FINANCIAL YEAR
During the financial year ended 31 December 2014, the activities of the Audit Committee included the following:•
Reviewing of the external auditors’ scope of work and their audit plan.
•
Reviewing with the external and internal auditors on the results of their audit, the audit report and internal control
recommendations in respect of improvements in internal control procedures noted in the course of their audit.
•
Reviewing and approving the annual audit plan of the Internal Audit Department, including the scope of work for the
financial year. Reviewing the annual report and the audited financial statements of the Company and the Group prior
to submission to the Board for their consideration and approval. The review was to ensure that the audited financial
statements were drawn up in accordance with the provisions of the Companies Act, 1965 and the applicable approved
accounting standards issued by the Malaysian Accounting Standards Board (“MASB”).
•
Reviewing the Company’s compliance with the Listing Requirements of the Bursa Malaysia Securities Berhad (“Bursa
Securities”) (“Listing Requirements”) and the applicable approved accounting standards issued by MASB.
•
Reviewing of the quarterly unaudited financial statements and its explanatory notes thereon and recommending to the
Board for Directors’ approval.
•
Reviewing and approving the Internal Audit Charter.
•
Reviewing the risk management policy and framework for adoption by the Group, prior to submission to the Board for
consideration and approval.
•
Reviewing the Audit Committee Report and Statement on Risk Management and Internal Control prior to their inclusion
in the Company’s Annual Report.
•
Meeting with the External Auditors without the presence of the Management and Executive Directors.
•
In January 2015, an Independent Committee comprising members of the Audit Committee was formed to investigate
various allegations against the Tanjung Group. In relation to this, the Independent Committee has also appointed
Messrs Ferrier Hodgson to perform a special audit on the allegations.
26
ANNUAL REPORT 2014
OPTIONS FOR SHARE ISSUANCE SCHEME(SIS)
As at 30 April 2015, the status of the SIS is as follows:No. of SIS
Options Granted
up to 30 April 2015
55,688,000
No. of SIS
exercised as at
30 April 2015
24,009,100
Cancelled
No. of SIS Options
Outstanding as at
30 April 2015
Date of expiry
Of SIS Scheme
2,112,900
29,566,000
7 May 2016
The Audit Committee has reviewed and verified that the allocation of share option during the year is in compliance with the
criteria and conditions of the SIS Byelaws.
The breakdown of the SIS allocations in the financial ended 31 December 2014 are as follows:-
No of
SIS Granted
No. of SIS
Exercised
No. of SIS
Cancelled
No. of SIS
Options
Outstanding
Executive Directors
5,000,000
1,660,000
-
3,340,000
Senior Management
(Manager and Above)
4,580,000
429,000
-
4,151,000
Other employees
1,090,000
240,300
120,000
729,700
10,670,000
2,329,300
120,000
8,220,700
Position
Total
No share options were granted to any non-executive directors.
INTERNAL AUDIT FUNCTION
The Group has engaged an external internal audit professional firm during the year to perform the internal audit function of
the Group. The internal audit firm reports directly to the Audit Committee and administratively to the Chief Executive Officer.
The activities of the internal audit firm are guided by the Internal Audit Charter that provides its independence in evaluating
and reporting on the adequacy, integrity and effectiveness of the overall internal control system, risk management and
corporate governance in the Group using a systematic and disciplined approach. The reviews and control improvement
initiatives conducted by the internal audit firm during the year were defined in an annual audit plan approved by the Audit
Committee. The audit plan encompassed the issuance of internal audit charter, documented terms of reference for the Board
and Board Committees, director’s code of ethics, service provider code of conduct and fraud prevention manual.
Other initiatives undertaken by the internal audit professional firm in FYE 2014 include the review of risk management
policies in key subsidiaries and operational review of project management within the Group. The corresponding reports of
the audit reviews performed were presented to the Audit Committee and forwarded to the Management for attention and
corrective actions. The Management is responsible for ensuring that the recommended corrective actions are taken within
the required timeframe. The cost incurred in relation to the internal audit function during the year was RM100, 000.00.
During the year, various management and reporting meetings were held to ensure that the internal audit policies are
implemented and communicated effectively throughout all divisions within the Group.
ANNUAL REPORT 2014
27
STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL
Introduction
Pursuant to paragraph 15.26(b) of the Bursa Malaysia Securities Berhad Main Market Listing Requirements, and as guided
by the Statement on Risk Management and the state of Internal Control: Guidelines for Directors of Listed Issuers (“the
Guidelines”), the Board of Directors (“the Board”) of Tanjung Offshore Berhad (“the Company”) is pleased to present the
statement on the state of the internal controls of the Group for the financial year ended 31 December 2014.
Board Responsibilities
The Board is responsible for the Group’s internal control and risk management system to safeguard shareholders’ investment
and the Group’s assets as well as reviewing the adequacy and effectiveness of the said system.
In view of the limitations inherent in any system of risk management and internal control, these systems are designed to
manage, rather than eliminate, the risk of failure to achieve the Group’s business and corporate objectives. These systems
can therefore only provide reasonable, but not absolute assurance, against material misstatement or loss.
Risk Management
Risk Management is regarded by the Board to be an integral part of the business operations. The Board maintains an
on-going commitment to enhance the Group’s control environment and processes. The key risks relating to the Group’s
operations and strategic and business plans are addressed at Management’s meetings. Significant risks identified by the
Management are to be brought to the attention of the Board at their scheduled meetings.
The abovementioned practices/initiatives put in place by the Board serve as the on-going practice used to identify, evaluate
and manage significant risks during the financial year under review. In view of the recent weaknesses on the Group’s
corporate governance and internal control systems that have come to the Board’s attention, the Board is in the process of
addressing these weaknesses noted so as to improve the effectiveness and efficiency of the risk management function and
the internal control systems of the Group.
System of Internal Control
The Group maintains a system of internal control that serves to safeguard its assets; identify and manage risk; ensure
compliance with statutory and regulatory requirements; and to ensure operational results are closely monitored and
substantial variances are promptly explained.
Whilst the Board maintains control and direction over appropriate strategic, financial, organizational and compliance issues,
it has delegated the implementation of the system of internal controls to the executive management, led by the Chief
Executive Officer. The Chief Executive Officer, who is empowered to manage the business of the Group, has primary
operational responsibility for the system of internal controls.
The Board convenes meetings on quarterly basis in order to maintain full and effective supervision. The Chief Executive Officer,
being the principal channel of communication between the Board and the management, will lead the presentation of Board
papers and provide comprehensive explanation on main issues. In arriving at any decisions based on recommendations by
management and the Audit Committee, a thorough deliberation and discussion by the Board is a prerequisite.
The salient features of the Group’s system of internal control include, inter alia :•
An organizational structure with clearly defined lines of responsibility and relevant authority has been set up for the
Group.
•
The Group’s management with the assistance of a centralized human resource function sets the policies for recruitment,
training and appraisal of the employees within the Group.
•
Policies and procedures which sets out the compliance standards for daily operations for the respective business units
of the Group;
•
The Group’s management meets monthly to review the operational and financial performance of the businesses in the
Group and its subsidiaries, and to discuss key business, operational and management issues.
•
The Board of Directors receives and reviews quarterly performance reports on the Group and its subsidiaries from the
management, and discuss on significant business and risk issues.
28
ANNUAL REPORT 2014
STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL
Whistle-Blowing
The Group has a whistle-blowing policy and procedure to provide opportunity for employees, directors and others to raise
their concerns of any malpractice within the Group. The objective of the policy and procedure is to provide and facilitate a
mechanism for whistleblower to report concern about any suspected and/or known misconduct, wrongdoings, corruption,
fraud, waste and/or any abuse of power.
This will enable each case/issue can be investigated and for appropriate action to be taken to ensure that the matter is
resolved effectively and within the Company wherever possible.
Conclusion
The Group Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”) are fully aware of the issues highlighted to
the Board arising from the weaknesses in the corporate governance and internal control systems of the Group. Together
with the Board, the CEO and the CFO are in the process of improving the adequacy, effectiveness and efficiency of the
corporate governance practices and the systems of internal control in the Group to continue to safeguard the interest of the
shareholders’ investment and the Group’s assets.
The Board is of the view that the risk management and internal control systems of the Group require continuous pertinent
efforts from the Board to improve its adequacy, effectiveness and efficiency in meeting the Group’s strategic objectives.
ANNUAL REPORT 2014
29
STATEMENT OF CORPORATE GOVERNANCE
The Board of Directors (“Board”) recognises the importance of good corporate governance and is committed to the
establishment and implementation of a proper framework and controls that are in line with the principles and best practices
as recommended by the Malaysia Code on Corporate Governance (“Code”).
The Board will continuously evaluate the status of the Group’s corporate governance practices and procedures with a view
to adopt and implement the Best Practices of the Code wherever applicable in the best interests of the shareholders of the
Company. The Board has generally applied the Principles and Best Practices of the Code.
The Board is pleased to report herein the manner in which the Company has applied the Principles of the Code and the
extent to which it has complied with the Best Practices of the Code.
DIRECTORS
1.
Board Responsibilities
The Board is fully aware of its role and has adopted the specific responsibilities that are listed in the Code, which
facilitates the discharge of the Board’s stewardship responsibilities.
a.
Board Balance
The Board of Directors consists of nine (9) members comprising two (2) executive directors, and six (6) independent
non-executive directors and one (1) non independent non-executive director. The Board has complied with
Paragraph 15.02 of the Listing Requirements that at least two or one-third of the Board, whichever is the higher is
independent directors. The Board considers its current size adequate given the existing scope and nature of the
Group’s business operations.
The Board is responsible for implementing the policies and decisions of the Board, overseeing the operations and
developing the business and corporate strategies of the Group. The Board also monitors the performance of the
Group and ensures that a proper internal control system is in place. The presence of independent non-executive
directors is to provide independent and unbiased views of financial and business inputs for the interests of the
Group.
The Board has conducted an assessment on Directors, except for those appointed recently.
Dato Dr. (H) Ab Wahab Bin Haji Ibrahim, has served the Company for more than nine (9) years. The Board holds
the view that the ability of an Independent Director to exercise independence is not a function of his length of
service as an independent director. The suitability and ability of an Independent Director to carry out his roles and
responsibilities effectively is very much a function of his caliber, qualifications, experience and personal qualities. With his in-depth knowledge of the Group’s business operations and activities, the Independent Non-Executive
Director can continue to provide check and balance, bring independent judgement and contribute objectively to
the Group’s conduct of business despite his length of service with the Group. As such, the Board concluded that
Dato’ Dr. (H) Ab Wahab Bin Haji Ibrahim, who has served the Board for more than nine (9) years, continue to serve
the Board as Independent Non-Executive Director.
The Company has also formalized a set of ethical standards through a code of conduct, which is subject to
periodical review, to ensure Directors practice ethical, businesslike and lawful conduct, including proper use of
authority and appropriate decorum when acting as Board members.
b.
Board Committees
The Board has established board committees to assist the Board in discharging their duties. These committees
are as follows:•
•
•
•
Audit Committee
Nominating Committee
Remuneration Committee
Share Issuance Scheme Committee
30
ANNUAL REPORT 2014
DIRECTORS (cont’d)
1.
Board Responsibilities (cont’d)
Audit Committee
The composition of the Audit Committee is in compliance with relevant regulatory requirements. The report of the
Audit Committee is stated herein.
Nominating Committee
The Board has established a nomination process of board members to facilitate and provide a guide for the
Nominating Committee to review the Board composition and balance as well as to consider the Board’s succession
planning and to identify, evaluate, select and recommend to the Board the candidate for new appointment of
Directors. The Nominating Committee meets as and when required. The decision on new appointment shall be the
responsibility of the Board after considering the recommendation of the Nominating Committee.
The members of the Nominating Committee are as follows:Member
Designation
Chairperson
Member
Member
The Board considers that the current mix of skills and experience of its members are sufficient for the discharge of
its duties and responsibilities effectively.
The director who is subject to re-election and/or re-appointment at next Annual General Meeting is assessed by
the Nominating Committee before recommendation is made to the Board and shareholders for re-election and/
or re-appointment. Appropriate assessment and recommendation by the Nominating Committee is based on the
yearly assessment conducted.
As all members of the Nominating Committee are Independent Directors, the assessment of the Nominating
Committee is conducted by the Board as a whole.
The activities carried out by the Nominating Committee during the financial year and up to the date of this Annual
Report are reviewing and assessing the suitability of directors and candidates for appointment as directors.
Remuneration Committee
The Board has established a remuneration policy and procedure to facilitate the Remuneration Committee to
review consider and recommend to the Board the levels and elements of remuneration of Directors with executive
functions and the senior management. The Board as a whole determines the allowances of the Non-Executive
Directors and the Non-Executive Chairman after considering the recommendation of Remuneration Committee.
The Remuneration Committee meets as and when required.
The members of Remuneration Committee are as follows:Member
Designation
Chairperson
Member
Dato’ Dr. (H) Ab Wahab bin Haji Ibrahim
Member
ANNUAL REPORT 2014
31
1.
Share Issuance SchemeCommittee
As at to date, SIS Committee comprises the following members:Member
Designation
Member
Rahmandin @ Rahmanudin bin Md Shamsudin
Member
The SIS Committee shall be vested with such powers and duties as are conferred upon it by the Board including
the powers:•
To administer the Share Issuance Scheme (“SIS”) and to grant share options in accordance to the Bye-Laws;
•
To recommend to the Board to establish, amend, and revoke Bye-Laws, rules and regulations to facilitate the
implementation of the SIS Scheme;
•
To construe and interpret the provisions hereof in the best interest of the Company; and
•
Generally, to exercise such powers and perform such acts as are deemed necessary or expedient to promote
the best interest of the Company.
Subject to the foregoing, the SIS Committee shall exercise its discretion in such manner as it deems fit.
As at 30 April 2015, the status of the SIS is as follows:-
c.
No. of SIS
Options Granted
up to 30 April 2015
No. of SIS
exercised as at
30 April 2015
55,688,000
24,009,100
Cancelled
No. of SIS Options
Outstanding as at
30 April 2015
Date of expiry
Of SIS Scheme
2,112,900
29,566,000
7 May 2016
Board Meetings
The Board meets at least four (4) times a year with additional meetings held as and when urgent issues warrant
matters to be attended.
The Directors are provided before each Board Meeting, with the appropriate information relating to the matters to be
discussed and where necessary, additional information is provided during the Board meeting on significant issues
that arise or when specifically requested by a Director. The Directors whether as a full board or in their individual
capacity also have access to the services of the Company Secretary and management staff. Where considered
necessary, the Board may also engage the services of professionals on specialized issues in furtherance of their
duties.
32
ANNUAL REPORT 2014
1.
c.
Board Meetings (cont’d)
During the financial year under review, nine (9) Board Meetings were held and the Directors’ attendances at the
Board Meetings were as follows:Attendance
(Independent Non Executive Chairman)
-
(Executive Director/Chief Executive Director)
Appointed on 12 February 2015
-
(Executive Director/Executive Deputy Chairman)
Appointed on 23 June 2014
5/5
9/9
-
(Independent Non Executive Director)
-
-
Tan Sam Eng
-
Datuk Dr Nik Norzrul Thani bin N. Hassan Thani
-
Dato’ Harzani bin Azmi
(Managing Director)
(Resigned on 19 June 2014)
4/4
Tan Wee Koh
(Executive Director)
(Resigned on 31 March 2015)
9/9
8/9
Muhammad Sabri bin Ab Ghani
(Executive Director)
9/9
Sharizal Hisham bin Abdul Halim
8/8
ANNUAL REPORT 2014
33
1.
Supply of Information
The Board recognizes that the decision making process is highly dependent on the quality of information furnished.
As such, the Board members have full and unrestricted access to all information concerning the Group’s affairs.
Prior to the Board meetings, all Board members are provided with the agenda and board papers containing
information relevant to the business of the meeting to enable them to obtain further explanations, where necessary,
in order to be properly briefed before the meetings. The Board papers including information on major financial,
operational and corporate matters of the Group. The Board members also have access to the advice and services
of the Company Secretary, senior management and independent professional advisers including the external
auditors.
Along with good governance practices and in order to enhance transparency and accountability, the Board has
established and put in place the following policies and procedures which are made available at the office of the
Company. These include the:-
-
Code of Conduct
Shareholder’s Right relating to General Meeting
Further information of the Group’s operations are also made available at the Company’s website at www.
tanjungoffshore.com.my.
Appointment and Re-election
In accordance with Article 103 of the Company’s Articles of Association, at least one-third of the Directors for the
time being shall retire from office and be subject to retirement by rotation at each Annual General Meeting (“AGM”).
The article also provides that all Directors shall retire once in every three (3) years in compliance with the Code.
Directors who are appointed before the next AGM will retire and be subject to re-election by shareholders at the
next AGM.
Directors’ Training
Directors have completed the Mandatory Accreditation Program. The Company does not have a formal training
program for new Director but they receive briefings and updates on the Group’s businesses, operations, risk
management, internal control, finance and relevant legislation, rules and regulations. The briefings and updates
aims at communication to the newly appointed Directors, the Company’s vision and mission, its philosophy and
nature of the business, current issues within the Group, the corporate strategy and the expectation of the Company
concerning input of the Director.
The Directors are encouraged to attend various external and internal professional courses, briefings, and seminars
relevant to the Group to keep themselves abreast with latest development in the industry, regulatory updates or
changes and to enhance their skills and knowledge.
The Board acknowledged that the Directors through varied experiences and qualifications provided the desired
contribution and support to the functions of the Board. Directors’ training is an on-going process as Directors
recognize the need to continually develop and refresh their knowledge and skills, and to update themselves on
market development.
34
ANNUAL REPORT 2014
DIRECTORS’ REMUNERATION
The determination of remuneration packages of the Directors are matters for the Board as a whole. The remuneration of the
Directors is structured to attract, retain and motivate them in order to run the Group successfully.
The Board reviews the remuneration of the Directors annually whereby the respective Executive Directors are abstained from
discussions and decisions on their own remuneration.
The aggregate remuneration of the Directors for the financial year ended 31 December 2014 is as follows:Remuneration Per year
Executive Directors
Non-Executive Directors
Total
1,400,240
-
1,400,240
Bonuses
-
-
-
Fees
-
135,000
135,000
Total
1,400,240
135,000
1,535,240
Basic salary
Remuneration Band (RM) per year
Executive Directors Non-Executive Directors
0 - 50,000
-
-
50,001 - 100,000
-
4
100,001 - 150,000
-
-
150,001 – 200,000
-
-
200,001 – 250,000
-
-
3*
-
> 250,000
*One of the directors has resigned during the current financial year.
CORPORATE DISCLOSURE
The Board has, based on the recommendation of the Code, adopted a Corporate Disclosure Policy to ensure accurate, clear,
timely and complete disclosure of material information necessary for informed investing and take reasonable steps to ensure
that all who invest in the Company’s securities enjoy equal access to such information to avoid an individual or selective
disclosure.
The Policy applies to all Directors, management, officers and employees of the Group.
RELATIONSHIP WITH SHAREHOLDERS
The Group recognizes the importance of effective communication with its shareholders and investors to keep them informed
of the major development of the group. As such, a shareholder communications policy has been implemented for the
purpose. Information is disseminated through the following channels:•
•
•
•
Annual Report;
Circulars to shareholders;
Various disclosures and announcement to Bursa Securities Malaysia Berhad; and
Company’s website at www.tanjungoffshore.com.my
The main forum for dialogue with shareholders remains at the Annual General Meeting which encourages the shareholders
to raise questions pertaining to the operations and financials of the Group.
The shareholders are informed of their rights to demand for poll prior to the commencement of each general meeting.
ANNUAL REPORT 2014
35
CORPORATE SOCIAL RESPONSIBILITY
The Company is consistent in its Corporate Social Responsibility (CSR) agenda, and is committed to employing responsible
practices with regard to the development and improvement of its employees, the environment as well as in our local
communities.
The Company’s employees are the greatest assets of the Group. As much as the Company commits to give back to the
society, the Company also commits significant resources in nurturing human talents, technical skills upgrading, career
development programs and lifelong learning. The Company aims to instill good civic values so that the employees too can
act as ambassadors in advancing the worthy causes.
A CSR policy is established to ensure the Company’s business operations are conducted according to best industry
standards and practices. Integrity is a core element of the Company’s business and operational competency model. A key
feature of this is that all business interactions will be discharged in a socially responsible manner. The goal is to behave
ethically and with integrity in the communities where the Company operates directly and indirectly, and to respect cultural,
national and religious diversity.
The CSR policy is to be assessed, reviewed and updated annually, with the assistance and advice from the Company
Secretary, in accordance with the needs of the Company and as and when there are changes to the regulations that may have
an impact on the Board in discharging its responsibilities. Any change and or updates to the policy shall be recommended
to the Board for approval.
ACCOUNTABILITY AND AUDIT
1.
Financial Reporting
The Board is responsible to present a balanced, clear and comprehensive assessment of the Group’s financial
performance and prospects through the quarterly and annual financial statements to shareholders. The Board and
the Audit Committee have to ensure that the financial statements are drawn up in accordance with the provisions
of the Companies Act, 1965 and applicable approved accounting standards in Malaysia. In presenting the financial
statements, the Board has reviewed and ensured that appropriate accounting policies have been used, consistently
applied and supported by reasonable judgments and estimates.
2.
Internal Control
The Board has overall responsibility for maintaining a sound and effective system of internal control of the Group,
covering not only financial controls but also controls relating to operations, compliance and risk management to
safeguard shareholders investments and the Group’s assets. The Board also recognizes that the system of internal
control has inherent limitations and is aware that such a system can only provide reasonable and not absolute assurance
against material misstatements, loss or fraud.
The internal control system of the Group is supported by an established organizational structure with well-defined
authority and responsibility lines, and which comprises of appropriate financial, operational and compliance controls.
3.
Relationship with Auditors
The Board, via the Audit Committee, has established a formal and transparent arrangement for maintaining an
appropriate relationship with its auditors, both external and internal.
4. Statement of Directors’ Responsibility
The Directors are required by the Companies Act, 1965 to prepare financial statements for each financial year, which
give a true and fair view of the state of affairs of the Group and the Company and of the results and cash flow of the
Group and the Company for the financial year then ended.
36
ANNUAL REPORT 2014
ACCOUNTABILITY AND AUDIT (cont’d)
4. Statement of Directors’ Responsibility (cont’d)
In preparing the financial statements for the FYE 2014, the Directors have:•
•
•
•
adopted the appropriate accounting policies and applied them consistently;
made judgments and estimates that are reasonable and prudent;
ensure applicable approved accounting standards have been followed, and any material departures have been
disclosed and explained in the financial statements; and
ensure the financial statements have been prepared on a going concern basis.
The Directors are responsible for keeping proper accounting records of the Group and Company, which disclose with
reasonable accuracy the financial position of the Group and the Company, and which will enable them to ensure the
financial statements have complied with the provisions of the Companies Act, 1965 and the applicable approved
accounting standards in Malaysia.
The Directors have the general responsibility for taking such steps as are reasonably open to them to safeguard the
assets of the Group and to prevent and detect fraud and other irregularities.
5. Gender Diversity
To date, the Board has appointed two women to the Board of Directors of Tanjung and they are Dato’ Maheran binti
Mohd Salleh (Independent Non Executive Director) and Ms Tan Sam Eng (Independent Non Executive Director). The Nominating Committee shall oversee the procedure in addition to the board recruitment, board performance
evaluation and succession planning processes. We shall always aim to provide a suitable working environment that
is free from harassment and discrimination in order to attract and retain women participation in the Board, and also to
have diversity in ethnicity and age on board as well as workforce.
6.
Compliance Statement
The above statements are clear reflections of the conscious efforts of the Board and Management to strengthen the
Company’s governance process. The Board believes this to be an ongoing process and shall continue to strive for full
adoption of the Best Practices of the Code in the near future.
ANNUAL REPORT 2014
37
OTHER INFORMATION
Other Disclosure Requirements
a)
Share Buybacks
The Company had not renewed the share buy-back mandate since the EighthAnnual General Meeting, therefore no
share buy-back were carried out during the financial year under review.
b)
Options, Warrants or Convertible Securities
As at 30 April 2015, the share option movements are as detailed below:No of Share Options
granted as at
30 April 2015
Share Options Exercised
as at
30 April 2015
Share Options Cancelled
as at
30 April 2015
No of Share Options
outstanding as at
30 April 2015
55,688,000
24,009,100
2,112,900
29,566,000
As at 31 December 2014, the number of outstanding Warrant A are as follows:-
Warrants A
c)
Conversion price
Outstanding as at
30 April 2015
Expiry Date
RM0.50
29,981,990
7 July 2016
Depository Receipt (“DR”) Programme
During the financial year under review, the Company did not sponsor any DR Program.
d)
Imposition of Sanctions/Penalties
There were no public sanctions and/or penalties imposed on the Company or its subsidiaries, Directors or management
by the relevant regulatory bodies during the financial year under review.
e)
Non-Audit Fees
The Board has engaged Messrs Ferrier Hodgson to perform a special audit on certain transactions undertaken by the
Company in the financial year ended 31 December 2014. Save as disclosed above, there were no other non-audit fees
paid to the external auditors during the financial year under review.
f) Variation in Results
There was no material variation between the audited results for the financial year ended 31 December 2014 and the
unaudited results previously announced.
g) Material Contracts
To the best of the Board’s knowledge, there are no material contracts involving the Group with any of the major
shareholders or Directors in office during the year under review.
h)
Contracts Relating to Loans
No contract relating to loans was executed by the Company during the year under review.
i)
Profit guarantees
No profit guarantees were provided by the Company or its subsidiaries during the year under review.
j) Related Party Transactions (“RPT”)
No RPT were transacted during the year under review.
FINANCIAL
Contents
39
Directors’ report
44
Statement by directors
45
Statutory declaration
46
Independent auditors’ report
48
Statements of financial position
50
Statements of profit or loss
51
Statements of comprehensive income
52
Statement of changes in equity
54
Statements of cash flows
56
Notes to the financial statements
ANNUAL REPORT 2014
39
REPORT OF THE DIRECTORS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2014
The directors hereby submit their report together with the audited financial statements of the Group and the Company for
the financial year ended 31 December 2014.
PRINCIPAL ACTIVITIES
The Company is principally engaged in investment holding. The principal activities of the subsidiaries are described in
Note 7 to the Financial Statements. There have been no significant changes in the nature of the activities during the
current financial year.
RESULTS
GROUP COMPANY
RM
RM
Net profit for the year
1,060,793
3,787,003
In the opinion of the directors, the results of the operations of the Group and the Company during the financial year have
not been affected by any item, transaction or event of a material or unusual nature.
DIVIDENDS
There were no dividend paid or declared since the end of the previous financial year ended and the directors do not
recommend any final dividend in respect of the current financial year.
RESERVES AND PROVISIONS
There were no material transfers to or from reserves or provisions other than those disclosed in the financial statements.
ISSUANCE OF SHARES
During the financial year, the Company has increased its authorised share capital from RM200,000,000 comprising of
400,000,000 ordinary shares of RM0.50 each to RM300,000,000 comprising of 600,000,000 ordinary shares of RM0.50
each by the creation of additional 200,000,000 new ordinary shares of RM0.50 each.
During the financial year, the Company also has issued the following ordinary shares:
No. of Shares Issued
Issue Price
Purposes
8,592,598
RM0.50
Exercise of Share Issuance Scheme
The new ordinary shares issued during the current financial year rank pari passu in all respects with the existing ordinary
shares held in the Company, other than those disclosed in the following section on unexercised options granted to
executive directors and employees of the Group and the Company.
40
ANNUAL REPORT 2014
UNEXERCISED OPTIONS GRANTED
i)
Share Issuance Scheme (“SIS”)
The SIS is governed by the By-Laws approved by the shareholders at an Extraordinary General Meeting held on 07
February 2013 and is to be in force for a period of 3 years. The SIS has been effective on 12 July 2013. The salient
features, terms and details of the SIS are disclosed in Note 29 to the Financial Statements.
The Company has been granted exemption by the Companies Commission of Malaysia from having to disclose the
names of holders to whom options have been granted to subscribe for less than 320,000 ordinary shares of RM0.50
each. The names of option holders granted options to subscribe for 320,000 or more ordinary shares of RM0.50 each
during the financial year, other than directors whose details are disclosed in the section on Directors’ Interests, are
as follows:
Name of employee
Granted in 2014
Muhamad Azarudin bin Abdullah
Norwahida binti Ja’afar
Supian bin Zaharin
Tan Seow Hoe
Rohafizah binti Ismail
Syed Elyas bin Syed Abdillah
1,000,000
1,000,000
1,000,000
1,000,000
500,000
500,000
As at 31 December 2014, there were 37,196,300 (2013: 36,244,200) unissued ordinary shares pursuant to the SIS
options granted under the SIS scheme, at RM0.50 per share.
ii)
Issuance of Warrants
The subscription price of Warrant A 2006/2016 is RM0.50.
The details of the issuance of Warrants are disclosed in Note 30 to the Financial Statements.
As at 31 December 2014, there is a total of 29,981,990 (2013: 29,981,990) outstanding Warrant A 2006/2016 warrants.
DIRECTORS
The directors who held office since the date of the last report are:
Tan Sam Eng
Datuk Dr. Nik Norzrul Thani bin N. Hassan Thani
Shahrizal Hisham bin Abdul Halim Tan Wee Koh
George William Warren Jr.
Dato’ Harzani bin Azmi
(Appointed w.e.f 23 June 2014)
(Appointed w.e.f 12 February 2015)
(Appointed w.e.f 23 March 2015)
(Appointed w.e.f 09 May 2014 and
resigned w.e.f 31 March 2015)
(Resigned w.e.f 31 March 2015)
(Resigned w.e.f 19 June 2014)
ANNUAL REPORT 2014
41
DIRECTORS’ BENEFITS
During and at the end of the financial year, no arrangements subsisted to which the Company or its subsidiaries is a party,
with the object or objects 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, other than those arising from the shares awarded under
SIS.
Since the end of the previous financial year, no director has received or become entitled to receive a benefit (other than
a benefit included in the aggregate amount of emoluments received or due and receivable by the directors shown in the
financial statements or the fixed salary of a full-time employee of the Company) by reason of a contract made by the
Company or a related corporation with 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.
DIRECTORS’ INTERESTS
According to the Register of Directors’ Shareholdings, the interests of directors in office at the end of the financial year in
the ordinary shares of the Company during the financial year are as follows:
Number of Ordinary Shares of RM0.50 each
At At
01.01.2014
Bought
Sold 31.12.2014
Direct Interests:
128,100
-
(128,100)
929,480
-
-
929,480
Tan Wee Koh
101,300
1,000,000
-
1,101,300
70
-
-
70
-
17,889,600
-
17,889,600
Indirect Interests:
Tan Sri Datuk Tan Kean Soon*
-
4,050,000
-
4,050,000
Number of Ordinary Shares of RM0.50 each
Granted under the SIS
At
At
01.01.2014
Granted
Vested 31.12.2014
Tan Wee Koh
3,890,000
4,390,000
2,000,000
1,500,000
(1,000,000)
-
4,890,000
5,890,000
Number of Warrants over Ordinary Shares
of RM0.50 each
At At
01.01.2014
Bought
Sold 31.12.2014
Direct Interests:
99
-
-
99
* Acquired through spouse and children.
None of the other directors in office at the end of the financial year held any shares or debentures in the Company or in
any related corporations during the financial year ended 31 December 2014.
42
ANNUAL REPORT 2014
OTHER STATUTORY INFORMATION
Before the financial statements of the Group and the Company were prepared, the directors took reasonable steps:
(a) to ascertain that proper action had been taken in relation to the writing-off of bad debts and the making of allowance
for doubtful debts, and have satisfied themselves that all known bad debts had been written off and that adequate
allowance had been made for doubtful debts; and
(b) to ensure that any current assets which were unlikely to be realised at their book values in the ordinary course of
business have been written down to their estimated realisable values.
As of the date of this report, the directors are not aware of any circumstances:
(a) which would render the amount written off for bad debts or the amount of the allowance for doubtful debts inadequate
to any substantial extent in the financial statements of the Group and the Company; or
(b) which would render the values attributed to current assets in the financial statements of the Group and the Company
misleading; or
(c) which have arisen which render adherence to the existing method of valuation of assets and liabilities of the Group
and the Company misleading or inappropriate; or
(d) not otherwise dealt with in this report or financial statements which would render any amount stated in the financial
statements of the Group and the Company misleading.
As of the date of this report, there does not exist:
(a) any charge on the assets of the Group or the Company which has arisen since the end of the financial year and
secures the liability of any other person; or
(b) any contingent liability of the Group or the Company which has arisen since the end of the financial year other than
those disclosed in Note 36 to the Financial Statements.
No contingent or other liability has become enforceable, or is likely to become enforceable within the period of twelve
months after the end of the financial year which, in the opinion of the directors, will or may substantially affect the ability
of the Group and the Company to meet its obligations as and when they fall due.
In the opinion of the directors, no item, transaction or event of a material or unusual nature has arisen in the interval
between the end of the financial year and the date of this report which is likely to affect substantially the results of the
operations of the Group and the Company for the current financial year.
SIGNIFICANT EVENTS DURING THE CURRENT FINANCIAL YEAR
Detail of the significant events is set out in Note 41 to the Financial Statements.
ANNUAL REPORT 2014
43
AUDITORS
The retiring auditors, Messrs. AljeffriDean, have indicated their willingness to be re-appointed in accordance with
Section 172(2) of the Companies Act, 1965.
Signed on behalf of the Board of Directors in accordance with a resolution of the directors,
……………………………………
…………………………………………………………..
Kuala Lumpur,
23 April 2015
44
ANNUAL REPORT 2014
STATEMENT BY THE DIRECTORS
Pursuant to Section 169 (15) of the Companies Act, 1965
The directors of Tanjung Offshore Berhad state that, in their opinion, the financial statements set out in pages 48 to
109 are drawn up in accordance with the Malaysian Financial Reporting Standards, International Financial Reporting
Standards and the provisions of the Companies Act, 1965 in Malaysia so as to give a true and fair view of the financial
positions of the Group and the Company as at 31 December 2014 and of their financial performance and the cash flows
of the Group and the Company for the financial year ended on that date.
In the opinion of the directors, the information set out in Note 44 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, as issued by the Malaysian
Institute of Accountants, and the directive of Bursa Malaysia Securities Berhad.
Signed on behalf of the Board of Directors in accordance with a resolution of the directors,
…………………………………………………………..
Kuala Lumpur,
23 April 2015
……………………………………
ANNUAL REPORT 2014
45
STATUTORY DECLARATION
Pursuant to Section 169 (16) of the Companies Act, 1965
I, Norwahida binti Ja’afar, the officer primarily responsible for the financial management of Tanjung Offshore Berhad,
do solemnly and sincerely declare that the financial statements set out in page 48 to 109 are, in my opinion, correct
and I make this solemn declaration conscientiously believing the same to be true, and by virtue of the provisions of the
Statutory Declarations Act, 1960.
Subscribed and solemnly declared by
By Norwahida binti Ja’afar
At Wilayah Persekutuan Kuala Lumpur
On 23 April 2015
)
)
)
)
Before me,
…………………………………………………………..
Commissioner for Oaths
Agong Sia (W460)
46
ANNUAL REPORT 2014
INDEPENDENT AUDITORS’ REPORT
TO THE MEMBERS OF TANJUNG OFFSHORE BERHAD
(Incorporated in Malaysia)
Report on the Financial Statements
We have audited the financial statements of Tanjung Offshore Berhad, which comprise statements of financial position
as at 31 December 2014 of the Group and of the Company, statements of profit or loss and statements of comprehensive
income, statements of changes in equity and statements of cash flows of the Group and the Company for the year then
ended, and a summary of significant accounting policies and other explanatory information, as set out on pages 48 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 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 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
In our opinion, the financial statements give a true and fair view of the financial position of the Group and the Company
as of 31 December 2014 and of their financial performance and cash flows for the year then ended in accordance
with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the
Companies Act, 1965 in Malaysia.
Report on Other Legal and Regulatory Requirements
In accordance with the requirements of the Companies Act, 1965 in Malaysia, we also report the following:
(a) In our opinion, the accounting and other records and the registers required by the Act to be kept by the Company
and its subsidiaries of which we have acted as auditors have been properly kept in accordance with the provisions
of the Act.
(b) We have considered the financial statements and the auditors’ reports of all the subsidiaries of which we have not
acted as auditors, which are indicated in Note 7 to the Financial Statements.
(c) We are satisfied that the financial statements of the subsidiaries that have been consolidated with the Company’s
financial statements are in form and content appropriate and proper for the purposes of the preparation of the
financial statements of the Group and we have received satisfactory information and explanations required by us for
those purposes.
ANNUAL REPORT 2014
47
INDEPENDENT AUDITORS’ REPORT
TO THE MEMBERS OF TANJUNG OFFSHORE BERHAD
(Incorporated in Malaysia)
Report on Other Legal and Regulatory Requirements (continued)
(d) The audit reports on the financial statements of the subsidiaries did not contain any qualification or any adverse
comment made under Section 174(3) of the Act.
Other Reporting Responsibilities
The supplementary information set out in Note 44 is disclosed to meet the requirement of Bursa Malaysia Securities
Berhad and is not part of the financial statements. The directors are responsible for the preparation of the supplementary
information in accordance with Guidance on 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, as issued by
the Malaysian Institute of Accountants (“MIA Guidance”) and the directive of Bursa Malaysia Securities Berhad. In our
opinion, the supplementary information is prepared, in all material respects, in accordance with the MIA Guidance and the
directive of 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.
……………..
AljeffriDean
AF 1366
Chartered Accountants
Kuala Lumpur, 23 April 2015
………………………..
Zuhairi Dziaruddin
No. 3145/06/16(J)
Chartered Accountant
48
ANNUAL REPORT 2014
STATEMENTS OF FINANCIAL POSITION
AS AT 31 DECEMBER 2014
NOTE
GROUP
2014
2013
RM
RM
NON-CURRENT ASSETS
Property, plant and equipment
5
Intangible assets
6
Subsidiary companies
7
Associate companies
8
Joint venture
9
Investment property
10
Other investments
11
Other receivables, deposits
and prepayments
12
COMPANY
2014
2013
RM
RM
15,562,577
3,242,638
-
1,285
331,582
36,439,960
489,897
29,775,899
3,515,910
-
173,575
-
-
-
-
-
95,364,167
-
-
-
-
57,931,424
-
6,480,000
-
6,480,000
-
62,547,939
33,465,384
101,844,167
57,931,424
13,817,414
70,715,322
-
-
-
29,438,652
-
-
-
14,005,172
113,731,065
3,873,613
97,989,251
-
-
18,926,182
11,474,941
466,185
60,400,621
14,005,172
77,300,943
241,707,625
132,263,987
152,172,921
CURRENT ASSETS
Inventories
13
1,416,507
Trade receivables
14
39,984,602
Other receivables, deposits and
prepayments
12
59,636,034
Amount owing by subsidiary companies
7
-
Amount owing by associate companies
8
100,380
Amount owing by joint venture
9
2,538,796
Other investments
11
20,226,182
Cash and cash equivalents
15
52,363,234
176,265,735
Assets of disposal group classified as held
for sale and discontinued operations
16 -
2,482,951
-
-
TOTAL ASSETS
238,813,674
277,655,960
234,108,154
210,104,345
3,499,067
4,429,961
-
-
3,499,067
4,429,961
-
-
NON-CURRENT LIABILITY
Long term borrowings
17
See accompanying notes to the financial statements.
ANNUAL REPORT 2014
49
STATEMENTS OF FINANCIAL POSITION
AS AT 31 DECEMBER 2014
NOTE
GROUP
2014
2013
RM
RM
CURRENT LIABILITIES
Trade payables
18
Other payables, provisions and accruals
19
Amount owing to subsidiary companies
7
Short term borrowings
20
Provision for taxation
COMPANY
2014
2013
RM
RM
31,644,958
10,216,745
-
713,102
2,161,750
47,397,325
25,760,993
-
3,986,045
986,638
-
967,339
24,739,678
-
98,446
353,077
9,720,929
636,638
44,736,555
78,131,001
25,805,463
10,710,644
Liabilities directly associated with the
assets of disposal group classified as
held for sale and discontinued operations 16
-
10,547,493
-
-
48,235,622
93,108,455
25,805,463
10,710,644
EQUITY ATTRIBUTABLE TO
EQUITY HOLDERS OF
THE COMPANY
Share capital
21
Treasury shares
22
Reserves
23
187,261,294
(4,396,520)
7,713,278
182,964,995
(4,396,520)
5,979,030
187,261,294
(4,396,520)
25,437,917
182,964,995
(4,396,520)
20,825,226
TOTAL EQUITY
190,578,052
184,547,505
208,302,691
199,393,701
TOTAL LIABILITIES AND EQUITY
238,813,674
277,655,960 234,108,154
210,104,345
TOTAL LIABILITIES
50
ANNUAL REPORT 2014
STATEMENTS OF PROFIT OR LOSS
NOTE
GROUP
2014
2013
RM
RM
COMPANY
2014
2013
RM
RM
Continuing Operations
Revenue
3(q), 24
Cost of sales
107,344,762
(84,069,876)
327,791,352
(279,950,663)
1,555,799
-
3,292,676
-
Gross profit
Other income
Operating expenses
23,274,886
1,373,078
(24,197,255)
47,840,689
1,280,027
(32,972,383)
1,555,799
8,835,942
(6,364,429)
3,292,676
865,472
(4,311,243)
Profit/(Loss) from operations
Finance costs
25
Share of profit of joint venture
Share of loss of associate companies
450,709
(322,610)
76,582
-
16,148,333
(1,943,474)
-
(1,466,049)
4,027,312
(25,281)
-
-
(153,095)
(122,895)
-
Profit/(Loss) before zakat and taxation
26
Zakat and taxation
27
(Loss)/Profit for the year after tax
204,681
(2,916,756)
12,738,810
(5,608,078)
4,002,031
(215,028)
(275,990)
(2,546,177)
(2,712,075)
7,130,732
3,787,003
(2,822,167)
Discontinued Operations
Profit for the year after tax
16
Net profit/(loss) for the year
3,772,868
1,060,793
6,901,901
14,032,633
-
3,787,003
(2,822,167)
1,060,793
14,032,633
3,787,003
(2,822,167)
attributable to:
Equity holders of the Company
Non-controlling interests
1,060,793
-
10,909,163
3,123,470
3,787,003
-
(2,822,167)
-
1,060,793
14,032,633
3,787,003
(2,822,167)
(0.74)
1.02
1.29
2.23
0.28
3.52
(0.74)
1.02
1.26
2.17
0.28
3.43
Earnings/(Losses) per share
attributable to equity holders of
the Company (Sen):
28
Basic
- Continuing operations
- Discontinued operations
Diluted
- Continuing operations
- Discontinued operations
ANNUAL REPORT 2014
51
STATEMENTS OF OTHER COMPREHENSIVE INCOME
Other comprehensive (loss)/income:
Items that will be subsequently
reclassified to profit or loss
GROUP
2014
2013
RM
RM
1,060,793
14,032,633
Exchange differences on translating
of foreign operations
(152,233)
(280,367)
Revaluation of short term investment
- Net fair value changes in short
term investment
15,895
125,233
- Reclassification adjustments
1,993
(120,737)
(134,345)
(275,871)
Total comprehensive income/(loss) for the year
Total comprehensive income/(loss) for the
year attributable to:
Equity holders of the Company
Non-controlling interests
COMPANY
2014
2013
RM
RM
3,787,003
(2,822,167)
-
-
15,895
1,993
125,233
(120,737)
17,888
4,496
926,448
13,756,762
3,804,891
(2,817,671)
926,448
-
10,633,292
3,123,470
3,804,891
-
(2,817,671)
-
926,448
13,756,762 3,804,891
(2,817,671)
N
on Distributable Distributable
A
ttributable to Equity Holders of the Company
14,908,000
4,201,900
17,199,865
-
29
29
30
Issuance of ordinary shares pursuant to SIS
Recognition of share-based payments
Warrants exercise during the year
Effect on termination of ESOS
187,261,294
Balance as at 31.12.2014
-
-
Disposal of subsidiary company
-
Effect on cancellation of SIS
Total comprehensive income for the year
-
29
4,296,299
182,964,995
29
Issuance of ordinary shares pursuant to SIS
-
-
non-controlling interest
-
146,655,230
Acquisition of a subsidiary company from
Share
Capital
Option
Total
TotalInterests Equity
BenefitsRevaluation Translation AccumulatedControlling
(4,396,520)
-
-
-
-
-
(4,396,520)
-
-
-
-
-
-
-
(4,396,520)
-
-
-
-
-
2,173,151
-
-
-
-
-
-
68,738,801 (19,579,028)
-
-
-
-
81,197
68,657,604 (19,579,028)
-
- (21,752,179)
-
687,995
-
-
1,285,986
66,683,623
-
-
-
-
-
-
-
-
-
(1,106,949)
-
-
-
-
1,106,949
1,080,621
-
(164,057)
(13,341)
807,800
(81,197)
531,416
-
-
-
-
531,416
-
-
-
22,384
17,888
-
-
-
-
4,496
4,496
-
-
-
-
-
-
-
-
17,887,860
531,416
4,201,900
16,193,986
10,909,163
10,633,292
1,060,793
164,057
13,341
-
-
926,448
-
-
807,800
4,296,299
(633,426) (41,916,074) 190,578,052
(152,233)
-
-
-
-
-
-
-
-
-
-
17,887,860
531,416
4,201,900
16,193,986
9,424,351 166,275,581
13,756,762
926,448
807,800
4,296,299
- 190,578,052
-
-
-
-
-
- 184,547,505
3,123,470
- (21,752,179) (12,547,821) (34,300,000)
1,106,949
-
-
-
-
(481,193) (43,154,265) 184,547,505
(280,367)
-
-
-
-
-
-
(200,826) (55,170,377) 156,851,230
RMRMRMRMRMRMRMRMRMRMRMRM
Private placement, net of transaction costs
Treasury
Share
Capital SharesPremiumReserve Reserve ReserveReserveReserve Losses
NOTE
Share
Employee
Investment
Currency
Non-
Employee
Settled
Foreign
Equity-
GROUP
52
ANNUAL REPORT 2014
STATEMENTS OF CHANGES IN EQUITY
(4,396,520)
-
-
-
-
-
4,296,299
-
-
-
-
187,261,294
(4,396,520)
-
-
-
-
-
4,201,900
-
17,199,865
-
-
182,964,995
(4,396,520)
-
146,655,230
14,908,000
68,736,693
81,197
-
-
-
-
68,655,496
-
-
687,995
-
-
66,683,623
1,283,878
1,975,462
-
-
-
-
-
1,975,462
-
-
-
-
-
1,975,462
-
-
-
-
-
-
-
-
-
-
-
(364,725)
-
364,725
-
1,080,621
(81,197)
807,800
(13,341)
(164,057)
-
531,416
-
531,416
-
-
-
-
-
22,384
-
-
-
-
17,888
4,496
-
-
-
-
4,496
-
-
4,201,900
531,416
17,887,860
(2,817,671)
4,296,299
807,800
3,804,891
(46,377,243) 208,302,691
-
-
13,341
164,057
3,787,003
(50,341,644) 199,393,701
-
-
-
364,725
(2,822,167)
(47,884,202) 163,398,318
-
16,191,878
ANNUAL REPORT 2014
29
Issuance of ordinary shares pursuant
to SIS
29
Effect on cancellation of SIS
Disposal of subsidiary company
Private placement, net of transaction 29
costs
to SIS
29
Warrants exercise during the year
30
Effect on termination of ESOS
Total comprehensive loss for the year
COMPANY Attributable to Equity Holders of the Company
Non Distributable Distributable
Equity
Employee
Settled
Share
Employee
Investment
Share
Treasury
Share
Capital
Option
Benefits RevaluationAccumulated
Total
NOTE
Capital
Shares Premium Reserve Reserve
Reserve Reserve
Losses
Equity
RM RMRM RMRM RMRMRMRM
53
STATEMENTS OF CHANGES IN EQUITY
54
ANNUAL REPORT 2014
STATEMENTS OF CASH FLOW
NOTE
CASH FLOW FROM OPERATING
ACTIVITIES
- From continuing operations
- From subsidiary held for sale and
discontinued operation
16
GROUP
2014
2013
RM
RM
COMPANY
2014
2013
RM
RM
204,681
12,738,810
4,002,031
(275,990)
3,772,868
6,915,459
-
-
3,977,549
19,654,269
4,002,031
(275,990)
264,903
-
-
1,991,584
-
20,007,727
1,943,474
-
2,858,862
1,641,437
172,642
531,416
-
-
-
25,281
-
-
-
178,005
-
122,8
1,419,333
-
-
(359,501)
-
-
1,254,019
(8,835,942)
-
37,886
(47,607)
(47,191)
(120,737)
-
1,993
(120,737)
Share of loss of associate company
Interest income
Reversal of provision
Operating profit/(loss) before changes in
working capital
(76,582)
-
(1,936,949)
(3,537,521)
-
1,466,049
(3,425,570)
(3,660,058)
-
-
(1,555,799)
-
(3,292,676)
(739,348)
5,803,288
43,278,807
(4,930,412)
(2,886,523)
Decrease in inventories
Decrease in receivables
Balances with subsidiary companies Balances with related companies
Balances with associate companies
Balances with joint venture
(Decrease)/Increase in payables
Cash generated from/(used in) operations
Zakat paid
Tax refund
Tax paid
12,023,492
589,156
-
(2,675,723)
(100,380)
(2,538,796)
(10,337,353)
46,564,097
46,080,457
-
-
-
-
(134,833,458)
-
103,403
(24,001,905)
(1,700,343)
-
-
614,262
134,441
(37,826,919)
(433,782)
2,763,684
(270,000)
1,355,624
(2,271,055)
1,089,903
-
5,356,532
(2,576,210)
(29,914,995)
(270,000)
-
(673,708)
(41,012,783)
42,500
(233,024)
Refurbishment cost incurred
Net cash (used in)/generated from
operating activities
(26,106,240)
-
-
-
(24,527,987)
3,870,225
(30,858,703)
(41,203,307)
Adjustments for:
Amortisation of intangible assets
273,272
Allowance for doubtful debts, impairment
and written off, net off recovered
530,685
Bad debt written off
4,588
Depreciation of property, plant and equipment
5,880,290
Interest expense
322,610
Impairment loss on investment in associate
125,359
Loss on disposal of associate company
46,931
Provision for damages
-
Unrealised (gain)/loss on foreign exchange
(245,522)
SIS expenses
807,800
Written off of amount owing by
subsidiary companies disposal
Gain on of a subsidiary company
Loss/(Gain) on disposal of property, plant
and equipment
(Gain)/Loss on redemption of other investment
ANNUAL REPORT 2014
55
STATEMENTS OF CASH FLOW
NOTE
GROUP
2014
2013
RM
RM
CASH FLOW FROM INVESTING
ACTIVITIES
Purchase of property, plant and equipment
31
Proceeds from disposal of property,
plant and equipment
Net cash inflow from disposal of a
subsidiary company
32
Net cash on acquisition of a subsidiary
company
33
Proceed from disposal of associate
company
Additional investment in associate
company
Incorporation of joint venture
Increase in development costs
Acquisition of a subsidiary company from
non-controlling shareholder
Purchase of other investment
Proceed from redemption of other
investment
Interest received
(271,892)
(918,048)
-
-
880,288
119,065
-
-
4,136,430
-
900,000
-
(36,789,000)
-
(36,789,000)
(2)
-
44,654
-
1
-
(255,000)
-
(30,000)
-
(301,268)
-
-
-
-
-
-
(11,300,000)
(34,300,000)
(122,000,000)
-
(9,500,000)
(34,300,000)
(122,000,000)
5,000,000
1,591,537
108,120,062
3,425,570
5,000,000
1,150,682
108,120,062
3,292,676
(37,007,637)
(45,839,965)
(39,238,318)
(44,887,263)
4,296,299
(60,243)
38,283,745
(25,393,969)
4,296,299
-
38,281,637
-
(728,830)
(613,823)
(1,709,730)
(1,943,474)
-
(25,281)
(122,895)
5,326,756
(4,103,648)
(724,071)
1,182,602
8,220,159
5,132,924
3,546,947
39,341,344
(53,315,465)
(36,836,816)
(66,550,074)
(46,749,226)
103,468,875
140,014,536
75,815,354
122,564,580
163
291,155
-
-
50,153,573
103,468,875
9,265,280
75,815,354
Net cash used in investing activities
CASH FLOW FROM FINANCING
ACTIVITIES
Issuance of shares
Net term loan and other borrowings
Repayment of hire purchase and finance
lease
Interest paid
Decrease/(Increase) in cash and cash
equivalents
pledged as security
Net cash generated from financing
activities
Net decrease in cash and cash equivalents
Cash and cash equivalents at beginning of
the year
Effects on exchange rate changes on cash
and cash equivalents
Cash and cash equivalents at end of
the year
34
COMPANY
2014
2013
RM
RM
56
ANNUAL REPORT 2014
NOTES TO THE FINANCIAL STATEMENTS
1.
GENERAL INFORMATION
The Company is a public limited company domiciled and incorporated in Malaysia and listed on the Main Market of
the Bursa Malaysia Securities Berhad.
The registered office is located at 802, 8th Floor, Block C, Kelana Square, 17 Jalan SS7/26, 47301 Petaling Jaya,
Selangor Darul Ehsan.
The principal place of business is located at Suite 5-1, Level 5, Menara UOA Damansara II, No.6 Changkat Semantan,
Damansara Heights, 50490 Kuala Lumpur.
The Company is principally engaged in investment holding. The principal activities of the subsidiaries are described
in Note 7 to the Financial Statements. There have been no significant changes in the nature of the activities during
the current financial year.
The functional currency of the Company is Ringgit Malaysia (“RM”) as the sales and purchases are mainly denominated
in RM, receipts from operations are usually retained in RM and funds from financing activities are mainly generated
in RM.
For the purpose of the consolidated financial statements, the financial statements of each entity within the Group are
expressed in RM, which is the functional currency of the Company, and the presentation currency for the consolidated
financial statements.
2. ADOPTION OF NEW
INTERPRETATIONS
AND
REVISED
MALAYSIAN
FINANCIAL
REPORTING
STANDARDS
AND
The accounting policies adopted by the Group and by the Company are consistent with those adopted in the previous
year except as discussed below:
MFRSs that do not have significant impacts on these financial statements
The following new and revised MFRSs issued by the Malaysian Accounting Standards Board (‘MASB’) have been
adopted which are effective for financial periods beginning on or after 01 January 2014:
Amendments to MFRS 10 Consolidated Financial Statements: Investment Entities Amendments to MFRS 12
Disclosure
of Interests in Other Entities: Investment Entities
Amendments to MFRS 127 Consolidated and Separate Financial Statements: Investment Entities Amendments to
MFRS
132 Financial Instruments: Presentation – Offsetting Financial Assets and Financial Liabilities
Amendments to MFRS 136 Impairment of Assets - Recoverable Amount Disclosures for Non- Financial Assets
MFRSs that have been issued but are not yet effective
The Group and the Company have not adopted the following MFRSs that have been issued by the MASB but are
not yet effective:
Effective for annual period beginning on or after 01 July 2014
Amendments to MFRS 2 Share-based payment (Annual Improvements to MFRSs 2010 - 2012 Cycle)
Amendments to MFRS 3 Business Combinations (Annual Improvements to MFRSs 2010 - 2012 Cycle)
Amendments to MFRS 3 Business Combinations (Annual Improvements to MFRSs 2011 - 2013 Cycle)
Amendments to MFRS 8 Operating Segments (Annual Improvements to MFRSs 2010 - 2012 Cycle)
Amendments to MFRS 13 Fair Value Measurement (Annual Improvements to MFRSs 2011 - 2013 Cycle)
Amendments to MFRS 116 Property, Plant and Equipment (Annual Improvements to MFRSs 2010 - 2012 Cycle)
Amendments to MFRS 119 Employee Benefits (Defined Benefit Plans: Employee Contributions) Amendments to
MFRS
124 Related Party Disclosures (Annual Improvements to MFRSs 2010
- 2012 Cycle)
Amendments to MFRS 138 Intangible Assets (Annual Improvements to MFRSs 2010 - 2012 Cycle)
Amendments to MFRS 140 Investment Property (Annual Improvements to MFRSs 2011 - 2013 Cycle)
ANNUAL REPORT 2014
57
2. ADOPTION OF NEW AND REVISED
INTERPRETATIONS (continued)
MALAYSIAN
FINANCIAL
REPORTING
STANDARDS
AND
Effective for annual period beginning on or after 01 January 2016
Amendments to MFRS 5 Non-current Assets Held for Sale and Discontinued Operations (Annual Improvements to
MFRSs
2012 - 2014 Cycle)
Amendments to MFRS 7 Financial Instruments: Disclosures (Annual Improvements to MFRSs 2012 - 2014 Cycle)
Amendments to MFRS 10 Consolidated Financial Statements - Sale or Contribution of Assets between an Investor
and
its Associate or Joint Venture
Amendments to MFRS 10 Consolidated Financial Statements - Investment Entities: Applying the Consolidation
Exception
Amendments to MFRS 11 Joint Arrangements - Accounting for Acquisitions of Interests in Joint Operations
Amendments to MFRS 12 Disclosures of Interest in Other Entities - Investment Entities: Applying the
Consolidation
Exception
Amendments to MFRS 101 Presentation of Financial Statements - Disclosure Initiative Amendments to MFRS 116
Property, Plant and Equipment - Clarification of Acceptable Methods of Depreciation and Amortisation
Amendments to MFRS 119 Employee Benefits (Annual Improvements to MFRSs 2012 - 2014 Cycle)
Amendments to MFRS 127 Consolidated and Separate Financial Statements - Equity Method in Separate Financial
Statements
Amendments to MFRS 128 Investment in Associates - Sale or Contribution of Assets between an Investor and its
Associate or Joint Venture
Amendments to MFRS 128 Investments in Associates - Investment Entities: Applying the Consolidation
Exception
Amendments to MFRS 134 Interim Financial Reporting (Annual Improvements to MFRSs 2012 - 2014 Cycle)
Amendments to MFRS 138 Intangible Assets - Clarification of Acceptable Methods of Depreciation and
Amortisation
MFRS 15 Revenue from Contracts with Customers
MFRS 9 Financial Instruments
These pronouncements are not expected to have any effect to the financial statements of the Group and the Company
upon their initial application, except as described below:
MFRS 9 Financial Instruments
In November 2014, MASB issued the final version of MFRS 9 Financial Instruments which reflects all phases of the
financial instruments project and replaces MFRS 139 Financial Instruments: Recognition and Measurement and
all previous versions of MFRS 9. The standard introduces new requirements for classification and measurement,
impairment and hedge accounting. MFRS 9 is effective for annual periods beginning on or after 01 January 2018, with
early application permitted. Retrospective application is required, but comparative information is not compulsory.
The adoption of MFRS 9 will have an effect on the classification and measurement of the Group’s financial assets,
but no impact on the classification and measurement of the Group’s financial liabilities.
MFRS 15 Revenue from Contracts with Customers
The core principle of MFRS 15 is that an entity should recognise revenue which depicts the transfer of promised
goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled
in exchange for those goods or services. Under MFRS 15, an entity recognises revenue when (or as) a performance
obligation is satisfied. Either a full or modified retrospective application is required for annual periods beginning on
or after 01 January 2017 with early adoption permitted. The Group is currently assessing the impact of MFRS 15 and
plans to adopt the new standard on the stipulated effective date. MFRS 15 establishes a new five- step models that
will apply to revenue arising from contracts with customers. MFRS 15 will supersede the current revenue recognition
guidance including MFRS 118 Revenue, MFRS 111 Construction Contracts and the related interpretations when it
becomes effective.
58
ANNUAL REPORT 2014
3.
SIGNIFICANT ACCOUNTING POLICIES
The financial statements have been prepared in accordance with the Malaysian Financial Reporting Standards
(“MFRSs”), International Financial Reporting Standards (“IFRSs”) and the provisions of the Companies Act, 1965.
(a) Basis of Preparation
The financial statements have been prepared on the historical cost basis unless otherwise indicated in the other
section of accounting policies.
The principal accounting policies adopted are set out below.
(b) Basis of Consolidation
The consolidated financial statements incorporate the financial statements of the Company and all subsidiaries.
Subsidiaries are entities controlled by the Company. The Group controls an entity when it is exposed to, or has
rights to, variable returns from its involvement with the entity and has the ability to affect those returns through
its power over the entity. Potential voting rights are considered when assessing control only when such rights
are substantive. The Group considers it has de facto power over an investee when, despite not having the
majority of voting rights, it has the current ability to direct the activities of the investee that significantly affect
the investee’s return.
Investment in subsidiaries is accounted for in the Company’s separate financial statements at cost. If an
investment in a subsidiary is classified as held for sale, that investment is accounted for in accordance with
MFRS 5 Non-current Assets Held for Sale and Discontinued Operations.
The results of a subsidiary are included in the consolidated financial statements from the acquisition date
until the date on which the Company ceases to control the subsidiary. Any difference between the fair value
of the consideration received from the loss of control of a subsidiary and the carrying amount as at the date
when control is lost, including the cumulative amount of any translation difference that relate to the subsidiary
formerly recognised in other comprehensive income, is reclassified to consolidated profit or loss as a gain or
loss. Consolidated financial statements are prepared using uniform accounting policies for like transactions and
other events in similar circumstances.
Non-controlling interests are presented in the consolidated statement of financial position within equity,
separately from the equity attributable to owners of the Company. Non- controlling interests in the profit or loss
of the Group are also separately disclosed.
Changes in the Company’s ownership interest in a subsidiary that do not result in a loss of control are accounted
for as equity transactions. Any difference between the amount by which the non-controlling interests are adjusted
and the fair value of the consideration paid or received are recognised directly in equity and attributable to the
owners of the Company.
All intragroup balances, transactions, income and expenses are eliminated in full.
(c) Business Combinations
Business combinations are accounted for by applying the acquisition method. The consideration transferred
in a business combination is measured at fair value, which is calculated as the sum of the acquisition-date
fair values of the assets transferred by the Group, the liabilities incurred by the Group to former owners of the
acquiree and the equity interests issued by the Group in exchange for control of the acquiree. Acquisitionrelated costs are generally recognised in profit or loss as incurred.
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3.
SIGNIFICANT ACCOUNTING POLICIES (continued)
(c) Business Combinations (continued)
At the acquisition date, the Group allocates the cost of a business combination by recognising the acquiree’s
identifiable assets, liabilities and contingent liabilities that satisfy the recognition criteria in MFRS 3 Business
Combinations at their fair values, except for non-current assets and disposal groups that are classified as held
for sale in accordance with MFRS 5 Non-current Assets Held for Sale and Discontinued Operations, which are
recognised at fair value less costs to sell.
(d) Property, Plant and Equipment
The cost of an item of property, plant and equipment is recognised as an asset when it is probable that future
economic benefits associated with the item will flow to the Group and the cost of the item can be measured
reliably. After recognition as an asset, items of property, plant and equipment are carried at cost less accumulated
depreciation and any accumulated impairment losses. Depreciation is provided on a straight-line basis so as to
write off the depreciable amount of the following assets over their estimated useful lives, as follows:
Percentage (%)
Freehold land and building
2
Leasehold land and building
Over 80 months - 50 years
Furniture and fittings
10
Renovation
10
Workshop tools
20
Office equipment
10 – 33 1/3
Motor vehicles
20 – 25
Equipment
10 – 50
Plant and machinery
10 – 33 1/3
Depreciation of an asset under construction begins when it is ready for its intended use. The residual values and
useful lives of depreciable assets, if significant, are reviewed at the end of each reporting period.
The carrying amounts of items of property, plant and equipment are derecognised on disposal or when no
future economic benefits are expected from their use. Any gain or loss arising from the derecognition of items
of property, plant and equipment, determined as the difference between the net disposal proceeds, if any,
and the carrying amounts of the item, is included in profit or loss. Neither the sale proceeds nor any gain on
derecognition is classified as revenue.
(e)Goodwill
Goodwill arising on the acquisition of a subsidiary or a proportionately consolidated jointly-controlled entity,
being the excess of the aggregate of the consideration transferred, the amount of any non-controlling interest
in the acquiree, and the acquirer’s previously held equity interest in the acquiree over the net of the acquisitiondate amounts of the identifiable assets acquired and the liabilities assumed. After initial recognition, goodwill is
measured at cost less any accumulated impairment losses.
Goodwill is not amortised but is reviewed for impairment at least annually. For the purpose of impairment
testing, goodwill is allocated at the acquisition date to each of the Group’s cash-generating units that are
expected to benefit from the synergies of the combination. A cash-generating unit to which goodwill has been
allocated is tested for impairment annually, and whenever there is an indication that the unit may be impaired,
by comparing the carrying amount of the unit, including the goodwill, with the recoverable amount of the unit.
An impairment loss is recognised for a cash-generating unit when the recoverable amount of the unit is less
than the carrying amount of the unit. Any impairment loss recognised is first allocated to reduce the carrying
amount of any goodwill allocated to the unit and then, to the other assets of the unit within the scope of MFRS
136 Impairment of Assets pro rata on the basis of the carrying amount of each applicable asset in the unit. Any
impairment loss recognised for goodwill is not reversed.
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3.
(e) Goodwill (continued)
Goodwill arising on the acquisition of investments in associates is included within the carrying amount of the
investments and is assessed for impairment as part of the investment.
If, after reassessment, the Group’s interest in the net fair value of the identifiable assets, liabilities and contingent
liabilities recognised exceeds the cost of the business combination, the excess is recognised immediately in
profit or loss.
On disposal of a subsidiary or a proportionately consolidated jointly-controlled entity, the attributable amount of
goodwill is included in the determination of the gain or loss on disposal.
(f) Other Intangible Assets
Intangible assets are recognised when it is probable that future economic benefits that are attributable to the
assets will flow to the Group and the cost of the assets can be measured reliably.
Internally Generated Intangible Assets
Costs associated with internally generated intangible assets arising from research activities are recognised in
profit or loss in the period in which the expenditure is incurred.
An internally generated intangible asset arising from development activities is recognised only when all of the
following conditions are demonstrated:
-
-
-
-
-
the technical feasibility of completing the intangible asset so that it will be available for use or sale.
the intention to complete the intangible asset and thereafter use it or sell it.
the ability to either use or sell the intangible asset.
how the intangible asset will generate probable future economic benefits.
the availability of adequate technical, financial and other resources to complete the development and
thereafter to use or sell the intangible asset.
-
the ability to measure reliably the expenditure attributable to the intangible asset during its development
phrase.
Other development expenditure is recognised in profit or loss as and when it is incurred.
After initial recognition, internally generated intangible assets are carried at cost less any accumulated
amortisation and accumulated impairment losses. Internally generated gas generator development costs are
amortised on a straight-line basis over their estimated useful lives of 15 years. The amortisation period and
method are reviewed at least at the end of each reporting period.
The carrying amounts of intangible assets are derecognised on disposal or when no future economic benefits
are expected from their use. Any gain or loss arising from the derecognition of an intangible asset, determined
as the difference between the net disposal proceeds, if any, and the carrying amounts of the asset, is recognised
in profit or loss. Neither the sale proceeds nor any gain on derecognition is classified as revenue.
(g) Investment in Associates
An associate is an entity over which the Group has significant influence and that is neither a subsidiary nor an
interest in a joint venture. Significant influence is the power to participate in the financial and operating policy
decisions of the investee but is not control or joint control over those policies.
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3.
(g) Investment in Associates (continued)
Investment in associates is accounted for in the Company’s separate financial statements at cost. If an associate
is classified as held for sale, the investment is accounted for in accordance with MFRS 5 Non-current Assets
Held for Sale and Discontinued Operations.
Investment in associates are accounted for in the Group’s consolidated financial statements using the equity
method until the date the Group ceases to have significant influence over the associates or the investment
is classified as held for sale in accordance with MFRS 5 Non-current Assets Held for Sale and Discontinued
Operations.
Under the equity method, investment in associates are initially recognised at cost and thereafter, the carrying
amount is increased or decreased to recognise the Group’s share of the profit or loss of the investees after the
date of acquisition. Losses of associates in excess of the Group’s interest in the associates, include any longterm interests that form part of the Group’s net investment in the associates, are not recognised.
Profits or losses on transactions entered into between the Group and associates are eliminated to the extent of
the Group’s interest in the associates.
On acquisition of an investment in an associate, any excess of the cost of the investment over the Group’s
share of the net fair value of the associate’s identifiable assets, liabilities and contingent liabilities is included
in the carrying amount of the investment. If, after reassessment, the Group’s interest in the net fair value of the
identifiable assets, liabilities and contingent liabilities recognised exceeds the cost of the business combination,
the excess is included as income in the determination of the Group’s share of the associates’ profit or loss in
the period in which the investment is acquired.
(h) Impairment of Assets Other Than Goodwill and Financial Assets
At the end of each reporting period, the Group assesses whether there is any indication that an asset may
be impaired. If any such indication exists, the recoverable amount of the asset is estimated. Irrespective of
whether there is any indication of impairment, the Group test an intangible asset with an indefinite useful life or
an intangible asset not yet available for use for impairment annually by comparing the carrying amount with its
recoverable amount. When there is an indication that an asset may be impaired but it is not possible to estimate
the recoverable amount of the individual asset, the Group determines the recoverable amount of the cashgenerating unit to which the asset belongs.
The recoverable amount of an asset and a cash-generating unit is the higher of the fair value less costs to sell
and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value
using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks
specific to the asset.
If the recoverable amount of an asset or a cash-generating unit is less than the carrying amount, an impairment
loss is recognised to reduce the carrying amount to its recoverable amount. An impairment loss for a cashgenerating unit is firstly allocated to reduce the carrying amount of any goodwill allocated to the cash-generating
unit, and then, to the other assets of the unit within the scope of MFRS 136 Impairment of Assets pro rata on the
basis of the carrying amount of each appropriate asset in the unit. An impairment loss is recognised immediately
in profit or loss.
An impairment loss recognised in prior periods for an individual asset or the appropriate assets of a cashgenerating unit is reversed when there has been a change in the estimates used to determine the asset’s
recoverable amount. An impairment loss is reversed to the extent that the asset’s carrying amount does not
exceed the carrying amount that would have been determined, net of depreciation, if no impairment loss had
been recognised in prior periods. A reversal of an impairment loss is recognised immediately in profit or loss.
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3.
(i)
Non-current Assets Held for Sale
Non-current assets and disposal groups are classified as held for sale if there has been a change in management
intentions in respect of the future use of the asset or disposal group, and hence the carrying amount will be
recovered principally through a sale transaction rather than through continuing use.
On initial classification as held for sale, non-current assets and disposal groups are measured at the lower of
their carrying amount and fair value less costs to sell. Immediately before the initial classification as held for sale,
the carrying amount of non- current assets and disposal groups is measured in accordance with the applicable
MFRSs.
An impairment loss is recognised for any initial or subsequent write-down of the assets and disposal groups to
fair value less costs to sell. Any subsequent increase in fair value less costs to sell is recognised as a gain in
profit or loss, to the extent of the cumulative impairment loss that had previously been recognised.
(j)
Foreign Currencies
Foreign Currency Transactions
Transactions in foreign currencies are initially recorded in the functional currency by applying to the foreign
currency amount the spot exchange rates between the functional currency and the foreign currency at the date
of the transactions. At the end of each reporting period, foreign currency monetary items are translated using
the closing rate. Non-monetary items that are measured at historical cost in a foreign currency are translated
using the exchange rates at the date of the transactions. Non-monetary items that are measured at fair value
in a foreign currency are translated using the exchange rates at the date when the fair value was determined.
Exchange differences are recognised in profit or loss in the period in which they arise except when a gain or loss
on a non-monetary item is recognised in other comprehensive income. If so, any exchange differences relating
to that gain or loss is recognised in other comprehensive income.
Exchange Differences on Net Investment in Foreign Operations
Exchange differences arising on monetary items that forms part of the Company’s net investment in foreign
operations are recognised in the profit or loss in the separate financial statements of the Company. In the
consolidated financial statements, such exchange differences are recognised initially in other comprehensive
income and accumulated in equity under the heading of foreign currency translation reserves. On the disposal
of a foreign operation, the cumulative amounts of the exchange differences relating to the foreign operation,
recognised in other comprehensive income and accumulated in the separate component of equity, are
reclassified from equity to profit or loss when the gain or loss on disposal is recognised.
Foreign Operations
Assets and liabilities of foreign operations, including goodwill arising on the acquisition and any fair value
adjustments, are translated into Ringgit Malaysia at the closing rate at the end of the reporting period. Income
and expenses are translated at exchange rates approximating the exchange rates at the date of the transactions.
All resulting exchange differences are recognised in other comprehensive income and accumulated in equity
under the heading of foreign currency translation reserve. On disposal of the foreign operations, the cumulative
amounts of the exchange differences relating to the foreign operations, recognised in other comprehensive
income and accumulated in the separate component of equity, are reclassified from equity to profit or loss when
the gain or loss on disposal is recognised.
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3.
(k)Inventories
Inventories are measured at the lower of cost and net realisable value. Cost of inventories comprises all costs of
purchase, costs of conversion and other costs incurred in bringing the inventories to their present location and
condition. Cost of inventories is assigned by using the First-in First-out method.
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.
Share-based Payments
(l)
The Group operates an equity-settled share-based payments scheme to allow the employees of the Group to
acquire ordinary shares of the Company. The grant by the Company of options over its equity instruments to
the employees of subsidiary undertakings in the Group is treated as a capital contribution in the subsidiaries’
financial statements. The fair value of employee services received, measured by reference to the grant date
fair value, is recognised over the vesting period as an increase to investment in subsidiary undertakings, with a
corresponding credit to equity-settled employee benefits reserve in the Company’s financial statements.
The fair value determined at the grant date is recognised as expense in profit or loss in accordance with MFRS
2 Share-based Payment over the periods during which the employees become unconditionally entitled to the
options, based on the Group’s estimate of the ordinary shares that will eventually vest, and adjusted for the
effect of non market- based vesting conditions. At the end of each reporting period, the Group revises the
estimates of the number of options that are expected to become exercisable, and recognises the impact of the
revision of the original estimates.
(m)Provisions
A provision is recognised when the Group and the Company have a present legal or constructive obligation
as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be
required to settle the obligation and a reliable estimate can be made of the amount of the obligation. The risks
and uncertainties are taken into account in reaching the best estimate of a provision. When the effect of the
time value of money is material, the amount recognised in respect of the provision is the present value of the
expenditure expected to be required to settle the obligation.
(n) Leases – as lessee Finance Leases
Leases of assets are classified as finance lease where substantially all the risks and benefits incidental to the
ownership of the assets, but not the legal ownership, are transferred to the Group. The Group initially recognise
finance leases as assets and liabilities in the statements of financial position at amounts equal to the fair value
of the leased assets or, if lower, the present value of the minimum lease payments at the inception of the leases.
Any initial direct costs are added to the amount recognised as an asset.
Minimum lease payments are apportioned between the finance charge and the reduction of the outstanding
liability. A finance charge is allocated to each period during the lease term so as to produce a constant periodic
rate of interest on the remaining balance of the liability. Finance charges are recognised in profit or loss unless
they are attributable to qualifying assets, in which case they are capitalised in accordance with the accounting
policy for borrowing costs. Contingent rents are charged as an expense in profit or loss in the period in which
they are incurred. The depreciation policy for depreciable leased assets is consistent with that of depreciable
assets that are owned. If there is no reasonable certainty that the Group will obtained ownership by the end of
the lease term, the leased assets are depreciated over the shorter of the lease terms and their useful lives.
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(n) Leases – as lessee Finance Leases
Operating Leases
All other leases are classified as operating leases. Lease payments under operating leases are recognised as
expense in profit or loss on a straight-line basis over the lease term.
(o) Financial Assets
Financial assets are recognised in the statements of financial position when the Group and the Company
become a party to the contractual provisions of the instrument. Regular way purchases and sales of financial
assets are recognised and derecognised using trade date accounting.
On initial recognition, financial assets are measured at fair value, plus transaction costs for financial assets not
at ‘fair value through profit or loss’.
Effective interest method is a method of calculating the amortised cost of financial assets and of allocating the
interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimate
future cash receipts through the expected life of the financial assets or a shorter period to the net carrying
amount of the financial assets.
After initial recognition, financial assets are classified into one of four categories: financial assets at ‘fair value
through profit or loss’, ‘held-to-maturity’ investments, loans and receivables and ‘available-for-sale’ financial
assets. The Group and the Company did not have any financial assets other than loans and receivables and
‘available-for-sale’ financial assets.
Loans and Receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not
quoted in an active market.
After initial recognition, loans and receivables are measured at amortised cost using the effective interest
method less any accumulated impairment losses. Gains or losses are recognised in profit or loss when loans
and receivables are derecognised or impaired.
‘Available-for-Sale’
Investment in quoted equity and debt instruments that are traded in active market and certain unquoted equity
instruments (when the fair value can be determined using a valuation technique) are classified as ‘available-forsale’ financial assets. ‘Available-forsale’ financial assets are measured at fair value.
Gains or losses on ‘available-for-sale’ financial assets are recognised in other comprehensive income, except
for impairment losses and foreign exchange gains or losses, until the ‘available-for-sale’ financial assets are
derecognised. At that time, the cumulative gains or losses previously recognised in other comprehensive income
are reclassified from equity to profit or loss as a reclassification adjustment.
Interest calculated using the effective interest method is recognised in profit or loss. Dividends on ‘available-forsale’ equity instruments are recognised in profit or loss when the Group’s and the Company’s right to receive
payment is established.
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3.
(o) Financial Assets (continued)
‘Held-to-Maturity’
‘Held-to-maturity’ investments are non-derivative financial assets with fixed or determinable payments and
fixed maturity that the Group and the Company have the positive intention and ability to hold to maturity.
After initial recognition, ‘held-to-maturity’ investments are measured at amortised cost using the effective
interest method less any accumulated impairment losses. Gains or losses are recognised in profit or loss when
‘held-to-maturity’ investments are derecognised or impaired.
Impairment of Financial Assets
At the end of each reporting period, the Group and the Company assess whether there is any objective evidence
that financial assets held are impaired. Financial assets are impaired if there is objective evidence of impairment
as a result of one or more events that occurred after the initial recognition of the financial assets which have an
impact on the estimated future cash flows of the financial assets that can be reliably measured.
For other financial assets, objective evidence could include:
-
significant financial difficulty of the issuer; or
-
a breach of contract; or
-
the lender granting to the borrower a concession that the lender would not otherwise consider; or
-
it becoming probable that the borrower will enter bankruptcy or other financial reorganisation; or
-
observable data indicating that there is a measurable decrease in the estimated future cash flows from the
financial assets since the initial recognition of those assets.
For certain categories of financial assets, such as trade receivables, if it is determined that no objective evidence
of impairment exists for an individually assessed financial asset, whether significant or not, the assets are
included in a group with similar credit risk characteristics and collectively assessed for impairment.
The carrying amounts of the financial assets are reduced directly, except for the carrying amounts of trade
receivables which are reduced through the use of an allowance account. Any impairment loss is recognised
in profit or loss immediately. If, in later periods, the amount of any impairment loss decreases, the previously
recognised impairment losses are reversed directly, except for the amounts related to trade receivables which
are reversed to write back the amount previously provided in the allowance account. The reversal is recognised
in profit or loss immediately.
If there is objective evidence that impairment losses have been incurred on financial assets carried at cost, the
amount of any impairment loss is measured as the differences between the carrying amounts of the financial
assets and the present value of their estimated future cash flows discounted at the current market rate of return
for a similar financial assets. Such impairment losses are not reversed.
For ‘available-for-sale’ financial assets, if a decline in fair value has been recognised in other comprehensive
income and there is objective evidence that the assets are impaired, the cumulative losses that have been
recognised are reclassified to profit or loss.
Impairment losses recognised in profit or loss for an investment in an equity instrument classified as ‘availablefor-sale’ financial assets are not reversed through profit or loss.
If the fair value of a debt instrument classified as an ‘available-for-sale’ financial asset subsequently increases,
and the increase can be objectively related to an event occurring after the impairment losses were recognised
in profit or loss, the impairment losses are reversed and recognised in profit or loss.
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(o) Financial Assets (continued)
Derecognition of Financial Assets
Financial assets are derecognised when the contractual rights to the cash flows from the financial assets expire
or the Group and the Company transfer the financial assets and the transfers qualify for derecognition.
On derecognition of financial assets in their entirety, the differences between the carrying amounts and the
sum of the consideration received and any cumulative gains or losses that have been recognised in other
comprehensive income are recognised in profit or loss.
(p) Financial Liabilities and Equity Instruments Issued by the Company
Classification of Liabilities and Equity
On initial recognition, financial liabilities and equity instruments are classified in accordance with the substance
of the contractual arrangement.
Interests, dividends, losses and gains relating to a financial instrument that is classified as a financial liability is
recognised as income or expense in profit or loss. Distributions to holders of an equity instrument are debited
directly to equity, net of any related income tax benefit. Transaction costs of an equity instrument are accounted
for as a deduction from equity, net of any related income tax benefit.
Equity Instruments
Equity instruments are any contracts that evidence a residual interest in the assets of the Company after
deducting all of its liabilities. Equity instruments issued by the Company are recognised at the proceeds
received, net of direct issue costs.
Treasury Shares
When the Company reacquires its own equity instruments (‘treasury shares’), these treasury shares are deducted
from equity. No gains or losses are recognised in profit or loss on the purchase, sale, issue and cancellation of
these treasury shares. Considerations paid or received are recognised directly in equity.
Financial Liabilities
Financial liabilities are recognised on the statements of financial position when the Group and the Company
become a party to the contractual provisions of the instrument.
On initial recognition, financial liabilities are measured at fair value, less transaction costs for financial liabilities
not at ‘fair value through profit or loss’.
After initial recognition, financial liabilities are either classified as at ‘fair value through profit or loss’ or amortised
cost using the effective interest method. The Group and the Company did not have any financial liabilities other
than financial liabilities at amortised cost using the effective interest method.
Financial Liabilities at Amortised Cost using the Effective Interest Method
Effective interest method is a method of calculating the amortised cost of financial liabilities and allocating the
interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimate
future cash payments through the expected life of the financial liabilities or a shorter period to the net carrying
amount of the financial liabilities.
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3.
(p) Financial Liabilities and Equity Instruments Issued by the Company (continued)
Financial Liabilities at Amortised Cost using the Effective Interest Method
After initial recognition, financial liabilities other than financial liabilities at ‘fair value through profit or loss’ are
measured at amortised cost using the effective interest method. Gains or losses are recognised in profit or loss
when the financial liabilities are derecognised or impaired.
Derecognition of Financial Liabilities
Financial liabilities are derecognised when the obligation specified in the contract is discharged, cancelled
or expires.
Any difference between the carrying amounts of financial liabilities derecognised and the consideration paid is
recognised in profit or loss.
(q)Revenue
Revenue is measured at the fair value of the consideration received or receivable, net of discounts and indirect
taxes applicable to the revenue.
Revenue is recognised in the profit or loss based on the following:
Rendering of Services
Revenue from rendering of services is recognised by reference to the stage of completion of the transaction at
the end of the reporting period when the outcome of the transaction can be estimated reliably. Upfront payments
for which there are subsequent deliverables are initially reported as deferred revenue and are recognised as
revenue only when the deliverables are completed and accepted by the customers. Cost incurred for work
performed for which performance milestones have yet to be achieved is initially recorded as deferred cost and
recognised as cost of sales only when the deliverables are completed and accepted by customers.
Sales of Goods
Revenue from sales of goods is recognised when the following conditions are satisfied:
-
the Group has transferred to the buyer the significant risks and rewards of ownership of the goods;
-
the Group retains neither continuing managerial involvement to the degree usually associated with
ownership nor effective control over the goods sold;
-
the amount of revenue can be measured reliably;
-
it is probable that the economic benefits associated with the transaction will flow to the Group; and
-
the costs incurred and to the incurred in respect of the transaction can be measured reliably.
Interest Revenue
Interest revenue is recognised on an accrued on a time basis.
Dividend Revenue
Dividend revenue is recognised when the shareholder’s rights to receive payment is established.
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(r) Employee Benefits
Short-term Employment Benefits
Short-term employment benefits, such as wages, salaries, bonuses, allowances and social security contributions,
are recognised as expense when the employees have rendered services to the Group.
The expected cost of accumulating compensated absences are recognised when the employees render services
that increase their entitlement to future compensated absences. The expected cost of non-accumulating
compensated absences, such as sick and medical leaves, are recognised when the absences occur.
The expected cost of accumulating compensated absences are measured as the additional amount expected to
be paid as a result of the unused entitlement that has accumulated at the end of the reporting period.
The expected cost of bonus payments are recognised when the Group and the Company have a present
legal or constructive obligation to make such payments as a result of past events and a reliable estimate of
the obligation can be made. A present obligation exists when the Group and the Company have no realistic
alternative but to make the payments.
Defined Contribution Plan
Contributions payable to the defined contribution plan are recognised as expense when the employees have
rendered services to the Group and the Company.
Termination Benefits
Termination benefits are recognised as a liability and an expense when the Group is demonstrably committed
to either terminate the employment of the employees before the normal retirement date, or provide termination
benefits as a result of an offer made for voluntary redundancy. The Group is demonstrably committed to a
termination when the Group has a detailed formal plan for the termination and are without realistic possibility
of withdrawal.
Termination benefits in relation to the offer made to encourage voluntary redundancy are measured based on
the number of employees expected to accept the offer.
(s) Borrowing Costs
Borrowing costs that are directly attributable to the acquisition, construction or production of qualifying assets
are capitalised as part of the cost of the assets when the Group incurs the expenditure for the assets, incur
borrowing costs and undertake activities that are necessary to prepare the assets for the intended use or sale.
Capitalisation of borrowing costs is suspended during extended periods in which active development is
suspended and ceased when substantially all the activities necessary to prepare the qualifying assets for the
intended use or sale are complete.
Other borrowing costs are recognised as expense in profit or loss when they are incurred.
(t) Zakat and Income Tax
The Group and the Company recognise its obligation towards the payment of zakat in the statements of profit
or loss.
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3.
(t) Zakat and Income Tax (continued)
Tax expense is the aggregate amount included in the determination of profit or loss for the period in respect of
current tax and deferred tax. Current tax and deferred tax are charged or credited directly to other comprehensive
income or equity if the tax relates to items that are credited or charged directly to other comprehensive income
or equity. Current tax for current and prior periods is recognised as a liability to the extent unpaid. If the amount
already paid in respect of the current and prior periods exceeds the amount due for those periods, the excess
is recognised as an asset.
Current tax assets and liabilities for the current and prior periods are measured at the amounts expected to
be paid or recovered, using the tax rates that have been enacted or substantially enacted by the end of the
reporting period. Current tax assets and liabilities are offset only when the Group and the Company have a
legally enforceable right to set off the recognised amounts and intend either to settle on a net basis, or to realise
the asset and settle the liability simultaneously.
Deferred tax is provided in full on temporary differences which are the differences between the carrying amounts
in the financial statements and the corresponding tax base of an asset or liability at the end of the reporting
period. Deferred tax liabilities are recognised for all taxable temporary differences and deferred tax assets are
recognised for all deductible temporary differences to the extent that it is probable that future taxable profit
will be available against which the deductible temporary differences can be utilised. Deferred tax liabilities and
assets are not recognised if the temporary differences arise from initial recognition of goodwill and the initial
recognition of assets or liabilities that is not a business combination and at the time of the transaction, affected
neither accounting profit nor taxable profit.
Deferred tax liabilities and assets reflect the tax consequences that would follow from the manner in which the
Group and the Company expect to recover or settle the carrying amounts of their assets and liabilities and are
measured at the tax rates that are expected to apply to the period when the asset is realised or the liability is
settled, based on tax rates that have been enacted or substantially enacted by the end of the reporting period.
The carrying amounts of the deferred tax assets are reviewed at the end of each reporting period, and they
are reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow the
benefit or part of the deferred tax assets to be utilised. The reduction is reversed to the extent that it becomes
probable that sufficient taxable profit will be available. Deferred tax assets and liabilities are offset when the
Group and the Company have a legally enforceable right to set off current tax assets and liabilities, and the
deferred tax assets and liabilities relate to income taxes levied by the same taxation authority on either the same
taxable entity or different taxable entities which intend either to settle current tax liabilities and assets on a net
basis or to realise the assets and settle the liabilities simultaneously, in each future period in which significant
amounts of deferred tax liabilities or assets are expected to be settled or recovered.
(u) Cash and Cash Equivalents
Cash and cash equivalents in statements of cash flows comprise cash and bank balances, highly liquid
investments that are readily convertible to a known amount of cash and which are subject to an insignificant risk
of changes in value, net of bank overdrafts.
(v) Segmental Reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief
operating decision maker. The chief operating decision maker, who is responsible for allocating resources and
assessing performance of the operating segment, has been identified as the board of directors that makes
strategic decisions.
70
ANNUAL REPORT 2014
3.
(v) Segmental Reporting
Segment reporting is presented for enhanced assessment of the Group’s and the Company’s risks and returns.
Business segments provide products or services that are subject to risk and returns that are different from those
of other business segments. Geographical segments provide products or services within a particular economic
environment that is subject to risks and returns that are different from those components operating in other
economic environments.
Segment revenue, results, assets and liabilities are those amounts resulting from the operating activities of
a segment that are directly attributable to the segment and the relevant portion that can be allocated on a
reasonable basis to the segment. Segment revenue, results, assets and liabilities are determined after elimination
of intragroup balances and intragroup transactions as part of the consolidation process.
(w) Financial Guarantee Contracts
A financial guarantee contract is a contract that requires the issuer to make specified payments to reimburse the
holder for a loss it incurs because a specified debtor fails to make payment when due.
Financial guarantee contracts are recognised initially as a liability at fair value, net of transaction costs.
Subsequent to initial recognition, financial guarantee contracts are recognised as income in the profit or loss
over the period of the guarantee. If the debtor fails to make payment relating to financial guarantee contract
when it is due and the Group, as the issuer, is required to reimburse the holder for the associated loss, the
liability is measured at the higher of the best estimate of the expenditure required to settle the present obligation
at the reporting date and the amount initially recognised less cumulative amortisation.
(x) Offsetting Financial Instruments
(y) Contingent Liabilities
Financial assets and liabilities are offset and the net amount presented in the statements of financial position
when there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on
a net basis, or realise the asset and settle the liability simultaneuosly.
The Group does not recognise contingent liabilities, but discloses its existence in the financial statements. A
contingent liability is a possible obligation that arises from past events whose existence will be confirmed by
the occurrence or non-occurrence of one or more uncertain future events beyond the control of the Group or a
present obligation that is not recognised because it is not probable that an outflow of resources will be required
to settle the obligation. A contingent liability also arises in the extremely rare case where there is a liability that
cannot be recognised because it cannot be measured reliably.
(z) Joint Arrangements
Joint arrangements are arrangements of which the Group has joint control, established by contracts requiring
unanimous consent for decisions about the activities that significantly affect the arrangements’ returns. Joint
arrangements are classified as either joint operation or joint venture. A joint arrangement is classified as a joint
operation when the Group or the Company has rights to the assets and obligations for the liabilities relating to
an arrangement. Whilst, a joint arrangement is classified as a joint venture when the Group has rights only to the
net assets of the arrangements.
ANNUAL REPORT 2014
71
3.
(z) Joint Arrangements (continued)
Joint Ventures
Investment in joint ventures is accounted for in the consolidated financial statements using the equity method
of accounting. Under the equity method, the investment in joint ventures is carried in the statements of financial
position at cost adjusted for post- acquisition changes in the Group’s share of net assets of the joint ventures.
The Group’s share of profit or loss of joint ventures is recognised in the statements of profit or loss. Where
there has been a change recognised directly in the equity of the joint ventures, the Group recognises its share
of such changes. In applying the equity method, unrealised gains or losses on transactions between the Group
and the joint ventures are eliminated to the extent of the Group’s interest in the joint ventures. After application
of the equity method, the Group determines whether it is necessary to recognise any additional impairment loss
with respect to the Group’s net investment in the joint ventures. The Group determines at each reporting date
whether there is any objective evidence that the investment in the joint ventures is impaired. If this is the case,
the Group calculates the amount of impairment as the difference between the recoverable amount of the joint
venture and its carrying value and recognises the amount in statements of profit or loss. The joint ventures are
equity accounted for from the date the Group obtains joint control until the date the Group ceases to have joint
control over the joint ventures.
Goodwill relating to a joint venture is included in the carrying amount of the investment and is not amortised.
Any excess of the Group’s share of the net fair value of the joint ventures’ identifiable assets, liabilities and
contingent liabilities over the cost of the investments is excluded from the carrying amount of the investment
and is instead included as income in the determination of the Group’s share of the joint ventures’ profit or loss
in the year in which the investments are acquired.
When the Group’s share of losses in joint ventures equals or exceeds its interest in the joint ventures, including
any long-term interests that, in substance, form part of the Group’s net investment in the joint ventures, the
Group does not recognise further losses, unless it has incurred obligations or made payments on behalf of the
joint ventures.
The most recent available audited financial statements of the joint ventures are used by the Group in applying
the equity method. Where the dates of the audited financial statements used are not coterminous with those of
the Group, the share of results is arrived at from the last audited financial statements available and management
financial statements to the end of the accounting year. Uniform accounting policies are adopted for like
transactions and events in similar circumstances.
On disposal of such investment, the difference between net disposal proceeds and their carrying amounts is
included in income statement.
Joint Operations
A joint operation is a joint arrangement whereby the parties that have joint control of the arrangement have rights
to the assets, and obligations for the liabilities, relating to the arrangement. Joint control is the contractually
agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities
require the unanimous consent of the parties sharing control.
The Group as a joint operator recognises in relation to its interest in a joint operation:
(a) its assets, including its share of any assets held jointly;
(b) its liabilities, including its share of any liabilities incurred jointly;
(c) its revenue from the sale of its share of the output arising from the joint operation;
(d) its share of the revenue from the sale of the output by the joint operation;
(e) its expenses, including its share of any expenses incurred jointly.
72
ANNUAL REPORT 2014
3.
(z) Joint Arrangements (continued)
Joint Operations
The Group accounts for the assets, liabilities, revenues and expenses relating to its interest in a joint operation
in accordance with the MFRSs applicable to the particular assets, liabilities, revenues and expenses.
Profits or losses resulting from transactions between the Group and its joint operation are recognised in the
Group’s financial statements only to the extent of unrelated investors’ interests in the joint operation.
(aa) Investment Property
Investment property which is held to earn rentals or for capital appreciation or both, including property that
is being constructed or developed for future use as investment property, is measured initially at its cost.
Transaction costs are included in the initial measurement.
After initial recognition as investment property, investment property is carried at cost less accumulated
depreciation and any accumulated impairment losses.
Depreciation of an investment property begins when it is ready for its intended use.
An investment property is derecognised on disposal or when the investment property is permanently
withdrawn from use and no future economic benefits are expected from its disposal. Any gain or loss
arising from derecognition, determined as the difference between any net disposal proceeds and the
carrying amounts of the investment property, and is recognised in statements of profit or loss.
4.
CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY
Critical Judgements in Applying the Accounting Policies
The judgements, apart from those involving estimations described below, that the management has made in the
process of applying the accounting policies and that have the most significant effect on the amounts recognised in
the financial statements are as follows:
Revenue Recognition
The Group is a party to the contractual agreements, which can involve upfront and milestone payments that may
occur over several years. These agreements may also involve certain future obligations. Revenue is only recognised
when, in management’s judgement, the significant risks and rewards of ownership have been transferred or when
the obligation has been fulfilled.
Deferred Tax Assets
Deferred tax assets are recognised for all unused tax losses and unabsorbed capital allowances to the extent that
it is probable that future taxable profits will be available against which the tax losses and capital allowances can
be utilised. Significant management judgement is required to determine the amount of deferred tax assets that
can be recognised, based upon the likely timing and level of future taxable profits together with future tax planning
strategies.
ANNUAL REPORT 2014
73
4.
CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY (continued)
Key Sources of Estimation Uncertainty
The key assumptions concerning the future, and other key sources of estimation uncertainty at the end of the
reporting period, that have a significant risk of causing a material adjustment to the carrying amounts of assets and
liabilities within the next financial year are as follows:
Allowance for Doubtful Debts
At the end of the reporting period, the allowance for doubtful debts of RM6,441,978 (2013: RM10,058,317) is
representing 14% (2013: 12%) from the total trade receivables. The estimates allowance is based on the historical
default rate. Hence, should the actual default rate becomes higher than the estimated default rate, the Group may be
required to charge additional allowance for doubtful debt to the profit or loss within the next financial year.
Useful Lives of Property, Plant and Equipment
Property, plant and equipment are depreciated on a straight-line basis over their estimated useful lives. The
management exercises their judgement in estimating the useful lives of the depreciable assets. The Group assesses
annually the useful lives of the property, plant and equipment and if the expectation differs from the original estimate,
such difference will impact the depreciation in the period in which such estimate has been charged.
Share-based Payments to Employees
The cost of providing the share-based payments to the employees is charged to the profit or loss over the vesting
period. The cost is based on the fair value of the options and the number of the options expected to vest. The fair
value of the options is determined using Black-Scholes-Merton option pricing model.
Amortisation of Intangible Assets
The development costs of gas generators are amortised on a straight line basis over their useful lives of 15 years.
The Group assesses annually the useful lives of the intangible assets and if the expectation differs from the original
estimate, such difference will impact the amortisation expenses in the period in which such estimate has been
charged.
261,829
1,568,088
948,113
3,110,732
End of the year
Net Carrying Amount
332,388
44,707
-
-
(115,266)
990,164
91,211
-
(133,262)
-
Accumulated Depreciation
Beginning of the year
Charge for the year
Reclassification from/(to)
Disposal/Written off
Disposal of a subsidiary company
1,829,917
4,058,845
End of the year
465,959
348,634
482,726
105,436
-
-
(239,528)
814,593
-
-
2,242,990
448,627
198,542
-
(2,890,159)
-
753,369
771,612
2,303,872
175,715
-
-
(1,707,975)
1,524,981
2,230,152
5,889,744
6,827,379
778,124
(198,542)
(11,577)
(1,505,640)
8,119,896
233,746
2,304,474
3,815,128
119,744
-
(97,663)
(1,532,735)
2,538,220
-
37,351,672
35,795,371
1,556,301
-
-
-
37,351,672
7,152,428
6,640,201
14,127,115
2,560,425
-
(4,837)
(10,042,502)
13,792,629
48,103
-
-
-
-
-
-
48,103
15,562,577
54,516,279
66,917,133
5,880,290
(247,339)
(18,033,805)
70,078,856
Leasehold
Furniture
Plant
Assets
GROUP
Freehold landlandand
Workshop
Office
Motorand
under
At 31 December 2014 and building and building
fittings Renovation
tools
equipment
vehicles Equipment
machinery construction
Total
RM RM RM RM RM RM RM RM RM RM RM Cost
5,097,248
2,557,917
1,109,461
4,061,937
3,373,387
9,878,985
4,103,749
37,351,672
28,931,456
227,220 96,693,032
Additions
-
-
26,402
3,650
-
108,252
79,257
-
-
54,331
271,892
-
-
-
198,542
-
(198,542)
-
-
-
-
Disposal/Written off
(1,038,403)
-
-
-
-
(20,443)
(97,665)
-
(9,000)
-
(1,165,511)
-
(728,000)
(321,270)
(4,264,129) (1,848,406)
(1,648,356)
(1,547,121)
- (15,129,827)
(233,448) (25,720,557)
5. PROPERTY, PLANT AND EQUIPMENT
74
ANNUAL REPORT 2014
990,164
4,107,084
-
Net Carrying Amount
853,569
136,595
-
-
-
49,794
-
-
(49,794)
End of the year
Accumulated
Depreciation
Charge for the year
Disposal
2,225,529
332,388
285,745
46,643
-
-
2,557,917
626,735
482,726
392,324
90,402
-
-
1,109,461
1,818,947
2,242,990
1,640,502
602,488
-
-
4,061,937
1,069,515
2,303,872
1,934,481
369,391
-
-
3,373,387
3,051,606
6,827,379
5,920,588
1,041,830
(135,039)
-
9,878,985
288,621
3,815,128
3,808,825
149,232
(142,929)
-
4,103,749
1,556,301
35,795,371
20,739,781
15,055,590
-
-
37,351,672
14,804,341
14,127,115
11,561,765
2,515,556
-
49,794
28,931,456
227,220
-
-
-
-
-
227,220
29,775,899
66,917,133
47,187,374
20,007,727
(277,968)
-
96,693,032
5,097,248
End of the year
-
99,023,566
5,918,048
(349,842)
(7,898,740)
-
Total
RM Leasehold
Furniture
Plant
Assets
GROUP
Freehold landlandand
Workshop
Office
Motorand
under
At 31 December 2014
Vessels and building and building
fittings Renovation
tools
equipment
vehicles Equipment
machinery construction
RM
RM RM RM RM RM RM RM RM RM RM Cost
50,000
5,097,248
2,557,917
725,247
4,004,189
3,373,387
9,907,462
4,161,678
45,250,412
23,668,806
227,220
Additions
-
-
-
384,214
57,748
-
178,436
85,000
-
5,212,650
-
Disposal
-
-
-
-
-
-
(206,913)
(142,929)
-
-
-
Reversal
-
-
-
-
-
-
-
-
(7,898,740)
-
-
(50,000)
-
-
-
-
-
-
-
-
50,000
-
5. PROPERTY, PLANT AND EQUIPMENT (continued)
ANNUAL REPORT 2014
75
76
ANNUAL REPORT 2014
5.
PROPERTY, PLANT AND EQUIPMENT (continued)
(a) Included in the property, plant and equipment are motor vehicles, office equipment and plant and machinery
which is acquired by means of hire purchase and lease arrangements with a net carrying amount of RM8,817
(2013: RM160,712), RMNil (2013: RM1,835,825) and RM4,338,454 (2013: RM5,768,924) respectively.
(b) Included in the office equipment are computer software and hardware with a net carrying amounts of RM955,862
and RM60,694 (2013: RM1,303,553 and RM125,384) respectively.
(c) Certain plant and machinery have been pledged to secure against the Group’s term loan as disclosed in Note
17 to the Financial Statements.
(d) Freehold and leasehold land and building have been pledged to secure against the Group’s bank overdraft as
disclosed in Note 20 to the Financial Statements.
6.
INTANGIBLE ASSETS
GROUP
Development Goodwill on
CostsConsolidation
Total
Cost
Additions
RM
3,811,617
301,268
RM
339,253
-
RM
4,150,870
301,268
4,112,885
339,253
4,452,138
Accumulated Amortisation
671,325
-
Amortised during the year
264,903
-
671,325
264,903
Amortised during the year
936,228
273,272
-
-
936,228
273,272
1,209,500
-
1,209,500
Net Carrying Amount
As at 31 December 2014
2,903,385
339,253
3,242,638
As at 31 December 2013
3,515,910
(a) The development costs incurred in developing gas generator are amortised on a straight line basis over their
useful lives of 15 years.
(b) Goodwill acquired in the business combinations is, from the acquisition date, allocated to the cash-generating
units (‘CGU’) that are expected to benefit from the synergies of the combination, as follows:
Balance as at 31.12.2013/Balance as at 31.12.2014
Engineered packages/Product and services
3,176,657
339,253
2014
RM
339,253
2013
RM
339,253
ANNUAL REPORT 2014
77
6.
INTANGIBLE ASSETS (continued)
The recoverable amounts of the cash-generating units are determined based on the computation of their value in
use.
The key assumptions used in the computation of value in use are discount rate, growth rate and projected cash flows
from use and disposal at the end of the useful life.
Discount rate is determined based on the pre-tax rate that reflect current market assessment of the time value of
money and risks specific to the assets.
The projected cash flows from use are derived from the most recent financial budgets approved by management.
The estimate of net cash flows for the disposal of the assets at the end of its useful life is the present value of the
amount that the Group expects to obtain from the disposal of the assets in an arm’s length transaction between
knowledgeable, willing parties, after deducting the estimated costs of disposal.
The key assumptions used for determining the value in use, which are determined based on management’s past
experience and expectation of the future development, are as follows:
%
Profit margin
30
Discount rate
7
7.
SUBSIDIARY COMPANIES
COMPANY
20142013
RM
RM
Unquoted shares, at cost
Less: Accumulated impairment losses
SIS granted to employees of the subsidiary companies
189,757,394
(95,568,386)
152,968,394
(95,568,386)
94,189,008
1,175,159
57,400,008
531,416
95,364,167
57,931,424
Details of the Company’s subsidiaries as at 31 December 2014 are as follows:
Group
Effective Country of
Interest
Incorporation
Principal Activities
2014
2013
%%
Held by the Company:
Tanjung Offshore Services Sdn. Bhd. 100 100
Malaysia
Integrated service provider to the oil and gas
and related industries.
78
ANNUAL REPORT 2014
7.
SUBSIDIARY COMPANIES (continued)
Group
Interest
Incorporation
2014
2013
%%
Tanjung CSI Sdn. Bhd.
100 100
Malaysia
Design, engineering, training, installation and
commissioning for plant automation and
safety system, flow metering solutions, control
valves, field instrumentations, control solutions
for turbines and compressors and after sales
activities for onshore and offshore services.
Gas Generators (Malaysia) Sdn. Bhd. 100 100
Malaysia
Manufacturingand supply of gas generators to
both industrial and oil and gas industry.
^7 NewMarket Street 100
-
Holdings Limited (Formerly
known as Wavenet Investments
Limited)
British Virgin Investment holding
Islands
Tanjung Offshore Marine Services 100 100
Malaysia
Sdn. Bhd.
Ownership and leasing offshore vessels to local
and international oil industry major.
Tanjung Citech Sdn. Bhd.
100
100
Malaysia
Dormant.
Tanjung Offshore Resources Sdn. Bhd.100
100
Malaysia
Mineral trading
*Tanjung Citech UK Limited
100 100
England
and Wales
Dormant.
*PT Tanjung Offshore Nusantara
In theprocessof voluntarily winding up.
80
80
Indonesia
*Tanjung HMS Petroleum Sdn. Bhd.
51
-
Malaysia
Oilfield development and provision of integrated
services to the oil and gas industry.
Tanjung Maintenance Services -
100
Malaysia
Sdn. Bhd.
Provision of maintenance services to the oil
and gas and related industries.
Held by Tanjung Offshore
Services Sdn. Bhd.:
Tanjung PetroConsult Sdn. Bhd.
100 100
Malaysia
Provision for engineering and professional
manpower services to the oil and gas and
related industries.
Tanjung NewEnergy Services
100 100
Malaysia
Sdn. Bhd
Provision of project management services to
the engineering and energy industries.
ANNUAL REPORT 2014
79
7.
SUBSIDIARY COMPANIES (continued)
Group
Interest
Incorporation
2014
2013
%%
Held by Tanjung Citech UK Limited:
*Citech Energy Recovery 100 100
Systems UK Limited
Held by Gas Generators
(Malaysia) Sdn. Bhd.:
Universal Gas Generators (M) Sdn. Bhd.
100
100
England
and Wales
Malaysia
Dormant.
Selling and letting of gas generator equipment.
*Gas Generators International Ltd
100
-
Malaysia Marketing gas generator packages.
(Wilayah Persekutuan
Labuan)
Held by 7 New Market Street Holdings Limited (Formerly known as Wavenet Investments Limited):
^7 New Market Street Limited 100
-
British
Acquire, develop and realisation of real estate.
(Formerly known as Sparkling Virgin Islands
Light Investments Limited)
* The financial statements of these companies are not audited by AljeffriDean.
^ These companies are not required by their local laws to appoint statutory auditors.
The amount owing by/(to) subsidiary companies are unsecured, interest free and are repayable on demand.
None of the Group’s subsidiary companies that have non-controlling interest are material to the Group. Therefore
the summarised financial information is not presented.
8.
ASSOCIATE COMPANIES
GROUP
20142013
RM
RM
Share of attributable post acquisition losses after taxation
Less: Accumulated impairment losses
134,999
(8,355)
184,499
(10,924)
126,644
(125,359)
173,575
-
1,285
173,575
The associate companies have no significant contingent liability to which the Group is exposed, nor has the Group
any significant contingent liability in relation to its interest in the associate companies.
80
ANNUAL REPORT 2014
8.
ASSOCIATE COMPANIES (continued)
Details of the Group’s associate companies as at 31 December 2014 are as follows:
Group
Interest
Incorporation
2014
2013
%%
Held by Gas Generators (M) - 49.50
Malaysia Commission agent for the fabrication and
Sdn. Bhd.:
supply of industrial equipment.
*Universal Hydrogen Generators (M) Sdn. Bhd.
*PT. Gas Generators Indonesia
35
35
Indonesia
Commission agent for the fabrication and
supply of industrial equipment.
* The financial statements of these companies are not audited by AljeffriDean.
The amount owing by associate companies are unsecured, interest free and are repayable on demand.
None of the Group’s associate companies are material to the Group. Therefore the summarised financial information
is not presented.
9.
JOINT VENTURE
GROUP
20142013
RM
RM
Share of attributable post acquisition profit after taxation
255,000
76,582
-
331,582
-
The joint ventures have no significant contingent liability to which the Group is exposed, nor has the Group any
significant contingent liability in relation to its interest in the associate companies.
Details of the Group’s joint ventures as at 31 December 2014 are as follows:
Group
Interest
Incorporation
2014
2013
%%
Held by Tanjung Offshore Services
Sdn. Bhd.:
Fircroft Tanjung Sdn. Bhd.
51
-
Malaysia
Supply manpower for the oil and gas industry and petrochemicals industry.
Tanjung Drilltec Sdn. Bhd.
51
-
Malaysia Dormant
ANNUAL REPORT 2014
81
9.
JOINT VENTURE (continued)
The above joint arrangements are structured via separate entity and provide the Group with the rights to the net
assets of the entity under the arrangements. Therefore this entity is classified as joint ventures of the Group. This
joint venture has the same reporting period as the Group. No quoted market prices are available for the shares of the
Group’s joint venture as this entity is a private company.
The amount owing by joint venture is unsecured, subject to interest rate at 8.60% per annum and is repayable on
demand.
Summarised statement of profit or loss of the joint venture is as follows:
20142013
RM
RM
Revenue
Net profit for the period
Share of results
5,079,973
-
153,163
-
76,582
-
Summarised statement of financial position of the joint venture is as follows:
20142013
RM
RM
Total assets
Total liabilities
Net assets
Group’s share of joint venture’s net assets
2,502,777
(1,849,610)
-
653,167
-
326,584
-
10. INVESTMENT PROPERTY
GROUP
Investment property
under refurbishment
20142013
RM
RM
Cost
Acquisition of a subsidiary company differences
Exchange
-
36,789,000
(349,040)
-
End of the year
36,439,960
-
The fair value of the investment property upon completion were estimated at £12,000,000 or approximately
RM65,300,000 (based on exchange rate of £1: RM5.44) based on the valuation done by the independent valuer.
82
ANNUAL REPORT 2014
10. INVESTMENT PROPERTY (continued)
As disclosed in Note 41 to the Financial Statements, the Company acquired the entire shares in 7 New Market Street
Holdings Limited (Formerly known as Wavenet Investments Limited) (“7NMSH”). 7NMSH owns a 100% shareholding
in 7 New Market Street Limited (Formerly known as Sparkling Light Investments Limited) which in turn owns an office
building in Birmingham, United Kingdom. During the current financial year, the Company decided to refurbish the
office building into a residential property. As at the date of this report, the refurbishment works still in progress.
The rental income earned from the investment property amounted to RMNil. Direct operating expenses that generated
rental income during the year amounted to RMNil.
11. OTHER INVESTMENTS
Held-to-maturity investment
Structured products
GROUP
2014
2013
RM
RM
COMPANY
2014
2013
RM
RM
6,300,000
-
5,000,000
-
Available-for-sale investment
Money market
Quoted share
13,926,182
489,897
14,005,172
-
13,926,182
-
14,005,172
-
14,416,079
14,005,172
13,926,182
14,005,172
20,716,079
14,005,172
18,926,182
14,005,172
Analyse as follows:
Non-current
489,897
Current
20,226,182
-
14,005,172
-
18,926,182
14,005,172
14,005,172
18,926,182
14,005,172
20,716,079
No impairment losses have been financial year.recognised in respect ofthe other financial assets during the
12. OTHER RECEIVABLES, DEPOSITS AND PREPAYMENTS
Other receivables
Deposits
Prepayments
Refurbishment cost
Chromite sand’s project
Proceeds from disposal of a subsidiary
company
Less: Allowance for doubtful debts
GROUP
2014
2013
RM
RM
COMPANY
2014
2013
RM
RM
3,077,796
175,702
26,433,014
26,106,240
7,621,998
2,255,724
2,064,360
25,852,843
-
4,664,441
1,830,101
-
423,512
-
-
233,161
233,024
-
8,100,000
-
8,100,000
-
71,514,750
(5,398,716)
34,837,368
(5,398,716)
10,353,613
-
466,185
-
66,116,034
29,438,652
10,353,613
466,185
ANNUAL REPORT 2014
83
12. OTHER RECEIVABLES, DEPOSITS AND PREPAYMENTS (continued)
GROUP
COMPANY
2014
2013
2014
2013
RM
RM
RM
RM
Analyse as follows:
Non-current
6,480,000
-
6,480,000
Current
59,636,034
29,438,652
3,873,613
466,185
66,116,034
29,438,652
10,353,613
466,185
Other receivables
Included in the Group’s and in the Company’s other receivables are amount owing by related company amounting
to RM2,675,723 and RM1,700,343 (2013: RMNil and RMNil) respectively. The amount owing is unsecured, interest
free and repayable on demand.
Refurbishment cost
As disclosed in Note 41 to the Financial Statements, 7 New Market Street Limited (Formerly known as Sparkling Light
Investments Limited) (“7NMS”), the wholly-owned subsidiary of the Company entered into a Development Agreement
to perform a refurbishment work on the newly acquired office building for a total cost of £4,800,000 or equivalent to
RM26,106,240 (based on average exchange rate of £1: RM5.42). The refurbishment cost will be capitalised as part
of the investment property based on the stage of completion.
Chromite sand’s project
This represents advances given for the purpose of washing and trading of chromite tailings in the Philippines. This
amount will be charged out to the statements of profit or loss upon issuance the sale invoice.
Proceeds from disposal of a subsidiary company
As disclosed in Note 41 to the Financial Statements, the Company entered into an agreement for the disposal of its
entire equity interest in Tanjung Maintenance Services Sdn. Bhd. via a management buy-out for a total consideration
of RM9,000,000. A deposit of RM900,000 has been paid by the purchasers upon signing the agreement and the
remaining consideration of RM8,100,000 will be paid via five equal yearly installments of RM1,620,000 per year until
full settlement.
13.INVENTORIES
GROUP20142013
RM
RM
At cost:
Work-in-progress
1,416,507
12,022,412
Raw materials
350,021
2,140,903
Finished goods
-
4,120
Less: Allowance for impairment losses
1,766,528
(350,021)
14,167,435
(350,021)
1,416,507
13,817,414
84
ANNUAL REPORT 2014
14. TRADE RECEIVABLES
GROUP20142013
RM
RM
Trade receivables
Less: Allowance for doubtful debts
46,426,580
(6,441,978)
80,773,639
(10,058,317)
39,984,602
70,715,322
The credit term of trade receivables are ranging from 30 days to 60 days.
Included in the Group’s trade receivables are accrued revenue amounting to RM6,449,148 (2013: RM12,888,899).
Included also in the Group’s trade receivables are amount owing by associate and related companies
totalling to RM1,254,726 (2013: RM2,008,032).
As at 31 December 2014, the trade receivables ageing are as follows:
GROUP20142013
RM
RM
Neither past due nor impaired
01 to 30 days past due but not impaired
31 to 60 days past due but not impaired
More than 61 days past due but not impaired
15,952,022
4,149,259
906,928
18,976,393
42,573,377
1,312,415
5,454,826
21,374,704
Impaired
39,984,602
6,441,978
70,715,322
10,058,317
46,426,580
80,773,639
Trade receivables that are neither past due nor impaired
Trade receivables that were neither past due nor impaired relate to customers for whom there were no default. None
of the Group’s trade receivables that are neither past due nor impaired have been renegotiated during the current
financial year.
Trade receivables that are past due but not impaired
Trade receivables that were past due but not impaired relate to customers that have good track record with the
Group. Based on past experience and no adverse information to date, the directors of the Group are of the opinion
that no allowance for impairment is necessary in respect of these balances as there has not been a significant
change in the credit quality and the balances are still considered fully recoverable.
Trade receivables that are impaired
All impaired trade receivables are individually determined. The reconciliation of the allowance account is as follows:
ANNUAL REPORT 2014
85
14. TRADE RECEIVABLES (continued)
Trade receivables that are impaired (continued)
GROUP20142013
RM
RM
Additional allowance recognised
Amounts recovered and reversed
Amounts written off
End of the year
15. CASH AND CASH EQUIVALENTS
GROUP
2014
2013
RM
RM
10,058,317
(4,147,024)
602,668
(71,983)
-
9,561,275
2,515,235
(1,626,229)
(391,964)
6,441,978
10,058,317
COMPANY
2014
2013
RM
RM
Cash and bank balances
Fixed deposits with licensed banks
11,468,020
40,895,214
22,517,737
91,213,328
8,024,941
3,450,000
5,304,255
71,996,688
52,363,234
113,731,065
11,474,941
77,300,943
The Group’s and the Company’s cash and cash equivalents amounting to RM2,209,661 (2013: RM7,536,417) and
RM2,209,661 (2013: RM1,485,589) respectively have been pledged to licensed banks for bank facilities granted to
the Group and the Company.
16. HELD FOR SALE AND DISCONTINUED OPERATIONS
On 10 February 2012, the Company announced that its wholly-owned subsidiary, Citech Energy Recovery Systems
UK Limited (“CiTech”), a company incorporated in the United Kingdom, has commenced the cessation of business
operations with immediate effect. In the previous financial year, the assets and liabilities of CiTech has been classified
as held for sale. During the current financial year, the assets and liabilities which previously being presented separately
in the statements of financial position has been reclassified as CiTech will be remain dormant.
Since the fair value of the disposal group less costs to sell exceeded the net carrying amount of the relevant assets
and liabilities, no impairment loss was recognised.
The assets and liabilities classified as held for sale and discontinued operations are as follows:
GROUP20142013
RM
RM
Assets classified as held for sale and discontinued operations:
Inventories
-
1,658,423
Trade receivables
-
309,745
Other receivables, deposits and prepayments
-
461,785
-
52,998
-
2,482,951
86
ANNUAL REPORT 2014
16. HELD FOR SALE AND DISCONTINUED OPERATIONS (continued)
GROUP20142013
RM
RM
Liabilities directly associated with assets classified as held for
sale and discontinued operations:
Trade payables
-
3,130,630
Other payables and accruals
-
7,416,863
-
10,547,493
The results of the held for sale and discontinued operations are as follows:
GROUP20142013
RM
RM
Revenue
Cost of sales
217,049
167,973
998,283
-
Gross profit
Other income
Operating expenses
385,022
-
3,387,846
998,283
6,097,047
(179,871)
Profit before taxation
Taxation
3,772,868
-
6,915,459
(13,558)
Profit for the year after tax
Profit before taxation are derived at after:
3,772,868
6,901,901
27,255
4,588
-
119,280
(1,958)
118,197
3,537,521 194
2,920,710
a) Other losses and expenses
Statutory audit
Bad debts written off
Rental expenses
b) Other gains and income
Gain on foreign exchange
Net cash flows attributable to held for sale and discontinued operations are as follows:
GROUP20142013
RM
RM
Net cash used in operating activities
53,323 2,619,901
ANNUAL REPORT 2014
87
17. LONG TERM BORROWINGS
GROUP20142013
RM
RM
Total outstanding term loan
Less: Repayable within 12 months (Note 20)
-
-
301,476
(90,360)
Hire purchase and finance lease payables (Note 37)
-
3,499,067
211,116
4,218,845
3,499,067
4,429,961
Term Loan 1
The purpose of this term loan is to finance the property held under PN 4125, Lot No. 3801, Mukim Teluk Kalong,
District of Kemaman, Terengganu Darul Iman. The term loan is repayable within 10 years and secured by letter of
undertaking, notice of assignment, fixed deposit and corporate guarantee from the Company.
18. TRADE PAYABLES
GROUP20142013
RM
RM
Ringgit Malaysia
Other currencies
20,697,645
10,947,313
35,139,974
12,257,351
31,644,958
47,397,325
The normal trade credit terms granted to the Group range from 30 to 45 days. The Group has in place a sound
financial risk management procedure to ensure that all amounts payable are paid within the credit periods.
Included in the Group’s trade payables are accrued cost amounting to RM18,338,683 (2013: RM17,212,658).
Included also in the Group’s trade payables are amount owing to associate and related companies totalling to
RM3,369,007 (2013: RMNil).
19. OTHER PAYABLES, PROVISIONS AND ACCRUALS
Other payables
Provisions
Accruals
GROUP
2014
2013
RM
RM
COMPANY
2014
2013
RM
RM
3,687,726
6,120,710
408,309
9,293,007
1,754,649
14,713,337
580,939
279,150
107,250
15,000
338,077
10,216,745
25,760,993
967,339
353,077
88
ANNUAL REPORT 2014
20. SHORT TERM BORROWINGS
GROUP20142013
RM
RM
Short term loan (Note 17)
Bank overdraft
Hire purchase and finance lease payables (Note 37)
-
-
713,102
90,360
2,778,771
1,116,914
713,102
3,986,045
Bank Overdraft
The purpose of this bank overdraft is for working capital requirement. The bank overdraft is secured against the
freehold and leasehold land and building of the subsidiary companies (Note 5 to the Financial Statements), pledged
of fixed deposits (Note 15 to the Financial Statements) and corporate guarantee from the Company.
At the end of the reporting period, there are no defaults in payment of borrowings nor breaches of facility agreement
terms.
The effective interest rates are disclosed in Note 40 to the Financial Statements.
21. SHARE CAPITAL
GROUP AND COMPANY
Number of Shares
2014
2013
UNIT
UNIT
Amounts
2014
2013
RM
RM
Authorised Share Capital
Ordinary Shares of RM0.50 each:
Created during the year
End of the year
Issued and Fully Paid Share Capital
Ordinary Shares of RM0.50 each:
Private placement
to SIS (Note 29)
Warrants exercise during the year (Note 30)
End of the year
400,000,000
200,000,000
400,000,000
-
200,000,000
100,000,000
200,000,000
-
600,000,000
400,000,000
300,000,000
200,000,000
365,929,989
-
293,310,460
29,816,000
182,964,995
-
146,655,230
14,908,000
8,592,598
-
8,403,800
34,399,729
4,296,299
-
4,201,900
17,199,865
374,522,587
365,929,989
187,261,294
182,964,995
During the financial year, the Company has increased its authorised share capital from RM200,000,000 comprising
of 400,000,000 ordinary shares of RM0.50 each to RM300,000,000 comprising of 600,000,000 ordinary shares of
RM0.50 each by the creation of additional 200,000,000 new ordinary shares of RM0.50 each.
ANNUAL REPORT 2014
89
21. SHARE CAPITAL (continued)
During the financial year, the Company also has issued the following ordinary shares:
No. of Shares Issued
Issue Price
Purposes
8,592,598
RM0.50
Exercise of Share Issuance Scheme
The new ordinary shares issued rank pari passu in respect of the distribution of dividends and repayment of capital
with the existing ordinary shares.
At the end of the reporting period, 2,477,500 (2013: 2,477,500) ordinary shares are held by the Company as treasury
shares (Note 22 to the Financial Statements), and number of outstanding ordinary shares issued and fully paid
(excluding treasury shares) is 372,045,087 (2013: 363,452,489) units.
Capital Management
The primary objective of the management of the Group’s and the Company’s capital structure is to optimise the
balance between debts and equity to achieve a low cost of capital and maximise the return to stakeholders.
The capital structure of the Group and the Company consists of debts (comprising hire purchase and finance lease,
bank overdrafts and other borrowings) and equity (comprising issued ordinary shares, accumulated losses and other
reserves). The Group and the Company monitor their capital using a gearing ratio, based on net debts divided by
total capital. The target gearing ratio is to maintain it at below 20%. The directors review the capital structure on a
quarterly basis, and consider the cost of capital and the risks associated with each class of capital.
During the current financial year, no significant changes were made in the objectives, policies or processes for
managing capital. The gearing ratio at the end of the reporting period was as follows:
Term loan (Note 17)
Bank overdraft
Hire purchase and finance lease payables
(Note 37)
Less: Cash and cash equivalents (Note 15)
GROUP
2014
2013
RM
RM
COMPANY
2014
2013
RM
RM
-
-
301,476
2,778,771
-
-
-
4,212,169
5,335,759
-
-
4,212,169
(52,363,234)
8,416,006
(113,731,065)
-
(11,474,941)
(77,300,943)
Net debts
Equity attributable to equity holders of the
Company
(48,151,065)
(105,315,059)
(11,474,941)
(77,300,943)
190,578,052
184,547,505
208,302,691
199,393,701
Total capital
142,426,987
79,232,446
196,827,750
122,092,758
NA
NA
NA
NA
Gearing ratio (%) - Net debts over total capital
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% of the issued and paid up capital (excluding
treasury shares) and such shareholders’ equity is not less than RM40,000,000. The Company has complied with this
requirement.
90
ANNUAL REPORT 2014
22. TREASURY SHARES
There was no share buy-back during the current financial year. The ordinary shares repurchased are being held as
treasury shares in accordance with the requirement of Section 67A of the Companies Act, 1965. The treasury shares
may be distributed as ‘share dividends’ to the shareholders.
23.RESERVES
GROUP
2014
2013
RM
RM
COMPANY
2014
2013
RM
RM
Non-distributable:
Share premium
Capital reserves
Equity-settled employee benefits reserve
Investment revaluation reserve
Foreign currency translation reserve
68,738,801
(19,579,028)
1,080,621
22,384
(633,426)
68,657,604
(19,579,028)
531,416
4,496
(481,193)
68,736,693
1,975,462
1,080,621
22,384
-
68,655,496
1,975,462
531,416
4,496
-
49,629,352
49,133,295
71,815,160
71,166,870
(41,916,074)
(43,154,265)
(46,377,243)
(50,341,644)
7,713,278
5,979,030
25,437,917
20,825,226
Distributable:
Accumulated losses
Share Premium
The share premium arose from the issues of ordinary shares in excess of the par value.
Capital Reserve
The capital reserves represent the value of warrants capitalised for the issuance of serial payment bond with detachable
warrants. Upon the exercise of the warrants, the value of these warrants will be credited to share premium. Capital
reserves also include all the changes in the Group’s ownership interest in a subsidiary company that do not result in
a loss of control.
Equity-Settled Employee Benefits Reserve
The reserve represents the cumulative value of employee services for the issue of SIS. If the share option is exercised,
the amount from the equity-settled employee benefits reserves is transferred to share premium. If the share option
expires, the amount from the equity-settled employee benefits reserves is transferred to accumulated losses. The
details of the SIS are disclosed in Note 29 to the Financial Statements.
Investment Revaluation Reserve
The investment revaluation reserve arose from the changes in the value of investment recognised when they are
revalued.
Foreign Currency Translation Reserve
The foreign currency translation reserve arose from the exchange differences on the translation of foreign operations.
ANNUAL REPORT 2014
91
23. RESERVES (continued)
Accumulated Losses
The Company has elected to discontinue utilising its tax credit under Section 108 of the Income Tax Act, 1967
since previous financial year. Accordingly, tax on the Company’s profits is a final tax, and dividends distributed to
shareholders will be exempted from tax.
24.REVENUE
GROUP
2014
2013
RM
RM
Rendering of services
76,598,277
Sales of goods
Interest revenue
1,555,799
107,344,762
25. FINANCE COSTS
199,099,309
29,190,686
-
125,399,367
-
3,292,676
1,555,799
3,292,676
327,791,352
1,555,799
3,292,676
GROUP
2014
2013
RM
RM
Hire purchase interest
Finance lease interest
Overdraft interest
Term loan interest
Interest on bill payable
Revolving credit interest
Commitment fee
COMPANY
2014
2013
RM
RM
COMPANY
2014
2013
RM
RM
68,287
5,597
103,961
-
22,389
-
122,376
166,563
63,508
429,086
778,026
254,143
87,337
164,811
-
-
322
-
-
-
24,959
107,646
15,249
322,610
1,943,474
25,281
122,895
26. PROFIT/(LOSS) BEFORE ZAKAT AND TAXATION
a) Other losses and expenses
Statutory audit
- Current year
- Other related services
Amortisation of intangible assets
Allowance for doubtful debts, impairment
and written off, net off recovered
Depreciation of property, plant and equipment
Impairment loss on investment in associate
Loss on disposal and written off
of property, plant and equipment
GROUP
2014
2013
RM
RM
COMPANY
2014
2013
RM
RM
96,261
18,000
273,272
93,173
18,000
264,903
20,000
18,000
-
20,000
18,000
-
530,685
5,880,290
125,359
1,991,584
20,007,727
-
-
-
-
-
37,886
-
-
-
92
ANNUAL REPORT 2014
26. PROFIT/(LOSS) BEFORE ZAKAT AND TAXATION (continued)
a) Other losses and expenses (continued)
Loss on disposal of associate company
Loss on redemption of other investment
Loss on foreign exchange
Provision for damages
Rental expenses
Written off of amount owing by subsidiary
companies
b) Other gains and income
Gain on disposal of property, plant and
equipment
Gain on foreign exchange
Gain on disposal of a subsidiary company
Gain on redemption of other investment
Interest income
Rental income
c) Employee benefit expenses
Staff costs (including directors’ remuneration
and fees):
- Short term benefits
- SIS expenses
- Termination benefits
- EPF contributions
GROUP
2014
2013
RM
RM
COMPANY
2014
2013
RM
RM
46,931
-
-
-
1,649,768
2,858,862
-
944,309
1,641,437
1,290,062
-
1,993
-
-
-
1,419,333
1,352
-
-
-
1,254,019
-
-
1,105,507
359,501
47,607
1,936,949
-
-
47,191
-
-
120,737
3,425,570
30,000
739,348
-
320,637
8,835,942
-
1,555,799
-
-
120,737
3,292,676
739,348
14,302,222
807,800
-
1,574,306
14,005,827
531,416
256,235
1,452,192
1,042,105
-
-
74,615
215,000
-
Key management personnel are defined as those persons having authority and responsibility for planning, directing
and controlling the activities of the Group directly or indirectly. There are no other key management personnel except
for the directors of the Company.
Employee benefit expenses including the following remuneration paid to the directors, who are the key management
personnel, of the Group and the Company:
Non-Executive
- Current year fee
- Overprovision in previous year fee
Executive
- Remuneration
GROUP
2014
2013
RM
RM
COMPANY
2014
2013
RM
RM
192,000
(57,000)
215,000
-
192,000
(57,000)
215,000
-
135,000
215,000
135,000
215,000
1,400,240
1,176,000
981,720
-
1,400,240
1,176,000
981,720
-
Total directors’ fee and remuneration
1,535,240
1,391,000
1,116,720
215,000
ANNUAL REPORT 2014
93
26. PROFIT/(LOSS) BEFORE ZAKAT AND TAXATION (continued)
Remuneration band:
Number of Directors
2014
2013
Non-Executive Directors:
RM0
-
RM1 - RM50,000
-
RM50,001 - RM100,000
4
4
Executive Directors:
RM100,001 - RM200,000
RM200,001 and above
-
3*
3
* One of the directors has resigned during the current financial year.
27. ZAKAT AND TAXATION
Zakat
GROUP
2014
2013
RM
RM
270,000
-
Corporate taxation
Current year provision
2,965,702
(Over)/Under provision in previous year
(318,946)
2,646,756
Deferred tax (Note 35)
Deferred tax relating to the origination
and reversal of temporary differences
-
2,916,756
COMPANY
2014
2013
RM
RM
270,000
-
1,563,574
3,283,395
401,119
(456,091)
657,203
1,888,974
4,846,969
(54,972)
2,546,177
761,109
-
-
5,608,078
215,028
2,546,177
The zakat and income tax expense is reconciled to the accounting profit at the applicable tax rates as follows:
GROUP
2014
2013
RM
RM
COMPANY
2014
2013
RM
RM
204,681
12,738,810
4,002,031
(275,990)
Taxation at Malaysian statutory tax rate at 25%
51,170
Zakat
270,000
Tax effect on expenses that are not deductible for
tax purposes
3,923,536
Deferred tax assets not recognised
172,728
Effect on Group’s relief
-
Utilisation of unused tax losses and unabsorbed
capital allowances
(283,544)
Income not subject to tax
(898,188)
(Over)/Under provision in previous year
(318,946)
2,916,756
3,184,703
-
1,000,508
270,000
(68,998)
-
7,656,658
804,749
-
1,955,563
-
(265,807)
942,569
-
(8,649,806)
(671,621)
3,283,395
-
(2,289,145)
(456,091)
(216,368)
1,888,974
5,608,078
215,028
2,546,177
94
ANNUAL REPORT 2014
27. ZAKAT AND TAXATION (continued)
The Malaysian statutory tax rate will be reduced to 24% from the current year’s rate of 25%, effective from Year of
Assessment 2016.
Deferred tax assets are not recognised for the following temporary differences by certain subsidiaries:
GROUP20142013
RM
RM
Unused tax losses
Unabsorbed capital allowances
39,566,959
25,343,139
42,227,479
30,442,008
64,910,098
72,669,487
Deferred tax assets are not recognised for the above temporary differences as it is not probable that future taxable
profit will be available against which the deductible temporary differences and unused tax losses can be utilised
by the subsidiaries. However, the unused tax losses and unabsorbed capital allowances may be carried forward
indefinitely. At the end of each reporting period, the subsidiaries reassess the unrecognised deferred tax assets,
previously unrecognised deferred tax assets are recognised to the extent that it has become probable that future
taxable profit will allow the deferred tax assets to be recovered.
28. EARNINGS PER SHARE
The amounts used in calculating basic and diluted earnings per share attributable to the ordinary equity holders of
the Company are as follows:
Profit
From continuing and discontinued operations
GROUP20142013
RM
RM
Earnings used for the computation of basic/diluted
- Profit attributable to equity holders of the Company
1,060,793
10,909,163
From continuing operations
GROUP20142013
RM
RM
Profit attributable to equity holders of the Company
Adjustment for profit from discontinued operations
(Loss)/Profit used for the computation of basic/diluted
from continuing operations
1,060,793
(3,772,868)
10,909,163
(6,901,901)
(2,712,075)
4,007,262
ANNUAL REPORT 2014
95
28. EARNINGS PER SHARE (continued)
Weighted Average Number of Ordinary Shares
From continuing and discontinued operations
GROUP
2014 2013
UNIT
UNIT
Weighted average number of ordinary shares after deducting treasury shares
368,858,910
309,872,510
Weighted average number of ordinary shares used for the computation of basic
368,858,910
309,872,510
-
-
7,478,962
-
368,858,910
317,351,472
Effects of dilutive potential ordinary shares:
- SIS*
- Warrants*
Weighted average number of ordinary shares used for the computation of diluted
* The amount is not presented as the computation would result in anti-dilutive.
29. SHARE ISSUANCE SCHEME (“SIS”)
The SIS is governed by the By-Laws approved by the shareholders at an Extraordinary General Meeting held on 07
February 2013 and is to be in force for a period of 3 years. The SIS has been effective on 12 July 2013. The salient
features of the By-Laws of SIS are as follows:
(a) The maximum number of Options which may be allotted pursuant to the SIS (“Options”) shall not exceed 15%
of the total issued and paid-up share capital of the Company (excluding Treasury Shares) at any point in time
during the duration of the SIS.
(b) Executive directors and employees of the Group and the Company will be eligible to participate in the SIS
provided that they fulfill the conditions for eligibility stipulated in the rules, terms and conditions contained in the
By-Laws (“Eligible Persons”).
(c) The maximum number of Options that may be offered and allotted to an Eligible Persons shall be determined
by the SIS Committee taking into consideration inter-alia, the Eligible Persons’ designation, job description,
responsibilities and seniority.
(d) The exercise price of the Options issued pursuant to SIS shall be as follows:
i)
at a discount of not more than 10% from the volume-weighted average market price of the shares as
shown in the daily official list issued by Bursa Malaysia Securities Berhad (“Bursa Securities”) for the 5
market days immediately preceding the date of offer; and
ii)
the par value of the shares.
(e) The new shares to be allotted and issued upon any exercise of the Options will, upon such allotment and
issuance, rank pari passu in all respects with the existing and issued shares except that the new shares so
issued will not be entitled to any dividends, rights, allotments and/or any other distributions which may be
declared, made or paid to shareholders prior to the date of allotment of the new shares. The new shares will be
subjected to all provisions of the Articles of Association in relation to their transfer, transmission or otherwise.
The Options shall not carry any right to vote at a general meeting of the Company.
96
ANNUAL REPORT 2014
29. SHARE ISSUANCE SCHEME (“SIS”) (continued)
(f)
Options are exercisable, in whole or in part (provided that an Option is exercised in part in respect of 1,000
shares or any multiple thereof) as follows:
Percentage of Options Exercisable
Number of Options Granted
from Acceptance Date
1st year
2nd year
3rd year
20,000 and below
20,001 to 50,000
Above 50,000
50%
33%
33%
50%
33%
33%
34%
34%
Movements of the number and the related weighted average exercise prices of SIS are as follows:
2014
2013
Weighted Weighted
Number of
Average
Number of
Average
Share Options Exercise Price Share Options Exercise Price
UNIT
RM
UNIT
RM
Granted
Cancelled
Exercised
36,244,200
10,670,000
(1,125,302)
(8,592,598)
0.50
0.50
0.50
0.50
-
45,018,000
(370,000)
(8,403,800)
0.50
0.50
0.50
End of the year
Exercisable at the end of the year
37,196,300
0.50
36,244,200
0.50
27,155,012
6,330,040
The SIS outstanding at the end of the reporting period has the following weighted average exercise prices and
remaining contractual life:
2014
2013
Number of
Number of
Oustanding
Exercise Oustanding
Exercise
SIS
Price
SIS
Price
UNIT
RM
UNIT
RM
07 May 2016
11 June 2017 36,365,300
831,000
0.50
0.50 36,244,200
-
0.50
0.50
The fair value of the services received for SIS is measured by reference to the fair value of the equity instruments
granted. The estimated fair values of the SIS granted on the grant date are RM0.09.
The fair values of the Options are estimates on the date of grant using the Black-Scholes-Merton option pricing
model with the following assumption:
Weighted average share price
Options exercise price
Expected dividend yield
Risk-free annual interest rate
Expected volatility
Expected Options life
RM0.65
RM0.50
6%
3%
5%
3 years
ANNUAL REPORT 2014
97
29. SHARE ISSUANCE SCHEME (“SIS”) (continued)
The expected volatility is based on the historical volatility, calculated based on the weighted average expected life
of the SIS.
There is no market conditions associated with the SIS granted. Vesting conditions, including service and performance
conditions, are not considered in the fair value measurement at grant date.
Included in the total number of outstanding SIS are outstanding SIS from the disposed subsidiary company totaling
to 8,972,000 unit.
30.WARRANTS
On 30 November 2005, the Company issued a RM150,000,000 nominal value up to eight (8) years 4.5% per annum
serial fixed rate bonds with detachable warrants to the primary subscribers.
On 03 March 2006, the primary subscribers were allotted a total of 18,514,600 warrants to the shareholders at an
offer price of RM0.24 per warrant on the basis of one (1) warrant for every five
(5) ordinary shares held on entitlement date.
On 29 August 2006, the Company completed the listing of an additional 9,257,000 warrants arising from the bonus
issue exercise which was implemented in accordance to the Deed Poll dated 13 January 2006 on the basis of one
(1) new warrant for every two (2) warrants held on entitlement date.
On 13 June 2007, the Company completed the listing of an additional 10,095,104 warrants arising from the bonus
issue exercise on the basis of two (2) new warrants for every five (5) existing warrants.
On 14 August 2012, the subscription price of Warrant A 2006/2016 has been adjusted from RM0.55 to RM0.50
pursuant to the special dividend of RM0.44 per ordinary share of RM0.50 each.
On 14 August 2012, the subscription price of Warrant B 2008/2013 has been adjusted from RM1.20 to RM0.52
pursuant to the special dividend of RM0.44 per ordinary share of RM0.50 each.
On 11 October 2013, the subscription right of the holders of Warrant B 2008/2013 has expired. Unexercised Warrants
2008/2013 will lapse and become null and void and shall cease to be exercisable thereafter.
As at 31 December 2014, there is a total of 29,981,990 (2013: 29,981,990) outstanding Warrant A 2006/2016 warrants.
31. PURCHASE OF PROPERTY, PLANT AND EQUIPMENT
GROUP20142013
RM
RM
Purchase of other property, plant and equipment
Less: Financed by hire purchase and finance lease arrangement
271,892
-
5,918,048
(5,000,000)
Cash purchase of property, plant and equipment
271,892
918,048
98
ANNUAL REPORT 2014
32. DISPOSAL OF A SUBSIDIARY COMPANY
As disclosed in Note 41 to the Financial Statements, the Company entered into an agreement for the disposal of
its entire equity interest in Tanjung Maintenance Services Sdn. Bhd. (“TMS”) via a management buy-out for a total
consideration of RM9,000,000. A deposit of 10% or equivalent to RM900,000 has been paid by the purchasers upon
signing the said agreement and the remaining of the consideration will be paid via five equal yearly installments of
RM1,620,000 per year until full settlement.
The net assets of TMS at the date of disposal and at 31 December 2013 were as follows:
GROUP
29.08.2014
31.12.2013
RM
RM
Inventories
Trade and other receivables
Cash and cash equivalents (including bank overdraft)
Trade and other payables
Term loan
7,686,750
2,035,838
30,468,355
(3,236,430)
(27,969,234)
(103,547)
(241,233)
9,457,946
3,510,316
18,705,127
(2,027,290)
(19,834,491)
(364,115)
(301,476)
8,640,499
359,501
9,146,017
Net assets
Gain on disposal of a subsidiary company
Total consideration
Unsettled consideration
Deposit received
Cash and cash equivalents disposed off
9,000,000
(8,100,000)
Net cash inflow from disposal of a subsidiary company
4,136,430
900,000
3,236,430
33. ACQUISITION OF A SUBSIDIARY COMPANY
As disclosed in Note 41 to the Financial Statements, the Company entered into a sale and purchase agreement for
the acquisition of entire shares in 7 New Market Street Holdings Limited (Formerly known as Wavenet Investments
Limited) (“7NMSH”) for a cash consideration of £6,700,000 or equivalent to RM36,789,000 (based on average
exchange rate of £1: RM5.49). 7NMSH owns a 100% shareholding in 7 New Market Street Limited (Formerly known
as Sparkling Light Investments Limited) which in turn owns an office building in Birmingham, United Kingdom. The
acquisition has been completed on 09 May 2014.
During the eight months period to 31 December 2014, 7NMSH and its subsidiary company have not contributed
significant amount to the Group’s result.
If the acquisition had been completed on 01 January 2014, the total Group’s result would have not been affected
significantly.
ANNUAL REPORT 2014
99
33. ACQUISITION OF A SUBSIDIARY COMPANY (continued)
The net assets acquired in the transactions were as follows:
Carrying
Fair
GROUP
amount
value
RM
RM
Investment property
36,789,000
36,789,000
Goodwill on consolidation
36,789,000
-
Purchase consideration
Cash and cash equivalents acquired
36,789,000
-
Net cash on acquisition of a subsidiary company
36,789,000
34. STATEMENTS OF CASH FLOW - CASH AND CASH EQUIVALENTS
GROUP
2014
2013
RM
RM
COMPANY
2014
2013
RM
RM
Cash and cash equivalents (Note 15)
Bank overdraft (Note 20)
Cash and cash equivalents from subsidiary
company classified as held for sale and
discontinued operations (Note 16)
52,363,234
-
113,731,065
(2,778,771)
11,474,941
-
77,300,943
-
-
52,998
-
-
52,363,234
111,005,292
11,474,941
77,300,943
(2,209,661)
(7,536,417)
(2,209,661)
(1,485,589)
50,153,573
103,468,875
9,265,280
75,815,354
Less: Cash and cash equivalents pledged
as security (Note 15)
35. DEFERRED TAXATION
The amounts of deferred tax assets and liabilities, after appropriate offsetting, are included in the statements of
financial position, as follows:
GROUP20142013
RM
RM
Deferred tax assets
Deferred tax liabilities
2,268,402
(2,268,402)
2,665,594
(2,665,594)
Net position--
100
ANNUAL REPORT 2014
35. DEFERRED TAXATION (continued)
The following are the movements of deferred tax assets and liabilities (before offsetting):
Disposal of a Recognised in
GROUPBeginning of the
subsidiary
the profit
End of the
2014
year
company
or loss
year
RM
RM
RM
RM
(Note 27)
Deferred Tax Assets
Unused tax losses and unabsorbed
capital allowances
2,665,594
(1,460,910)
1,063,718
2,268,402
Deferred Tax Liabilities
2,665,594
(1,460,910)
1,063,718
2,268,402
Net Position
2013
Deferred Tax Assets
Unused tax losses and unabsorbed
capital allowances
Exercise of options pursuant to ESOS
Deferred Tax Liabilities
Net Position
---
2,974,429
761,109
-
-
(308,835)
(761,109)
2,665,594
-
3,735,538
-
(1,069,944)
2,665,594
2,974,429
-
(308,835)
2,665,594
761,109
-
(761,109)
-
36. CONTINGENT LIABILITIES
As at 31 December 2014, the Company has the contingent liabilities as follows:
COMPANY20142013
RM
RM
Aggregate of corporate guarantees pursuant to banking facilities granted
to the Group
30,222,531
23,634,653
The corporate guarantee does not have a determinable effect on the terms of the banking facilities due to the bank
requiring parent guarantee as a pre-condition for approving the banking facilities granted to the Group. The actual
terms of the banking facilities are likely to be the best indicator of “at market” terms and hence the fair value of the
banking facilities are equal to the banking facilities amount received by the Group. As such, there is no value on the
corporate guarantees to be recognised in the financial statements.
ANNUAL REPORT 2014
101
37. HIRE PURCHASE AND FINANCE LEASE PAYABLES
GROUP20142013
RM
RM
Classified as:
Non-current liability
3,499,067
4,218,845
Current liability
713,102
1,116,914
4,212,169
5,335,759
Future minimum hire purchase and finance lease payments
Not later than 1 year
964,796
1,125,806
Later than 1 year and not later than 5 years
3,987,814
5,329,280
4,952,610
6,455,086
Less: Future finance charges
(740,441)
(1,119,327)
Present value of hire purchase and finance lease payables
Present value of hire purchase and finance lease payables is analysed as follows:
Not later than 1 year
Later than 1 year and not later than 5 years
4,212,169 5,335,759
713,102
3,499,067
1,116,914
4,218,845
4,212,169
5,335,759
The Group obtains the above facilities to finance the acquisition of certain motor vehicles, office equipments and
plant and machinery. Implicit interest rates are fixed at the date of the agreements, and the amount of the payments
is fixed throughout the period. The Group has the option to purchase the assets at the end of the agreements.
38. RELATED PARTY TRANSACTIONS
GROUP20142013
RM
RM
With associate company
Sales to associate company
-
679,089
Purchase from associate company
-
(28,865,337)
With joint venture
Sales to associate company
Purchase from associate company
With related companies
Sale to related companies
Purchase from related companies
-
(915,432)
-
5,264,824
(2,063,248)
7,388,602
(116,003)
The directors are of the opinion that all the transactions above have been entered into in the normal course of
business and have been established on terms and conditions that are not materially different from that obtainable in
transactions with unrelated parties.
102
ANNUAL REPORT 2014
39. OPERATING SEGMENTS
General Information
The information reported to the Group’s chief operating decision maker to make decisions about resources to be
allocated and for assessing their performance is based on the nature of the products and services of the Group. The
Group’s operating segments are as follows:
(a) Products and services;
(b) Maintenance services – maintenance activities; and
(c) Engineered packages – engineering activities
Measurement of Reportable Segments
Segment information is prepared in conformity with the accounting policies adopted for preparing and presenting
the consolidated financial statements. Transactions between reportable segments are measured on the basis that is
similar to those external customers.
Segment results are profit earned or loss incurred by each segment without allocation of finance costs, share of
loss from associates and income tax expense. There are no significant changes from prior financial year in the
measurement methods used to determine reported segment results.
All the Group’s assets are allocated to reportable segments other than assets used centrally for the Group, associate
companies, joint venture and current and deferred tax assets. Jointly used assets are allocated on the basis of the
revenues earned by individual segments.
All the Group’s liabilities are allocated to reportable segments other than liabilities incurred centrally for the Group,
current and deferred tax liabilities. Jointly incurred liabilities are allocated in proportion to the segment assets.
Geographical Information
The operating segments are not presented by geographical segment as all the foreign operations have been
discontinued and in the process of winding up. The newly acquired foreign operations have not commenced its
business.
Total Total
GROUP
Products and Maintenance Engineered Continuing Discontinued
Total
2014
Services ServicesPackages
Operations
Operations
Operations
RM
RM
RM
RM
RM
RM
Segment Revenue and Results
Segment Revenue
Revenue from all customers 49,690,731 24,200,200 33,453,831 107,344,762
Segment Results
Segment profit or loss
(9,031,824)
844,149
8,638,384
450,709
Finance costs
(322,610)
76,582
Zakat and taxation (2,916,756)
3,772,868
-
-
-
4,223,577
(322,610)
76,582
(2,916,756)
Net (loss)/profit for the year
3,772,868
1,060,793
(2,712,075)
217,049 107,561,811
ANNUAL REPORT 2014
103
39. OPERATING SEGMENTS (continued)
Total Total
GROUP
Total
2014
Operations
Operations
Operations
RM
RM
RM
RM
RM
RM
Segment Assets and Liabilities
Assets
Segment assets
190,877,144
- 47,603,663 238,480,807
- 238,480,807
Associate companies
1,285
Joint venture
331,582
Total Group’s assets 238,813,674
Liabilities
Segment liabilities
32,808,174
- 13,265,698 46,073,872
-
46,073,872
2,161,750
Total Group’s liabilities
48,235,622
Total Total
GROUP
Total
2013
Operations
Operations
Operations
RM
RM
RM
RM
RM
RM
Segment Revenue and Results
Segment Revenue
Revenue from all customers
172,831,554 36,819,614 118,140,184 327,791,352
998,283 328,789,635
Segment Results
Segment profit or loss
11,653,319
(4,773,561)
9,268,575
Finance costs
Share of loss from associate companies
Zakat and taxation
16,148,333
(1,943,474)
(1,466,049)
(5,608,078)
6,915,459
-
-
(13,558)
23,063,792
(1,943,474)
(1,466,049)
(5,621,636)
Net profit for the year
7,130,732
6,901,901
14,032,633
Segment Assets and Liabilities
Assets
Segment assets
202,417,401 28,339,613 44,242,420 274,999,434
2,482,951 277,482,385
Associate companies
173,575
Total Group’s assets 277,655,960
Liabilities
Segment liabilities
44,291,612 20,427,563 16,855,149 81,574,324 10,547,493
92,121,817
986,638
Total Group’s liabilities
93,108,455
104
ANNUAL REPORT 2014
40. FINANCIAL INSTRUMENTS
Classification of financial instruments
Financial assets and financial liabilities are measured on an ongoing basis either at fair value or at amortised cost. The
principal accounting policies in Note 3 to the Financial Statements describe how the classes of financial instruments
are measured, and how income and expense, including fair value gains or losses, are recognised. The following table
analyses the financial assets and liabilities in the statements of financial position by the class of financial instruments
to which they are assigned, and therefore by the measurement basis:
Financial
GROUP
Loans and
Available-
Held-to-
Liabilities at
2014
Receivables
For-Sale
Maturity Amortised Cost
RM
RM
RM
RM
Financial Assets
Trade receivables
39,984,602
and prepayments
66,116,034
Amount owing by associate
companies
100,380
Amount owing by joint venture 2,538,796
Other investments
-
52,363,234
161,103,046
Trade payables
Other payables, provisions
and accruals
2013
Financial Assets
Trade receivables
and prepayments
Other investments
Total
RM
-
-
-
39,984,602
-
-
-
66,116,034
-
-
14,416,079
-
-
-
6,300,000
-
-
-
-
-
100,380
2,538,796
20,716,079
52,363,234
14,416,079
6,300,000
-
181,819,125
-
-
-
-
-
-
3,499,067
31,644,958
3,499,067
31,644,958
-
-
-
-
-
-
10,216,745
713,102
10,216,745
713,102
-
-
-
46,073,872
46,073,872
70,715,322
-
-
-
70,715,322
29,438,652
-
113,731,065
-
14,005,172
-
-
-
-
-
-
-
29,438,652
14,005,172
113,731,065
213,885,039
14,005,172
-
-
227,890,211
Trade payables
Other payables, provisions
and accruals
-
-
-
-
-
-
4,429,961
47,397,325
4,429,961
47,397,325
-
-
-
-
-
-
25,760,993
3,986,045
25,760,993
3,986,045
-
-
-
81,574,324
81,574,324
ANNUAL REPORT 2014
105
40. FINANCIAL INSTRUMENTS (continued)
Financial risk management objective and policies
The Group is mainly exposed to credit risk, liquidity risk and market risk (including foreign currency risk, interest rate
risk and equity price risk). The Group has formal risk management policies and guidelines, as approved by the Board
of Directors, which set out its overall business strategies, its tolerance for risks and its general risk management
philosophy. Such policies are monitored and undertaken by the Managing Director.
Credit risk
Credit risk refers to the risk that a counter party will default on its contractual obligations resulting in financial loss
to the Group.
The carrying amounts of the financial assets recorded on the statements of financial position at the end of the
reporting period represent the Group’s maximum exposure to credit risk in relation to financial assets. No financial
assets carry a significant exposure to credit risk other than those disclosed in the notes.
The Group does not hold any collateral and thus, the credit exposure is continuously monitored by the directors.
Included in the Group’s trade receivables are a group of debtors that represented 40% (2013: 49%) of total trade
receivables. There are no concentrations of credit risk for other financial assets.
Liquidity risk
The Group’s funding requirements and liquidity risk are managed with the objective of meeting business obligations
on a timely basis. The Group monitors its cash flows and ensures that sufficient funding is in place to meet the
obligations as and when they fall due.
The following table analyses the remaining contractual maturity for non-derivative financial liabilities. The tables have
been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the
Group can be required to pay.
Weighted
Average
Not Later than
GROUP
Effective
1 Year or on
Later
2014
Interest Rate
Demand
than 1 Year
Total
RM
RM
RM
RM
Trade payables
-
31,644,958
-
31,644,958
2.78 to 9.79
713,102
3,499,067
4,212,169
32,358,060
3,499,067
35,857,127
2013
Trade payables
-
Term loan
8.25
Bank overdraft
7.85 to 8.10
2.78 to 9.79
47,397,325
90,360
2,778,771
1,116,914
-
211,116
-
4,218,845
47,397,325
301,476
2,778,771
5,335,759
51,383,370
4,429,961
55,813,331
106
ANNUAL REPORT 2014
Market risk
Foreign currency risk
The Group incurs foreign currency risk on transactions that are denominated in foreign currencies. The currencies
giving rise to this risk are primarily the Great Britain Pound (“GBP”), United States Dollar (“USD”), Australia Dollar
(“AUD”), Singapore Dollar (“SGD”) and EURO. The Group has not entered into any derivative instruments for hedging
or trading purposes as the net exposure to foreign currency risk is not significant. The carrying amounts of the
Group’s foreign currency denominated financial assets and financial liabilities at the end of the reporting period are
as follows:
Financial Assets
2014
GBP
RM
Trade receivables
USD
RM
AUD
RM
SGD
RM
EURO
RM
Total
RM
344,277
491,203
15,002,562
25,706,943
-
892,539
124,276
-
3,102,129
3,854,151
18,573,244
30,944,836
835,480
40,709,505
892,539
124,276
6,956,280
49,518,080
2013
Trade receivables
292,156
1,135,539
22,986,477
13,371,028
682,881
14,296
169,438
-
105,194
194,809
24,236,146
14,715,672
1,427,695
36,357,505
697,177
169,438
300,003
38,951,818
2014
Trade payables
GBP
RM
598,378
USD
RM
9,984,468
AUD
RM
SGD
RM
EURO
RM
Total
RM
-
-
364,467
10,947,313
1,984
196,050
12,257,351
2013
Trade payables
88,872
11,967,779
2,666
Certain of the other foreign currencies are not presented as the amounts are not material.
Foreign currency risk sensitivity
A 10% strengthening of Ringgit Malaysia against the following foreign currencies at the end of the reporting period
would increase/(decrease) the profit before tax and other comprehensive income by the amounts shown below. This
analysis assumes that all other variables remain unchanged.
107
ANNUAL REPORT 2014
2014
GBP
RM
USD
RM
AUD
RM
SGD
RM
EURO
RM
Total
RM
Profit before tax
Other comprehensive income
(23,710)
(186,210)
(3,072,504)
-
(89,254)
-
(12,428)
-
(659,181)
-
(3,857,077)
(186,210)
(209,920)
(3,072,504)
(89,254)
(12,428)
(659,181)
(4,043,287)
2013
Profit before tax
(133,882) (2,438,973)
Other comprehensive income
(804,594)
-
(938,476) (2,438,973)
(69,451)
-
(16,745)
-
(10,395)
-
(2,669,446)
(804,594)
(69,451)
(16,745)
(10,395)
(3,474,040)
A 10% weakening of Ringgit Malaysia against the above foreign currencies at the end of the reporting period would
have had the equal but opposite effect on the above currencies to the amounts shown above, on the basis that all
other variables remain unchanged.
Interest rate risk
The Group obtains financing through leasing arrangement, bank borrowings and other financial liabilities. The Group’s
policy is to obtain the borrowings with the most favourable interest rates in the market.
The Group constantly monitors its interest rate risk and does not utilise interest swap contracts or other derivative
instruments for trading or speculative purposes. At the end of the reporting period, there were no such arrangements,
interest rate swap contracts or other derivative instruments outstanding.
The carrying amounts of the Group’s financial instruments that are exposed to interest rate risk are as follows:
Financial Assets
Other investments
Fixed deposits with
licensed banks
Weighted
Average
Effective
Interest Rate
%
2014
Fixed
Floating
Rate
Rate
RM
RM
2013
Fixed
Rate
RM
Floating
Rate
RM
3.00 to 3.10
20,226,182
-
14,005,172
-
2.80 to 3.17
40,895,214
-
91,213,328
-
61,121,396
-
105,218,500
-
-
-
-
-
-
-
301,476
2,778,771
4,212,169
-
5,335,759
-
4,212,169
-
5,335,759
3,080,247
Term loan
8.25
Bank overdraft
7.60 to 8.35
Hire purchase and finance
lease payables
2.78 to 9.79
108
ANNUAL REPORT 2014
Financial instruments subject to floating interest rates are repriced regularly. Financial instruments at fixed rates
are fixed until the maturity of the instruments. The other financial instruments of the Group that are not included in
the abovementioned table are not subject to interest rate risks.
Interest rate risk sensitivity
An increase in market interest rates by 1% on financial assets and liabilities of the Group which have variable
interest rates at the end of the reporting period would decrease the profit before tax approximately by RMNil (2013:
RM31,000). This analysis assumes that all other variables remain unchanged. A decrease in market interest rates by
1% on financial assets and liabilities of the Group which have variable interest rates at the end of the reporting period
would have had the equal but opposite effect on the amounts shown above, on the basis that all other variables
remain unchanged.
Equity price risk
Equity price risk is the risk that the value of an equity instrument will fluctuate as a result of changes in market prices.
The Group and the Company are exposed to equity price risk through the Company’s holding of fund in Maybank
Enhanced Cash Fund.
If the unit prices for quoted ‘available-for-sale’ financial assets increased by 10%, with all other variables being held
constant, the Group’s ‘available-for-sale’ financial assets reserves at the end of the reporting period would increase
approximately by RM1,440,000 (2013: RM1,400,000) respectively.
If the unit prices for quoted ‘available-for-sale’ financial assets decreased by 10%, with all other variables being held
constant, it would have the equal but opposite effect on the amounts shown above.
Fair value of financial assets and financial liabilities
The carrying amounts of financial assets and financial liabilities, as reported in the financial statements, approximate
their respective fair values.
Determination of fair value
The carrying amounts of the financial assets and financial liabilities are recognised at their fair values, except for
the financial assets and financial liabilities which are recognised at cost and amortised cost after initial recognition.
However, the directors are of the opinion that the carrying amounts do not materially different from their fair values.
Valuation techniques and significant assumptions used in determining fair value of financial assets and financial
liabilities recognised at amortised cost or cost after initial recognition are as follows:
Financial assets and liabilities with published price in active markets
The fair values of financial assets and financial liabilities traded on active markets are determined with reference to
their quoted market price.
Trade and other receivables, fixed deposits, cash and bank balances, bank overdrafts and trade and other
payables
The carrying amounts approximate the fair values due to their short-term nature.
Non-current borrowings
Non-current borrowings are determined by discounting the relevant cash flows using the current interest rates for
similar instruments at the end of the reporting period and their carrying amounts are expected to approximate fair
values.
ANNUAL REPORT 2014
109
41. SIGNIFICANT EVENTS DURING THE CURRENT FINANCIAL YEAR
On 21 March 2014, the Company entered into a sale and purchase agreement with Cross Space Securities Limited,
a company incorporated in British Virgin Islands to acquire the entire shares in its wholly-owned subsidiary, 7 New
Market Street Holdings Limited (Formerly known as Wavenet Investments Limited) (“7NMSH”) for a cash consideration
of £6,700,000 or equivalent to RM36,789,000 (based on average exchange rate of £1: RM5.49). 7NMSH owns a
100% shareholding in 7 New Market Street Limited (Formerly known as Sparkling Light Investments Limited) which
in turn owns an office building in Birmingham, United Kingdom. Both newly acquired companies are incorporated in
British Virgin Islands. The acquisition has been completed on 09 May 2014.
On 23 May 2014, the Company entered into an Option Agreement with H.B. Properties PLC in the United Kingdom
(“HBP”) for the Company to require HBP to purchase all shares in 7 New Market Street Holdings Limited (Formerly
known as Wavenet Investments Limited) (“7NMSH”), which directly owns 7 New Market Street Limited (Formerly
known as Sparkling Light Investments Limited), the owner of the office building in Birmingham, United Kingdom for
a cash consideration of £7,000,000. The said agreement will expire in 30 months from the agreement date. During
the option period, the Company shall not transfer, dispose of, charge, pledge or encumber in any ways its interest
in 7NMSH.
On 26 May 2014, 7 New Market Street Limited (Formerly known as Sparkling Light Investments Limited) (“7NMS”),
the wholly-owned subsidiary of the Company entered into Development Agreement with Cross Space Securities
Limited (“CSSL”), a company incorporated in British Virgin Islands for the appointment of CSSL as developer to
perform a refurbishment work on the newly acquired office building for a total cost of £4,800,000 or equivalent to
RM26,106,240 (based on average exchange rate of £1: RM5.42). 7NMS will not be obliged or liable to pay CSSL
any amount in respect of development cost amounting to more than £4,800,000 and 7NMS’s liability under this
agreement shall be limited to £4,800,000.
41. SIGNIFICANT EVENTS DURING THE CURRENT FINANCIAL YEAR…CONT’D.
On 29 August 2014, the Company entered into an agreement for the Sale and Purchase of the entire share capital in
Tanjung Maintenance Services Sdn. Bhd. (“TMS”) with Zulkifli Bin Ahmad and Encik Syed Elyas Bin Syed Abdullah
(“the purchasers”), to dispose of its entire equity interest in TMS via a management buy-out for a total consideration
of RM9,000,000. A deposit of 10% or equivalent to RM900,000 will be paid by the purchasers upon signing the said
agreement and the remaining of the consideration will be paid via five equal yearly installments of RM1,620,000 per
year until full settlement.
42. OPERATING LEASE COMMITMENTS
The Group has lease commitments in respect of rented premises which are classified as operating leases. A summary
of the non-cancellable long-term commitments is as follows:
GROUP20142013
RM
RM
Within 1 year
Later than 1 year
762,048
-
1,571,376
1,689,768
43. AUTHORISATION FOR ISSUE OF THE FINANCIAL STATEMENTS
The financial statements of the Company were authorised for issue by the Board of Directors on 23 April 2015.
110
ANNUAL REPORT 2014
44. SUPPLEMENTARY INFORMATION – BREAKDOWN OF ACCUMULATED LOSSES INTO REALISED AND
UNREALISED
The breakdown of the accumulated losses of the Group and of the Company as at 31 December 2014 into realised
and unrealised losses is presented in accordance with the directive issued by Bursa Malaysia Securities Berhad
dated 25 March 2010 and prepared in accordance with Guidance on 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, as issued by the Malaysian Institute of Accountants.
GROUP
2014
2013
RM
RM
COMPANY
2014
2013
RM
RM
Total accumulated losses:
- Realised
- Unrealised
(41,916,074)
-
(43,154,265)
-
(46,377,243)
-
(50,341,644)
-
(41,916,074)
(43,154,265)
(46,377,243)
(50,341,644)
ANNUAL REPORT 2014
111
LIST OF PROPERTIES
As at todate, a summary of the land and buildings owned by Tanjung Offshore Services Sdn Bhd (“TOS”)is set out below:-
Title Identification / Postal
Address
Description And
Existing Use /
Ownership
Approximate Age of
Building / Tenure / Date of
Expiry of Lease
Land Area /
(Built-Up Area)
Net Book
Value As At
31 December
2014
(sq. ft.)
(RM)
509,919.54
GRN 38601 Lot No. 25929
Mukim of Setapak, District
and State of Wilayah
Persekutuan /
No. 8-3, Jalan Puncak
Setiawangsa 4,
54200 Kuala Lumpur; and
Age of building : 11 years/
Tenure : Freehold
1,760 / (4,634)
GRN 38600 Lot No. 25930
Persekutuan/
No. 10, Jalan Puncak
Setiawangsa 4, Taman
Setiawangsa, 54200 Kuala
Lumpur
Age of building : 11 years/
Tenure : Freehold
1,760 / (4,634)
3-storey shopoffices
owned by TOS
1,760 / (4,634)
GRN 38599 Lot No. 25931
Persekutuan /
Setiawangsa 4,
54200 Kuala Lumpur; and
Age of building : 11 years
Tenure : Freehold
GRN 38598 Lot No. 25932
Persekutuan /
Setiawangsa 4, Taman
Setiawangsa, 54200 Kuala
Lumpur
Tenure : Freehold
PN 4114, Lot No. 3790
(formerly known as HS(D)
2670, PT 4199), Mukim
of Teluk Kalung, District
of Kemaman, State of
Terengganu /
Lot D1 Kawasan MIEL
Teluk Kalung
24007 Kemaman
Terengganu Darul Iman
592,000.08
1,036,288.06
1,760 / (4,634)
A factory lot used
as the Group’s
Kemaman
Operation Centre
providing complete
maintenance services
Tenure : 60-year leasehold
expiring 22.8.2057
1,020,000
21,427 / (8,626)
714,685.89
112
ANNUAL REPORT 2014
LIST OF PROPERTIES
Title Identification / Postal
Address
Description And
Existing Use /
Ownership
Approximate Age of
Building / Tenure / Date of
Expiry of Lease
Land Area /
(Built-Up Area)
Net Book
Value As At
31 December
2014
(sq. ft.)
(RM)
PN 4115, Lot No. 3791
(formerly known as HS(D)
2671, PT 4200), Mukim
of Teluk Kalung, District
of Kemaman, State of
Terengganu /
Lot D2 Kawasan MIEL
Teluk Kalung
24007 Kemaman
Terengganu
A factory lot used
as the Group’s
Kemaman
Operation Centre
providing complete
maintenance
services.
Age of building : 2.5 years/
Tenure : 60-year leasehold
expiring 22.8.2057
16,017 / (8,626)
674,981.03
HM Land Registry,
WM230856, SP 0687, Section
S, Britannia House, 7 New
Market Street (50 Great
Charles Street) Queensway,
West Midlands, Birmingham
B3 2LT
8 storey of
commercial office
building with ground
floor commercial
space and 18 car
parking spaces
Tenure: Freehold
52,088
36,789,000
ANNUAL REPORT 2014
113
As at 30 April 2015
Authorised Capital
Issued And Fully Paid-up Capital
Class of Shares
Voting Rights
:
:
:
:
RM300, 000,000.00
RM190, 767,893.00
Ordinary shares of 50 sen each fully paid
One vote per 50 sen share
DISTRIBUTION OF SHAREHOLDINGS
Size of holding
No. of
Shareholders
% of
Shareholders
No. of
Shares
% of Issued
Share Capital
Less than 100
100 to 1,000
1,001 to 10,000
10,001 to 100,000
100,001 to less than 5% of issued shares
5% and above of issued shares
99
512
2,635
1,829
318
3
1.834
9.488
48.832
33.895
5.893
0.055
3,071
362,985
15,447,185
63,643,006
204,643,039
94,959,000
0.000
0.095
4.075
16.789
53.987
25.051
Total
5,396
100.000379,058,286
100.000
Total issued shares as at 30 April 2015 : 381,535,786
Treasury shares as at 30 April 2015 : 2,477,500
**‘Adjusted’ capital after netting treasury shares as at 30 April 2015 : 379,058,286
THIRTY LARGEST SHAREHOLDERS
No. of % of
Name
Shares Issued Share
Capital**
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
RAHMANDIN @ RAHMANUDIN BIN MD SHAMSUDIN
LEMBAGA TABUNG HAJI
TAN KEAN SOON
ANUGERAH BAKTI SUPPLIES SDN BHD
ABYSSINA RESOURCES (M) SDN BHD
NORLIYAH BINTI JAAFAR
ALLIANCEGROUP NOMINEES (TEMPATAN) SDN BHD
PLEDGED SECURITIES ACCOUNT FOR CAROL VUN ON NEI (8078831)
NORHAFIZAH BT MOHD NORDIN
AMSEC NOMINEES (TEMPATAN) SDN BHD
AMTRUSTEE BERHAD FOR APEX DANA AL-SOFI-I (UT-APEX-SOFI)
PUBLIC NOMINEES (TEMPATAN) SDN BHD
PLEDGED SECURITIES ACCOUNT FOR JESSIE TANG (E-KKU)
NIK NORZRUL THANI BIN N.HASSAN THANI
TAN WEE KOH
NG BOO KEAN @ NG BEH KIAN
CITIGROUP NOMINEES (ASING) SDN BHD
CBNY FOR DIMENSIONAL EMERGING MARKETS VALUE FUND
AMSEC NOMINEES (TEMPATAN) SDN BHD
AMTRUSTEE BERHAD FOR APEX DANA AL-FAIZ-I (UT-APEX-FAIZ)
37,183,900
30,739,000
28,220,000
15,485,700
13,134,800
9,755,100
9.81
8.109
7.444
4.085
3.465
2.573
5,918,300
5,900,000
1.561
1.556
5,286,900
1.394
4,915,000
4,460,000
4,440,200
4,149,700
1.296
1.176
1.171
1.094
4,056,100
1.070
3,825,300
1.009
114
ANNUAL REPORT 2014
THIRTY LARGEST SHAREHOLDERS (continued)
No. of % of
Name
Shares Issued Share
Capital**
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
LIM GAIK BWAY @ LIM CHIEW AH
HLB NOMINEES (TEMPATAN) SDN BHD
PLEDGED SECURITIES ACCOUNT FOR TAN CHING LING
CITIGROUP NOMINEES (ASING) SDN BHD
CBNY FOR DFA EMERGING MARKETS SMALL CAP SERIES
RHB NOMINEES (TEMPATAN) SDN BHD
OSK CAPITAL SDN BHD FOR NORWAHIDA BINTI JA’AFAR
YIP WAN YIN
ALLIANCEGROUP NOMINEES (TEMPATAN) SDN BHD
PLEDGED SECURITIES ACCOUNT FOR KONG KOK KEONG (6000418)
MAYBANK NOMINEES (TEMPATAN) SDN BHD
PLEDGED SECURITIES ACCOUNT FOR TEOH PEK WEI
TAN BOON HAR
CARTABAN NOMINEES (ASING) SDN BHD
EXEMPT AN FOR KGI ASIA LTD
SYED ABDILLAH BIN SYED ABAS
TAY HOCK TIAM
TAN ENG HEONG
MALACCA EQUITY NOMINEES (TEMPATAN) SDN BHD
EXEMPT AN FOR PHILLIP CAPITAL MANAGEMENT SDN BHD (EPF)
CIMB GROUP NOMINEES (TEMPATAN) SDN BHD
CIMB COMMERCE TRUSTEE BERHAD FOR APEX DANA ASLAH (50143 TR01)
LOW BEY TEE
TOTAL
3,236,200
0.853
2,987,000
0.788
2,775,700
0.732
2,504,000
2,460,000
0.660
0.648
2,128,500
0.561
2,017,100
1,650,000
0.532
0.435
1,534,800
1,527,700
1,508,800
1,450,000
0.404
0.403
0.398
0.382
1,444,900
0.381
1,393,500
1,374,000
0.367
0.362
206,278,300
54.418
No. of Shares held
**%
Indirect
%
SUBSTANTIAL SHAREHOLDERS AS AT 30 APRIL 2015
(as per Register of Substantial Shareholders)
Name
Direct
RAHMANDIN @ RAHMANUDIN BIN MD SHAMSUDIN37,183,900 LEMBAGATABUNG HAJI
30,739,000
TAN SRI DATUK TAN KEAN SOON
28,220,000
9.81
8.11
7.44
-
-
-
-
ANNUAL REPORT 2014
115
DIRECTORS’ SHAREHOLDINGS AS AT 30 APRIL 2015
(as per Register of Directors’ Shareholdings)
Name
Datuk Mohd Hafarizam Bin Harun
Rahmandin @ Rahmanudin Bin Md. Shamsudin
Dato’ Dr. (H) Ab Wahab Bin Ibrahim
Datuk Dr. Nik Norzrul Bin N. Hassan Thani
Dato’ Maheran Bte Mohd Salleh
Ms Tan Sam Eng Datuk Syed Hussian Syed Junid
Direct
N
o. of Shares held
**%
Indirect
%
-
-
-
28,220,000 7.44
597,000(a)
0.16
37,183,900 9.81
-
-
-
-
4,460,000
1.18
4,190,000(b)
1.11
-
-
4,190,000(b)
1.11
-
-
-
70,000
0.02
-
- ---
**based on ‘Adjusted’ capital after netting treasury shares
Deemed interest by virtue of his spouse and children’s interests pursuant to Section 134(12) of the Companies Act, 1965
(b)
Deemed interest by virtue of his / her interests in Abyssina Resources (M) Sdn. Bhd. pursuant to Section 6A of the
Companies Act, 1965
(a)
DIRECTORS’ OPTIONS HOLDINGS AS AT 30 APRIL 2015
(as per Register of Directors’ Options Holdings)
Name
Dato’ Dr. (H) Ab Wahab bin Ibrahim
Edwanee Cheah bin Abdullah
Datuk Seri Syed Ali Bin Tan Sri Syed Abbas Alhabshee
Harzani bin Azmi
Tan Wee Koh
Encik Muhammad Sabri Bin Ab Ghani
Direct
-
-
-
-
-
-
-
N
o. of Options held
%
Indirect
-
-
-
-
-
-
-
-
-
-
-
-
-
-
%
-
116
ANNUAL REPORT 2014
ANALYSIS OF WARRANTS A (2006/2016)
ANALYSIS BY SIZE OF WARRANT HOLDINGS : A (2006/2016) AS AT 30 APRIL 2015
Size of holding
No. of
Holders % of
Holders
No. of
Warrants Less than 100
100 to 1,000
1,001 to 10,000
10,001 to 100,000
100,001 to less than 5% of issued shares
5% and above of issued warrants
82
73
165
233
53
1
13.509
12.026
27.182
38.385
8.731
0.164
3,751
36,986
990,942
9,170,768
17,662,435
2,117,108
Total
607
% of Issued Warrants
100.00029,981,990
0.012
0.123
3.305
30.587
58.910
7.061
100.000
THIRTY LARGEST WARRANT A HOLDERS
No. of Name
Warrants
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
ABDULLAH BIN HASHIM
2,117,108
LEE GEOK THYE (HOLDINGS) SDN BHD
1,390,000
TAN BOON HAR
1,274,500
RAHMANDIN @ RAHMANUDIN BIN MD SHAMSUDIN
937,039
LEUNG KIT MAN
909,700
TAY HOCK TIAM
811,000
SYEDELYAS BIN SYED ABDILLAH
750,339
NG CHEET HONG
749,700
TAN BOON HAR
610,000
MAYBANK NOMINEES (TEMPATAN) SDN BHD
505,500
MOHAMED ADZMAN BIN MOHAMED SURA
LIM GAIK BWAY @ LIM CHIE WAH
431,300
CHOWSENGKITT
425,800
HLIB NOMINEES (TEMPATAN SDN BHD)
423,900
HONG LEONG BANK BHD FOR LIM CHE OON KIAT
KENANGA NOMINEES (TEMPATAN) SDN BHD
408,800
PLEDGED SECURITIES ACCOUNT FOR TEY BOON HUAT
CHIM LUAN GENG
405,400
HLIB NOMINEES (TEMPATAN) SDN BHD
403,000
PLEDGED SECURITIES ACCOUNT FOR TEDDY HO
PANG HIN (CCTS)
RUSLI BIN HARUN
350,000
AHMAD RASIDI BIN OSMAN
334,000
POON YIN KWOON
310,800
JONATHAN LEE SZE SENG
300,700
AZMAN BIN HUSSIN
300,000
CHIM LUANG ENG
275,700
LIEW YUEH MING
270,000
SYED ARIFFIN BIN SYED HUSSAIN ALHABSHEE
259,000
% of
Issued
Warrants
7.061
4.636
4.250
3.125
3.034
2.704
2.502
2.500
2.034
1.686
1.438
1,420
1.413
1.363
1.352
1.344
1.167
1.114
1.036
1.002
1.000
0.919
0.900
0.863
ANNUAL REPORT 2014
117
ANALYSIS OF WARRANTS A (2006/2016)
THIRTY LARGEST WARRANT A HOLDERS (continued)
No. of Name
Warrants
25
26
27
28
29
30
% of
Issued
Warrants
YIELDFORCE SDN BHD
257,000
CHIN SOOTH CHAIN
255,600
NORLIYAH BINTI JAAFAR
250,000
HLB NOMINEES (TEMPATAN) SDN BHD
200,000
PLEDGED SECURITIES ACCOUNT FOR HIU WOONG CHOONG
ISMET BIN OMAR
200,000
TAN HOOI MENG
200,000
16,315,946
0.857
0.852
0.833
0.667
0.667
0.667
54.419
WARRANT HOLDINGS WITH 5% AND ABOVE
No. of Warrants A held
Name
Direct
%Indirect
Abdullah bin Hashim
2,117,108
7.061
-
%
-
DIRECTORS’ WARRANTS A HOLDINGS AS AT 30 APRIL 2015
(as per Register of Directors’ Warrants Holdings)
Name
Datuk Mohd Hafarizam Bin Harun
Rahmandin @ Rahmanudin Bin Md. Shamsudin
Dato’ Dr. (H) Ab Wahab Bin Ibrahim
Datuk Dr. Nik Norzrul Bin N. Hassan Thani
Dato’ Maheran Bte Mohd Salleh
Ms Tan Sam Eng
Datuk Syed Hussian Syed Junid
Direct
-
-
937,039
-
-
-
-
-
-
No. of Warrent held
%Indirect
-
-
3.125
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
%
-
This page has been intentionally left blank.
(Incorporated in Malaysia under the Companies Act, 1965)
FORM OF PROXY
I/We
........................................................................................................................................................................................................
NRIC No./Company No.................................................................. of ......................................................................................................
......................................................................................................................... being a Member/Members of Tanjung Offshore Berhad
(“the Company”), hereby appoint .............................................................................................................................................................
of ................................................................................................................................................................................. or failing him/her
.............................................................................................................. of ..................................................................................................
.............................................................................. as my/our proxy to vote for me/us and on my/our behalf at Eleventh Annual General
Meeting of the Company to be held at Kristal Ballroom 1, 1st Floor West Wing PJ Hilton No. 2, Jalan Barat, Seksyen 52, 46200 Petaling
Jaya, Selangor on Thursday, 25 June 2015 at 10.00 a.m. and at any adjournment thereof in the manner as indicated below:For
ORDINARY RESOLUTION
Against
Resolution No. 1
Resolution No. 2
Resolution No. 3
Resolution No. 4
Resolution No. 5
Resolution No. 6
Resolution No. 7
Resolution No. 8
Resolution No. 9
Resolution No. 10
Resolution No. 11
(Please indicate with an “X” in the spaces provided on how you wish your vote to be cast. In the absence of specific direction, your
proxy will vote or abstain as he / she thinks fit)
Signed this
day of
2015.
No. of Shares Held
....................................................................
Signature of Shareholder or Common Seal
Notes:-
1.
2.
3.
4.
5.
6.
7.
Only depositors whose names appear on the Record of Depositors as at 19 June 2015 shall be entitled to attend, speak and vote at the said
meeting or appoint proxies to attend, speak and vote on his/her behalf.
A member entitled to attend and vote at the meeting shall not be entitled to appoint more than two (2) proxies to attend and vote in his/her
stead. 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.
Where a member appoints two (2) proxies, the appointment shall be invalid unless he/she specifies the proportions of his/her shareholding to
be represented by each proxy.
Where a Member is an authorised nominee as defined under the Central Depositories Act, it may appoint one (1) proxy in respect of each
Securities Account it holds with ordinary shares of the Company standing to the credit of the said Securities Account.
Where a Member of the Company is an Exempt Authorised Nominee which holds ordinary shares in the Company for multiple beneficial
owners in one securities account known as an omnibus account, there is no limit to the number of proxies which the Exempt Authorised
Nominee may appoint in respect of each omnibus account its holds.
The instrument appointing a proxy shall be in writing under the hand of the appointer or of his/her attorney duly authorised in writing or, if the
appointer is a corporation, either under its Common Seal or under the hand of its officer or attorney duly authorised.
The instrument appointing a proxy and the power of attorney or other authority (if any), under which it is signed or a notarially certified copy
thereof, must be deposited at the Company’s Share Registrar’s Office at Tricor Investor Services Sdn. Bhd., Level 17, The Gardens North
Tower, Mid Valley City, Lingkaran Syed Putra, 59200 Kuala Lumpur,not less than forty eight hours (48) hours before the time appointed for
holding the meeting or any adjournment thereof.
FOLD THIS FLAP FOR SEALING
FOLD HERE
STAMP
(Company No.: 662315-U)
Level 17, The Gardens North Tower
Mid Valley City
Lingkaran Syed Putra
59200 Kuala Lumpur
FOLD HERE
Suite 5-1, Level 5, Wisma UOA Damansara II,
No. 6, Changkat Semantan,
Damansara Heights, 50490 Kuala Lumpur.
Tel: +60-3-2087 7000 Fax: +60-3-2087 7040
www.tanjungoffshore.com.my

TOB-Annual Report 2014 - Tanjung Offshore Berhad

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