/ annual report 2007
advance synergy berhad
Corporate Vision and Mission
OUR VISION
To be premier global corporation.
OUR MISSION
To attain success as a socially responsible global corporation which excel in every undertaking.
OUR STRATEGY
We seek synergistic partnerships and alliances to achieve our mission.
WE ENSURE
• Entrepreneurship excellence in all our pursuits.
• Sustainable growth through identification and satisfaction of customers’ needs.
• Productive partnerships with business associates, suppliers, employees and governments.
• Fairness in all business dealings with partners, customers and suppliers.
OUR VALUES
• To Our Shareholders
We ensure a fair return so that our shareholders will value their investment.
• To Our Customers
We value our customers by providing them with high quality products and services at competitive prices.
• To Our Employees
We care for our people by creating a conducive work environment, nurturing them to their fullest potential and
recognising their contribution.
• To Our Community
We honour our social obligations and contribute to the economic and social wellbeing of every community in which
we operate.
Logo Rationale
This logo, circular in shape, comprises symbols which represent the fire, water, and earth
elements in constant interaction. The interaction of these elements releases free flowing energy
which produces the TREE, a symbol of all life on earth. Situated at the centre of the logo, the
TREE represents the focus of the company goal which is the creation of wealth benefiting
shareholders and society at large. The logo holistically, symbolises synergistic energy in motion.
Contents
Group Corporate Structure as at 6 May 2008
002
Notice of Annual General Meeting
004
Notice of Nomination
006
Board of Directors & Corporate Information
007
Management Information
011
Statement on Corporate Governance
012
Additional Compliance Information
017
Audit Committee Report
019
Statement on Internal Control
023
Corporate Social Responsibility
025
Chairman’s Statement
026
Financial Statements
033
•
Directors’ Report
034
•
Statement by Directors
038
•
Statutory Declaration
038
•
Report of the Auditors to the Members of Advance Synergy Berhad
039
•
Income Statements
040
•
Balance Sheets
041
•
Statements of Changes in Equity
043
•
Cash Flow Statements
046
•
Notes to the Financial Statements
049
Statement on Directors’ Interests
129
Statistics on Shareholdings
130
Statistics on Warrantholdings
132
Statistics on ICULS holdings
134
List of Properties
136
Proxy Form
Enclosed
advance synergy berhad (1225-D)
annual report 2007
001
Group Corporate Structure as at 6 May 2008
002
advance synergy berhad (1225-D)
annual report 2007
** 29% of the equity interest of the company is held by ASC.
advance synergy berhad (1225-D)
annual report 2007
003
Notice of Annual General Meeting
NOTICE IS HEREBY GIVEN that the Eighty-Fourth ANNUAL GENERAL MEETING of the Company will be held at
Mezzanine Floor, Synergy Com Centre, No. 72, Pesiaran Jubli Perak, Seksyen 22, 40000 Shah Alam, Selangor Darul
Ehsan on Monday, 30 June 2008 at 2.00 p.m. for the following purposes:1.
To receive and adopt the audited financial statements for the financial year ended 31 December
2007 and the Directors’ and Auditors’ reports thereon.
Resolution 1
2.
To approve Directors’ fees for the financial year ended 31 December 2007.
Resolution 2
3.
To re-elect Datin Masri Khaw Binti Abdullah as Director.
Resolution 3
4.
To elect the following Directors:4.1 Dato’ Abdul Murad Bin Khalid
5.
Resolution 4
4.2 Lee Su Nie
Resolution 5
4.3 Yong Teck Ming
Resolution 6
To appoint Messrs Baker Tilly Monteiro Heng as Auditors of the Company in place of the retiring
auditors, Messrs BDO Binder, and to authorise the Directors to fix their remuneration.
Resolution 7
Notice of Nomination pursuant to Section 172(11) of the Companies Act, 1965 (a copy of which
is annexed on page 6) has been received by the Company of the intention to propose the
following ordinary resolution:“THAT Messrs Baker Tilly Monteiro Heng be and are hereby appointed as Auditors of the
Company in place of the retiring auditors, Messrs BDO Binder, and to hold office until the
conclusion of the next Annual General Meeting at a remuneration to be fixed by the Directors.”
6.
As special business, to consider and, if thought fit, pass with or without modifications the
following resolution:Ordinary Resolution - Authority to allot and issue shares
“THAT subject always to the approvals of the relevant authorities, the Directors be and are hereby
authorised and empowered pursuant to Section 132D of the Companies Act, 1965 to allot and
issue new shares in the Company, from time to time and upon such terms and conditions and for
such purposes as the Directors may, in their absolute discretion deem fit, provided that the
aggregate number of shares issued pursuant to this resolution does not exceed 10% of the
issued share capital of the Company for the time being AND THAT the Directors be and are
hereby empowered to obtain the approval for the listing of and quotation for the additional shares
so issued on Bursa Malaysia Securities Berhad AND THAT such authority shall continue in force
until the conclusion of the next Annual General Meeting of the Company.”
7.
To transact any other ordinary business of which due notice shall have been given.
BY ORDER OF THE BOARD
HO TSAE FENG
Secretary
Selangor Darul Ehsan
6 June 2008
004
advance synergy berhad (1225-D)
annual report 2007
Resolution 8
Note:1. A member of the Company entitled to attend and vote at the general meeting is entitled to appoint at least one (1)
proxy but not more than two (2) proxies to attend and vote in his/her stead. A proxy need not be a member of the
Company.
2. A member of the Company who is an authorised nominee as defined under the Securities Industry (Central
Depositories) Act, 1991 may appoint at least one (1) proxy but not more than two (2) proxies in respect of each
securities account it holds with shares of the Company standing to the credit of the said securities account.
3. The instrument appointing a proxy in the case of an individual shall be signed by the appointer or his/her attorney
duly authorised and in the case of a corporation, the instrument appointing a proxy must be under its common seal
or under the hand of an officer or attorney duly authorised.
4. The instrument appointing a proxy must be deposited at the Registered Office of the Company at Level 3, Wisma
ASCAP - QBC, No. 72, Pesiaran Jubli Perak, Seksyen 22, 40000 Shah Alam, Selangor Darul Ehsan not less than 48
hours before the time appointed for holding the meeting or any other adjournment thereof.
EXPLANATORY NOTE ON SPECIAL BUSINESS
Resolution 8 - Authority to allot and issue shares
The Ordinary Resolution pursuant to Section 132D of the Companies Act, 1965, if passed, will empower the Directors,
from the date of the above General Meeting until the next Annual General Meeting to allot and issue new shares of the
Company up to an amount not exceeding in total 10% of the issued share capital of the Company for the time being
and for such purposes as the Directors consider would be in the best interests of the Company. This would avoid any
delay and cost involved in convening a general meeting to specifically approve the aforesaid. This authority, unless
revoked or varied at a general meeting, will expire at the next Annual General Meeting of the Company.
Statement Accompanying Notice of Annual General Meeting
Details of Directors who are standing for election
Details of the Directors standing for election under Resolution 4 to Resolution 6 are as stated in Directors’ Profile on
pages 8 to 10 of this Annual Report. Their securities holdings in the Company and its subsidiaries are stated on page
129 of this Annual Report.
advance synergy berhad (1225-D)
annual report 2007
005
Notice of Nomination
006
advance synergy berhad (1225-D)
annual report 2007
Board of Directors & Corporate Information
BOARD OF DIRECTORS
Dato’ Ahmad Sebi Bakar
Lee Su Nie
Dato’ Abdul Murad Bin Khalid
Datin Masri Khaw Binti Abdullah
Chim Wai Khuan
Yong Teck Ming
SECRETARY
Ho Tsae Feng
Dato’ Ahmad Sebi Bakar
Executive Chairman
Dato’ Abdul Murad
Bin Khalid
Independent
Non-Executive Director
Lee Su Nie
Executive Director
Datin Masri Khaw
Binti Abdullah
Non-Independent
Non-Executive Director
AUDITORS
BDO Binder
Chartered Accountants
12th Floor, Menara Uni. Asia
1008, Jalan Sultan Ismail
50250 Kuala Lumpur
Tel : 03-2616 2888
Fax : 03-2616 3190
REGISTRARS
Sectrars Services Sdn Bhd
No. 28-1, Jalan Tun Sambathan 3
Brickfields, 50470 Kuala Lumpur
Tel : 03-2274 6133
Fax : 03-2274 1016
REGISTERED OFFICE
Level 3, Wisma ASCAP - QBC
No. 72, Pesiaran Jubli Perak
Seksyen 22, 40000 Shah Alam
Selangor Darul Ehsan
Tel : 03-5192 8822
Fax : 03-5192 8811
PRINCIPAL BANKER
Affin Bank Berhad
Chim Wai Khuan
Independent
Non-Executive Director
Yong Teck Ming
Independent
Non-Executive Director
STOCK EXCHANGE LISTING
Main Board of the
Bursa Malaysia Securities Berhad
advance synergy berhad (1225-D)
annual report 2007
007
Directors
Dato’ Ahmad Sebi Bakar, 60, a Malaysian, is a Non-Independent Director and the Executive Chairman of
Advance Synergy Berhad. He was appointed to the Board on 9 April 1991. Dato’ Ahmad Sebi Bakar holds a
Bachelor of Arts (Hons) degree from the University of Malaya, Kuala Lumpur, a Diploma in Journalism from
the Thomson Foundation, United Kingdom and a Master of Arts from Michigan State University, United States
of America. He was the Editor of the Malay Mail, a member of the New Straits Times Press Group from 1976
to 1982 and subsequently the Group Editor of Berita Harian from 1983 to 1986. From 1986 to 1989, he was the
Managing Director of Sistem Televisyen Malaysia Bhd and a director of the New Straits Times Press Group from
1988 to 1989. He was also the Non-Executive Chairman of Unified Communications Holdings Limited, an indirect
subsidiary of Advance Synergy Berhad which is listed on the Singapore Exchange Securities Trading Limited,
from December 2003 to June 2006.
He was conferred the Ahli Mangku Negara (A.M.N.) by the Yang Di-Pertuan Agong, DYMM Tuanku Haji Ahmad
Shah Al-Mustain Billah Ibni Almarhum Sultan Abu Bakar in 1983, the Justice of Peace (J.P.) by DYMM Sultan
Azlan Muhibbuddin Shah Ibni Almarhum Sultan Yusoff Izzuddin Shah Ghafarullah, Sultan of Perak, in 1986 and
the Dato’ Setia Diraja Kedah (D.S.D.K.) by DYMM Tuanku Alhaj Abdul Halim Mu’adzam Shah Ibni Almarhum
Sultan Badlishah, Sultan of Kedah, in 1988.
Currently, he sits on the Board of public listed companies namely, Advance Synergy Capital Berhad, in which he
holds the position as Chairman and Kumpulan Powernet Berhad, in which he holds both the positions as
Executive Chairman and Managing Director. He is also a director of Alangka-Suka Hotels & Resorts Berhad,
a non-listed public company which is a subsidiary of Advance Synergy Berhad. He is actively involved in
social and charitable work and is the Chairman of several non-profit organisations, namely, the privately funded
Orphanage Foundation of Malaysia (YATIM) and in the past the Bosnia Action Front, Malaysia. He is also the
President of the Malaysian National Writers Association (PENA) since 1992.
Dato’ Ahmad Sebi Bakar does not have any family relationship with any director and/or major shareholder of
Advance Synergy Berhad, nor has he any conflict of interest with Advance Synergy Berhad, except that he is
also a substantial shareholder of Advance Synergy Berhad and Suasana Dinamik Sdn Bhd, which is also a
substantial shareholder of Advance Synergy Berhad. He has had no convictions for any offences within the past
10 years.
Lee Su Nie, 47, a Malaysian, is the Executive Director and Chief Executive Officer of Advance Synergy Berhad.
She was appointed to the Board on 9 July 2007. Ms Lee Su Nie holds a Bachelor of Commerce (Accounting)
degree from the University of Birmingham, United Kingdom and a Master of Science (Business Administration)
degree from the University of Bath, United Kingdom. She is a Fellow Member of The Association of Chartered
Certified Accountants, United Kingdom. In 1985, she joined Kassim Chan Management Consultants Sdn Bhd,
where she provided management consultancy services. She joined the Corporate Finance Department of Rakyat
Merchant Bankers Berhad in 1989. In 1991, she left Rakyat Merchant Bankers Berhad to join Perdana Merchant
Bankers Berhad (now known as Southern Investment Bank Berhad). She subsequently left her position as First
Vice President, Corporate Finance of the Bank to join Advance Synergy Berhad in 1995 as Assistant General
Manager of Corporate Planning & Finance. She was subsequently appointed the Group General Manager,
Operations, of Advance Synergy Berhad prior her appointment as Chief Executive Officer on 22 April 2004.
She is the Non-Executive Chairman of Unified Communications Holdings Limited, an indirect subsidiary of
Advance Synergy Berhad which is listed on the Singapore Exchange Securities Trading Limited. She also holds
directorships in several private limited companies within Advance Synergy Berhad Group.
She does not have any family relationship with any director and/or major shareholder of Advance Synergy
Berhad, nor has she any conflict of interest with Advance Synergy Berhad. She has had no convictions for any
offences within the past 10 years.
008
advance synergy berhad (1225-D)
annual report 2007
Dato’ Abdul Murad Bin Khalid, 54, a Malaysian, is an Independent Non-Executive Director of Advance Synergy
Berhad. He was appointed to the Board on 9 July 2007. Dato’ Abdul Murad Bin Khalid holds a Bachelor of
Economics (Hons) and Diploma in Accounting from the University of Malaya and is a Member of Malaysian
Institute of Chartered Public Accountants.
In 1976, Dato’ Abdul Murad Bin Khalid joined Bank Negara Malaysia as Administrative Officer and was
subsequently appointed as Assistant Governor in 1994. In January 1999, he left Bank Negara Malaysia to join
RHB Bank Berhad as Executive Director. He left RHB Bank Berhad in September 1999.
Dato’ Abdul Murad Bin Khalid currently holds directorships in Rexit Berhad and several private limited companies.
He is also presently managing his family business.
Dato’ Abdul Murad Bin Khalid is the Chairman of the Remuneration Committee of Advance Synergy Berhad. He
is also a member of the Nomination Committee, Risk Management Committee and Audit Committee of Advance
Synergy Berhad.
He does not have any family relationship with any director and/or major shareholder of Advance Synergy
Berhad, nor has he any conflict of interest with Advance Synergy Berhad. He has had no convictions for any
offences within the past 10 years.
Datin Masri Khaw Binti Abdullah, 55, a Malaysian, is a Non-Independent Non-Executive Director of Advance
Synergy Berhad. She was appointed to the Board on 6 January 1995. Datin Masri Khaw Binti Abdullah was one
of the first Asians to complete the General Manager’s Programme at the Holiday Inn University in Memphis, USA
in 1976. In 1982, she completed a summer course on Hotel Development & Design at Cornell University, USA
and had undergone Hotel training in Singapore and Canada. She was awarded the Best Marketing Person of the
Year for Holiday Inn Hotels Asia Pacific in 1985. Datin Masri Khaw Binti Abdullah played a key role when Antara
Holiday Villas Sdn Bhd won a special award for Quality Management in the Industry Excellence Award 1997
organised by the Ministry of International Trade and Industry. She received the prestigious award from the
former Prime Minister Tun Dr. Mahathir Mohamad on 18 December 1997. Her experience in the hotel industry
dates back to 1969 and she has since contributed significantly to the development of new hotels. She initiated
the Holiday Villa chain in 1987 with the opening of Holiday Villa Cherating.
She is presently the Managing Director and Chief Executive Officer of Antara Holiday Villas Sdn Bhd and
Holiday Villas International Limited, subsidiaries of Advance Synergy Berhad. She also sits on the Board of
other subsidiaries of Advance Synergy Berhad, including Alangka-Suka Hotels & Resorts Berhad and Mayor
Hotels Berhad, which are non-listed public companies.
Datin Masri Khaw Binti Abdullah is a member of the Remuneration Committee and Nomination Committee of
Advance Synergy Berhad.
She does not have any family relationship with any director and/or major shareholder of Advance Synergy
Berhad, nor has she any conflict of interest with Advance Synergy Berhad. She has had no convictions for any
offences within the past 10 years.
advance synergy berhad (1225-D)
annual report 2007
009
Chim Wai Khuan, 57, a Malaysian, is an Independent Non-Executive Director of Advance Synergy Berhad. He
was appointed to the Board on 12 December 2001. Mr Chim Wai Khuan is a member of the Malaysian Institute
of Accountants. He has vast experience in auditing, taxation and management consultancy services while he
was attached to several accounting firms in Malaysia and the United Kingdom from 1974 to 1985. Currently, he
manages his own practice under the name WKC & Co., an audit firm.
He is also an independent non-executive director of Advance Synergy Capital Berhad, Ganad Corporation
Berhad and United U-Li Corporation Berhad.
Mr Chim Wai Khuan is the Chairman of the Nomination Committee as well as a member of the Audit Committee,
Risk Management Committee and Remuneration Committee of Advance Synergy Berhad.
He does not have any family relationship with any director and/or major shareholder of Advance Synergy
Berhad, nor has he any conflict of interest with Advance Synergy Berhad. He has had no convictions for any
offences within the past 10 years.
Yong Teck Ming, 54, a Malaysian, was appointed to the Board on 9 July 2007. He is an Independent Non-Executive
Director of Advance Synergy Berhad. He also serves as Chairman of the Audit Committee and Risk Management
Committee.
He holds a Bachelor of Commerce Degree from the University of Auckland, New Zealand. He is a member of the
Institute of Chartered Accountants, New Zealand and a member of the Institute of Chartered Secretaries and
Administrators, United Kingdom.
Mr Yong Teck Ming started his career in New Zealand in 1973 and worked in several accounting positions before
returning to Malaysia in February 1979. From March 1979 to January 1995, he served in various positions in the
Berjaya Group of Companies including as Group Executive Director from February 1988 until January 1995. He
currently sits on the Boards of IFCA MSC Berhad and several private limited companies.
He does not have any family relationship with any director and/or major shareholder of Advance Synergy
Berhad, nor has he any conflict of interest with Advance Synergy Berhad. He has had no convictions for any
offences within the past 10 years.
010
advance synergy berhad (1225-D)
annual report 2007
Management Information
CORPORATE OFFICE
Advance Synergy Berhad Group
Dato’ Ahmad Sebi Bakar
Executive Chairman
HEADS OF KEY GROUP DIVISIONS
FINANCIAL SERVICES & TRANSPORTATION
Lee Su Nie
Executive Director / Chief Executive Officer
Advance Synergy Capital Berhad
Wong Joon Hian
Managing Director
Chan Kian Heoi
General Manager
Corporate Services
INFORMATION & COMMUNICATIONS TECHNOLOGY
Anton Syazi Dato’ Ahmad Sebi
General Manager
Corporate Development
Anton Syazi Dato’ Ahmad Sebi
Executive Director / Deputy Chief Executive Officer
Tan Mui Ping
Manager
Finance
Ho Tsae Feng
Manager
Secretarial
Zuhaida Zainuddin
Manager
Internal Audit
Unified Communications Holdings Limited
Wong Tze Leng
Executive Director / Chief Executive Officer
HOTELS & RESORTS
Alangka-Suka Hotels & Resorts Berhad
Datin Masri Khaw Binti Abdullah
Managing Director and Chief Executive Officer
CARD & PAYMENT SERVICES
iSynergy Sdn Bhd
Synergy Cards Sdn Bhd
Yap Chee Kong
Chief Executive Officer
MANUFACTURING, MARKETING & DISTRIBUTION
Advansa Pty Ltd
Anton Syazi Dato’ Ahmad Sebi
Executive Director
PROPERTY DEVELOPMENT
Advance Synergy Realty Sdn Bhd
Sng Ngiap Koon
Executive Director / Chief Operating Officer
Sadong Development Sdn Bhd
Liew Chaw Thai
Manager
TRAVEL & TOURS
Orient Escape Travel Sdn Bhd
Cheah Ping Huey
Executive Director
Columbus Travel & Tours Sdn Bhd
Fabio Delisi
Chief Executive Officer
advance synergy berhad (1225-D)
annual report 2007
011
Statement on Corporate Governance
The Board of Directors (“Board” or “Directors”) fully subscribes to the recommendations of the Malaysian Code on
Corporate Governance (“the Code”) and is committed in ensuring that the Company and its subsidiaries (“the Group”)
practises the highest standard of Corporate Governance as a fundamental part of discharging its responsibilities to
protect and enhance long-term shareholder value and the financial performance of the Group.
The disclosure statement describes the manner in which the Group has applied the Code’s Principles and the extent
of compliance with the Best Practices advocated therein.
BOARD OF DIRECTORS
The direction and control of the Group rest firmly with the Board as it effectively assumes the overall responsibility for
corporate governance, strategic direction, formulation of policies and overseeing the investments and operations of
the Group.
The Board meets at least four (4) times a year, with additional meetings convened as necessary. During the financial
year ended 31 December 2007, four (4) meetings were held. Details of attendance of each Director at Board Meetings
held during the financial year are as follows:-
Name of Directors
No. of Meetings Attended
Dato’ Ahmad Sebi Bakar
4/4
Datin Masri Khaw Binti Abdullah
4/4
Chim Wai Khuan
4/4
Lee Su Nie (appointed on 9 July 2007)
2/2
Dato’ Abdul Murad Bin Khalid (appointed on 9 July 2007)
2/2
Yong Teck Ming (appointed on 9 July 2007)
2/2
Wong Ah Nam @ Wong Joon Tuang (resigned on 9 July 2007)
2/2
Sng Ngiap Koon (resigned on 9 July 2007)
2/2
Aznan Bin Haji Ismail (passed away on 10 May 2007)
-
The Board has established three (3) committees: an Audit Committee, a Nomination Committee and a Remuneration
Committee, the details of which are set out in this Statement and Annual Report. These Committees have the authority
to examine particular issues and report back to the Board with their recommendations. The ultimate responsibility for
decisions on all matters, however, lies with the Board.
BOARD BALANCE
The Board currently consists of an Executive Chairman, an Executive Director/Chief Executive Officer and four (4)
Non-Executive Directors, three (3) of whom are independent. The current Directors bring a wide range of business and
financial experience, skills and knowledge necessary for the effective stewardship of the Group. Profiles of the Directors
are set out on pages 8 to 10 of this Annual Report.
The Executive Chairman is entrusted with the task of running the business of the Group and implementation of the
policies and strategies adopted by the Board.
The presence of three (3) Independent Non-Executive Directors representing 50% of the total number of Directors fulfil
a pivotal role in ensuring that there is balance of power and authority. Although all the Directors have an equal
responsibility for the Group’s operations, the role of these Independent Non-Executive Directors is particularly
important in ensuring that the strategies proposed by the executive management are fully deliberated upon, and take
into account the long term interests of the shareholders, employees, customers, suppliers and the many communities
in which the Group conduct its business. Together, their representation on the Board fairly reflect the investment of the
minority shareholders of the Company and in addition carry sufficient weight for decision making.
012
advance synergy berhad (1225-D)
annual report 2007
SUPPLY OF INFORMATION
Each Director has unrestricted access to senior management, all information within the Company and is entitled to
the advice and services of the Company Secretary whose appointment and removal should be a matter for the Board
as a whole. The Directors whether as full Board or in their individual capacity, may in furtherance of their duties, take
independent professional advice at the Company’s expense, if required.
Prior to Board meetings, the Agenda for each meeting together with reports and papers containing information relevant
to the business of the meetings (including information on major financial, operational and corporate matters as well as
activities and performance of the Group and minutes of Committees of the Board and Board meetings) are circulated
to the Board members to provide time for the Board members to read and contemplate the issues. During Board
meetings, management provides further details on each issue raised for discussion or as supplementary information.
APPOINTMENTS TO THE BOARD
With the establishment of the Nomination Committee, a formal transparent procedure is in place for the appointment
of new Directors to the Board. Candidates for directorship will be identified and recommended to the Board by the
Committee.
Nomination Committee
The Nomination Committee consists of three (3) Non-Executive Directors. Members of the Nomination Committee are:• Chim Wai Khuan
(Chairman, Independent Non-Executive Director)
• Datin Masri Khaw Binti Abdullah
(Member, Non-Independent Non-Executive Director)
• Dato’ Abdul Murad Bin Khalid
(Member, Independent Non-Executive Director)
• Wong Ah Nam @ Wong Joon Tuang
(Member, Independent Non-Executive Director)
(appointed on 9 July 2007)
(resigned on 9 July 2007)
The Nomination Committee is responsible for making recommendations on any nomination to the Board and to
Committees of the Board. In making these recommendations, due consideration is given to the required mix of skills
and experience that the proposed directors should bring to the Board and to the respective Board Committees. The
actual decision as to who shall be nominated is the responsibility of the full Board after considering the Nomination
Committee’s recommendations.
The Nomination Committee will also assess annually, the effectiveness of the Board as a whole, the Committees of the
Board and the contribution of each individual Director including Independent Non-Executive Directors, as well as Chief
Executive Officer. The Board, through the Nomination Committee, reviews annually its required mix of skills and
experience and other qualities, including core competencies, which Non-Executive Directors should bring to the
Board.
The Nomination Committee shall meet once a year and additional meetings can be scheduled if the Chairman of the
Committee considers necessary.
All Directors have attended the Mandatory Accreditation Programme as required under the Listing Requirements of
Bursa Malaysia Securities Berhad (“Bursa Securities”). During the financial year ended 31 December 2007, the
Directors have also attended individually and collectively various training programmes (including training relating to
the fraud issues and investor relation) as a continuing effort to train and equip themselves to effectively discharge their
duties. The Board shall evaluate and determine the training needs of its members on a continuous basis pursuant to
the Listing Requirements of Bursa Securities.
advance synergy berhad (1225-D)
annual report 2007
013
RE-ELECTION
In accordance with the Company’s Articles of Association, one-third (1/3) of the Directors retire from office at each
Annual General Meeting (“AGM”) but shall be eligible for re-election. Directors who are appointed by the Board during
each financial year are subject to election by shareholders at the first AGM following their appointments. The Articles
of Association of the Company provide that all Directors shall submit themselves for re-election at least once every
three (3) years.
AUDIT COMMITTEE
The terms of reference as well as further information on the Audit Committee are set out on pages 19 to 22 of this
Annual Report.
DIRECTORS’ REMUNERATION
The remuneration for all Directors are determined at levels so as to ensure that the Company attracts and retains the
right calibre of Directors needed to run the Group successfully. The Remuneration Committee reviews and
recommends to the Board, the Company’s remuneration policy for Executive Directors to ensure that they are
appropriately rewarded for their contribution to the Group.
The determination of the remuneration of the Non-Executive Directors is a matter for the Board as a whole.
No Director shall take part in decisions pertaining to his or her own remuneration.
Remuneration Committee
The members of the Remuneration Committee during the financial year ended 31 December 2007 are as follows:• Dato’ Abdul Murad Bin Khalid
(Chairman, Independent Non-Executive Director)
(appointed on 9 July 2007)
• Chim Wai Khuan
(Member, Independent Non-Executive Director)
• Datin Masri Khaw Binti Abdullah
(Member, Non-Independent Non-Executive Director)
• Aznan Bin Haji Ismail
(Chairman, Independent Non-Executive Director)
(passed away on 10 May 2007)
The Remuneration Committee shall meet at least once a year and additional meetings can be scheduled if the Chairman
of the Committee considers necessary.
Details of the aggregate remuneration for the Directors of the Company (including remuneration earned as Executive
Directors of subsidiaries) for the financial year ended 31 December 2007 are as follows:1. Aggregate remuneration of Directors categorised into appropriate components:Fees
RM’000
Salaries &
Bonus
RM’000
Benefitsin-kind
RM’000
Total
RM’000
Executive Directors
310
607
78
995
Non-Executive Directors
411
347
-
758
Category of Director
014
advance synergy berhad (1225-D)
annual report 2007
DIRECTORS’ REMUNERATION (continued)
Remuneration Committee (continued)
2. Range of Aggregate Remuneration:Number of Directors
Executive
Non-Executive
Below 50,000
-
4
50,001 - 100,000
-
1
150,001 - 200,000
1
-
250,001 - 300,000
1
-
500,001 - 550,000
1
-
600,001 - 650,000
-
1
SHAREHOLDERS
The Board acknowledges the importance of establishing a direct line of communication with shareholders and
investors through timely dissemination of information on the Group’s performance and operations via distribution of
annual reports and relevant circulars, release of quarterly financial results, press releases and announcements.
The AGM is the principal forum for dialogue with shareholders. There is an open question and answer session in
which shareholders may pose questions regarding the resolutions being proposed at the meeting and also on matters
relating to the Group’s businesses and affairs. The Board members are in attendance to provide explanations to all
shareholders’ queries and shareholders are encouraged to participate in discussions and to give their views to the
Directors.
To enhance the quality and value of the AGM, the Board ensures that, for re-election of Directors, the Notice of AGM
identifies the Directors standing for re-election or election with a brief description to include matters such as age,
relevant experience, list of directorships, date of appointment to the Board, details of participation in Board Committees
and whether the particular Director is independent. In addition, each item of special business included in the Notice of
AGM will be accompanied by a full explanation of the effects of a proposed resolution.
It is also the practice of the Board to hold a press conference with journalists upon request after an AGM.
FINANCIAL REPORTING
In presenting the annual financial statements and quarterly announcement of results, the Board aims to present a
balanced and understandable assessment of the Group’s position and prospects. This also applies to other
price-sensitive public reports and reports to regulators. The Audit Committee assists the Board in scrutinizing such
reports to ensure accuracy and adequacy.
Statement on Directors’ Responsibility for Preparing Financial Statements
The Directors are required by the Companies Act, 1965 to prepare financial statements for each financial year which
have been made out in accordance with applicable approved Financial Reporting Standards in Malaysia and give a
true and fair view of the state of affairs of the Group and the Company at the end of the financial year and of the results
and cash flows of the Group and the Company for the financial year.
advance synergy berhad (1225-D)
annual report 2007
015
FINANCIAL REPORTING (continued)
Statement on Directors’ Responsibility for Preparing Financial Statements (continued)
In preparing the financial statements, the Directors have:• Selected suitable accounting policies and applied them consistently;
• Made judgments and estimates that are reasonable and prudent;
• Ensured that all applicable Financial Reporting Standards have been followed; and
• Prepared financial statements on the going concern basis as the Directors have a reasonable expectation, having
made enquiries, that the Group and the Company have adequate resources to continue in operational existence for
the foreseeable future.
The Directors have the responsibility for ensuring that the Company keeps accounting records which disclose with
reasonable accuracy the financial position of the Group and the Company and which enables them to ensure that the
financial statements comply with the Companies Act, 1965.
The Directors have overall responsibilities 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.
INTERNAL CONTROL
The Board acknowledges its overall responsibility for maintaining a sound system of internal control to safeguard
shareholders’ investments, the Company’s assets, and the need to review the adequacy and integrity of those systems
regularly. In establishing and reviewing the system of internal control, the Directors recognise that the system of
internal control can only provide reasonable but not absolute assurance against the risk of material misstatement or
loss. The effectiveness of the Group’s system of internal controls is reviewed periodically by the Audit Committee and
such review covers the financial, operational and compliance controls as well as risk management.
The Statement on Internal Controls as set out on pages 23 to 24 of this Annual Report provides an overview of the
state of internal control within the Group.
RELATIONSHIP WITH AUDITORS
Through the Audit Committee of the Board, the Company has established a formal transparent and appropriate
relationship with the Company’s auditors. The external auditors are invited to attend Audit Committee Meetings at least
twice a year to discuss the nature and scope of the audit and problems and reservations arising from the final audit.
016
advance synergy berhad (1225-D)
annual report 2007
Additional Compliance Information
1. UTILISATION OF PROCEEDS
The Company has on 31 January 2008 completed the Capital Reduction and Rights Issue as detailed in Notes 52(a)
and 53(b) to the financial statements. In conjunction with the Rights Issue, the Company had raised gross proceeds
of approximately RM82.76 million. The status of utilisation of proceeds as at 6 May 2008 were as follows:Purpose
Proposed Utilisation
RM’000
Amount Utilised
RM’000
Repayment of bank borrowings
50,259
47,302
Working capital
30,000
3,106
2,500
2,340
82,759
52,748
Expenses incidental to the Capital Reduction and Rights Issue
Total
2. OPTIONS, WARRANTS OR CONVERTIBLE SECURITIES
A total of 168,896,809 warrants were issued by the Company on 29 August 2000. The duration and exercise period
of these warrants had been extended for a further two (2) years expiring on 28 August 2010 (“Further Extension”).
Details of the Further Extension are as disclosed in Note 28 to the financial statements. As at 31 December 2007,
none of these warrants have been exercised.
The Company has not issued any options, warrants or convertible securities during the financial year ended 31
December 2007.
3. NON-AUDIT FEES PAID TO EXTERNAL AUDITORS
Non-statutory audit fees paid to the external auditors, BDO Binder, by the Company and by the Group for the financial
year ended 31 December 2007 amounted to RM59,000 and RM63,000 respectively.
4. MATERIAL CONTRACTS INVOLVING DIRECTORS AND MAJOR SHAREHOLDERS
Save as diclosed below, there were no material contracts entered into by the Company and its subsidiaries involving
Directors’ and major shareholders’ interests, either still subsisting at the end of the financial year ended 31 December
2007 or entered into since the end of the previous financial year.
A software rental and maintenance agreement dated 30 June 2006 was entered into between iSynergy Sdn Bhd
(“iSynergy”) as vendor and Synergy Cards Sdn Bhd (“Synergy Cards”) as hirer for the rental of various financial
software as listed out in Schedule 1 of the software rental and maintenance agreement for a period of two (2) years
from the agreement date at a rental price as set out in the software rental and maintenance agreement subject to a
maximum rental of RM5.0 million per year.
In respect of the aforesaid contract, the related party concerned is Interpay International Resources Ltd (“IIR”),
a company incorporated in the British Virgin Islands, by virtue of it being a major shareholder of both iSynergy and
Synergy Cards. However, IIR does not have any interest in the Company.
5. REVALUATION POLICY ON LANDED PROPERTIES
The revaluation policy of the Group on landed properties is as disclosed in Note 4.4 to the financial statements.
advance synergy berhad (1225-D)
annual report 2007
017
6. RECURRENT RELATED PARTY TRANSACTIONS OF A REVENUE OR TRADING NATURE
In accordance with Paragraph 10.09(1)(b), Part E, Chapter 10 of the Listing Requirements of Bursa Securities,
the details of the recurrent related party transactions conducted during the financial year ended 31 December 2007
pursuant to the shareholders’ mandate were as follows:-
018
Nature of
transaction
Vendor /
Provider
Purchaser /
Recipient
Rental of office
premise located
at B-16-8 Megan
Phileo Avenue,
No. 12, Jalan Yap
Kwan Seng,
50450 Kuala
Lumpur, covering
an area of 3,708
sq. ft.
ASH Holdings
Sdn Bhd (“ASH”)
Antara Holiday
Villas Sdn Bhd
(“Antara”)
advance synergy berhad (1225-D)
annual report 2007
Aggregate
value
of recurrent
transactions
(RM’000)
Nature of relationship with
Advance Synergy Berhad (“ASB”)
- interested directors,
major shareholders and
persons connected
98
Datin Masri Khaw Binti Abdullah is a
director of ASB, Alangka-Suka Hotels &
Resorts Berhad, a 99.63%-owned
subsidiary company of ASB (“ASHR”)
and Antara, a wholly-owned subsidiary
company of ASHR. She holds 50%
equity interest in ASH.
Audit Committee Report
MEMBERSHIP AND ATTENDANCE
The members of the Audit Committee during the financial year ended 31 December 2007 and details of attendance of
each member at the five (5) meetings held during the financial year are as follows:-
Name of Directors
No. of Meetings Attended
Yong Teck Ming (appointed on 9 July 2007)
Chairman / Independent Non-Executive Director
2/2
Chim Wai Khuan
Member / Independent Non-Executive Director
5/5
Dato’ Abdul Murad Bin Khalid (appointed on 1 October 2007)
Member / Independent Non-Executive Director
1/1
Wong Ah Nam @ Wong Joon Tuang (resigned on 9 July 2007)
Chairman / Independent Non-Executive Director
3/3
Sng Ngiap Koon (resigned on 9 July 2007)
Member / Executive Director
3/3
Lee Su Nie (appointed on 9 July 2007 and subsequently resigned on 1 October 2007)
Member / Executive Director
1/1
ACTIVITIES
The Audit Committee carried out its duties as set out in the terms of reference for activities related to the year 2007.
INTERNAL AUDIT FUNCTION
The Board, with the assistance of the Audit Committee and Group Risk Management Committee, is actively monitoring
the risk management and internal controls of the Company and the subsidiaries (“Group”).
The Audit Committee has adopted a top down, risk based approach to the implementation and monitoring of internal
controls of the Group. This was achieved via the critical and in depth review and deliberation of the management
reports and relevant issues presented during the regular Audit Committee meetings held. This top down, risk based
approach will enable the Audit Committee to identify any major breakdown in the risk management and internal
controls of the Group and to take necessary steps to address the issues.
The Audit Committee endorses the importance of the internal audit function to assist in maintaining a sound system of
internal control to safeguard shareholders’ investment. The Internal Audit Department is responsible for undertaking
regular and systematic reviews of the system of controls and reports directly and independently to the Audit
Committee.
During the financial year, our Internal Audit Department had carried out various operational, system and risk assessment
reviews in accordance with the Internal Audit Plan approved by the Audit Committee. Follow-up audits have also been
performed by the Internal Audit Department to ensure that audit recommendations and corrective action plans have
been implemented accordingly.
TERMS OF REFERENCE OF THE AUDIT COMMITTEE
OBJECTIVE
The Audit Committee assists the Board in fulfilling its responsibility for overseeing and ensuring the quality and integrity
of the accounting, auditing, internal control, and financial reporting practices of the Group.
advance synergy berhad (1225-D)
annual report 2007
019
MEMBERSHIP
The Audit Committee shall be appointed by the Board from amongst the Directors of the Company and shall
consist of not less than three (3) members, all of whom shall be Non-Executive Directors and a majority shall be
Independent Directors. No alternate director shall be appointed as a member of the Audit Committee.
All members of the Audit Committee shall be financially literate and at least one (1) member of the Audit Committee:(i) Must be a member of the Malaysian Institute of Accountants; or
(ii) If he/she is not a member of the Malaysian Institute of Accountants, he/she must have at least three (3) years
working experience and:(a) He/she must have passed the examinations specified in Part I of the 1st Schedule of the Accountants Act 1967;
(b) He/she must be a member of one of the associations of accountants specified in Part II of the 1st Schedule of
the Accountants Act 1967; or
(c) Fulfils such other requirements as prescribed or approved by Bursa Securities.
The Chairman of the Audit Committee shall be an Independent Non-Executive Director and shall be appointed by the
Board.
The appointment of an Audit Committee member terminates when the member ceases to be a Director.
MEETINGS
A quorum shall be two (2) members present, both of whom must be Independent Directors.
The Audit Committee shall meet at least four (4) times a year, or more frequently as the Audit Committee considers
necessary. The Audit Committee shall meet with the external auditors without executive Board members present
at least twice a year.
The members of the Audit Committee may participate in a meeting by means of conference telephone, conference
videophone or any similar or other communications equipment by means of which all persons participating in the
meeting can hear each other. Such participation in a meeting shall constitute presence in person at such meeting.
All decisions shall be decided on a show of hands by a majority of votes.
A resolution in writing signed and approved by a majority of the Committee and who are sufficient to form a quorum
shall be as valid and effective as if it had been passed at a meeting of the Committee duly called and constituted.
The Head of Finance, Head of Internal Audit and a representative of the external auditors shall normally be invited
to attend the meetings. Other Board members may attend meetings upon the invitation of the Audit Committee. The
Secretary to the Audit Committee shall be the Company Secretary.
MINUTES
The Secretary of the Audit Committee will prepare the minutes, which shall be signed by the Chairman of the meeting
and distributed to each member of the Audit Committee and of the Board. The Chairman of the Audit Committee
shall report on each meeting to the Board.
020
advance synergy berhad (1225-D)
annual report 2007
AUTHORITY
The Audit Committee is authorised by the Board:(i)
To investigate any activity within its terms of reference;
(ii)
To have the Internal Audit Function report directly to the Audit Committee;
(iii) To have the resources required to perform its duties;
(iv) To have full and unrestricted access to any information pertaining to the Group;
(v)
To have direct communication channels with the internal and external auditors;
(vi) To obtain external legal or other independent advice as necessary; and
(vii) To convene meetings with the external auditors, the internal auditors or both, excluding the attendance of other
Directors and employees of the Company, whenever deemed necessary.
FUNCTIONS AND DUTIES
The functions and duties of the Audit Committee shall be:(i)
To report to the Board on the following:(a) the review with the external auditor, the audit plan and the nature and scope of the audit;
(b) the review with the external auditor, his evaluation of the system of internal controls;
(c) the review with the external auditor, his audit report;
(d) the assistance given by the employees of the Group to the external auditor;
(e) any letter of resignation from the external auditors of the Company;
(f) whether there is reason (supported by grounds) to believe that the external auditor is not suitable for
reappointment;
(g) the external auditors’ management letter and management’s response;
(h) the consideration and recommendations to the Board on the appointment of external auditors and their fee
and any question of resignation or dismissal;
(i) the discussion with the external auditors on problems and reservations arising from the interim and final
audits, their evaluation of the system of internal controls, and any matters the external auditor may wish to
discuss (in the absence of management where necessary);
(j) the quarterly results and year end financial statements prior to the approval by the Board, focusing particularly
on:- changes in or implementation of major accounting policy and practices changes;
- significant and unusual events;
- significant adjustments arising from the audit;
- the going concern assumption; and
- compliance with accounting standards, requirements of Bursa Securities and other legal requirements;
(k) any related party transaction and conflict of interest situation that may arise within the Group including any
transaction, procedure or course of conduct that raises questions of management integrity; and
(l) review the adequacy of the Risk Management policies and procedure used within the Group;
advance synergy berhad (1225-D)
annual report 2007
021
FUNCTIONS AND DUTIES (continued)
The functions and duties of the Audit Committee shall be (continued):(ii)
To do the following in relation to the internal audit function and report the same to the Board:(a) review the adequacy of the scope, functions, competency and resources of the internal audit functions
and that it has the necessary authority to carry out its work;
(b) review the internal audit programme, processes, the results of the internal audit programme, processes or
investigations undertaken and whether or not appropriate action is taken on the recommendations of the
internal audit function;
(c) review any appraisal or assessment of the performance of the members of the internal audit functions;
(d) approve any appointment or termination of senior staff members of the internal audit functions; and
(e) take cognisance of resignations of internal audit staff members and provide the resigning staff member an
opportunity to submit his reasons for resigning;
(iii) To prepare the Audit Committee Report for the annual report as established by paragraph 15.16 of the Listing
Requirements of Bursa Securities;
(iv) Where the Audit Committee is of the view that any matter reported by it to the Board has not been satisfactorily
resolved resulting in a breach of the Listing Requirements of Bursa Securities, the Audit Committee must promptly
report such matters to Bursa Securities;
(v)
To consider the major findings of internal investigations authorised by the Board and management’s response; and
(vi) To carry out any other function that may be mutually agreed upon by the Audit Committee and the Board.
The Chairman of the Audit Committee should engage on a continuous basis with senior management, such as the
Chairman, the Chief Executive Officer, the Head of Finance, the Head of Internal Audit and the external auditors in
order to be kept informed of matters affecting the Company.
022
advance synergy berhad (1225-D)
annual report 2007
Statement on Internal Control
The Code stipulates that a listed company shall maintain a sound system of internal control to safeguard its
shareholders’ investment and its assets.
The Board is pleased to present its Statement of Internal Control for the financial year ended 31 December 2007,
which is made pursuant to Paragraph 15.27(b) of the Listing Requirements of Bursa Securities, and in
accordance with the “Standard of Internal Control – Guidedance for Directors of Public Listed Companies”
issued by the Institute of Internal Auditors and adopted by Bursa Securities.
For the purpose of this Statement, the Group means the Company and its subsidiaries, excluding the associates.
This Statement does not cover the associates as the Company does not have control over the operations,
management and internal control system of these companies.
BOARD RESPONSIBILITY
The Board acknowledges its ultimate responsibility for the Group’s system of internal control, which includes
the establishment of an appropriate control environment and framework as well as reviewing its adequacy and
integrity on a regular basis. In view of the limitations that are inherent in any system of internal control the
Group’s system is designed to manage, rather than eliminate, the risk of failure to achieve corporate objectives.
Accordingly, it can only provide reasonable but not absolute assurance against material misstatement,
operational failures, fraud or loss. The Group’s system of internal control covers risk management, financial,
operational and compliance controls. Except for insurable risks where insurance covers are purchased, other
significant risks faced by the Group (excluding associated companies) are reported to, and managed by the
respective Boards within the Group.
RISK MANAGEMENT
Following the implementation of a structured risk management framework, the Group has an ongoing process of
identifying, documenting, evaluating, monitoring and managing significant risks affecting the achievement of its
business objectives. By this process, all significant risks are communicated to the holding company and a group
level risk profiling is also conducted.
In addition, the Risk Management Committee regularly reviews the risk management process within the Group
and the adequacy and integrity of the systems to manage risks.
The effectiveness of the Group’s system of internal controls will continue to be reviewed in the light of changes
in the operating environment. The Board also seeks assurance on the continuity and effectiveness of the internal
control system through independent appraisals by the Internal Auditors.
INTERNAL AUDIT FUNCTION
During the year, the internal audit function carried out the audit reviews in accordance with the internal audit
plan. The internal audit function provides assurance of the effectiveness of the system of internal controls within
the Group. Adapting a risk based approach, it conducts independent reviews of the key activities within the
Group’s operating units based on the annual internal audit plan approved by the Audit Committee.
All audit findings are deliberated and resolved with management. The Audit Committee, on behalf of the Board,
reviews the internal control issues identified, and the recommendations made by the Internal Auditors on a
regular basis and recommendations made by the External Auditors during the annual statutory audit.
advance synergy berhad (1225-D)
annual report 2007
023
OTHER RISK AND CONTROL PROCESSES
Apart from internal audit and risk management, the Board has put in place the following processes to provide a
certain degree of assurance to the Board as to the operation and validity of the system on internal control within
the Group:•
Rigorous review of the quarterly financial results and reports and evaluating the reasons for unusual
variances noted thereof by the Board and Audit Committee;
•
The Executive Director is closely involved in the running of the business and operations of the Group and
reports to the Board on significant changes in the business and external environment, which affect the
operations of the Group at large; and
•
The Board has in place an organisational structure with formally defined lines of responsibility, proper
segregation of duties and delegation of authority. A process of hierarchical reporting has been established,
which provides for a documented and auditable trail of accountability. The procedures include the
establishment of limits of authority and policies on health and safety, training and development, equality
of opportunity, staff performance and serious misconduct. These procedures are implemented across
the Group to provide continuous assurance to senior management and, finally to the Board.
WEAKNESSES IN INTERNAL CONTROLS THAT RESULT IN MATERIAL LOSSES
There were no material losses incurred during the current financial year as a result of weaknesses in internal
control. The Board, together with Management, continues to take measures to strengthen the control environment.
024
advance synergy berhad (1225-D)
annual report 2007
Corporate Social Responsibility
The Group acknowledges the importance of Corporate Social Responsibility towards the well-being of its
employees, community and environment and views it as an extension of the Group’s effort in fostering a strong
corporate governance culture.
ENVIRONMENT
During the year, the Company embarked on a recycling program where shredded waste paper and old newspapers
were collected and donated to a non-profit organisation.
At our hotels and resorts, several initiatives were implemented to reduce energy usage. These included installing
lighting appliances with low electricity consumption and using heat recovery systems for the supply of hot water
at these establishments.
All waste materials produced by our transportation division are deposited at designated areas and disposed
periodically, in an environmentally safe manner, by our authorised waste disposal agents.
COMMUNITY
The Group offers graduate placement programmes in our hotels and resorts, property development and
information and communications technology divisions. In addition, our hotels and resorts division gives first
preference to local workforce in the location where it operates. We also provide educational and training
opportunities to orphans under the care of YATIM (Yayasan Kebajikan Anak-Anak Yatim Malaysia). Yang
Berbahagia Dato’ Azman Shah Dato’ Seri Harun, the Chairman of Antara Holiday Villas Sdn Bhd, a subsidiary
under our hotels and resorts division is the Treasurer of Rumah Bakti Dato’ Seri Harun. He is also the Trustee of
ISTAC Trust Fund (International Institute of Islamic Thought and Civilisation).
MARKETPLACE
Our hotels and resorts division periodically reviews all vendors/suppliers to ensure that they adhere to good
manufacturing practices, practise professional labour management and are qualified under mandatory
Occupational Health and Safety Act requirements. We also give priority and support for locally produced
products such as using locally produced water boilers and televisions at our hotel properties.
Our manufacturing division ensures that their suppliers’ products comply with applicable and prevailing safety
and environmental protection rules and regulations.
WORKPLACE
The Group continuously promotes human capital development by encouraging and sponsoring the participation
of our staff in training programmes and seminars to enhance their knowledge and skills.
The Group strives to forge a safe working environment and promotes healthy work practices for all levels of staff.
Training courses were carried out to ensure continuous improvement of safety and health practices.
We also acknowledge the need to provide a healthy lifestyle to our people. In this regard, social and recreational
activities such as staff parties, annual dinners, treasure hunts and various sports and games are organised to
encourage physical wellbeing, greater employees interaction, as well as to cultivate team spirit among the
employees.
In recognition and appreciation of our employees, our hotels and resorts division presented awards under its
“Manja Deed” programme with the theme “You are Precious To Us” to long serving employees and employees or
teams who have demonstrated outstanding performance.
advance synergy berhad (1225-D)
annual report 2007
025
Chairman’s Statement
ADVANCE SYNERGY BERHAD
ANNUAL REPORT 2007
Chairman’s Statement
INTRODUCTION
On behalf of the Board of Directors, I am pleased to present the Annual Report of Advance Synergy Berhad and its
Group of Companies (“the Group”) for the financial year ended 31 December 2007.
The year 2007 for the Group was somewhat similar to 2006, in that certain businesses of the Group continued to face
both a harsh industry climate and challenging operating conditions. It was, however, also a positively different year in
many respects, for many of our businesses at the operating level.
The year 2006 was most notably marked by the Group’s public transportation business being significantly impacted
by the massive increases in fuel and raw materials costs. This, coupled with the adverse effects of the transition in
strategy at the Group’s information and communications technology (“ICT”) business, contributed to a large part of the
Group’s net loss result in 2006.
In contrast, both these businesses in 2007 recorded improvements in operating performance. The Group’s public
transportation business was selectively scaled down, nursed back to better financial health and posted a significantly
reduced loss. The Group’s ICT business meanwhile, delivered substantial growth in revenue and a much-improved
earnings before interest, tax, depreciation and amortisation (“EBITDA”) result (before *exceptional items) in 2007, as
compared to 2006.
These positive developments during the year certainly outnumbered the not-so-positive outcomes. Augmenting the
operating level performance improvements at the Group’s public transportation and ICT businesses, was the
performance of the Group’s hotels and resorts business. This business of the Group posted yet another year of strong
growth in profits in 2007.
The Group’s travel and tours business, together with the Group’s associated companies, had similarly shown sound
improvements in performance during the year.
The businesses that were buffeted by challenging operating conditions, and fared less well in 2007, include the Group’s
manufacturing, marketing and distribution business in Australia; our property development business operating in
East Malaysia, and our card and payment services business.
As a result of the many positive developments outweighing the less positive, the Group produced improved consolidated
financial results in 2007, as compared to 2006.
The Group’s variously improving businesses can indeed be regarded as shoots and seedlings that were further
watered, nurtured, and strengthened during the year, to promote their future development towards a healthy and fruitful
maturity.
FINANCIAL RESULTS
The Group recorded total revenue of RM223.7 million for the financial year ended 31 December 2007, as compared to
RM230.7 million for the previous year, representing a decrease of 3.0%.
In spite of the decline in the Group’s revenue, the improvements in profitability of majority of the Group’s businesses,
and the increase in contribution from associated companies had resulted in a significantly lower net loss of RM17.8
million for the Group for the year ended 31 December 2007, as compared to a net loss of RM54.7 million for the
previous year.
The Group’s loss per share for the year ended 31 December 2007 decreased to 4.21 sen from a loss per share of 7.99
sen for the previous year.
* Exceptional items comprise: provision for doubtful debts, allowances for inventories obsolescence, inventories written off, loss on disposal of plant and
equipment, and plant and equipment written off.
advance synergy berhad (1225-D)
annual report 2007
027
REVIEW OF GROUP OPERATIONS
Hotels and Resorts
Total revenue achieved by the Group’s hotels and resorts business, operated under the Holiday Villa brand, amounted
to RM82.3 million, representing a 1.5% increase over the preceding year.
The steady revenue growth achieved by the Group’s hotels and resorts business in 2007, its 20th year of business
operations, was driven by the positive effect of Visit Malaysia Year 2007 on tourist arrivals and occupancy of its
Malaysian hotels and resorts, the improvement in the performance of its operation in Bali, and growth achieved by
its hotel operations in London.
This business of the Group concluded 2007 with a profit before tax of RM12.9 million, representing a decrease of
35.72% against the result of the preceding year. The results for the year 2006 includes a gain on disposal of a
subsidiary of RM10.8 million. Excluding the gain on disposal, the hotels and resorts’ division result has been
increased by 39% compared to 2006.
Other notable achievements of the Group’s hotels and resorts business during the year include:•
In June 2007, a hotel management services agreement to manage and operate Wina Hotel Kuta, Bali was executed.
This property has since been renamed Wina Holiday Villa Kuta, Bali and refurbished to meet the Holiday Villa
standard; and
•
The opening of two new marketing representative offices - in Jakarta and Singapore to service the Indonesian and
Singaporean markets respectively.
Information and Communications Technology
Total revenue achieved by the Group’s ICT business, represented by the Unified Communications Holdings Limited
Group, amounted to RM56.7 million, representing a 53.2% increase over the preceding year.
The substantial revenue growth achieved by the Group’s ICT business in 2007 was driven by a 78.8% increase in the
combined revenue generated by the Proprietary Solutions and Operations Support Systems (“OSS”) segments of the
business.
In tandem with the higher revenue achieved for the year, this business also recorded higher gross profit of RM20.5
million, representing a 44.4% increase over the preceding year. In addition to the improvement in gross profit, the
business had also further secured an 11% reduction in operating expenses, before *exceptional items.
In spite of such improvements in performance at the operating level, the Group’s ICT business yet recorded a loss
before tax of RM9.9 million for the year. This loss before tax posted by the business in 2007 is largely attributable
to high ‘other operating expenses’ amounting to RM13.3 million, comprising mainly allowances for impairment of
certain long-standing receivables, allowances and losses relating to slow-moving or obsolete inventories and foreign
exchange (or otherwise, *exceptional items).
By excluding the impact of such exceptional items recorded within ‘other operating expenses’, the effect on this
business’ profitability is no less than remarkable. From a loss before interest, tax, depreciation and amortisation
(“LBITDA”) and net loss position, this business would have turned in alternative result of a significantly improved
EBITDA of RM9.4 million and a net profit for the full year.
This alternative result upon excluding ‘other operating expenses’, would certainly be representative of the significant
improvements that were secured at the operations level of the Group’s ICT business.
028
advance synergy berhad (1225-D)
annual report 2007
The most notable achievements of the Group’s ICT business during the year include:•
The securing of its appointment as the exclusive technical partner to the awardee for the Mobile Number
Portability Clearinghouse project in Malaysia, comprising (1) a system customisation/build and implementation
phase and (2) a five-year operate and manage phase;
•
The expansion of its mobile value-added-services (“VAS”) solution deployment footprint into new territories within
the Middle-East, South Asia and South-East Asia, including Saudi Arabia, United Arab Emirates, Sri Lanka,
Vietnam and Cambodia; and
•
The successful deployment, launch and rapid revenue growth of its Personalised Ringback Tone mobile VAS
solution at a major mobile network operator in India.
Manufacturing
Total revenue achieved by the Group’s manufacturing business, represented primarily by Advansa Pty Ltd, amounted
to RM17.0 million, representing a decrease of 26.9% on the previous year.
This decrease in revenue was primarily due to the business’ withdrawal from a low-profitability, retail-market based
distribution channel for its Tuff Hardware range of builders’ hardware and construction products, and increased
competition faced by its Jarrett range of winches and cranes.
This business of the Group concluded 2007 with a loss before tax of RM3.5 million, representing an increase of
558.2% against the result of the preceding year. The increase in loss before tax in 2007, as compared to 2006, was due
to both the lower revenue earned during the year, as well certain provisions for obsolete inventories.
The most notable achievements of the Group’s manufacturing business during the year include:•
The introduction of new retail packaging formats and rope accessories for its Jarrett range of winches; and
•
The significant expansion of the customer base in Queensland for its Tuff Hardware range of builders’ hardware
and construction products.
Property Development
Total revenue achieved by the Group’s property development business, represented primarily by Advance Synergy
Realty Sdn Bhd, amounted to RM22.9 million, representing a decrease of 41.4% on the previous year.
This decrease in revenue was primarily due to the softening of the residential property market in Kuching.
This business of the Group concluded 2007 with a profit before tax of RM0.9 million, representing a decrease of 61.9%
against the result of the preceding year. The decrease in profit before tax in 2007, as compared to 2006, was due to
both the lower revenue earned during the year, as well as additional expenses incurred associated with earthworks
carried out and certain changes to the specifications of the previously approved civil works as required by local
authorities, for the Synergy Square Commercial Centre at Telipok, Kota Kinabalu.
The most notable achievements of the Group’s property development business during the year include:•
Commencement of development of Synergy Garden in Kuching, consisting of 65 double-storey terraced houses;
•
Completion of the development and sale of Muara Tuang Park in Kuching, which consisted of 276 of various types
of residential property; and
•
The near-completion of the construction of Synergy Square Commercial Centre at Telipok, Kota Kinabalu, a
development of 65 double-storey shop-offices.
advance synergy berhad (1225-D)
annual report 2007
029
Travel and Tours
Total revenue achieved by the Group’s travel and tours business, represented primarily by Orient Escape Travel Sdn
Bhd and Columbus Travel and Tours Sdn Bhd, amounted to RM28.4 million, representing an increase of 19.3% over
the previous year.
This increase in revenue was driven by substantial improvements in outbound, incentive and conference management
(“ICM”) and growth in inbound travel and tours related business.
This business of the Group concluded 2007 with a profit before tax of RM1.1 million, representing an increase of 32.2%
against the result of the preceding year. The increase in profit before tax in 2007, as compared to 2006, is attributable
to both the higher revenue earned during the year, as well as improved profit margins associated with a more
favourable sales-mix achieved.
The most notable achievements of the Group’s travel and tours business during the year include:•
The launch of Orient Escape Travel’s new and improved website;
•
The opening of new branch office in Petaling Jaya;
•
The appointment of Orient Escape Travel for Jetstar Asia and Air Asia online bookings; and
•
A letter of recognition received by the ICM division from the Ministry of Tourism office (London), in relation to the
business’ service to the City Livery Club, London.
Card and Payment Services
During the year, the Group’s card and payment services business of the Group, represented primarily by Synergy
Cards, continued with the implementation of its business restructuring efforts. However, due to system integration
delays, this business was unable to launch its credit card operations by the third quarter of 2007 as originally
anticipated. The launch date for this business’ credit card operations is now slated for the third quarter of 2008.
Notwithstanding the delay in launching, the business continued to execute its preparatory work to ensure a smooth
go-to-market process for its credit card operations. As part of this preparatory work, the Group’s card and payment
services business developed amongst others, a new proprietary purchasing card product.
Bus Transportation Services
Total revenue achieved by the Group’s bus transportation services business, operated under the Triton brand by
Advance Synergy Capital Berhad Group, amounted to RM10.5 million, representing a decrease of 48.0% on the
previous year.
This decrease in revenue was mainly due to the fewer routes being operated as a result of route rationalisation.
This business of the Group concluded 2007 with a loss before tax of RM20.3 million, representing a decrease of 52.3%
against the result of the preceding year. The decrease in loss before tax in 2007, as compared to 2006, was due to
reductions in both bus operating costs and impairment losses for buses.
The most notable achievements of the Group’s bus transportation services business during the year include the
completion of a rationalisation exercise on its bus operations and the implementation of measures to reduce loss
making routes.
As a result, its express bus division withdrew from all its routes except for the KLIA-Ipoh route; and the commuter bus
division focused its operations in the city of Johor Bahru.
030
advance synergy berhad (1225-D)
annual report 2007
Share of Profits in Associated Companies
The Group’s share of profits in associated companies amounted to RM10.2 million in 2007, representing an increase
of 28.0% on the result of the preceding year. This improvement in profits in associated companies of the Group was
driven primarily by the results achieved by associates in property and casualty insurance and ICT businesses.
THE FUTURE
The Group is expected to continue to deliver improved performance in the coming years, as each business within the
Group continues to execute their respective growth and development plans.
DIVIDENDS
The Directors do not recommend the payment of any dividend for the financial year ended 31 December 2007.
APPRECIATION
To all shareholders, customers and associates our deepest gratitude for their confidence, trust and continued support.
To the Regulatory Authorities, our appreciation for their continued guidance and support, and to the management and
staff, my appreciation for your perseverance and dedication in helping achieve the goals of the Group.
DATO’ AHMAD SEBI BAKAR
Executive Chairman
advance synergy berhad (1225-D)
annual report 2007
031
This page is intentionally left blank.
Financial Statements
ADVANCE SYNERGY BERHAD
ANNUAL REPORT 2007
Directors’ Report
The Directors hereby submit their report and the audited financial statements of the Group and of the Company for the
financial year ended 31 December 2007.
PRINCIPAL ACTIVITIES
The principal activities of the Company are that of investment holding and providing full corporate and financial
support to its subsidiaries. The principal activities of the subsidiaries are set out in Note 51 to the financial statements.
There have been no significant changes in the nature of these activities during the financial year.
RESULTS
Group
RM’000
Company
RM’000
Net loss for the financial year
17,803
11,044
Attributable to:
Equity holders of the Company
Minority interests
14,215
3,588
11,044
-
17,803
11,044
DIVIDEND
No dividend has been paid or declared by the Company since the end of the previous financial year. The Directors do
not recommend any dividend payment in respect of the financial year ended 31 December 2007.
RESERVES AND PROVISIONS
There were no material transfers to or from reserves or provisions during the financial year ended 31 December 2007
other than those disclosed in the financial statements.
ISSUE OF SHARES AND DEBENTURES
During the financial year, the Company increased its authorised share capital from RM800,000,000 to RM900,000,000
by the creation of an additional 100,000,000 ordinary shares at RM1.00 each.
The Company has not issued any debentures during the financial year.
OPTIONS GRANTED OVER UNISSUED SHARES
No options were granted to any person to take up unissued shares of the Company during the financial year.
WARRANTS 2000/2010
On 1 May 2000, the Company issued 168,896,809 warrants where each warrant entitles the registered holder at any
time during the exercise period to subscribe for one new stock unit of RM1.00 each at the exercise price of RM1.00 per
stock unit during the exercise period which had been extended from 28 August 2003 to 28 August 2008.
The warrants are constituted by a Deed Poll dated 28 April 2000 and a Supplemental Deed Poll dated 24 July 2003.
Pursuant to the Capital Reduction and Rights Issue (as detailed in Note 52(a) to the financial statements), on 10
December 2007, the Company announced that the exercise price of the warrants has been adjusted from RM1.00 per
Advance Synergy Berhad (“ASB”) share (previously stock unit) to RM0.71 per ASB share with effect from 27 December
2007.
The Company also announced on 31 December 2007 that the duration and exercise period of the 168,896,809
outstanding warrants will be extended for a further period of two (2) years from 28 August 2008 up to and including 28
August 2010.
034
advance synergy berhad (1225-D)
annual report 2007
Directors’ Report (continued)
WARRANTS 2000/2010 (continued)
The registered holders have no right to participate by virtue of the warrants in any other share issue of the Company
and its subsidiaries.
Upon expiry of the exercise period, any unexercised warrants will lapse and cease to be valid for any purpose.
As at the end of the current financial year, no exercise of warrants had taken place and the outstanding warrants in
the Company remains at 168,896,809.
DIRECTORS
The Directors who held office since the date of the last report are:
Dato’ Ahmad Sebi Bakar
Datin Masri Khaw Binti Abdullah
Chim Wai Khuan
Dato’ Abdul Murad Bin Khalid
Lee Su Nie
Yong Teck Ming
Wong Ah Nam @ Wong Joon Tuang
Sng Ngiap Koon
Aznan Bin Haji Ismail
(appointed on 9 July 2007)
(appointed on 9 July 2007)
(appointed on 9 July 2007)
(resigned on 9 July 2007)
(resigned on 9 July 2007)
(deceased on 10 May 2007)
DIRECTORS’ INTERESTS
The Directors holding office at the end of the financial year and their beneficial interests in the ordinary shares and/or
warrants of the Company and shares of its related corporations during the financial year ended 31 December 2007 as
recorded in the Register of Directors’ Shareholdings kept by the Company under Section 134 of the Companies Act,
1965, were as follows:
------- Number of ordinary shares of RM1.00 each ------Balance
Balance
as at
as at
1.1.2007
Bought
Sold
31.12.2007
Direct Interests
Dato’ Ahmad Sebi Bakar
Datin Masri Khaw Binti Abdullah
15,203,509
1,000,000
-
-
27,451,109
3,100,000
-
-
(1,300,000)
-
15,203,509
1,000,000
Indirect Interests
Dato’ Ahmad Sebi Bakar
Datin Masri Khaw Binti Abdullah
Lee Su Nie
33,451,109*
1,800,000
365,000**
------------ Number of Warrants 2000/2010 -----------Balance
Balance
as at
as at
1.1.2007
Bought
Sold
31.12.2007
Direct Interests
Dato’ Ahmad Sebi Bakar
Datin Masri Khaw Binti Abdullah
7,510,005
3,000
-
(500,000)
-
13,727,000
350,000
-
(350,000)
7,010,005
3,000
Indirect Interests
Dato’ Ahmad Sebi Bakar
Datin Masri Khaw Binti Abdullah
21,465,000***
-
advance synergy berhad (1225-D)
annual report 2007
035
Directors’ Report (continued)
DIRECTORS’ INTERESTS (continued)
*
This include his son’s interest in 6,000,000 ordinary shares of the Company which shall be treated as his interest in the
ordinary shares of the Company pursuant to Section 134(12)(c) of the Companies Act, 1965 which came into effect on 15
August 2007.
**
This is her spouse’s interest in the ordinary shares of the Company which shall be treated as her interest in the ordinary
shares of the Company (as at 9 July 2007, the date on which she was appointed as Director of the Company) pursuant to
Section 134(12)(c) of the of the Companies Act, 1965 which came into effect on 15 August 2007.
***
This include his son’s interest in 7,738,000 warrants of the Company which shall be treated as his interest in the warrants
of the Company pursuant to Section 134(12)(c) of the Companies Act, 1965 which came into effect on 15 August 2007.
No other Directors holding office at the end of the financial year had any beneficial interests in the ordinary shares or
Warrants of the Company and shares of its related corporations during the financial year ended 31 December 2007.
DIRECTORS’ BENEFITS
Since the end of the previous financial year, none of the Directors of the Company has received or become entitled to
receive a benefit (other than the benefits included in the aggregate amount of emoluments received or due and receivable
by the Directors as shown in Note 9 to the financial statements), by reason of a contract made by the Company or a
related corporation with the Director or with a firm of which the Director is a member, or with a company in which the
Director has a substantial financial interest other than remuneration received by certain Directors as directors/
executives of the subsidiaries.
There were no arrangements made or entered into during and at the end of the financial year, to which the Company
is a party, which had the object of enabling Directors of the Company to acquire benefits by means of the acquisition
of ordinary shares in or debentures of the Company or any other body corporate.
OTHER STATUTORY INFORMATION REGARDING THE GROUP AND THE COMPANY:
(I)
AS AT THE END OF THE FINANCIAL YEAR
(a)
(b)
Before the income statements and balance sheets of the Group and of the Company were made out, the
Directors took reasonable steps:
(i)
to ascertain that proper action had been taken in relation to the writing off of bad debts and the making
of provision for doubtful debts and have satisfied themselves that all known bad debts had been
written off and that adequate provision had been made for doubtful debts; and
(ii)
to ensure that any current assets which were unlikely to realise their book values in the ordinary
course of business had been written down to their estimated realisable values.
In the opinion of the Directors, the results of the operations of the Group and of the Company during the
financial year have not been substantially affected by any item, transaction or event of a material and
unusual nature.
(II) FROM THE END OF THE FINANCIAL YEAR TO THE DATE OF THIS REPORT
(c)
036
The Directors are not aware of any circumstances:
(i)
which would render the amount written off for bad debts or the amount of the provision for doubtful
debts in the financial statements of the Group and of the Company inadequate to any material extent;
or
(ii)
which would render the values attributed to current assets in the financial statements of the Group and
of the Company misleading; and
(iii)
which have arisen which would render adherence to the existing methods of valuation of assets or
liabilities of the Group and of the Company misleading or inappropriate.
advance synergy berhad (1225-D)
annual report 2007
Directors’ Report (continued)
OTHER STATUTORY INFORMATION REGARDING THE GROUP AND THE COMPANY (continued):
(II)
FROM THE END OF THE FINANCIAL YEAR TO THE DATE OF THIS REPORT (continued)
(d)
In the opinion of the Directors:
(i)
there has not arisen any item, transaction or event of a material and unusual nature likely to affect
substantially the results of the operations of the Group and of the Company for the financial year in
which this report is made; and
(ii)
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 will or may affect the abilities of the
Group and of the Company to meet their obligations as and when they fall due.
(III) AS AT THE DATE OF THIS REPORT
(e)
There are no charges on the assets of the Group and of the Company which have arisen since the end of
the financial year to secure the liabilities of any other person.
(f)
There are no contingent liabilities of the Group and of the Company which have arisen since the end of the
financial year.
(g)
The Directors are not aware of any circumstances not otherwise dealt with in the report or financial
statements which would render any amount stated in the financial statements of the Group and of the
Company misleading.
SIGNIFICANT EVENTS DURING THE FINANCIAL YEAR
Significant events during the financial year are disclosed in Note 52 to the financial statements.
SIGNIFICANT EVENTS SUBSEQUENT TO THE BALANCE SHEET DATE
The significant events that took place subsequent to the balance sheet date are disclosed in Note 53 to the financial
statements.
AUDITORS
The auditors, BDO Binder, have expressed their willingness to continue in office.
Signed on behalf of the Board in accordance with a resolution of the Directors.
Dato’ Ahmad Sebi Bakar
Director
Yong Teck Ming
Director
Selangor Darul Ehsan
12 May 2008
advance synergy berhad (1225-D)
annual report 2007
037
Statement By Directors
In the opinion of the Directors, the financial statements set out on pages 40 to 128 have been drawn up in accordance
with applicable approved Financial Reporting Standards in Malaysia and the provision of the Companies Act, 1965 so
as to give a true and fair view of the state of affairs of the Group and of the Company as at 31 December 2007 and of
the results of the operations of the Group and of the Company and of the cash flows of the Group and of the Company
for the financial year then ended.
On behalf of the Board,
Dato’ Ahmad Sebi Bakar
Director
Yong Teck Ming
Director
Selangor Darul Ehsan
12 May 2008
Statutory Declaration
I, Lee Su Nie, being the Director primarily responsible for the financial management of Advance Synergy Berhad,
do solemnly and sincerely declare that the financial statements set out on pages 40 to 128 are, to the best of my
knowledge and belief, correct and I make this solemn declaration conscientiously believing the same to be true
and by virtue of the provisions of the Statutory Declarations Act, 1960.
Lee Su Nie
Subscribed and solemnly declared by the abovenamed at Petaling Jaya this 12 May 2008.
Before me:
Soong Foong Chee
No. B 158
Commissioner for Oaths
Malaysia
038
advance synergy berhad (1225-D)
annual report 2007
Report Of The Auditors To The Members Of Advance Synergy Berhad
We have audited the financial statements set out on pages 40 to 128. These financial statements are the responsibility
of the Company’s Directors.
It is our responsibility to form an independent opinion, based on our audit, on the financial statements and to report
our opinion to you, as a body, in accordance with Section 174 of the Companies Act, 1965 and for no other purpose.
We do not assume responsibility towards any other person for the content of this report.
We conducted our audit in accordance with approved standards on auditing in Malaysia. Those standards require that
we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting principles used and significant estimates made
by the Directors, as well as evaluating the overall financial statements presentation. We believe that our audit provides
a reasonable basis for our opinion.
In our opinion:
(a) the financial statements have been properly drawn up in accordance with applicable approved Financial Reporting
Standards in Malaysia and the provisions of the Companies Act, 1965 so as to give a true and fair view of:
(i)
the matters required by Section 169 of the Companies Act, 1965 to be dealt with in the financial statements
of the Group and of the Company; and
(ii)
the state of affairs of the Group and of the Company as at 31 December 2007 and of the results of the
operations of the Group and of the Company and of the cash flows of the Group and of the Company for the
financial year then ended;
and
(b) the accounting and other records and the registers required by the Act to be kept by the Company and the
subsidiaries of which we have acted as auditors have been properly kept in accordance with the provisions of the
said Act.
We have considered the financial statements and the auditors’ reports of the subsidiaries of which we have not acted
as auditors, as indicated in Note 51 to the financial statements, being financial statements that are included in the
consolidated financial statements.
We are satisfied that the financial statements of the subsidiaries that are consolidated with the Company’s financial
statements are in form and content appropriate and proper for the purposes of the preparation of the consolidated
financial statements and we have received satisfactory information and explanations required by us for those purposes.
The auditors’ reports on the financial statements of the subsidiaries were not subject to any qualification and did not
include any comment made under Section 174(3) of the Act.
BDO Binder
AF : 0206
Chartered Accountants
Tang Seng Choon
2011/12/09 (J)
Partner
Kuala Lumpur
12 May 2008
advance synergy berhad (1225-D)
annual report 2007
039
Income Statements
for the financial year ended 31 December 2007
NOTE
Revenue
8
Cost of sales
Gross profit
Group
2007
2006
RM’000
RM’000
(restated)
223,715
230,674
(132,382)
(153,981)
Company
2007
2006
RM’000
RM’000
3,062
854
-
-
91,333
76,693
3,062
854
5,749
19,644
27
199
Distribution costs
(10,475)
(12,601)
-
-
Administration expenses
(52,499)
(53,118)
(327)
(330)
Other operating expenses
(46,949)
(78,604)
(3,223)
(3,271)
Finance costs
(12,074)
(15,007)
(10,598)
(13,259)
Share of profit of associates
10,243
-
-
(11,059)
(15,807)
15
4,834
Other operating income
Loss before tax
9
(14,672)
Tax (expense)/income
10
(3,131)
Net loss for the financial year
8,002
(54,991)
254
(17,803)
(54,737)
(11,044)
(10,973)
(14,215)
(3,588)
(27,005)
(27,732)
(11,044)
-
(10,973)
-
(17,803)
(54,737)
(11,044)
(10,973)
(4.21)
(7.99)
Attributable to:
Equity holders of the Company
Minority interests
Loss per ordinary share attributable to
equity holders of the Company (sen)
Basic
11
The accompanying notes form an integral part of the financial statements.
040
advance synergy berhad (1225-D)
annual report 2007
Balance Sheets
as at 31 December 2007
NOTE
Group
2007
2006
RM’000
RM’000
(restated)
Company
2007
2006
RM’000
RM’000
215,501
984
106,523
73,132
62,224
3,035
1,595
242,987
1,229
5,893
109,646
74,598
73,884
4,435
2,447
419
424,561
35,175
-
528
424,561
35,175
-
462,994
515,119
460,155
460,264
34,201
3,441
24,633
90,638
4,040
2,019
62,707
39,028
17,210
29,019
64,216
15,156
3,003
58,084
99,327
2,389
828
93,088
11,316
11
221,679
225,716
102,544
104,415
741
-
-
-
685,414
740,835
562,699
564,679
ASSETS
Non-current assets
Property, plant and equipment
Prepaid lease payments for land
Land held for development
Intangible assets
Investments in subsidiaries
Investments in associates
Investment securities
Trade and other receivables
Deferred tax assets
12
13
14
15
18
19
20
24
36
Current assets
Property development costs
Accrued billings
Inventories
Trade and other receivables
Current tax asset
Marketable securities
Cash and cash equivalents
Non-current assets classified as
held for sale
TOTAL ASSETS
21
22
23
24
25
26
27
The accompanying notes form an integral part of the financial statements.
advance synergy berhad (1225-D)
annual report 2007
041
Balance Sheets
as at 31 December 2007 (continued)
Group
2007
2006
RM’000
RM’000
(restated)
Company
2007
2006
RM’000
RM’000
337,794
(19,380)
337,794
(12,417)
337,794
(33,114)
337,794
(22,070)
Minority interests
318,414
140,836
325,377
144,539
304,680
-
315,724
-
TOTAL EQUITY
459,250
469,916
304,680
315,724
30
36
88,963
3,396
101,841
3,853
-
10,562
-
37
38
412
30
303
31
-
-
92,801
106,028
-
10,562
76,881
55,336
1,146
78,275
80,902
5,714
214,261
43,758
-
201,929
36,464
-
133,363
164,891
258,019
238,393
TOTAL LIABILITIES
226,164
270,919
258,019
248,955
TOTAL EQUITY AND LIABILITIES
685,414
740,835
562,699
564,679
NOTE
EQUITY AND LIABILITIES
Equity attributable to equity holders of
the Company
Share capital
Reserves
28
29
LIABILITIES
Non-current liabilities
Borrowings
Deferred tax liabilities
Provision for retirement benefit
obligations
Deferred income
Current liabilities
Trade and other payables
Borrowings
Current tax payable
39
30
The accompanying notes form an integral part of the financial statements.
042
advance synergy berhad (1225-D)
annual report 2007
337,794
Net loss for the financial year
Total recognised income and
expenses for the financial year
Dividend paid to minority interest
of a subsidiary
Balance as at 31 December 2007
430,437
-
-
-
-
-
430,437
430,437
-
The accompanying notes form an integral part of the financial statements.
-
Net (loss)/gain recognised in
equity statements
337,794
337,794
-
-
54
Note
Foreign currency translation
Balance as at 31 December 2006
(restated)
Balance as at 31 December 2006
as previously stated
Prior years’ adjustments
Group
-
-
-
-
-
-
-
-
12,721
-
(4)
-
(4)
(4)
12,725
43,436
(30,711)
6,006
-
7,256
-
7,256
7,256
(1,250)
(1,250)
-
-
-
-
-
-
-
-
-
-
(6,963)
(14,215)
7,252
7,252
(158)
(3,545)
(3,588)
43
43
(468,544) 318,414 140,836
-
(14,215)
(14,215)
-
-
(454,329) 325,377 144,539
(461,194) 349,223 144,653
6,865 (23,846)
(114)
459,250
(158)
(10,508)
(17,803)
7,295
7,295
469,916
493,876
(23,960)
<--------------------- Non-distributable --------------------->
Exchange Reserve
Revalua- transon
AccumuShare
Share
Capital
tion
lation
consolilated
Minority
Total
capital premium reserve reserve reserve dation
losses
Total interests equity
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
<-------------------- Attributable to equity holders of the Company -------------------->
Statements of Changes in Equity
for the financial year ended 31 December 2007
advance synergy berhad (1225-D)
annual report 2007
043
044
advance synergy berhad (1225-D)
annual report 2007
-
Net loss for the financial year
Total recognised income and expenses
for the financial year
Dividend paid to minority interest of
subsidiaries
430,437
-
-
-
-
-
-
-
-
-
1,792
1,792
-
The accompanying notes form an integral part of the financial statements.
337,794
-
Net gain/(loss) recognised in equity
statements
Balance as at 31 December 2006
(restated)
-
Foreign currency translation
Deficit on revaluation of properties
Effect of new acquisition
Effect of share buy-back
Transfer to accumulated losses
Realisation of exchange translation reserve
Impairment of properties
Realisation of revaluation reserve
12,214
-
12,725
-
(1,250)
-
(38,141) (13,464)
-
(38,141) (13,464)
- (12,136)
(7,430)
(1,328)
(24,858)
(5,853)
-
50,866
-
-
-
-
-
-
-
-
144,539
(513)
469,916
(513)
(71,315) (28,849) (100,164)
(54,737)
(27,005) (27,732)
(12,192)
(7,458)
(833)
(86)
(24,858)
-
570,593
(45,427)
(56)
(28)
(833)
(86)
(114)
173,901
(1,117)
(44,310)
(12,136)
(7,430)
(24,858)
114
(454,329) 325,377
-
(21,502)
(27,005)
5,503
(1,792)
1,328
5,967
(432,827) 396,692
Balance as at 31 December 2005
(1,792)
337,794
Group
430,437
<--------------------- Non-distributable --------------------->
Exchange Reserve
Revalua- transon
AccumuShare
Share
Capital
tion
lation
consolilated
Minority
Total
capital premium reserve reserve reserve dation
losses
Total interests equity
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
<-------------------- Attributable to equity holders of the Company -------------------->
Statements of Changes in Equity
for the financial year ended 31 December 2007 (continued)
Statements of Changes in Equity
for the financial year ended 31 December 2007 (continued)
Company
Share
capital
RM’000
Share
premium
RM’000
Balance as at 31 December 2005
337,794
430,437
Net loss for the financial year,
representing total income and
expenses for the financial year
-
Balance as at 31 December 2006
Capital
reserve
RM’000
Accumulated
losses
RM’000
Total
RM’000
69
(441,603)
326,697
-
-
(10,973)
337,794
430,437
69
(452,576)
Net loss for the financial year,
representing total income and
expenses for the financial year
-
-
-
(11,044)
Balance as at 31 December 2007
337,794
430,437
69
(463,620)
(10,973)
315,724
(11,044)
304,680
The accompanying notes form an integral part of the financial statements.
advance synergy berhad (1225-D)
annual report 2007
045
Cash Flow Statements
for the financial year ended 31 December 2007
NOTE
Group
2007
2006
RM’000
RM’000
(restated)
Company
2007
2006
RM’000
RM’000
(14,672)
(54,991)
(11,059)
7,499
1,768
1,782
2,701
1,396
20
202
17,171
(1)
70
161
20,793
(2)
CASH FLOWS FROM OPERATING
ACTIVITIES
Loss before tax
Adjustments for:
Allowance for doubtful debts
Allowance for inventories obsolescence
Amortisation of intangible assets
Amortisation of prepaid lease payments
for land
Bad debts written off
Depreciation
Deferred income recognised
Gain on disposal of land held
for development
Gain on disposal of marketable
securities
Gross dividend income
Impairment loss on:
- property, plant and equipment
- associates
- purchased goodwill
Allowance for diminution in value of
investment in securities
Write back of allowance for diminution
in value of investment in securities
Write back of impairment loss on
marketable securities
Interest expense
Interest income
Inventories written off
Gain on disposal of quoted
investment securities
Gain on disposal of property,
plant and equipment
Gain on disposal of subsidiary
Other payables written back
Provision for retirement benefits plan
Property, plant and equipment
written off
Share of profits of associates
Allowance for doubtful debts no
longer required
Balance carried forward
15
13
12
(127)
12
15
advance synergy berhad (1225-D)
annual report 2007
116
-
-
-
17,396
5,458
-
-
-
-
12,393
-
-
-
-
-
(390)
15,007
(1,816)
552
(2,998)
13,709
(3,174)
-
(796)
16,122
(2,921)
-
(1,580)
-
-
(207)
(35)
111
(1,031)
(10,781)
(117)
41
-
-
387
(10,243)
417
(8,002)
-
-
(26)
(110)
-
-
13,874
The accompanying notes form an integral part of the financial statements.
046
114
-
7,540
1,346
-
12
-
(3,238)
(345)
12,074
(1,422)
2,462
37
-
(545)
(6,525)
(4,340)
41
-
(15,807)
(5,673)
(3,408)
(3,286)
Cash Flow Statements
for the financial year ended 31 December 2007 (continued)
NOTE
Group
2007
2006
RM’000
RM’000
(restated)
Company
2007
2006
RM’000
RM’000
CASH FLOWS FROM OPERATING
ACTIVITIES (continued)
Balance brought forward
13,874
Loss on disposal of property,
plant and equipment
267
Net unrealised (gain)/loss on foreign
exchange
Write back of provision for damages
(272)
(83)
Operating profit/(loss) before working
capital changes
13,786
Decrease in property development
costs
(Increase)/Decrease in inventories
(Increase)/Decrease in trade and other
receivables
(Increase)/Decrease in marketable
securities
Decrease/(Increase) in short term deposits
(Decrease)/Increase in trade and other payables
Cash generated from operations
Retirement benefit paid
Net tax refunded/(paid)
Net cash from operating activities
(5,673)
(3,408)
(3,286)
1
-
248
-
-
(85)
-
(3,408)
(3,371)
(5,424)
-
4,827
(63)
1,138
11,455
(12,098)
6,737
(2,905)
23,535
(1,118)
2,575
(1,420)
1,129
(6,311)
8,286
8,462
34,512
6,489
17,010
2,149
54,676
(2)
6,499
(7,361)
9,751
-
9,649
11,900
54,676
12,986
-
-
CASH FLOWS FROM INVESTING
ACTIVITIES
Purchase of investment securities
Proceeds from disposal of investment
securities
Proceeds from disposal of land held
for development
Proceeds from disposal of marketable
securities
Additional investment in a subsidiary
Acquisition of software development
expenditure
Dividend received
Interest received
Balance carried forward
15
-
(15,908)
-
-
-
9,724
-
-
6,020
-
-
-
2,992
-
(1,076)
-
(1,020)
18,303
1,422
(1,231)
13,976
1,816
63
573
58
28,737
7,301
63
(389)
The accompanying notes form an integral part of the financial statements.
advance synergy berhad (1225-D)
annual report 2007
047
Cash Flow Statements
for the financial year ended 31 December 2007 (continued)
NOTE
Group
2007
2006
RM’000
RM’000
(restated)
Company
2007
2006
RM’000
RM’000
CASH FLOWS FROM INVESTING
ACTIVITIES (continued)
Balance brought forward
Proceeds from disposal of property,
plant and equipment
Prepaid of land lease
Purchase of property, plant and equipment
Net cash inflow from disposal of a
subsidiary
28,737
40
41
Net cash from/(used in) investing activities
4,339
(25)
(7,851)
7,301
63
(389)
74,956
(15,836)
(5)
(5)
16
30,110
-
-
25,216
96,531
58
(394)
CASH FLOWS FROM FINANCING
ACTIVITIES
Acquisition of treasury shares by a
subsidiary
Dividend paid
Drawdown of short term borrowings
Drawdown of short term loan
Drawdown of term loans
Drawdown of finance lease
Interest paid
Repayment of hire purchase creditors
Repayment of short term borrowings
Repayment of term loans
(158)
1,356
3,533
(11,641)
(654)
(1,203)
(17,915)
(15)
(505)
2,654
16,000
43,024
18,810
(14,871)
(677)
(9,277)
(155,992)
(7,872)
(3,269)
(11,131)
(43,163)
(26,682)
(100,849)
(11,141)
(54,294)
3,484
(14,933)
-
-
15,004
(9,602)
817
(12)
As previously reported
Effect of exchange rate changes
24,568
(40)
34,409
(239)
11
-
23
-
As restated
24,528
34,170
11
23
39,532
24,568
828
11
Net cash used in financing activities
Effect of exchange rate changes
Net increase/(decrease) in cash and cash
equivalents
Cash and cash equivalents at beginning
of financial year
Cash and cash equivalents at end
of financial year
43
The accompanying notes form an integral part of the financial statements.
048
advance synergy berhad (1225-D)
annual report 2007
Notes To The Financial Statements
31 December 2007
1.
CORPORATE INFORMATION
The Company is a public limited liability company, incorporated and domiciled in Malaysia and listed on the Main
Board of Bursa Securities.
The registered office and principal place of business of the Company is located at Level 3, Wisma ASCAP - QBC,
No. 72, Pesiaran Jubli Perak, Seksyen 22, 40000 Shah Alam, Selangor Darul Ehsan.
The financial statements are presented in Ringgit Malaysia (“RM”), which is also the Company’s functional currency.
All financial information presented in RM has been rounded to the nearest thousand, unless otherwise stated.
The financial statements were authorised for issue in accordance with a resolution by the Board of Directors on
12 May 2008.
2.
PRINCIPAL ACTIVITIES
The principal activities of the Company are that of investment holding and providing full corporate and financial
support to its subsidiaries. The principal activities of the subsidiaries are set out in Note 51 to the financial
statements. There have been no significant changes in the nature of these activities during the financial year.
3.
BASIS OF PREPARATION
The financial statements of the Group and of the Company have been prepared in accordance with applicable
approved Financial Reporting Standards (“FRS”) and the provisions of the Companies Act, 1965.
4.
SIGNIFICANT ACCOUNTING POLICIES
4.1 Basis of accounting
The financial statements of the Group and of the Company have been prepared under the historical cost
convention except as otherwise stated in the financial statements.
The preparation of financial statements requires the Directors to make estimates and assumptions that
affect the reported amounts of assets, liabilities, revenue and expenses and disclosure of contingent assets
and contingent liabilities. In addition, the Directors are also required to exercise their judgement in the
process of applying the accounting policies. The areas involving such judgements, estimates and assumptions
are disclosed in Note 7 to the financial statements. Although these estimates and assumptions are based
on the Directors’ best knowledge of events and actions, actual results could differ from those estimates.
4.2 Basis of consolidation
The consolidated financial statements incorporate the financial statements of the Company and all its
subsidiaries made up to the end of the financial year using the purchase method of accounting.
Under the purchase method of accounting, the cost of business combination is measured at the aggregate
of fair values at the date of exchange, of assets given, liabilities incurred or assumed, and equity instruments
issued plus any costs directly attributable to the business combination.
advance synergy berhad (1225-D)
annual report 2007
049
Notes To The Financial Statements
31 December 2007 (continued)
4.
SIGNIFICANT ACCOUNTING POLICIES (continued)
4.2 Basis of consolidation (continued)
At the acquisition date, the cost of business combination is allocated to identifiable assets, liabilities and
contingent liabilities in the business combination which are measured initially at their fair values at the
acquisition date. The excess of the cost of business combination over the Group’s interest in the net fair
value of the identifiable assets, liabilities and contingent liabilities is recognised as goodwill. If the cost of
business combination is less than the interest in the net fair value of the identifiable assets, liabilities and
contingent liabilities, the Group will:
(a)
reassess the identification and measurement of the acquiree’s identifiable assets, liabilities and
contingent liabilities and the measurement of the cost of the combination; and
(b)
recognise immediately in profit or loss any excess remaining after that reassessment.
When a business combination includes more than one exchange transaction, any adjustment to the fair
values of the subsidiary’s identifiable assets, liabilities and contingent liabilities relating to previously held
interests of the Group is accounted for as a revaluation.
Subsidiaries are consolidated from the acquisition date, which is the date on which the Group effectively
obtains control, until the date on which the Group ceases to control the subsidiaries. Control exists when
the Group has the power to govern the financial and operating policies of an entity so as to obtain benefits
from its activities. In assessing control, potential voting rights that are exercisable are taken into account.
Intragroup balances, transactions and unrealised gains and losses on intragroup transactions are eliminated
in full. Intragroup losses may indicate an impairment that requires recognition in the consolidated financial
statements. If a subsidiary uses accounting policies other than those adopted in the consolidated financial
statements for like transactions and events in similar circumstances, appropriate adjustments are made to
its financial statements in preparing the consolidated financial statements.
The gain or loss on disposal of a subsidiary, which is the difference between the net disposal proceeds
and the Group’s share of its net assets as of the date of disposal including the carrying amount of goodwill
and the cumulative amount of any exchange differences that relate to the subsidiary, is recognised in the
consolidated income statement.
Minority interest is that portion of the profit or loss and net assets of a subsidiary attributable to equity interests
that are not owned, directly or indirectly through subsidiaries, by the Group. It is measured at the minority’s
share of the fair value of the subsidiaries’ identifiable assets and liabilities at the acquisition date and the
minority’s share of changes in the subsidiaries’ equity since that date.
Where losses applicable to the minority in a subsidiary exceed the minority’s interest in the equity of that
subsidiary, the excess and any further losses applicable to the minority are allocated against the Group’s
interest except to the extent that the minority has a binding obligation and is able to make additional investment
to cover the losses. If the subsidiary subsequently reports profits, such profits are allocated to the Group’s
interest until the minority’s share of losses previously absorbed by the Group has been recovered.
Minority interest is presented in the consolidated balance sheet within equity and is presented in the
consolidated statement of changes in equity separately from equity attributable to equity holders of the
Company.
Minority interest in the results of the Group is presented in the consolidated income statement as an allocation
of the total profit or loss for the financial year between minority interest and equity holders of the Company.
4.3 Revenue recognition
Revenue is measured at the fair value of the consideration received or receivable net of discounts and
rebates.
050
advance synergy berhad (1225-D)
annual report 2007
Notes To The Financial Statements
31 December 2007 (continued)
4.
SIGNIFICANT ACCOUNTING POLICIES (continued)
4.3 Revenue recognition (continued)
Revenue is recognised to the extent that it is probable that the economic benefits associated with the
transaction will flow to the Group, and the amount of revenue and the cost incurred or to be incurred in
respect of the transaction can be reliably measured and specific recognition criteria have been met for each
of the Group’s activities as follows:
(a)
Sale of goods
Revenue from sale of goods is recognised when significant risk and rewards of ownership of the
goods has been transferred to the customer and where the Group retains neither continuing managerial
involvement over the goods, which coincides with delivery of goods and services and acceptance by
customers.
(b)
Services
Revenue in respect of the rendering of services is recognised based on the stage of completion at the
balance sheet date and when the cost incurred can be reliably measured. The stage of completion is
determined by the services performed to date as a percentage of total services to be performed.
(c)
Hotel and resort services
Revenue represents income from the rental of rooms, sale of food and beverages and other related
services.
Revenue is recognised as follows:
- room revenue is recognised upon actual occupancy by guest;
- food and beverage revenue is recognised upon servicing; and
- other related services is recognised upon rendering of services.
(d)
Information and telecommunication technology related services
(i)
Revenue from contract work
Where the outcome of contract work can be reliably estimated, contract revenue and associated
costs are recognised as revenue and expenses respectively by reference to the stage of completion
of the contract activity at the balance sheet date. The stage of completion is measured by reference
to the proportion of contract costs incurred for work performed to date to the estimated total
contract costs.
Where the outcome of contract cannot be reliably estimated, contract revenue is recognised only
to the extent of contract costs incurred that it is probable will be recoverable and contract costs
are recognised as an expense in the period in which they are incurred.
When it is probable that total contract costs will exceed total contract revenue, the expected loss
is recognised as an expense immediately.
(ii)
Revenue from maintenance contract is recognised on a straight line basis over the period of the
respective contracts.
advance synergy berhad (1225-D)
annual report 2007
051
Notes To The Financial Statements
31 December 2007 (continued)
4.
SIGNIFICANT ACCOUNTING POLICIES (continued)
4.3 Revenue recognition (continued)
(e)
(f)
Bus transportation services
(i)
Revenue from bus fare is recognised on the collection basis.
(ii)
Revenue from sale of buses is recognised when significant risk and rewards of ownership
of the buses has been transferred to the customer and where the Group retains neither continuing
managerial involvement over the buses, which coincides with delivery of buses and services
and acceptance by customers.
Travel and tours
Revenue from invoiced value of tickets sold is recognised in the income statement upon issuance of
the tickets.
Revenue from travel and tour is recognised in the income statement based on accrual basis upon
performance of services.
Revenue from foreign currencies exchange is recognised in the income statement upon customer’s
acceptance.
(g)
Property development
Property development revenue is recognised in respect of all development units that have been sold.
Revenue recognition commences when the sale of the development unit is effected, upon the
commencement of development and construction activities and when the financial outcome can be
reliably estimated. The attributable portion of property development cost is recognised as an expense
in the period in which the related revenue is recognised. The amount of such revenue and expenses
recognised is determined by reference to the stage of completion of development activity at the
balance sheet date. The stage of completion is measured by reference to the proportion that property
development costs incurred for work performed to date bear to the estimated total property development
cost.
When the financial outcome of a development activity cannot be reliably estimated, the property
development revenue is recognised only to the extent of property development costs incurred that is
probable to be recoverable and the property development costs on the development units sold are
recognised as an expense in the period in which they are incurred.
Any expected loss on a development project is recognised as an expense immediately, including costs
to be incurred over the defects liability period.
(h)
Discount and cash advance fees
Revenue from discount and cash advance fees are recognised upon receipt of billings from merchants.
Revenue from joining fees is recognised upon issuance of cards to approved members.
(i)
Membership fees
Membership fees in respect of vacation investment timesharing facilities are recognised on the basis
of 50% in the first year and the balance over the period of 30 years.
(j)
Dividend income
Dividend from investments in subsidiaries, associates and other investments are recognised when the
shareholders’ right to receive payment is established.
052
advance synergy berhad (1225-D)
annual report 2007
Notes To The Financial Statements
31 December 2007 (continued)
4.
SIGNIFICANT ACCOUNTING POLICIES (continued)
4.3 Revenue recognition (continued)
(k)
Interest income
Interest income is recognised as it accrues, using the effective interest method unless collectability is
in doubt.
(l)
Rental income
Rental income is accounted for on a straight line basis over the lease terms on ongoing leases. The
aggregate cost of incentives provided to lessees is recognised as a reduction of rental income over the
lease term on a straight line basis.
4.4 Property, plant and equipment
All items of property, plant and equipment are initially measured at cost. Cost includes expenditure that is
directly attributable to the acquisition of the asset.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as
appropriate, only when the cost is incurred and it is probable that the future economic benefits associated
with the asset will flow to the Group and the cost of the asset can be measured reliably. The carrying
amount of parts that are replaced is derecognised. The costs of the day-to-day servicing of property,
plant and equipment are recognised in the income statement as incurred. Cost also comprises the
initial estimate of dismantling and removing the asset and restoring the site on which it is located for
which the Group is obligated to incur when the asset is acquired, if applicable.
Each part of an item of property, plant and equipment with a cost that is significant in relation to the total
cost of the asset and which has different useful life, is depreciated separately.
After initial recognition, property, plant and equipment except for freehold land and buildings are stated at
cost less any accumulated depreciation and any accumulated impairment losses. The freehold land and
buildings are stated at valuation, which is the fair value at the date of revaluation less any subsequent
accumulated depreciation and subsequent accumulated impairment losses. The freehold land and buildings
are revalued with sufficient regularity to ensure that the carrying amount does not differ materially from that
which would be determined using fair value at balance sheet date.
Freehold land, system in progress and construction in progress are not depreciated. Depreciation on buses
under refurbishment commences when the buses are ready for their intended use.
Depreciation is calculated to write off the cost or valuation of the assets to its estimated residual values on
straight line basis over their estimated useful lives. The principal annual depreciation rates are as follows:
Hotel properties (buildings)
Buildings
Plant and machinery
Motor vehicles
Furniture, fittings and equipment
Renovation
Computer equipment and software
Buses in operation
Telecommunications, research and development equipment
30 - 50 years
0.5% - 5%
10% - 20%
15% - 20%
2% - 20%
10% - 20%
20% - 33.33%
Over 7 years
20% - 33.33%
advance synergy berhad (1225-D)
annual report 2007
053
Notes To The Financial Statements
31 December 2007 (continued)
4.
SIGNIFICANT ACCOUNTING POLICIES (continued)
4.4 Property, plant and equipment (continued)
Crockery, glassware, cutleries, linen and kitchen utensils are capitalised at the minimum level required for
normal operations. Replacements are written off to the income statement in the financial year in which they
are incurred.
At each balance sheet date, the carrying values of property, plant and equipment is assessed for impairment
when events or changes in circumstances indicate that its carrying amount may not be recoverable.
The residual values, useful lives and depreciation method are reviewed at each financial year end to ensure
that the amount, method and period of depreciation are consistent with previous estimates and the
expected pattern of consumption of the future economic benefits embodied in the items of property, plant
and equipment.
The carrying amount of an item of property, plant and equipment is derecognised on disposal or when no
future economic benefits are expected from its use or disposal. The difference between the net disposal
proceeds, if any, and the carrying amount is included in profit or loss and the revaluation surplus related to
those assets, if any, is transferred directly to retained earnings.
4.5 Lease and hire purchase
(a)
Finance lease and hire purchase
Assets acquired under finance lease and hire purchase arrangements which transfer substantially all
the risks and benefits of ownership to the Group are recognised initially at amounts equal to the fair
value of the leased property or, if lower, the present value of the minimum lease payments, each
determined at the inception of the lease. The discount rate used in calculating the present value of the
minimum lease payments is the interest rate implicit in the leases, if this is practicable to determine;
if not, the Group’s incremental borrowing rate is used. Any initial direct costs incurred by the Group
are added to the amount recognised as an asset. The assets are capitalised as property, plant and
equipment and the corresponding obligations are treated as liabilities. The property, plant and equipment
capitalised are depreciated on the same basis as owned assets.
The minimum lease payments are apportioned between the finance charges and the reduction of the
outstanding liability. The finance charges are recognised in income statement over the period of the
lease term so as to produce a constant periodic rate of interest on the remaining lease and hire
purchase liabilities.
(b)
Operating leases
An operating lease is a lease other than a finance lease. Lease payments under operating lease are
recognised as an expense in the income statement on straight line basis over the lease period.
(c)
Leases of land and buildings
For leases of land and buildings, the land and buildings elements are considered separately for the
purpose of lease classification and these leases are classified as operating or finance leases in the
same way as leases of other assets.
The minimum lease payments including any lump-sum upfront payments made to acquire the interest
in the land and building, are allocated between the land and the building elements of the lease in
proportion to the relative fair values for leasehold interest in the land element and the building element
on the lease at the inception of the lease.
054
advance synergy berhad (1225-D)
annual report 2007
Notes To The Financial Statements
31 December 2007 (continued)
4.
SIGNIFICANT ACCOUNTING POLICIES (continued)
4.5 Lease and hire purchase (continued)
(c)
Leases of land and buildings (continued)
Leasehold land that normally has an indefinite economic life and where the lease does not transfer
substantially all the risk and rewards incidental to ownership is treated as an operating lease. The
lump-sum upfront lease payment made on entering into or acquiring leasehold land are accounted for
as prepaid lease payments and are amortised over the lease term on a straight line basis except for
leasehold land that is classified as an asset held under property development.
The buildings element is classified as a finance or operating lease in accordance with Note 4.5(a)
and 4.5(b) to the financial statements. If the lease payment cannot be allocated reliably between these
two elements, the entire lease is classified as a finance lease, unless it is clear that both elements are
operating lease, in which case the entire lease is classified as an operating lease.
Prior to 1 January 2007, the Group had classified a lease of land as finance lease and had recognised
the amount of prepaid lease payments as property within its property, plant and equipment. On adoption
of FRS 117 Leases, the Group treats such a lease as an operating lease, with the unamortised carrying
amount classified as prepaid lease payments in accordance with the transitional provisions in FRS
117. The effect of the change in accounting policy is disclosed in Note 6(c) to the financial statements.
For a lease of land and building in which the amount that would initially be recognised for the land
element is immaterial, the land and buildings is treated as a single unit for the purpose of lease
classification and is accordingly classified as a finance or operating lease. In such a case, the economic
life of the buildings is recognised as the economic life of the entire leased assets.
4.6 Property development activities
(a)
Land held for development
Land held for development is stated at cost or valuation less impairment losses, if any. Such land is
classified as non-current assets when no development work has been carried out or where development
activities are not expected to be completed within the normal operating cycle.
(b)
Property development cost
Property development costs comprise all costs that are directly attributable to the development activities
or that can be allocated on a reasonable basis to such activities. They comprise the cost of land under
development, construction costs and other related development costs common to the whole project
including professional fees, stamp duties, commissions, conversion fees and other relevant levies as
well as borrowing costs.
Development properties on which development activities have commenced or where it can be
demonstrated that the development activities can be completed within the normal operating cycle are
classified as current assets.
Property development costs not recognised as an expense are recognised as an asset measured at
the lower of cost and net realisable value.
When revenue recognised in the income statement exceeds progress billings to purchasers, the
balance is classified as accrued progress billings under current asset. When progress billings exceed
revenue recognised in the income statement, the balance is classified as progress billings under
current liabilities.
advance synergy berhad (1225-D)
annual report 2007
055
Notes To The Financial Statements
31 December 2007 (continued)
4.
SIGNIFICANT ACCOUNTING POLICIES (continued)
4.7 Investments
(a)
Subsidiaries
A subsidiary is an entity in which the Group and the Company has power to control the financial and
operating policies so as to obtain benefits from its activities. The existence and effect of potential voting
rights that are currently exercisable or convertible are considered when assessing whether the Group
has such power over another entity.
An investment in subsidiary, which is eliminated on consolidation, is stated in the Company’s separate
financial statements at cost less impairment losses, if any. On disposal of such an investment, the
difference between the net disposal proceeds and its carrying amount is included in profit or loss.
(b)
Associates
An associate is an entity over which the Group and the Company 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.
In the Company’s separate financial statements, an investment in associate is stated at cost less
impairment losses, if any.
An investment in associate is accounted for in the consolidated financial statements using the equity
method of accounting. The investment in associate in the consolidated balance sheet is initially
recognised at cost and adjusted thereafter for the post acquisition change in the Group’s share of net
assets of the investment.
The interest in the associate is the carrying amount of the investment in the associate under the equity
method together with any long-term interest that, in substance, form part of the Group’s net interest in
the associate.
The Group’s share of the profit or loss of the associate during the financial year is included in the
consolidated financial statements, after adjustments to align the accounting policies with those of the
Group, from the date that significant influence commences until the date that significant influence
ceases. Distributions received from the associate reduce the carrying amount of the investment.
Adjustments to the carrying amount may also be necessary for changes in the Group’s proportionate
interest in the associate arising from changes in the associate’s equity that have not been recognised
in the associate’s profit or loss. Such changes include those arising from the revaluation of property,
plant and equipment and from foreign exchange translation differences. The Group’s share of those
changes is recognised directly in equity of the Group.
When the Group’s share of losses in the associate equals or exceeds its interest in the associate,
the carrying amount of that interest is reduced to nil and the Group does not recognise further losses
unless it has incurred legal or constructive obligations or made payments on its behalf.
The most recent available financial statements of the associate are used by the Group in applying
the equity method. Where the reporting dates of the financial statements are not coterminous, the
share of results is arrived at using the latest audited financial statements for which difference in
reporting date is no more than three months. Adjustments are made for the effects of any significant
transactions or events that occur between the intervening period.
Upon disposal of such investment, the difference between the net disposal proceeds and its carrying
amounts is included in profit or loss.
056
advance synergy berhad (1225-D)
annual report 2007
Notes To The Financial Statements
31 December 2007 (continued)
4.
SIGNIFICANT ACCOUNTING POLICIES (continued)
4.7 Investments (continued)
(c)
Investment securities
Non-current investment securities are stated at cost and an allowance for diminution in value is made
where in the opinion of the Directors, there is a decline other than temporary in the value of such
investments.
Upon disposal of such investment, the difference between net disposal proceeds and its carrying
amount is recognised in profit or loss.
(d)
Marketable securities
Marketable securities are acquired and held with the intention of resale in the short-term, and are
stated at the lower of cost and market value, determined on an aggregate portfolio basis by category
of investment. Cost is derived at on the weighted average basis while market value is determined
based on quoted market value. On disposal of an investment, the difference between net disposal
proceeds and its carrying amount is recognised in the income statement.
4.8 Intangible assets
(a)
Goodwill
Goodwill acquired in a business combination is recognised as an asset at the acquisition date and is
initially measured at cost being the excess of the cost of business combination over the Group’s interest
in the net fair value of the identifiable assets, liabilities and contingent liabilities. After initial recognition,
goodwill is measured at cost less accumulated impairment losses, if any. Goodwill is not amortised
but instead tested for impairment annually or more frequently if events or changes in circumstances
indicate that the carrying value may be impaired.
Goodwill arising on acquisition of an associate is the excess of cost of investment over the Group’s
share of the net fair value of net assets of the associates’ identifiable assets, liabilities and contingent
liabilities at the date of acquisition.
Goodwill relating to the associate is included in the carrying amount of the investment and is not
amortised. The excess of the Group’s share of the net fair value of the associate’s identifiable
assets, liabilities and contingent liabilities over the cost of investment is included as income in the
determination of the Group’s share of the associate’s profit or loss in the period in which the investment
is acquired.
(b)
Other intangible assets
Other intangible assets are recognised only when identifiable, control and economic benefit probability
criteria are met.
The Group recognises at the acquisition date separately from goodwill, an intangible asset of the
acquiree if the fair value can be measured reliably, irrespective of whether the asset had been recognised
by the acquiree before the business combination. In-process research and development projects
acquired in such combinations are recognised as an asset even if subsequent expenditure is written
off because the criteria specified in the policy for research and development are not met.
Intangible assets are initially measured at cost. The cost of intangible assets acquired in a business
combination is their fair values as at the date of acquisition.
advance synergy berhad (1225-D)
annual report 2007
057
Notes To The Financial Statements
31 December 2007 (continued)
4.
SIGNIFICANT ACCOUNTING POLICIES (continued)
4.8 Intangible assets (continued)
(b)
Other intangible assets (continued)
After initial recognition, intangible assets are carried at cost less any accumulated amortisation and
any accumulated impairment losses. The useful lives of intangible assets are assessed to be either
finite or indefinite. Intangible assets with finite lives are amortised on a straight line basis over the
estimated economic useful lives and are assessed for any indication that the asset may be impaired. If
any such indication exists, the entity shall estimate the recoverable amount of the asset. The amortisation
period and the amortisation method for an intangible asset with a finite useful life are reviewed at least
at each financial year end. The amortisation expense on intangible assets with finite lives is recognised
in profit or loss and is included within the other operating expenses line item.
An intangible asset has an indefinite useful life when based on the analysis of all the relevant factors;
there is no foreseeable limit to the period over which the asset is expected to generate net cash inflows
to the Group. Intangible assets with indefinite useful lives are tested for impairment annually and
wherever there is an indication that the carrying value may be impaired. Such intangible assets are not
amortised. Their useful lives are reviewed each period to determine whether events and circumstances
continue to support the indefinite useful life assessment for the asset. If they do not, the change in the
useful life assessment for indefinite to finite is accounted for as a change in accounting estimate in
accordance with FRS 108 Accounting Policies, Changes in Accounting Estimates and Errors.
Expenditure on an intangible item that are initially recognised as an expense are not recognised as
part of the cost of an intangible asset at a later date.
An intangible asset is derecognised on disposal or when no future economic benefits are expected
from its use. The gain or loss arising from the derecognition determined as the difference between the
net disposal proceeds, if any, and the carrying amount of the asset is recognised in profit or loss when
the asset is derecognised.
Research and development expenditure
Research expenditure is recognised as an expense when incurred. Expenditure incurred on software
development projects (relating to the design and testing of new or improved products) is recognised
as intangible assets when it is probable that the project will be a success considering its commercial
and technological feasibility, and only if the expenditure can be measured reliably. Other development
expenditure are recognised as an expense when incurred. Development expenditure previously
recognised as an expense are not recognised as an asset in subsequent years.
Development expenditure that have been capitalised are amortised from the commencement of
commercial production of the product to which they relate on a straight line basis over the period of
their expected benefits, not exceeding a period of five (5) years.
Development expenditure are stated at cost less accumulated amortisation and accumulated
impairment losses.
Intellectual property
Expenditure on acquired intellectual property is capitalised and amortised using the straight line method
over their expected benefits, not exceeding a period of five (5) years.
Acquired intellectual property is stated at cost less accumulated amortisation and accumulated
impairment losses.
058
advance synergy berhad (1225-D)
annual report 2007
Notes To The Financial Statements
31 December 2007 (continued)
4.
SIGNIFICANT ACCOUNTING POLICIES (continued)
4.9 Contract work-in-progress
Contract work-in-progress cost comprise cost related directly to the specific contract work-in-progress and
those that are attributable to the contract work-in-progress activity in general and can be allocated to the
contract work-in-progress and such other cost that are specifically chargeable to the customer under the
terms of the contract.
When the total of costs incurred on contract work-in-progress plus recognised profits (less recognised
losses) exceeds progress billings, the balance is classified as amount due from customers for contract workin-progress work. When progress billings exceed costs incurred plus recognised profits (less recognised
losses), the balance is classified as amount due to customers for contract work.
4.10 Impairment of non-financial assets
The carrying amounts of assets, except for financial assets (excluding investment in subsidiaries and
associates), property development cost, inventories, deferred tax assets and non-current assets (or
disposal groups) held for sale, are reviewed at each balance sheet date to determine whether there is any
indication of impairment. If any such indication exists, the asset’s recoverable amount is estimated.
Goodwill and intangible assets that have an indefinite useful life are tested annually for impairment or more
frequently if events or changes in circumstances indicate that the goodwill or intangible asset might be
impaired.
The recoverable amount of an asset is estimated for an individual asset. Where it is not probable to estimate
the recoverable amount of the individual asset, the impairment test is carried out on the cash generated unit
(“CGU”) to which the asset belongs. Goodwill acquired in a business combination is from the acquisition
date, allocated to each of the Group’s CGU or groups of CGU that are expected to benefit from the synergies
of the combination giving rise to the goodwill irrespective of whether other assets or liabilities of the
acquiree are assigned to those units or groups of units.
The recoverable amount of an asset or CGU is the higher of its fair value less cost to sell and its value in
use.
In estimating the value in use, the estimated future cash inflows and outflows to be derived from continuing
use of the asset and from its ultimate disposal 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
for which the future cash flow estimates have not been adjusted. An impairment loss is recognised in
the income statement when the carrying amount of the asset or the CGU, including the goodwill or intangible
asset, exceeds the recoverable amount of the asset or the CGU. The total impairment loss is allocated, first,
to reduce the carrying amount of any goodwill allocated to the CGU and then to the other assets of the CGU
on a pro-rate basis of the carrying amount of each asset or the CGU.
The impairment loss is recognised in the income statement immediately except for the impairment on a
revalued asset where the impairment loss is recognised directly against the revaluation reserve account to
the extent of the surplus credited from the previous revaluation for the same asset with the excess of the
impairment loss charged to the income statement.
An impairment loss on goodwill is not reversed in subsequent periods. An impairment loss for other assets
is reversed if and only if there has been a change in the estimates used to determine the assets’ recoverable
amount since the last impairment loss was recognised.
An impairment loss is only reversed to the extent that the asset’s carrying amount does not exceed the
carrying amount that would have been determined, net of depreciation or amortisation, if no impairment
loss had been recognised.
advance synergy berhad (1225-D)
annual report 2007
059
Notes To The Financial Statements
31 December 2007 (continued)
4.
SIGNIFICANT ACCOUNTING POLICIES (continued)
4.10
Impairment of non-financial assets (continued)
Such reversals are recognised as income immediately in the income statement except for the reversal of an
impairment loss on a revalued asset where the reversal of the impairment loss is treated as a revaluation
increase and credited to the revaluation reserve account of the same asset. However, to the extent that an
impairment loss on the same revalued asset was previously recognised in profit or loss, a reversal of that
impairment loss is also recognised in profit or loss.
4.11
Inventories
Inventories are stated at the lower of cost and net realisable value.
Cost is determined using first-in, first-out formula. The cost of raw materials, food and beverage and operating
supplies comprises all cost of purchase plus the cost of bringing the inventories to their present location
and condition. The cost of work-in-progress and finished goods includes the cost of raw materials, direct
labour and a proportion of production overheads based on normal operating capacity of the production
facilities. The cost of completed properties held for sale comprises cost associated with the acquisition of
land, direct costs and appropriate proportion on of common costs.
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.
4.12
Financial instruments
4.12.1
Financial instruments recognised on the balance sheets
Financial instruments are recognised on the balance sheet when the Group has become a party
to the contractual provisions of the instrument.
Financial instruments are classified as liabilities or equity in accordance with the substance of the
contractual arrangement. Interest, dividends and losses and gains relating to a financial
instrument or a component that is a financial liability shall be recognised as income or expense in
profit or loss. Distributions to holders of an equity instrument is debited directly to equity, net of
any related tax effect. Financial instruments are offset when the Group has a legally enforceable
right to offset and intends to settle on a net basis or to realise the asset and settle the liability
simultaneously.
(a)
Receivables
Receivables including amounts owing by associates and related parties are carried at
anticipated realisable value. Known bad debts are written off and specific allowance is made
for debts considered to be doubtful of collection.
Receivables are not held for trading purposes.
(b)
Cash and cash equivalents
Cash and cash equivalents include cash and bank balances, bank overdrafts, deposits and
other short-term, highly liquid investments which are readily convertible into cash and which
are subject to insignificant risk of changes in value.
060
advance synergy berhad (1225-D)
annual report 2007
Notes To The Financial Statements
31 December 2007 (continued)
4.
SIGNIFICANT ACCOUNTING POLICIES (continued)
4.12
Financial instruments (continued)
4.12.1
Financial instruments recognised on the balance sheets (continued)
(c)
Payables
Payables including amounts owing to associates and related corporations are recognised
when there is a contractual obligation to deliver cash or another financial asset to
another entity. Payables are measured at fair value of the consideration to be paid in the
future for goods and services received, and subsequently measured at amortised cost
using the effective interest method.
(d) Interest bearing borrowings
All loans and borrowings are initially recognised at fair value of the consideration received
less directly attributable transaction costs. After initial recognition, interest-bearing
loans and borrowings are subsequently measured at amortised cost using the effective
interest method.
(e) Equity instruments
Ordinary shares are recorded at the nominal value and proceeds in excess of the nominal
value of shares issued, if any, are accounted for as share premium. Both ordinary shares
and share premium are classified as equity. Transaction costs of an equity transaction are
accounted for as a deduction from equity, net of any related income tax benefit. Otherwise,
they are charged to the income statement.
Dividends to shareholders are recognised in equity in the period in which they are declared.
If the Company reacquires its own equity instruments, the consideration paid, including
any attributable transaction costs is deducted from equity as treasury shares until they are
cancelled. No gain or loss is recognised in profit or loss on the purchase, sale, issue or
cancellation if the Company’s own equity instruments. Where such shares are issued by
resale, the difference between the sales consideration and the carrying amount is shown
as a movement in equity.
4.12.2
Financial instruments not recognised on the balance sheets
There were no financial instruments not recognised on the balance sheets.
4.13
Borrowing costs
Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying
asset is capitalised as part of the cost of the asset until when substantially all the activities necessary to
prepare the asset for its intended use or sale are complete, after which such expense is charged to the
income statement. A qualifying asset is an asset that necessarily takes a substantial period of time to get
ready for its intended use or sale. Capitalisation of borrowing cost is suspended during extended periods
in which active development is interrupted.
The amount of borrowing costs eligible for capitalisation is the actual borrowing costs incurred on the
borrowing during the period less any investment income on the temporary investment of the borrowing.
All other borrowing costs are recognised in profit or loss in the period in which they are incurred.
advance synergy berhad (1225-D)
annual report 2007
061
Notes To The Financial Statements
31 December 2007 (continued)
4.
SIGNIFICANT ACCOUNTING POLICIES (continued)
4.14
Income taxes
Income taxes include all domestic and foreign taxes on taxable profit. Income taxes also include other
taxes, such as withholding taxes, which are payable by a foreign subsidiary, associate or jointly controlled
entity on distributions to the Group and Company, and real property gains taxes payable on disposal of
properties, prior to 1 April 2007, if any.
Taxes in the income statement comprises current tax and deferred tax.
(a)
Current tax
Current tax is the amount of income taxes payable or receivable in respect of the taxable profit or
loss for a period.
Current tax for the current and prior periods are measured at the amount expected to be recovered
from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are
those that have been enacted or substantially enacted by the balance sheet date.
(b)
Deferred tax
Deferred tax is recognised in full using the liability method on temporary differences arising between
the carrying amount of an asset or liability in the balance sheet and its tax base.
Deferred tax is recognised for all temporary differences, unless the deferred tax arises from goodwill
or the initial recognition of an asset or liability in a transaction which is not a business combination
and at the time of transaction, affects neither accounting profit nor taxable profit.
A deferred tax asset is recognised only to the extent that it is probable that taxable profit will be
available against which the deductible temporary differences, unused tax losses and unused tax
credits can be utilised. The carrying amount of a deferred tax asset is reviewed at each balance
sheet date. If it is no longer probable that sufficient taxable profit will be available to allow the
benefit of part or all of that deferred tax asset to be utilised, the carrying amount of the deferred
tax asset will be reduced accordingly. When it becomes probable that sufficient taxable profit will
be available, such reductions will be reversed to the extent of the taxable profit.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current
tax assets against current tax liabilities and when the deferred income taxes relate to the same
taxation authority.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the
year when the asset is realised or the liability is settled, based on tax rates and tax laws that have
been enacted or substantively enacted by the balance sheet date.
4.15
Provisions
Provisions are recognised when there is a present obligation, legal or constructive, as a result of a past
event, when 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.
Where the effect of the time value of money is material, the amount of a provision will be discounted to
its present value at a pre-tax rate that reflects current market assessments of the time value of money and
the risks specific to the liability.
062
advance synergy berhad (1225-D)
annual report 2007
Notes To The Financial Statements
31 December 2007 (continued)
4.
SIGNIFICANT ACCOUNTING POLICIES (continued)
4.16
Employee benefits
4.16.1
Short term employee benefits
Wages, salaries, social security contributions, paid annual leave, paid sick leave, bonuses and
non-monetary benefits are recognised as an expense in the financial year when employees have
rendered their services to the Group.
Short term accumulating compensated absences such as paid annual leave are recognised as an
expense when employees render services that increase their entitlement to future compensated
absences. Short term non-accumulating compensated absences such as sick leave are
recognised when the absences occur.
Bonuses are recognised as an expense when there is a present, legal or constructive obligation
to make such payments, as a result of past events and when a reliable estimate can be made of
the amount of the obligation.
4.16.2
Defined contribution plans
The Company and subsidiaries incorporated in Malaysia make contributions to a statutory
provident fund and foreign subsidiaries make contributions to their respective countries’ statutory
pension schemes. The contributions are recognised as a liability after deducting any contribution
already paid and as an expense in the period in which the employees render their services.
4.16.3
Defined benefits plans
Certain subsidiaries operate an unfunded retirement benefits plan for rank and file employees
in accordance with an article contained in the collective union agreement. The liabilities in respect
of the retirement benefits plan are determined by an actuarial valuation for its defined benefit
obligations under the Projected Unit Credit Method. Under this method, the current service cost is
calculated as the present value of benefits that will accrue on valuation date (by reference to the
number of employees providing the service in that year and projected final salaries). The liabilities
will be recognised immediately in the year they are incurred.
4.17
Foreign currencies
4.17.1
Functional currency
The separate financial statements of each entity in the Group are measured using the currency of
the primary economic environment in which the entity operates (“the functional currency”).
4.17.2
Foreign currency transactions and translations
A foreign currency transaction is recorded, on initial recognition in the functional currency, by
applying to the foreign currency amount the spot exchange rate between the functional currency
and the foreign currency at the date of the transaction.
At each balance sheet date, foreign currency monetary items are translated using the exchange
rate at that date. Non-monetary items that are measured in terms of historical cost in a foreign
currency is translated using the exchange rate at the date of the transaction. 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 arising on the settlement of monetary items or on translating monetary
items at rates different from those at which they were translated on initial recognition during the
period or in previous financial statements are recognised in profit or loss in the period in which
they arise.
advance synergy berhad (1225-D)
annual report 2007
063
Notes To The Financial Statements
31 December 2007 (continued)
4.
SIGNIFICANT ACCOUNTING POLICIES (continued)
4.17
Foreign currencies (continued)
4.17.2
Foreign currency transactions and translations (continued)
Exchange differences arising on a monetary item that forms part of a reporting entity’s net
investment in a foreign operation shall be recognised in profit or loss in the financial statements
of the Company or the individual financial statements of the foreign operation, as appropriate. In
the consolidated financial statements, such exchange differences are recognised initially in the
exchange translation reserve except for a monetary item that is denominated in a currency other
than the functional currency of either the company or the foreign operation, which exchange
differences is recognised in profit or loss in the consolidated financial statements. On the disposal
of the foreign operation, the cumulative amount of the exchange differences relating to the foreign
operation is recognised in profit or loss when the gain or loss on disposal is recognised.
The results and financial position of an entity whose functional currency is not the currency of a
hyperinflationary economy shall be translated into a different presentation currency using the
following procedures:
(a)
assets and liabilities for each balance sheet presented (i.e. including comparatives) shall be
translated at the closing rate at the date of that balance sheet;
(b)
income and expenses for each income statement (i.e. including comparatives) shall be
translated at exchange rates at the dates of the transactions; and
(c)
all resulting exchange differences shall be recognised as a separate component of equity.
Any goodwill arising on the acquisition of a foreign operation and any fair value adjustments to
the carrying amounts of assets and liabilities arising on the acquisition of a foreign operation is
treated as assets and liabilities of the foreign operation and is translated at the closing rate.
4.18
Non-current assets (or disposal groups) held for sale and discontinued operation
4.18.1
Non-current assets (or disposal groups) held for sale
Non-current assets (or disposal groups) are classified as held for sale if their carrying amounts
will be recovered principally through a sale transaction rather than through continuing use. For
this to be the case, the asset (or disposal group) must be available for immediate sale in its
present condition subject only to terms that are usual and customary for sale of such assets (or
disposal groups) and its sale must be highly probable.
Immediately before the initial classification as held for sale, the carrying amounts of the noncurrent assets (or all the assets and liabilities in a disposal group) are measured in accordance
with applicable FRSs. On initial classification as held for sale, non-current assets or disposal
groups (other than investment properties, deferred tax assets, employee benefits assets, and
financial assets carried at fair value) are measured at the lower of carrying amount immediately
before the initial classification as held for sale and fair value less costs to sell. The differences, if
any, are recognised in profit or loss as impairment loss.
Non-current assets (or disposal groups) held for sale are classified as current assets (and current
liabilities, in the case of non-current liabilities included within disposal groups) on the face of
the balance sheet and are stated at the lower of carrying amount immediately before initial
classification and fair value less costs to sell and are not depreciated. Any cumulative income or
expense recognised directly in equity relating to the non-current asset (or disposal groups)
classified as held for sale is presented separately.
064
advance synergy berhad (1225-D)
annual report 2007
Notes To The Financial Statements
31 December 2007 (continued)
4.
SIGNIFICANT ACCOUNTING POLICIES (continued)
4.18
Non-current assets (or disposal groups) held for sale and discontinued operation (continued)
4.18.1
Non-current assets (or disposal groups) held for sale (continued)
If the Group has classified an asset (or disposal group) as held for sale but subsequently the
criteria for classification is no longer met, the Group ceases to classify the asset (or disposal
group) as held for sale. The Group measures a non-current asset that ceases to be classified as
held for sale (or ceases to be included in a disposal group classified as held for sale) at the lower
of:
4.18.2
(a)
its carrying amount before the asset (or disposal group) was classified as held for sale,
adjusted for any depreciation, amortisation or revaluations that would have been
recognised had the asset (or disposal group) not been classified as held for sale; and
(b)
its recoverable amount at the date of the subsequent decision not to sell.
Discontinued operations
A component of the Group is classified as a discontinued operation when the criteria to be
classified as held for sale have been met or it has been disposed of and such a component
represents a separate major line of business or geographical area of operations, is part of a
single co-ordinated plan to dispose of a separate major line of business or geographical area of
operations or is a subsidiary acquired exclusively with a view to resale. When an operation is
classified as discontinued operation, the comparative income statement is restated as if the
operation had been discontinued from the start up of the comparative period.
5.
ADOPTION OF NEW FRS AND AMENDMENT TO FRS
5.1
New FRS and amendment to FRS adopted
On 1 January 2007, the Group and the Company adopted the following new and revised FRSs which are
mandatory for annual periods beginning on or after 1 January 2007:
FRS 6
FRS 117
FRS 124
Amendment to FRS 1192004
Exploration for and Evaluation of Mineral Resources
Leases
Related Party Disclosures
Employee Benefits – Actuarial Gains and Losses, Group Plans and
Disclosures
FRS 6 is not relevant to the Group’s operations. The effects of adopting the new FRS and amendment to
FRS are set out in Note 6 to the financial statements.
5.2
New FRS and amendments to FRS not adopted
The Group has not adopted FRS 139 Financial Instruments: Recognition and Measurement and the
consequential amendments resulting from FRS 139 which effective date is deferred to a date to be
announced by the Malaysia Accounting Standards Board (“MASB”). FRS 139 establishes the principles
for the recognition and measurement of financial assets and financial liabilities including circumstances
under which hedge accounting is permitted. By virtue of the exemption provided under paragraph 103AB
of FRS 139, the impact of applying FRS 139 on its financial statements upon first adoption of the standard
as required by paragraph 30(b) of FRS 108 is not disclosed.
advance synergy berhad (1225-D)
annual report 2007
065
Notes To The Financial Statements
31 December 2007 (continued)
5.
ADOPTION OF NEW FRS AND AMENDMENT TO FRS (continued)
5.2
New FRS and amendments to FRS not adopted (continued)
The Group has also not adopted the following FRS and amendments that have been issued as at the date
of authorisation of these financial statements but are not yet effective for the Group. The Directors do not
anticipate that the application of these standards when they are effective will have a material impact on
the results and the financial position of the Group:
(a)
FRS which are effective for annual periods beginning on or after 1 July 2007
FRS 107
FRS 111
FRS 112
FRS 118
FRS 120
FRS 134
FRS 137
Cash Flow Statement
Construction Contract
Income Taxes
Revenue
Accounting for Government Grants and Disclosure of Government Assistance
Interim Financial Reporting
Provisions, Contingent Liabilities and Contingent Assets
These amendments align the MASB’s FRS with the equivalent International Accounting Standards
(“IAS”), both in terms of form and content. The adoption of these standards will only impact the form
and content of disclosures presented in the financial statements. The Group will apply this amendment
for its annual period beginning 1 January 2008. FRS 120 is not relevant to the Group’s operations.
(b)
Framework for the Preparation and Presentation of Financial Statements (“Framework”) which is
effective for annual periods beginning on or after 1 July 2007
The Framework sets out the concepts that underlie the preparation and presentation of financial
statements for external users. It is not an MASB approved accounting standard and hence does not
define standards for any particular measurement or disclosure issue. The Group will apply this
Framework for its annual period beginning 1 January 2008.
(c)
066
Amendments and IC Interpretations which are effective for annual periods beginning on or after 1
July 2007
Amendment to FRS 121
The effects of Changes in Foreign
Exchange Rates - Net Investment in
a Foreign Operation
This amendment results in exchange differences arising
from a monetary item that forms part of the Group’s net
investment in a foreign operation to be recognised in equity
irrespective of the currency in which the monetary item is
denominated and if whether the monetary item results
from a transaction with the Company or any of its
subsidiaries. Previously, exchange differences arising
from such transactions between the Company and its
subsidiaries would be accounted for in the income
statement or in equity depending on the currency of the
monetary item. The Group will apply this amendment from
its annual periods beginning 1 January 2008.
IC Interpretation 1
Changes in Existing Decommissioning, Restoration and
Similar Liabilities
IC Interpretation 2
Members’ Shares in Co-operative Entities and Similar
Instruments
IC Interpretation 5
Rights to Interests arising from Decommissioning,
Restoration and Environmental Rehabilitation Funds
advance synergy berhad (1225-D)
annual report 2007
Notes To The Financial Statements
31 December 2007 (continued)
5.
ADOPTION OF NEW FRS AND AMENDMENT TO FRS (continued)
5.2
New FRS and amendments to FRS not adopted (continued)
(c)
Amendments and IC Interpretations which are effective for annual periods beginning on or after 1
July 2007 (continued)
IC Interpretation 6
Liabilities arising from Participating in a Specific Market
– Waste Electrical and Electronic Equipment
IC Interpretation 7
Applying the Restatement Approach under FRS 1292004
Financial Reporting in Hyperinflationary Economies
IC Interpretation 8
Scope of FRS 2
The above IC Interpretations are not relevant to the Company’s operations.
6.
EFFECTS OF ADOPTION OF NEW FRS AND AMENDMENT TO FRS
The adoption of FRS 124 has not resulted in significant changes in accounting policies of the Group. The principal
changes in accounting policies and their effects resulting from the adoption at the other new FRS and
amendments to FRS are summarised below:
(a)
FRS 117 Leases
(i)
Leasehold land held for own use
Under FRS 117, leasehold land held for own use is now classified as operating lease. The up-front
payment made for the leasehold land represents prepaid lease payments that are amortised on a
straight-line basis over the lease term. Prior to 1 January 2007, leasehold land held for own use was
classified as property, plant and equipment and was stated at cost less accumulated depreciation
and impairment losses.
In accordance with the transitional provisions of FRS 117, the unamortised amount of leasehold
land as at 1 January 2007 which was stated at valuation is retained as the surrogate carrying
amount of prepaid lease payments. The reclassification of leasehold land as prepaid lease
payments has been accounted for retrospectively. The effects on the consolidated balance sheet as
at 31 December 2007 are set out in Note 6(c) to the financial statements. There were no effects on
the consolidated income statement for the year ended 31 December 2007 and the Company’s
financial statements.
(ii)
Initial direct costs
FRS 117 requires initial direct cost incurred by a lessor in an operating lease arrangement in
negotiating and arranging lease be added to the carrying amount of the leased asset and be
recognised as an expense over the lease term on the same basis as the lease income. Prior to 1
January 2007 such costs were expensed in profit and loss. This change in accounting policy is to be
applied retrospectively. In general, the Group does not incur significant initial direct costs on
negotiating and arranging leases and as a result, this change in accounting policy does not materially
affect the financial statements of the Group and the Company.
(b)
Amendment to FRS 1192004 Employee Benefits - Actuarial Gains and Losses, Group Plans and Disclosures
is mandatory for annual periods beginning on or after 1 January 2007
This amendment permits any systematic method that results in recognition of actuarial gains and losses
in the period in which they occur provided that the same basis is applied to both, gains and losses and the
basis is applied consistently from period to period.
advance synergy berhad (1225-D)
annual report 2007
067
Notes To The Financial Statements
31 December 2007 (continued)
6.
EFFECTS OF ADOPTION OF NEW FRS AND AMENDMENT TO FRS (continued)
(b)
Amendment to FRS 1192004 Employee Benefits - Actuarial Gains and Losses, Group Plans and Disclosures
is mandatory for annual periods beginning on or after 1 January 2007 (continued)
As the Group does not intend to change the accounting policy adopted for the recognition of actuarial
gains and losses and does not participate in any multi-employer plans, the adoption of this amendment
will only impact the format and extent of disclosures presented in the financial statements.
(c)
Summary of effects of adopting new and revised FRSs on the current year’s financial statements
The following tables provide estimates of the extent to which each of the line items in the balance sheets
for the financial year ended 31 December 2007 is higher or lower than it would have been had the previous
policies been applied in the current financial year:
[-------Increase/(Decrease)-------]
FRS 117
FRS 5
Total
Group
RM’000
RM’000
RM’000
Property, plant and equipment
Prepaid lease payments for land
Non-current assets classified as held for sale
7.
984
(984)
-
741
(741)
1,325
(984)
(741)
SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGEMENTS
7.1
Critical judgements made in applying the accounting policies
The following are the judgements made by the Directors in the process of applying the Group’s accounting
policies that have the most significant effect on the amounts recognised in the financial statements.
(a)
Classification of sale and leaseback transactions
The Group had treated the sales and leaseback transactions with a third party in respect of
Holiday Villa Cherating, Holiday Villa Alor Setar and Holiday Villa Langkawi (collectively known as
“hotel properties”) as finance leases in the financial year ended 31 December 2006 after taking into
consideration the nature of the transactions as a refinancing arrangement, the risk and rewards
incidental to the ownership and the Group’s intention to buy back the hotel properties after the lease
period.
For the financial year ended 31 December 2007, following receipt of auditors’ recommendations, the
Directors conducted a further review of the risks and rewards incidental to the ownership, amongst
others, that the present value of the minimum lease payments of each transaction does not amount
to substantially all of the fair value of the leased assets and the uncertainties in the market condition
after the long duration of the lease tenure which may cause uncertainty in the market value of the
hotel properties and the likelihood of the exercise of the buyback option. The Directors concluded
that the auditors’ recommendation to treat the sale and leaseback transactions with the third party
in respect of two of the hotel properties as operating lease is more appropriate and will result in
better presentation of the financial statements.
The effects of the change in treatment of the sale and leaseback transactions are detailed in Note 54
to the financial statements.
068
advance synergy berhad (1225-D)
annual report 2007
Notes To The Financial Statements
31 December 2007 (continued)
7.
SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGEMENTS (continued)
7.2
Key sources of estimation uncertainty
The following are key assumptions concerning the future and other key sources of estimation uncertainty
at the balance sheet date that have a significant risk of causing a material adjustment to the carrying
amounts of assets and liabilities within the next financial year.
(a)
Impairment of goodwill on consolidation
The Group determines whether goodwill on consolidation is impaired at least on an annual basis.
This requires an estimation of the value-in-use of the subsidiaries to which goodwill is allocated.
Estimating a value-in-use amount requires management to make an estimate of the expected future
cash flows from the subsidiaries and also to choose a suitable discount rate in order to calculate the
present value of those cash flows. Further details are disclosed in Note 16 to the financial
statements.
(b)
Recoverability of investment in unquoted shares
The Company had instituted legal action against Perbadanan Kemajuan Negeri Kedah (“PKNK”) to
recover its investment in Kedah Marble Sdn. Bhd. (“KMSB”) as explained in Note 45 to the financial
statements. The Directors are of the opinion, after seeking solicitors’ advice, that the Company has
a good cause of action against PKNK and the likely outcome of the proceedings would be a decision
in favour of the Company. Therefore, there is to no additional impairment loss recognised in the
income statement.
(c)
Depreciation of property, plant and equipment
The Group depreciates the property, plant and equipment over their estimated useful lives and after
taking into account their estimated residual values, using the straight line method. The estimated
useful live applied by the Group as disclosed in Note 4.4 to the financial statements reflects the
Directors’ estimate of the periods that the Group expects to derive future economic benefits from the
use of the Group’s property, plant and equipment. These are common life expectancies applied in
the various business segments of the Group. Changes in the expected level of usage and
technological developments could impact the economic useful lives and the residual values of these
assets, therefore future depreciation charges could be revised.
(d)
Property development
The Group recognises property development revenue and expenses in the income statement by
using the stage of completion method. The stage of completion is determined by the proportion that
property development costs incurred for work performed to date bear to the estimated total property
development costs.
Significant judgement is required in determining the stage of completion, the extent of the property
development costs incurred, the estimated total property development revenue and costs, as well as
the recoverability of the development projects. In making the judgement, the Group evaluates based
on past experience and by relying on the work of specialists.
(e)
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 taxable profit will be available against which the 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.
advance synergy berhad (1225-D)
annual report 2007
069
Notes To The Financial Statements
31 December 2007 (continued)
7.
SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGEMENTS (continued)
7.2
Key sources of estimation uncertainty (continued)
(f)
Income taxes
Significant judgement is involved in determining the provision for income taxes. There are certain
transactions and computations for which the ultimate tax determination is uncertain during the
ordinary course of business. Where the final tax outcome of these matters is different from the
amounts that were initially recognised, such differences will impact the income tax and deferred tax
provisions in the period in which such determination is made.
8.
REVENUE
Group
2007
2006
RM’000
RM’000
Sales of goods
Hotel and resort services
Bus transportation services
Information, telecommunication technology and
related services
Travel and tours
Card and payment services
Interest and financing income
Property development
Rental income
Gross dividend income
9.
Company
2007
2006
RM’000
RM’000
34,871
63,452
10,510
42,501
61,622
20,196
-
-
56,713
28,093
288
22,837
1,238
5,713
36,903
23,418
2,579
916
38,874
690
2,975
63
2,999
58
796
223,715
230,674
3,062
854
LOSS BEFORE TAX
Group
2007
2006
RM’000
RM’000
(restated)
Company
2007
2006
RM’000
RM’000
Loss before tax is arrived at after charging:
Allowance for doubtful debts
Allowance for inventories obsolescence
Allowance for diminution in value of investment
in securities
Amortisation of intangible assets
Amortisation of prepaid lease payments for land
Auditors’ remuneration:
- statutory:
- holding company
- subsidiaries
- under/(over) provision in prior years
- non-statutory:
- holding company
- subsidiaries
Bad debts written off
Depreciation
070
advance synergy berhad (1225-D)
annual report 2007
7,499
1,768
2,701
-
-
-
1,782
20
12,393
1,396
70
-
-
80
5
75
-
114
46
116
80
662
27
34
4
202
17,171
75
648
(24)
46
4
161
20,793
Notes To The Financial Statements
31 December 2007 (continued)
9.
LOSS BEFORE TAX (continued)
Group
2007
2006
RM’000
RM’000
(restated)
Company
2007
2006
RM’000
RM’000
Loss before tax is arrived at after charging:
(continued)
Directors’ remuneration:
- fees
- other emoluments
Impairment loss on:
- associates
- property, plant and equipment
- purchased goodwill
Interest expenses:
- advances from subsidiaries
- bank overdrafts
- finance lease
- hire purchase
- term loans
- others
Inventories written off
Loss on disposal of property,
plant and equipment
Lease rental
Loss on foreign exchange:
- realised
- unrealised
Property, plant and equipment written off
Provision for retirement benefits plan
Rental expenses:
- equipment
- premises
- land
- others
721
954
705
1,208
246
321
250
314
7,540
1,346
5,458
17,396
-
-
-
50
1,611
91
10,268
54
2,462
69
901
98
13,818
121
552
4,515
3,374
5,820
-
3,819
4,588
7,715
-
267
10,296
1
7,784
-
-
343
387
111
1
367
417
41
-
-
178
4,473
24
289
209
5,951
37
279
209
-
219
-
26
1
127
545
110
21
1,580
-
-
-
207
1,031
-
-
858
-
403
14
2,998
-
796
-
5,667
2,821
-
-
And crediting:
Allowance for doubtful debts no longer
required
Bad debts recovered
Gain on disposal of investment securities
Gain on disposal of land held for development
Gain on disposal of marketable securities
Gain on disposal of property,
plant and equipment
Gross dividend income from:
- Malaysia:
- quoted subsidiaries
- unquoted subsidiaries
- quoted investments
- unquoted investments
- Outside Malaysia:
- unquoted investments
advance synergy berhad (1225-D)
annual report 2007
071
Notes To The Financial Statements
31 December 2007 (continued)
9.
LOSS BEFORE TAX (continued)
Group
2007
2006
RM’000
RM’000
(restated)
Company
2007
2006
RM’000
RM’000
And crediting (continued):
Gain on disposal of a subsidiary
Gain on foreign exchange:
- realised
- unrealised
Interest income:
- short term deposits
- advances to a subsidiary
- others
Other payables written back
Rental income
Write back of allowance for diminution in value of
investment securities
Written back of impairment loss on marketable
securities
Write back of provision for damages
35
10,781
-
-
703
615
640
119
27
-
93
85
1,121
301
1,729
839
977
117
1,893
63
3,111
-
58
2,863
-
4,340
-
-
-
345
83
390
-
-
-
10. TAX (INCOME)/EXPENSES
Group
2007
2006
RM’000
RM’000
(restated)
Current tax expense based on profit for
the financial year:
Real property gain tax
Malaysian income tax
Foreign income tax
Under/(Over) provision in prior years:
Malaysian income tax
Real property gain tax
Deferred tax (Note 36)
Relating to origination and reversal
of temporary differences
Relating to changes in tax rates
Over provision in prior years
Total tax expense
072
advance synergy berhad (1225-D)
annual report 2007
Company
2007
2006
RM’000
RM’000
323
3,410
858
1,258
5,659
972
-
-
4,591
7,889
-
-
(1,888)
11
(3,154)
-
(15)
-
(4,834)
-
2,714
4,735
(15)
(4,834)
150
(138)
405
(3,092)
(1,897)
-
-
417
(4,989)
-
-
3,131
(254)
(15)
(4,834)
Notes To The Financial Statements
31 December 2007 (continued)
10. TAX (INCOME)/EXPENSES (continued)
The Malaysian income tax is calculated at the statutory tax rate of 27% (2006: 28%) of the estimated taxable
profit for the fiscal year. The Malaysian statutory tax rate has been reduced to 27% from the previous year’s rate
of 28% for the fiscal year of assessment 2007, to 26% for fiscal year of assessment 2008, and to 25% for fiscal
year of assessment 2009 onwards. The computation of deferred tax as at 31 December 2007 has reflected these
changes.
Tax expense for other taxation authorities are calculated on the rates prevailing in those respective jurisdictions.
The numerical reconciliation between the average effective tax rate and the applicable tax rate of the Group and
of the Company are as follows:
Group
Company
2007
2006
2007
2006
%
%
%
%
Applicable tax rate
(27)
(28)
(27)
(28)
55
35
27
28
(2)
(2)
-
-
57
7
(8)
(30)
16
(7)
(1)
(1)
-
-
(19)
(4)
-
-
Over provision in prior years
33
(11)
8
(9)
-
(31)
Average effective tax rate
22
(1)
-
(31)
Tax effect in respect of:
Non allowable expenses
Utilisation of previously unrecognised tax losses
and capital allowances
Unutilised tax losses and capital allowances not
recognised in loss making subsidiaries
Different tax rates in foreign jurisdiction
Non-taxable income
Tax incentives and allowances
Share of tax of associates included in share of
profit of associates
Tax savings of the Group and of the Company are as follows:
Group
2007
2006
RM’000
RM’000
Arising from utilisation of previously
unrecognised tax losses
411
1,349
Company
2007
2006
RM’000
RM’000
-
advance synergy berhad (1225-D)
annual report 2007
-
073
Notes To The Financial Statements
31 December 2007 (continued)
11. LOSS PER ORDINARY SHARE
(a)
Basic
Basic loss per ordinary share for the financial year is calculated by dividing the consolidated loss for the
financial year attributable to ordinary equity holders of the Company by the number of ordinary shares
outstanding during the financial year.
Group
2007
2006
Consolidated loss attributable to ordinary equity holders of the
Company (in RM’000)
14,215
27,005
Weighted average number of ordinary share in issue (in ’000)
Basic loss per ordinary share (sen)
(b)
337,794
337,794
4.21
7.99
Diluted
The diluted loss per ordinary shares for 2007 and 2006 are not presented as the average market value of
the ordinary shares of the Company is lower than the exercise price for the outstanding Warrants and any
exercise of the Warrants would result in anti-dilutive.
074
advance synergy berhad (1225-D)
annual report 2007
Freehold land
Hotel properties:
- at valuation:
- freehold land
- buildings
Hotel properties:
- buildings
Buildings
Plant and machinery
Furniture, fittings and
equipment
Renovation
Motor vehicles
Buses:
- operation
- under refurbishment
Computer equipment
and software
Crockeries, glassware,
cutleries, linen and
kitchen utensils
Telecommunications
and research and
development
equipment
System in progress
Construction in progress
Carrying amount at
cost unless stated
otherwise
Group
2007
65
315
887
176
3,157
585
502
472
285
332
1,448
20
8,244
43,810
27,886
99,448
764
5,949
1,742
17,151
5,469
2,766
13,533
632
1,414
3,310
8,242
7,877
2,994
242,987
(10,987)
(143)
(8,167)
-
-
(21)
(387)
47
-
-
(77)
-
(133)
(147)
(4)
(2,106)
(2)
(1)
(370)
(121)
(73)
-
-
(56)
-
-
-
-
-
-
-
-
-
-
-
-
20
-
-
(31)
-
(247)
265
(5)
(2)
-
-
(741)
-
-
-
(187)
(311)
-
(243)
-
-
-
1,096
(29)
270
-
24
(6)
-
74
(34)
25
13
(79)
17
821
-
(17,171)
(2,684)
-
(65)
(685)
(4,132)
-
(4,435)
(869)
(1,255)
(26)
(151)
(578)
(2,291)
-
(7,540)
-
-
-
(7,340)
(200)
-
-
-
-
215,501
6,881
3,014
3,601
879
1,976
-
13,461
5,267
2,028
1,066
6,363
1,226
27,886
97,978
43,875
Reclassified
as nonDepreciation Impairment
Exchange charge for the loss for the Balance
Balance
current
as at
Written Revalua- Reclassi- assets held translation
financial
financial
as at
1.1.2007 Additions Disposals
off
tion
fication
for sale adjustments
year
year
31.12.2007
RM’000 RM’000
RM’000 RM’000 RM’000
RM’000
RM’000
RM’000
RM’000
RM’000
RM’000
(restated)
12. PROPERTY, PLANT AND EQUIPMENT
Notes To The Financial Statements
31 December 2007 (continued)
advance synergy berhad (1225-D)
annual report 2007
075
Notes To The Financial Statements
31 December 2007 (continued)
12. PROPERTY, PLANT AND EQUIPMENT (continued)
Group
2007
Cost
RM’000
Accumulated
depreciation
RM’000
Accumulated
impairment
loss
RM’000
Carrying
amount
RM’000
At cost unless stated otherwise
Freehold land
Hotel properties:
- at valuation:
- freehold land
- buildings
Hotel properties:
- buildings
Buildings
Plant and machinery
Furniture, fittings and equipment
Renovation
Motor vehicles
Buses:
- operation
- under refurbishment
Computer equipment and software
Crockeries, glassware, cutleries, linen and
kitchen utensils
Telecommunications, research and development
equipment
System in progress
Construction in progress
076
advance synergy berhad (1225-D)
annual report 2007
43,875
-
(1,621)
43,875
27,886
110,059
(10,460)
1,322
7,273
8,799
59,345
9,198
7,660
(256)
(910)
(7,573)
(45,884)
(3,931)
(5,632)
36,187
210
17,869
(15,900)
(16,990)
5,480
(1,879)
-
3,601
18,911
3,014
(12,030)
-
-
6,881
3,014
357,088
(121,445)
(18,311)
(210)
-
(20,142)
27,886
97,978
1,066
6,363
1,226
13,461
5,267
2,028
1,976
879
215,501
Freehold land
Hotel properties:
- at valuation:
- freehold land
- buildings
Hotel properties:
- buildings
Buildings
Plant and machinery
Furniture, fittings and
equipment
Renovation
Motor vehicles
Buses:
- operation
- under refurbishment
Computer equipment
and software
Crockeries, glassware,
cutleries, linen and
kitchen utensils
Telecommunications
and research and
development equipment
System in progress
Construction in progress
Carrying amount at cost
unless stated otherwise
Group
2006
(restated)
233
330
216
4,396
638
456
3,202
3,034
785
213
482
11
2,389
16,385
72,469
168,934
49,790
3,137
1,328
18,817
5,296
3,644
18,496
10,608
703
3,210
8,491
7,088
605
419,166
Additions
RM’000
46,550
Balance
as at
1.1.2006
RM’000
(127,745)
(315)
-
-
(7)
-
(97)
(195)
(49,308)
-
(30,328)
(47,495)
-
Disposals
RM’000
12. PROPERTY, PLANT AND EQUIPMENT (continued)
(417)
-
-
-
-
(10)
-
(401)
(6)
-
-
Written
off
RM’000
(32,788)
-
-
-
-
-
4,963
2,374
1,228
-
(89)
1,796
12,224
(12,224)
(1,791)
429
89
2,973
927
-
(14,255)
(18,533)
-
(2,973)
-
1,612
30
(9)
-
50
5
-
224
(70)
-
1
375
(4)
1,010
-
(20,793)
(2,820)
-
(74)
(1,868)
(5,841)
-
(4,388)
(824)
(1,228)
(49)
(135)
(719)
(2,847)
-
(17,396)
(441)
-
-
-
(14,548)
(786)
-
-
(1,621)
-
242,987
8,242
7,877
2,994
3,310
1,414
13,533
632
17,151
5,469
2,766
764
5,949
1,742
27,886
99,448
43,810
Exchange
Depreciation
Impairment
Balance
Revalua- Reclassi- translation charge for the loss for the
as at
tion
fication adjustments financial year financial year 31.12.2006
RM’000
RM’000
RM’000
RM’000
RM’000
RM’000
Notes To The Financial Statements
31 December 2007 (continued)
advance synergy berhad (1225-D)
annual report 2007
077
Notes To The Financial Statements
31 December 2007 (continued)
12. PROPERTY, PLANT AND EQUIPMENT (continued)
Group
2006
(restated)
Cost
RM’000
Accumulated
depreciation
RM’000
Accumulated
impairment
loss
RM’000
Carrying
amount
RM’000
At cost unless stated otherwise
Freehold land
Hotel properties:
- at valuation:
- freehold land
- buildings
Hotel properties:
- buildings
Buildings
Plant and machinery
Furniture, fittings and equipment
Renovation
Motor vehicles
Buses:
- operation
- under refurbishment
Computer equipment and software
Crockeries, glassware, cutleries, linen and kitchen
utensils
Telecommunications and research and development
equipment
System in progress
Construction in progress
078
advance synergy berhad (1225-D)
annual report 2007
43,810
-
(1,621)
43,810
27,886
109,044
(7,975)
983
6,731
8,924
60,415
8,610
8,021
(219)
(782)
(7,182)
(43,264)
(3,141)
(5,255)
41,490
1,418
18,302
(13,409)
(16,888)
5,064
(1,754)
17,714
8,318
2,994
(9,472)
-
(441)
-
8,242
7,877
2,994
369,724
(109,341)
(17,396)
242,987
(14,548)
(786)
-
27,886
99,448
764
5,949
1,742
17,151
5,469
2,766
13,533
632
1,414
3,310
Notes To The Financial Statements
31 December 2007 (continued)
12. PROPERTY, PLANT AND EQUIPMENT (continued)
Company
2007
Balance
as at
1.1.2007
RM’000
Additions
RM’000
Depreciation Balance
charge for
as at
the year
31.12.2007
RM’000
RM’000
Carrying amount
Computer equipment
Motor vehicles
Furniture, fittings and equipment
Renovation
13
89
426
3
2
-
(13)
(16)
(85)
3
75
341
528
5
(114)
419
Cost
RM’000
Computer equipment
Motor vehicles
Furniture, fittings and equipment
Renovation
Company
2006
Balance
as at
1.1.2006
RM’000
Accumulated
depreciation
RM’000
Carrying
amount
RM’000
40
5
921
849
(37)
(5)
(846)
(508)
3
75
341
1,815
(1,396)
419
Additions
RM’000
Depreciation Balance
charge for
as at
the year
31.12.2006
RM’000
RM’000
Carrying amount
Computer equipment
Motor vehicles
Furniture, fittings and equipment
Renovation
24
104
511
1
4
-
(12)
(19)
(85)
13
89
426
639
5
(116)
528
Cost
RM’000
Computer equipment
Motor vehicles
Furniture, fittings and equipment
Renovation
Accumulated
depreciation
RM’000
Carrying
amount
RM’000
37
5
919
849
(24)
(5)
(830)
(423)
13
89
426
1,810
(1,282)
528
advance synergy berhad (1225-D)
annual report 2007
079
Notes To The Financial Statements
31 December 2007 (continued)
12. PROPERTY, PLANT AND EQUIPMENT (continued)
(a)
The carrying amounts of property, plant and equipment held under hire purchase and lease arrangements
are as follows:
Group
2007
2006
RM’000
RM’000
Motor vehicles
(b)
1,341
The carrying amounts of certain hotel properties and buildings of the Group which are charged to financial
institutions for credit facilities granted to the Group and the Company are as follows:
Group
2007
2006
RM’000
RM’000
Freehold land
Hotel properties
Buildings
(c)
16,707
31,147
1,539
16,642
31,573
1,656
49,393
49,871
The carrying amount of hotel properties under the sale and finance leaseback arrangements are as
follows:
Group
2007
2006
RM’000
RM’000
Freehold land
Hotel properties
(d)
1,679
17,220
16,794
17,220
16,875
34,014
34,095
The hotel properties of the Group were revalued by the Directors in year 2005 based on the valuation carried
out by independent professional firms of valuers using the open market value basis.
Had the revalued assets been carried at cost less accumulated depreciation, the carrying amounts would
have been as follows:
Accumulated Carrying
Group
Cost
depreciation
amount
2007
RM’000
RM’000
RM’000
Hotel properties:
- freehold land
- buildings
20,234
95,567
(11,225)
20,234
84,342
115,801
(11,225)
104,576
20,234
94,895
(8,875)
20,234
86,020
115,129
(8,875)
106,254
2006
Hotel properties:
- freehold land
- buildings
080
advance synergy berhad (1225-D)
annual report 2007
Notes To The Financial Statements
31 December 2007 (continued)
12. PROPERTY, PLANT AND EQUIPMENT (continued)
(e)
(f)
(i)
The management of Advance Synergy Capital Berhad (“ASC”) carried out a review of the recoverable
amounts of their property, plant and equipment during the current financial year due to the deterioration
in the market value for used buses. The review led to the recognition of an impairment loss for buses
amounting to RM7.54 million (2006: RM15.33 million) in the income statements (included in the other
operating expenses) as disclosed in Note 9 to the financial statements. The recoverable amounts of
the buses are based on the management’s estimated market value.
(ii)
The management of Alangka-Suka Hotels & Resorts Berhad (“ASHR”) carried out a review of the
recoverable amounts of its hotel properties in financial year 2006. The review led to the recognition of
an impairment loss of RM1.62 million in the income statements based on indicative selling price.
Term loan interest capitalised during the financial year under freehold land of the Group amounted to
RM65,000 (2006: RM233,000).
13. PREPAID LEASE PAYMENTS FOR LAND
Group
Balance
as at
1.1.2007
RM’000
(restated)
Additions
RM’000
Disposals
of
subsidiary
RM’000
Amortisation Balance
charge for the
as at
financial year 31.12.2007
RM’000
RM’000
Carrying amount
Long term leasehold land
1,229
25
(250)
(20)
984
Group
[-------------- As at 31.12.2007 -------------]
Cost
RM’000
Long term leasehold land
Group
1,042
Balance
as at
1.1.2006
RM’000
(restated)
Disposals
RM’000
(restated)
Accumulated
amortisation
RM’000
(58)
Carrying
amount
RM’000
984
Amortisation Balance
charge for the
as at
financial year 31.12.2006
RM’000
RM’000
(restated)
(restated)
Carrying amount
Long term leasehold land
Hotel properties:
- Leasehold land
2,091
(842)
(20)
1,229
7,577
(7,527)
(50)
-
9,668
(8,369)
(70)
1,229
advance synergy berhad (1225-D)
annual report 2007
081
Notes To The Financial Statements
31 December 2007 (continued)
13. PREPAID LEASE PAYMENTS FOR LAND (continued)
Group
[-------------- As at 31.12.2006 -------------]
Cost
RM’000
(restated)
Long term leasehold land
Hotel properties:
- Leasehold land
1,278
1,278
Accumulated Carrying
amortisation
amount
RM’000
RM’000
(restated)
(restated)
(49)
(49)
1,229
1,229
Group
2007
2006
RM’000
RM’000
(restated)
Analysed as:
Long term leasehold land
984
1,229
14. LAND HELD FOR PROPERTY DEVELOPMENT
Balance
as at
1.1.2007
RM’000
Group
Disposals
RM’000
Balance
as at
31.12.2007
RM’000
Carrying amount
Long term leasehold land:
- at valuation
- at cost
Development expenditure
3,868
327
1,698
(3,868)
(327)
(1,698)
-
5,893
(5,893)
-
Balance
as at
1.1.2006
RM’000
Group
Additions
RM’000
Balance
as at
31.12.2006
RM’000
Carrying amount
Long term leasehold land:
- at valuation
- at cost
Development expenditure
082
advance synergy berhad (1225-D)
annual report 2007
3,868
327
1,698
-
3,868
327
1,698
5,893
-
5,893
Notes To The Financial Statements
31 December 2007 (continued)
14. LAND HELD FOR PROPERTY DEVELOPMENT (continued)
The entire long term leasehold land was charged to financial institutions for credit facilities granted to the Group.
During the year, the entire long term leasehold land has been disposed of and the proceeds from disposal have
been utilised to repay the credit facilities.
Long term leasehold land at valuation were revalued by the Directors on an open market value basis in 1981 and
1983 based on valuations carried out by independent professional firms of valuers. As permitted by the transitional
provision of FRS 201- Property Development Activities, the carrying amounts of this land shown at valuation have
been retained on the basis of their previous revaluations as their surrogate costs.
15. INTANGIBLE ASSETS
Group
Note
Balance
Dilution of Amortisation Impairment
Exchange
Balance
as at
shareholdings charge for loss for the
translation
as at
1.1.2007 in a subsidiary the year
financial year adjustment 31.12.2007
RM’000
RM’000
RM’000
RM’000
RM’000
RM’000
Carrying
amount
Goodwill on
consolidation
Purchased
goodwill
Intellectual
property
Software
development
expenditure
16
103,542
(1)
-
17
1,346
-
-
1,689
-
(1,050)
3,069
-
(732)
109,646
(1)
(1,782)
Note
Goodwill on consolidation
Purchased goodwill
Intellectual property
Software development expenditure
16
17
-
-
103,541
-
-
-
-
639
-
6
2,343
6
106,523
(1,346)
(1,346)
Group
------------------------- As at 31.12.2007 ------------------------Accumulated
Exchange
translation
Carrying
amortisation
Cost
and impairment
adjustment
Amount
RM’000
RM’000
RM’000
RM’000
103,542
1,346
5,250
3,687
(1)
(1,346)
(4,613)
(1,348)
2
4
103,541
639
2,343
113,825
(7,308)
6
106,523
advance synergy berhad (1225-D)
annual report 2007
083
Notes To The Financial Statements
31 December 2007 (continued)
15. INTANGIBLE ASSETS (continued)
Group
Note
Balance
as at
1.1.2006
RM’000
Additions
RM’000
Accretion of Amortisation
shareholding charge for
in a subsidiary the year
RM’000
RM’000
Exchange
Balance
translation
as at
adjustment 31.12.2006
RM’000
RM’000
Carrying
amount
Goodwill on
consolidation
Purchased
goodwill
Intellectual
property
Software
development
expenditure
16
103,349
191
2
-
-
103,542
17
1,342
-
-
-
4
1,346
2,738
-
-
(1,049)
(2)
1,689
2,185
1,231
-
(347)
2
3,069
109,614
1,422
2
(1,396)
4
109,646
Note
Goodwill on consolidation
Purchased goodwill
Intellectual property
Software development expenditure
16
17
Group
----------- As at 31.12.2006 ----------Accumulated
Carrying
Cost
amortisation
amount
RM’000
RM’000
RM’000
103,542
1,346
5,250
3,687
(3,563)
(616)
103,542
1,346
1,687
3,071
113,825
(4,179)
109,646
16. GOODWILL ON CONSOLIDATION
Group
2007
2006
RM’000
RM’000
084
Balance as at 1 January
Acquisition of subsidiaries
(Dilution)/Accretion of shareholdings in a subsidiary
Acquisition of treasury shares by a subsidiary
103,542
(1)
-
103,349
261
2
(70)
Balance as at 31 December
103,541
103,542
advance synergy berhad (1225-D)
annual report 2007
Notes To The Financial Statements
31 December 2007 (continued)
16. GOODWILL ON CONSOLIDATION (continued)
The carrying amounts of goodwill allocated to the Group’s CGU are as follows:
Group
2007
2006
RM’000
RM’000
Information and communication technology - CGU 1
Investments - CGU 2
Others
53,138
44,203
6,200
53,138
44,203
6,201
103,541
103,542
The recoverable amount used in CGU 1 is based on value in use and the recoverable amount of CGU 2 is based
on fair value less cost to sell.
CGU 1
The recoverable amount of CGU 1 is based on 10 years cash flow projections for the financial years ending 31
December 2008 to 2018 prepared based on available information and anticipated projects. The growth rate used
to extrapolate cash flow projections range from 9% to 29% over the period. The budgeted gross profit margin
used range from 48% to 59% over the period. A discount factor of 13% has been applied in arriving at the present
value of future cash flows.
CGU 2
The recoverable amount of CGU 2 is based on the fair value less cost to sell. As the core operation of CGU 2 has
been scaled down pending the determination of its future business direction, the management believes that the
value in use is not reflective of the recoverable amount and instead fair value less cost to sell would better reflect
the recoverable amount.
The fair value less cost to sell has been determined after taking into account the intrinsic value of various investments.
This include, amongst others, investment in unquoted shares in a financial institution in Malaysia, investment in
quoted shares in Malaysia, investment in an unquoted associate in Malaysia and investment in unquoted shares
in a financial institution outside Malaysia, and the value of its bus transportation business.
The investment in unquoted shares in a financial institution in Malaysia has been estimated based on the
expected market value. The investments in quoted shares in Malaysia are determined using observable market
prices. The investment in unquoted associates in Malaysia is determined based on price earnings ratio after
taking into consideration the weighted average of same industry price earnings ratio. The investment in unquoted
shares outside Malaysia is valued based on the lower of the present value of future earnings and recent share
sale transactions. The value of its bus transportation business is based on the business plan and forecast and
projections adopted by the subsidiary’s Board of Directors. The remaining assets and liabilities of CGU 2 are
assumed to be settled at their book values giving rise to no gain or loss on disposal.
advance synergy berhad (1225-D)
annual report 2007
085
Notes To The Financial Statements
31 December 2007 (continued)
17. PURCHASED GOODWILL
Group
2007
2006
RM’000
RM’000
Balance as at 1 January
Exchange translation adjustment
Less: Impairment loss
Balance as at 31 December
1,346
-
1,342
4
1,346
(1,346)
1,346
-
-
1,346
An impairment loss on purchased goodwill amounting to RM1,346,000 relating to a subsidiary has been recognised
during the financial year due to declining business operation as a result of intense competition.
18. INVESTMENTS IN SUBSIDIARIES
Company
2007
2006
RM’000
RM’000
Quoted shares - at cost
Less: Impairment losses
Unquoted shares - at cost
Less: Impairment losses
Market value of quoted shares
086
450,302
(207,570)
450,302
(207,570)
242,732
242,732
217,495
(35,666)
217,495
(35,666)
181,829
181,829
424,561
424,561
33,438
27,069
(a)
The details of the subsidiaries are set out in Note 51 to the financial statements.
(b)
Certain shares of a quoted subsidiary and an unquoted subsidiary with the carrying amount of RM164.30
million (2006: RM242.72 million) and RM59.57 million (2006: RM103.79 million) respectively, have been
charged to financial institutions for credit facilities granted to the Group and to the Company.
advance synergy berhad (1225-D)
annual report 2007
Notes To The Financial Statements
31 December 2007 (continued)
18. INVESTMENTS IN SUBSIDIARIES (continued)
(c)
During the financial year, the following transactions were completed:
(i)
On 4 June 2007, Unified Communications Sdn. Bhd., a subsidiary, completed the incorporation of a
wholly-owned subsidiary, known as GlobeOSS Pte. Ltd., with an issued and paid-up share capital of
SGD2.00 in the Republic of Singapore.
(ii)
On 6 July 2007, the Company announced the following changes in the Group structure:
(a) ASHR, a subsidiary of the Company had acquired the entire issued and paid-up share capital of
Super Leisure Sdn. Bhd. (“SLSB”), a wholly owned subsidiary of the Company held through
Excellent Display Sdn. Bhd., another wholly owned subsidiary of the Company, at a nominal cash
consideration of RM100.00. Consequently, SLSB became a wholly owned subsidiary of ASHR.
(b) The issued and paid-up capital of Suntop Corporation Sdn. Bhd. (“Suntop”), a subsidiary of
ASHR, had been enlarged with the allotment of new shares to other new investors to facilitate the
development of the resort and holiday homes project in Kota Tinggi, Johor to be undertaken by
Suntop. Consequently, the equity interest of ASHR in Suntop has been reduced from 100% to
40%. Suntop therefore ceased to be a subsidiary of the Company and become an associate.
19. INVESTMENTS IN ASSOCIATES
Group
2007
2006
RM’000
RM’000
At cost:
Quoted shares
Less: Impairment losses
12,758
(7,458)
12,758
(7,458)
Unquoted shares
5,300
27,418
5,300
27,360
Share of post acquisition reserves, net of dividends received
32,718
40,414
32,660
41,938
73,132
74,598
5,300
5,300
Market value of quoted shares
The details of the associates are set out in Note 51 to the financial statements.
During the financial year:
(i)
On 12 April 2007, ASHR acquired 40% equity interest in Greenvox Development Sdn. Bhd. (“Greenvox”),
comprising four (4) issued and paid-up ordinary shares of RM1.00 each. On 17 May 2007, Greenvox
changed its name to Holiday Villa Kuala Lumpur Sdn. Bhd.
(ii)
On 20 April 2007, ASHR completed the incorporation of a 40%-owned associate in Malaysia, known as
Holiday Villa Hotels & Resorts Sdn. Bhd.
(iii)
Suntop has been ceased to be a subsidiary of the Company and become an associate as explained in the
Note 18 (c) (ii) (b) to the financial statements.
advance synergy berhad (1225-D)
annual report 2007
087
Notes To The Financial Statements
31 December 2007 (continued)
19. INVESTMENTS IN ASSOCIATES (continued)
The summarised financial information of the associates are as follows:
Group
2007
2006
RM’000
RM’000
Results
Revenue
Profit for the financial year
213,943
15,482
222,060
8,472
507,617
301,612
716,074
507,379
Assets and liabilities
Total assets
Total liabilities
The financial statements of the associates are coterminous with those of the Group, except for Kumpulan Powernet
Berhad (“KPB”) which has a financial year end of 30 April. In applying the equity method of accounting, the
unaudited financial statements of KPB for the financial year ended 31 January 2008 have been used and appropriate
adjustments have been made for the effects of significant transactions between 31 December 2007 and 31 January
2008.
20. INVESTMENT SECURITIES
Group
2007
2006
RM’000
RM’000
Company
2007
2006
RM’000
RM’000
Quoted Securities
In Malaysia:
Shares stated at cost
Less: Allowance for diminution in value
20,289
(8,053)
12,236
20,289
(12,393)
7,896
-
-
-
-
Unquoted Securities
In Malaysia:
Shares stated at cost
Less: Allowance for diminution in value
Outside Malaysia:
Shares stated at cost
52,662
(17,483)
52,662
(17,483)
52,658
(17,483)
52,658
(17,483)
35,179
35,179
35,175
35,175
14,809
30,809
-
-
49,988
65,988
35,175
35,175
62,224
73,884
35,175
35,175
12,232
7,892
-
-
Market value:
Quoted shares in Malaysia
088
advance synergy berhad (1225-D)
annual report 2007
Notes To The Financial Statements
31 December 2007 (continued)
21. PROPERTY DEVELOPMENT COSTS
Group
2007
Leasehold
land at
cost
RM’000
Leasehold
land at
valuation
RM’000
Development
costs
RM’000
Total
RM’000
Cumulative property development costs
Balance as at 1 January
Incurred during the financial year
Transferred to inventories
Completed properties
31,959
2,767
(1,006)
(158)
1,426
-
81,361
9,189
(3,036)
(6,560)
114,746
11,956
(4,042)
(6,718)
Balance as at 31 December
33,562
1,426
80,954
115,942
Cumulative costs recognised in income
statement
Balance as at 1 January
Recognised during the financial year
Completed properties
(15,328)
(2,292)
158
32
(67)
-
(60,421)
(10,383)
6,560
(75,717)
(12,742)
6,718
Balance as at 31 December
(17,462)
(35)
(64,244)
(81,741)
Property development costs at 31 December
16,100
1,391
16,710
34,201
Balance as at 1 January
Incurred during the financial year
Transferred to inventories
Completed properties
34,502
(14)
(2,529)
1,460
(2)
(32)
62,753
29,950
(660)
(10,682)
98,715
29,950
(676)
(13,243)
Balance as at 31 December
31,959
1,426
81,361
114,746
2006
Cumulative property development costs
Cumulative costs recognised in income
statement
Balance as at 1 January
Recognised during the financial year
Completed properties
(12,424)
(5,433)
2,529
32
(46,125)
(24,979)
10,683
(58,549)
(30,412)
13,244
Balance as at 31 December
(15,328)
32
(60,421)
(75,717)
1,458
20,939
39,028
Property development costs at 31 December
16,631
advance synergy berhad (1225-D)
annual report 2007
089
Notes To The Financial Statements
31 December 2007 (continued)
21. PROPERTY DEVELOPMENT COSTS (continued)
Included in the property development costs are the following charges incurred during the financial year:
Group
2007
2006
RM’000
RM’000
Interest expense
Plant hire expenses
284
15
741
50
Certain leasehold land held for development were revalued by the Directors in year 1993 after taking into
consideration the valuation carried out by independent professional firms of valuers on year 1992 and since
then, the revaluation has not been updated. The revaluation resulted in a surplus of RM6,168,952 which has
been transferred to asset revaluation reserve. The asset revaluation reserve is transferred to retained profits
upon development and sale of such land. A total amount of RM5,738,076 has been transferred to retained
profits as at 31 December 2007.
Certain leasehold land held under development with carrying amount of RM13,807,404 (2006: RM22,824,098)
have been charged to financial institutions for credit facilities granted to a subsidiary.
22. ACCRUED BILLING
Group
2007
2006
RM’000
RM’000
Aggregate costs incurred to date
Add: Attributable profits
Less: Progress billings
14,172
2,354
31,028
3,985
16,526
(13,085)
35,013
(17,803)
3,441
17,210
23. INVENTORIES
Group
2007
2006
RM’000
RM’000
At cost:
Completed development properties
Raw materials
Work-in-progress
Finished goods
Food and beverages
Operating supplies
At net realisable value:
Finished goods
8,906
1,492
2,195
8,973
328
1,790
6,907
1,614
1,051
14,346
369
4,629
23,684
28,916
949
103
24,633
29,019
Certain units of completed development properties with carrying amount of RM2.07 million (2006: RM2.07 million)
of the Group have been pledged to licensed banks for credit facilities granted to a subsidiary.
090
advance synergy berhad (1225-D)
annual report 2007
Notes To The Financial Statements
31 December 2007 (continued)
24. TRADE AND OTHER RECEIVABLES
Group
2007
2006
RM’000
RM’000
Company
2007
2006
RM’000
RM’000
Non-current
Trade receivables
Third parties
Finance lease receivables (Note 24.1)
2,026
-
5,016
472
-
-
Less: Allowance for doubtful debts - third parties
2,026
(979)
5,488
(1,053)
-
-
1,047
4,435
-
-
4,170
(2,182)
-
-
-
1,988
-
-
-
3,035
4,435
-
-
Third parties
Finance lease receivables (Note 24.1)
Amount due from customers for contract works
87,641
334
34
59,720
1,087
1,042
-
-
Less: Allowance for doubtful debts
88,009
(10,007)
61,849
(7,294)
-
-
78,002
54,555
-
-
5,395
1,484
9,264
3,948
6,525
1,630
8,272
-
1,741
4
226,869
-
750
11
221,614
-
20,091
16,427
228,614
222,375
Other receivables, deposits and prepayments
Other receivables
Less: Allowance for doubtful debts
Current
Trade receivables
Other receivables, deposits and prepayments
Other receivables
Deposits
Prepayments
Amounts owing by subsidiaries
Amounts owing by associates
Less: Allowance for doubtful debts - subsidiaries
Allowance for doubtful debts - third parties
(7,455)
(6,766)
(128,782)
(505)
(128,782)
(505)
(7,455)
(6,766)
(129,287)
(129,287)
12,636
9,661
99,327
93,088
90,638
64,216
99,327
93,088
advance synergy berhad (1225-D)
annual report 2007
091
Notes To The Financial Statements
31 December 2007 (continued)
24. TRADE AND OTHER RECEIVABLES (continued)
(a)
Trade receivables are non-interest bearing and normal credit terms offered by the Group range from 30 to
90 days except for finance lease receivables, the interest of which is disclosed in Note 50 to the financial
statements.
(b)
Amounts owing by subsidiaries are unsecured, interest-free and are repayable on demand except for
balances amounting to RM39.49 million (2006: RM36.28 million) which bear interest at the rate of 8.55%
(2006: 8.55%) per annum.
(c)
Amount due from customers for contract works
Note
Aggregate costs incurred to date and attributable profits
recognised to date
Less: Progress billings
Group
2007
2006
RM’000
RM’000
22,620
(30,612)
3,489
(2,447)
(7,992)
1,042
(8,026)
34
1,042
(7,992)
1,042
Analysed as follows:
Amount due to customers for contract works
Amount due from customers for contract works
(d)
39
The allowance for doubtful debts is net of bad debts written off as follows:
Group
2007
RM’000
Bad debts written off
2006
RM’000
2,068
15
Company
2007
2006
RM’000
RM’000
-
-
(e)
Information on financial risks of trade and other receivables are disclosed in Note 50 to the financial
statements.
24.1
Finance lease receivables
Group
2007
2006
RM’000
RM’000
092
Gross receivable due:
- not later than one year
- later than one year but not later than five years
344
-
1,246
508
Less: Unearned finance income
344
(10)
1,754
(195)
Net investment in finance leases
334
1,559
The net investment in finance leases may be analysed as follows:
- not later than one year
- later than one year but not later than five years
334
-
1,087
472
334
1,559
advance synergy berhad (1225-D)
annual report 2007
Notes To The Financial Statements
31 December 2007 (continued)
25. MARKETABLE SECURITIES
Group
2007
2006
RM’000
RM’000
Quoted securities:
Shares in Malaysia – at net realisable value
Market value of shares quoted in Malaysia
2,019
3,003
1,943
3,155
26. CASH AND CASH EQUIVALENTS
Group
2007
2006
RM’000
RM’000
Short term deposits
Cash and bank balances
35,533
27,174
33,772
24,312
62,707
58,084
Included in the short term deposits of the Group are:
(a)
an amount of RM6.53 million (2006: RM9.85 million) charged to licensed banks as security for banking
facilities granted to certain subsidiaries.
(b)
an amount of RM16.05 million (2006: RM15.30 million) placed with lease creditor as security deposit for
lease payments.
27. NON-CURRENT ASSETS CLASSIFIED AS HELD FOR SALE
On 3 December 2007 and 11 December 2007, the Group has entered into sale and purchase agreements to dispose
off certain properties and buses respectively. The disposals are expected to be completed by June 2008 and May
2008 respectively.
As at 31 December 2007, the asset and liabilities of the non-current assets classified as held for sale are as
follows:
Group
2007
RM’000
Property, plant and equipment
741
advance synergy berhad (1225-D)
annual report 2007
093
Notes To The Financial Statements
31 December 2007 (continued)
28. SHARE CAPITAL
Ordinary shares of RM1.00 each
Group and Company
2007
2006
Number of
Number of
shares
shares
’000
RM’000
’000
RM’000
Authorised:
At beginning of financial year
Shares created during the financial year
800,000
100,000
800,000
100,000
800,000
-
800,000
-
At end of financial year
900,000
900,000
800,000
800,000
337,794
337,794
337,794
337,794
Issued and fully paid-up:
At beginning/end of financial year
During the financial year, the Company increased its authorised share capital from RM800,000,000 to
RM900,000,000 by creation at an additional 100,000,000 ordinary shares at RM1.00 each.
Warrants 2000/2010
On 1 May 2000, the Company issued 168,896,809 warrants where each warrant entitles the registered holder at
any time during the exercise period to subscribe for one new stock unit of RM1.00 each at the exercise price of
RM1.00 per stock unit during the exercise period which had been extended from 28 August 2003 to 28 August
2008.
The warrants are constituted by a Deed Poll dated 28 April 2000 and a Supplemental Deed Poll dated 24 July
2003.
Pursuant to the Capital Reduction and Rights Issue (as detailed in Note 52(a) to the financial statements), on 10
December 2007, the Company announced that the exercise price of the warrants has been adjusted from RM1.00
per ASB share (previously stock unit) to RM0.71 per ASB share with effect from 27 December 2007 (“Adjustment
to the ASB Warrant Exercise Price”).
The Company also announced on 31 December 2007 that the duration and exercise period of the 168,896,809
outstanding warrants will be extended for a further period of two (2) years from 28 August 2008 up to and including
28 August 2010 (“Further Extension of ASB Warrant Exercise Period”).
The registered holders have no right to participate by virtue of the warrants in any other share issue of the
Company and its subsidiaries.
Upon expiry of the exercise period, any unexercised warrants will lapse and cease to be valid for any purpose.
As at the end of the current financial year, no exercise of warrants had taken place and the outstanding warrants
in the Company remains at 168,896,809.
094
advance synergy berhad (1225-D)
annual report 2007
Notes To The Financial Statements
31 December 2007 (continued)
29. RESERVES
Non-distributable:
Share premium
Capital reserve
Revaluation reserve
Exchange translation reserve
Distributable:
Accumulated losses
Group
2007
2006
RM’000
RM’000
Company
2007
2006
RM’000
RM’000
430,437
12,721
6,006
430,437
12,725
(1,250)
430,437
69
-
430,437
69
-
449,164
441,912
430,506
430,506
(468,544)
(454,329)
(463,620)
(452,576)
(19,380)
(12,417)
(33,114)
(22,070)
The movements in reserves are shown in the Statements of Changes in Equity.
(a)
Revaluation reserve
The revaluation reserve represents the surplus on the revaluation of certain hotel properties of the
Group.
(b)
Exchange translation reserve
The exchange translation reserve is used to record foreign currency exchange differences arising from the
translation of the financial statements of foreign operations whose functional currencies are different from
that of the Group’s presentation currency. It is also used to record the exchange differences arising from
monetary items which form part of the Group’s net investment in foreign operations, where the monetary
item is denominated in either the functional currency of the reporting entity or the foreign operation.
30. BORROWINGS
Group
2007
2006
RM’000
RM’000
Current liabilities
Term loans
Finance lease creditor
Hire purchase creditors
Bank overdrafts
Short term bank loans
Bankers’ acceptance and trust receipts
Non-current liabilities
Term loans
Finance lease creditor
Hire purchase creditors
Company
2007
2006
RM’000
RM’000
50,981
1,512
449
600
1,794
52,959
1,502
511
8,367
16,000
1,563
43,758
-
36,464
-
55,336
80,902
43,758
36,464
67,578
20,643
742
80,328
20,506
1,007
-
10,562
-
88,963
101,841
-
10,562
144,299
182,743
43,758
47,026
advance synergy berhad (1225-D)
annual report 2007
095
Notes To The Financial Statements
31 December 2007 (continued)
30. BORROWINGS (continued)
Note
Group
2007
2006
RM’000
RM’000
Company
2007
2006
RM’000
RM’000
Total borrowings
Term loans
Finance lease creditor
Hire purchase creditors
Bank overdrafts
Short term borrowings
31
32
33
34
35
118,559
22,155
1,191
600
1,794
133,287
22,008
1,518
8,367
17,563
43,758
-
47,026
-
144,299
182,743
43,758
47,026
Information on financial risks of borrowings and its remaining maturity is disclosed in Note 50 to the financial
statements.
31. TERM LOANS
Group
2007
2006
RM’000
RM’000
Term loan:
- Secured
- Unsecured
Company
2007
2006
RM’000
RM’000
113,346
5,213
125,406
7,881
43,758
-
47,026
-
118,559
133,287
43,758
47,026
The term loans are secured by:
096
(i)
fixed charges over the freehold land and certain hotel properties of the Group;
(ii)
the entire issued and paid up share capital of certain subsidiaries;
(iii)
certain shares of a quoted subsidiary and an unquoted subsidiary at carrying amount of RM164.30 million
and RM59.57 million respectively;
(iv)
quoted investment securities of the Group and certain quoted shares beneficially owned by a Director of
the Company;
(v)
fixed and floating charges over the assets of certain subsidiaries; and
(vi)
corporate guarantee by the Company.
advance synergy berhad (1225-D)
annual report 2007
Notes To The Financial Statements
31 December 2007 (continued)
32. FINANCE LEASE CREDITOR
Group
2007
2006
RM’000
RM’000
Minimum lease payments:
- not later than one year
- later than one year but not later than five years
- later than five years
Total minimum lease payments
Less: Future finance lease interest
Present value of finance lease liabilities
1,623
6,591
28,711
1,611
6,552
30,310
36,925
(14,770)
38,473
(16,465)
22,155
22,008
Finance lease creditor represents obligation arising from the finance lease for a hotel property pursuant to sale
and leaseback agreements entered into in the last financial year.
The Group has an option to buyback the hotel property at RM23 million at the end of the lease term, which is for
a period of ten (10) years with an option to extend for another period of five (5) years.
33. HIRE PURCHASE CREDITORS
Group
2007
2006
RM’000
RM’000
Minimum hire-purchase payments:
- not later than one year
- later than one year but not later than five years
- later than five years
496
789
-
600
936
111
Total minimum hire-purchase payments
Less: Future interest charges
1,285
(94)
1,647
(129)
Present value of hire purchase liabilities
1,191
1,518
34. BANK OVERDRAFTS
Group
2007
2006
RM’000
RM’000
Bank overdrafts:
- secured
- unsecured
509
91
8,305
62
600
8,367
The bank overdrafts are secured by the following:
(a)
pledge of short term deposits; and
(b)
guarantee and indemnity from the Company and subsidiaries.
advance synergy berhad (1225-D)
annual report 2007
097
Notes To The Financial Statements
31 December 2007 (continued)
35. SHORT TERM BORROWINGS
Group
2007
2006
RM’000
RM’000
Borrowings from third party
Bankers’ acceptance and trust receipts
Company
2007
2006
RM’000
RM’000
1,794
16,000
1,563
-
-
1,794
17,563
-
-
The borrowing, bankers’ acceptance and trust receipts are secured by:
(i)
short term deposit and corporate guarantee by a subsidiary; and
(ii)
unquoted investment securities of the Group.
During the financial year, part of the unquoted investment securities of the Group has been disposed off to fully
settle the borrowing from third party.
36. DEFERRED TAX
(a)
The deferred tax assets and liabilities are made up of the following:
Note
Balance as at 1 January
Recognised in the income statement
Arising from revaluation of hotel properties
Exchange translation adjustments
Balance as at 31 December
10
Group
2007
2006
RM’000
RM’000
1,406
417
(22)
6,912
(4,989)
(477)
(40)
1,801
1,406
(1,595)
3,396
(2,447)
3,853
1,801
1,406
Presented after appropriate offsetting:
Deferred tax assets, net
Deferred tax liabilities, net
098
advance synergy berhad (1225-D)
annual report 2007
Notes To The Financial Statements
31 December 2007 (continued)
36. DEFERRED TAX (continued)
(b)
The component and movements of deferred tax assets and liabilities during the financial year prior to
offsetting are as follows:
Deferred tax liabilities of the Group
Property,
plant and
equipment
RM’000
Others
RM’000
Total
RM’000
At 1 January 2007
Recognised in the income statement
3,853
(597)
140
3,853
(457)
At 31 December 2007
3,256
140
3,396
At 1 January 2006
Recognised in the income statement
8,776
(4,923)
(111)
111
8,665
(4,812)
At 31 December 2006
3,853
-
3,853
Others
RM’000
Total
RM’000
Deferred tax assets of the Group
Unused tax
losses and
unabsorbed
capital
allowances
RM’000
(c)
At 1 January 2007
Recognised in the income statement
2,273
(828)
174
(24)
2,447
(852)
At 31 December 2007
1,445
150
1,595
At 1 January 2006
Recognised in the income statement
1,753
520
174
1,753
694
At 31 December 2006
2,273
174
2,447
The amount of temporary differences for which no deferred tax assets have been recognised in the balance
sheet are as follows:
Group
2007
2006
RM’000
RM’000
Unused tax losses
Unabsorbed capital allowances
201,490
65,570
189,345
46,088
267,060
235,433
Deferred tax assets have not been recognised in respect of these items as it is not probable that taxable profits
of certain subsidiaries will be available against which the deductible temporary differences can be utilised.
advance synergy berhad (1225-D)
annual report 2007
099
Notes To The Financial Statements
31 December 2007 (continued)
37. PROVISION FOR RETIREMENT BENEFIT OBLIGATIONS
The Group operates unfunded defined retirement benefit plans for some of its employees.
The amounts recognised in the balance sheet are as follows:
Group
2007
2006
RM’000
RM’000
Present value of unfunded defined benefit obligations
Unrecognised actuarial losses
633
(221)
303
-
412
303
The total expenses recognised in the income statement are as follows:
Group
2007
2006
RM’000
RM’000
Current service cost
Interest cost
Amortisation of net loss
Expenses recognised in the income statement under administrative expenses
64
32
15
16
16
9
111
41
The movements during the financial year on the amount recognised in the balance sheet in respect of the
retirement benefit plans are as follows:
Group
2007
2006
RM’000
RM’000
Balance as at 1 January
Amounts recognised in the income statement
Paid during the financial year
303
111
(2)
262
41
-
Balance as at 31 December
412
303
The principal actuarial assumptions used are as follows:
Group
Discount rate
Expected rate of salary increases
2007
%
2006
%
6.0
6.0
7.0
5.0
38. DEFERRED INCOME
This represents the remaining 50% of the timeshare membership subscription fee received which is to be
recognised as income over the validity period of the timeshare membership agreement, i.e. 30 years, from
the admission date of the members.
100
advance synergy berhad (1225-D)
annual report 2007
Notes To The Financial Statements
31 December 2007 (continued)
39. TRADE AND OTHER PAYABLES
Group
2007
2006
RM’000
RM’000
Trade payables
Third parties
Amount due to customers for contract works
(Note 24(c))
Other payables and accruals
Other payables
Accruals
Accrued interest
Deposit received
Dividend payable
Initial franchise and technical service fee
Amounts owing to subsidiaries
Amounts owing to associates
Company
2007
2006
RM’000
RM’000
27,574
24,267
-
-
8,026
-
-
-
35,600
24,267
-
-
11,013
25,905
3,224
920
84
135
25,465
24,852
2,190
967
122
412
-
682
2,705
3,224
207,650
-
898
2,178
2,190
196,663
-
41,281
54,008
214,261
201,929
76,881
78,275
214,261
201,929
(a)
Trade payables are non-interest bearing and the normal credit terms granted to the Group range from 30 to
90 days.
(b)
Amounts owing to subsidiaries are unsecured, interest free and payable upon demand except for an
amount of RM53.04 million (2006: RM51.52 million) which is subject to interest rate of 3% to 6% (2006: 3%
to 6%) per annum.
(c)
Amount owing to associates are unsecured, interest free and payable on demand.
(d)
Information on financial risks of trade and other payables are disclosed in Note 50 to the financial
statements.
40. PURCHASE OF PROPERTY, PLANT AND EQUIPMENT
During the financial year, the Group and the Company made the following cash payments to purchase property,
plant and equipment:
Group
Company
2007
2006
2007
2006
Note
RM’000
RM’000
RM’000
RM’000
Purchase of property, plant
and equipment
Financed by hire purchase
and lease arrangements
Capitalisation of term loan interest
Cash payments on purchase of
property, plant and equipment
12
8,244
(328)
(65)
7,851
16,385
5
5
(316)
(233)
-
-
15,836
5
5
advance synergy berhad (1225-D)
annual report 2007
101
Notes To The Financial Statements
31 December 2007 (continued)
41. DISPOSAL OF A SUBSIDIARY
On 6 July 2007, the issued and paid-up capital of Suntop, a subsidiary of ASHR, had been enlarged with the
allotment of new shares to other new investors to facilitate the development of the resort and holiday homes
project in Kota Tinggi, Johor to be undertaken by Suntop. Consequently, the equity interest of ASHR in Suntop
have been reduced from 100% to 40%. Suntop therefore ceased to be a subsidiary of the ASHR and became an
associate. The effect of the deemed disposal is as follows:
Group
2007
RM’000
Property, plant and equipment
Sundry receivables
Cash and bank balances
Sundry payables and accruals
Goodwill written off
Less: Reclassified as an associate
252
100
2
(313)
1
(59)
Net liabilities deemed disposed
Less: Net proceeds from additional shares issued to minority interests
(17)
(18)
Gain on disposal of the subsidiary
(35)
Proceeds from additional shares issued to minority interests
Less: Cash and cash equivalents of subsidiary disposed
18
(2)
Net cash inflow
16
During the previous financial year, the Group disposed off its entire shareholding of two (2) ordinary shares of
USD1.00 each representing 100% equity interest in Interwell International Limited. The fair value of the net assets
disposed and the cash inflow on the disposal of the subsidiary are as follows:
Group
2006
RM’000
102
Property, plant and equipment
Other receivables
Cash and bank balances
Other payables and accruals
Borrowings
48,900
4,476
20
(6,940)
(27,107)
Net assets disposed
Less: Net proceeds from disposal
19,349
(30,130)
Gain on disposal of the subsidiary
(10,781)
Proceeds from disposal
Less: Cash and cash equivalents of subsidiary disposed
30,130
(20)
Net cash inflow
30,110
advance synergy berhad (1225-D)
annual report 2007
Notes To The Financial Statements
31 December 2007 (continued)
42. ACQUISITION OF A SUBSIDIARY
During the previous financial year, the Group acquired seven (7) ordinary shares of USD1.00 each representing
70% equity interest in Celestial Beauty Limited which subsequently changed its name to Holiday Villa Middle East
Limited. The fair value of the assets acquired and the liabilities assumed are as follows:
Group
2006
RM’000
Other payables and accruals, liabilities assumed
Goodwill on consolidation
(21)
21
Total purchase consideration
-
43. CASH AND CASH EQUIVALENTS
Cash and cash equivalents included in the cash flow statements as at the end of the financial year comprise the
following balance sheet amounts:
Group
Company
2007
2006
2007
2006
RM’000
RM’000
RM’000
RM’000
Short term deposits
Cash and bank balances
Bank overdrafts
Less: Deposits placed with lease creditors as
security deposit for lease payments
Less: Deposits pledged to licensed banks
35,533
27,174
(600)
33,772
24,312
(8,367)
828
-
11
-
62,107
49,717
828
11
(16,049)
(15,301)
-
-
(6,526)
(9,848)
-
-
39,532
24,568
828
11
44. CONTINGENT LIABILITIES - UNSECURED
Group
2007
2006
RM’000
RM’000
Corporate guarantee given to bank for credit
facilities granted to subsidiaries
One of the subsidiaries has received advice of
pending legal claims for compensation for the
purported supply of faulty goods and a trade mark
infringement
Company
2007
2006
RM’000
RM’000
-
-
70,423
163,153
296
-
-
-
advance synergy berhad (1225-D)
annual report 2007
103
Notes To The Financial Statements
31 December 2007 (continued)
44. CONTINGENT LIABILITIES - UNSECURED (continued)
Litigation
A third party action was filed by American Home Assurance Company (“AHA”) on 24 October 2002 against
Rewardstreet.com (Malaysia) Sdn. Bhd. (“Rewardstreet.com”), a wholly-owned subsidiary of iSynergy, AHA is
sued as a Defendant in the main suit filed by Ultra Dimension Sdn. Bhd. as Plaintiff for, inter alia, the alleged
infringement of their copyright via the AHA Privilege Cash-In Rebate Cards. AHA’s claim is for general damages,
exemplary damages and aggravated damages which are to be assessed by the Court, together with interest at 8%
per annum. An application filed by Rewardstreet.com to strike-out the third party action by AHA on the basis that
AHA was responsible for the design and that no cause of action lay against Rewardstreet.com, was not
successful. The case is initially fixed for mention on 17 April 2008 but has been delayed to another date. The
solicitors acting for Rewardstreet.com are of the opinion that they may negate any liability, which is alleged
by the Defendant in this suit.
45. PENDING LITIGATION
The Company had on 14 June 2004 instituted legal action against Perbadanan Kemajuan Negeri Kedah (“PKNK”)
to recover its investment of RM52,500,000 in Kedah Marble Sdn. Bhd. together with other sums, damages,
interests and costs. The Company’s solicitors had obtained the signed and sealed copy of the Judgement in
Default of Appearance dated 1 August 2004 (“Default Judgement”) from the Court for the sum of RM52,500,000,
interest thereon at the rate of 8% per annum from the date of Judgment to the date of realisation and cost of
RM225. On 10 November 2004, PKNK applied to the Court to set aside the Default Judgement. On 3 August 2005,
the Court allowed PKNK’s application to set aside the Default Judgement. As a procedural step to progress
the suit to a trial, the Company’s solicitor had on 29 December 2005 forwarded to the Court for filing of the
Notice to Attend Pre-Trial Case Management and the Pre-Trial Case Management was fixed for hearing on
17 May 2006. Due to a change in PKNK’s solicitors, PKNK’s new solicitors had asked for an adjournment
on the grounds that they require time to take their client’s instructions and there is a likelihood for an
application to amend the Statement of Defence. The Court had fixed the Pre-Trial Case Management
for mention on 21 November 2006. PKNK’s new solicitors filed an application to amend PKNK’s Statement of
Defence and the application was also fixed for hearing on 21 November 2006. On 21 November 2006, the Court
granted leave to PKNK to amend their Statement of Defence. The Court has fixed for further Case Management
on 7 July 2008 to enable the parties to comply with the Court’s directions. The Company’s solicitors for the
litigation are of the opinion that the Company has a good cause of action against PKNK and the likely outcome of
the proceedings would be a decision in favour of the Company.
46. COMMITMENTS
(i)
Capital commitments in respect of:
Group
2007
2006
RM’000
RM’000
Capital expenditure:
- authorised and contracted for
Analysed as follows:
- purchase of property, plant and equipment
- subscription of new shares in associate/subsidiary
- construction of hotel buildings
104
advance synergy berhad (1225-D)
annual report 2007
108
439
87
21
*
50
389
*
108
439
Notes To The Financial Statements
31 December 2007 (continued)
46. COMMITMENTS (continued)
*
A subsidiary had entered into a lease agreement on 31 January 1996 with the Municipality Council of Phnom
Penh which stipulated that the subsidiary has an obligation to construct a new hotel building and carry
out renovation and refurbishment works on the existing hotel building. The expected date of completion is
within 36 months from 1 October 1999. The amount contracted shall not be less than USD3 million for both
buildings. An extension of time has been granted for the subsidiary to commence the construction of the
new hotel building not later than 1 October 2002 and to be completed by 1 October 2004. The refurbishment
work on the existing hotel building has since been completed but construction of the new hotel building has
not begun as at to date.
The subsidiary was granted approval from the municipality for a further deferment on the commencement of
the construction of the new building to 2007. The subsidiary had on 7 December 2006 written to the
Municipality of Phnom Penh to defer the deadline for the construction of the new building to year 2010.
Notwithstanding this, the subsidiary has decided to proceed with the construction of the new hotel building
and the building plans are expected to be submitted before mid of 2008.
(ii) The Group has lease commitments under non-cancellable operating leases, which are payable as follows:
Group
2007
2006
RM’000
RM’000
Not later than one year
Later than one year but not later than five years
Later than five years
11,322
48,338
60,005
11,596
46,423
81,559
119,665
139,578
47. EMPLOYEE BENEFITS
Salaries and wages
Defined contribution plan
Other employee benefits
2007
RM’000
Group
2006
RM’000
Company
2007
2006
RM’000
RM’000
34,577
2,701
4,698
41,541
3,417
4,502
1,883
230
23
1,903
222
27
41,976
49,460
2,136
2,152
48. SIGNIFICANT RELATED PARTY DISCLOSURES
(a)
Identities of related parties
Parties are considered to be related to the Group if the Group has the ability, directly or indirectly, to control
the party or exercise significant influence over the party in making financial and operating decisions, or
vice versa, or where the Group and the party are subject to common control or common significant
influence. Related parties may be individuals or other entities.
The Company has controlling related party relationship with its direct and indirect subsidiaries.
advance synergy berhad (1225-D)
annual report 2007
105
Notes To The Financial Statements
31 December 2007 (continued)
48. SIGNIFICANT RELATED PARTY DISCLOSURES (continued)
(b)
Significant related party transactions and balances
In addition to the transactions detailed elsewhere in the financial statements, the Group and the Company
had the following transactions with related parties during the financial year:
Group
2007
2006
RM’000
RM’000
(a) Income
(i) Interest receivable from a subsidiary:
- iSynergy
Company
2007
2006
RM’000
RM’000
-
-
3,111
2,863
(ii) Interest receivable from associates:
- Southern Investment Bank Berhad
(“SIBB”)
- Hicom Australia Pty. Ltd.
9
11
36
11
-
-
(iii) Rental receivable from an associate:
- KPB
92
83
-
-
-
-
4,516
3,819
2
12
-
-
13
31
-
-
721
954
78
705
1,208
96
246
322
38
250
314
35
(b) Expenses
(i) Interest payable to a subsidiary:
- ASC Credit Sdn. Bhd. (“ASCC”)
(ii) Corporate advisory fees paid to an
associate, SIBB
(iii) Management fees payable to
an associate, SIBB
(iv) Directors’ emoluments:
- fees
- salaries and bonuses
- benefit-in-kind
The related party transactions described above were entered into in the ordinary course of business
and have been established under negotiated terms.
Individually significant outstanding balances arising during the financial year from transactions other
than normal trade transactions with related parties are as follows:
Group
2007
2006
RM’000
RM’000
106
Company
2007
2006
RM’000
RM’000
Amount owing by a subsidiary, iSynergy
- interest receivable
-
-
3,111
2,863
Amount owing to a subsidiary, ASCC
- interest payable
-
-
4,516
3,819
advance synergy berhad (1225-D)
annual report 2007
Notes To The Financial Statements
31 December 2007 (continued)
48. SIGNIFICANT RELATED PARTY DISCLOSURES (continued)
(c)
Compensation of key management personnel
The remuneration of Directors and other key management personnel during the financial year are as
follows:
Group
Company
2007
2006
2007
2006
RM’000
RM’000
RM’000
RM’000
Short term employee benefits
Contributions to defined contribution plans
2,131
263
2,307
253
573
69
568
68
2,394
2,560
642
636
The estimated monetary value of other benefits, not included in the above, received by Directors and other
key management personnel of the Company and its subsidiaries were RM41,500 (2006: RM41,500) for the
Company and RM149,908 (2006: RM156,574) for the Group.
Included in the employee benefits of the Group and of the Company are Executive Directors’ remuneration
amounting RM953,961 (2006: RM1,208,076) and RM321,602 (2006: RM313,600) respectively.
49. SEGMENT REPORTING
(a)
Reporting format
The primary segment reporting format is determined to be business segments as the Group’s risks and
returns are affected predominantly by differences in the products and services it produces.
Secondary information is reported geographically.
(b)
Business segments
The Group’s operations comprise the following business segments:
Investment holding
:
Investment holding and providing full corporate and financial
support to the Group.
Property development
:
Development of residential and commercial properties.
Hotels and resorts
:
Operate and manage hotels and resorts and other related services.
Information and communications
technology
:
Provision of telecommunications products, customised solutions,
project management and support services, and research and
development for the telecommunications industry and distribution
of third party telecommunications products and components.
Bus transportation services
:
Provision of stage bus, express bus and bus maintenance and
related services.
Others
:
Businesses involving manufacturing, trading, travel and tour and
licensed money changing, and travel related services, and card
and payment related services.
advance synergy berhad (1225-D)
annual report 2007
107
Notes To The Financial Statements
31 December 2007 (continued)
49. SEGMENT REPORTING (continued)
(c)
Geographical segments
In determining the geographical segments of the Group, revenue is based on the geographical locations
of customers. Segment assets and capital expenditure are based on the geographical location of the
assets. The composition of each geographical segment is as follows:
(d)
Malaysia
: Investment holding and providing full corporate and financial support to the
Group, property development, owner and operator of hotels and resorts, travel
and tour related services, card and payment related services, provision of
telecommunications products, customised solutions, project management and
support services, and research and development for the telecommunications
industry and distribution of third party telecommunications products and
components, provision of bus transportation services and bus maintenance
and related services.
Singapore
: Provision of telecommunications products, customised solutions, project
management and support services, and research and development for the
telecommunications industry and distribution of third party telecommunications
products and components, provision of management and investment
holdings.
Africa and Middle East
: Operate and manage hotels and resorts.
Europe
: Operate and manage hotels and resorts.
Australia
: Owner and operator of hotel, manufacturing, and marketing of builder
hardware products and trading of home entertainment products.
Others
: Operate and manage hotels and resorts.
Allocation basis and inter-segment pricing
Segment results, assets and liabilities include items directly attributable to a segment as well as those
that can be allocated on a reasonable basis. Unallocated items comprise mainly corporate assets, liabilities
and expenses.
Inter-segment prices between business segments are set on an arm’s length basis in a manner similar to
transactions with third parties. Segment revenue, expenses and results include transfer between business
segments. These segments are eliminated on consolidation.
108
advance synergy berhad (1225-D)
annual report 2007
Notes To The Financial Statements
31 December 2007 (continued)
49. SEGMENT REPORTING (continued)
The following table provides an analysis of the Group’s revenue, results, assets, liabilities and other information
by business segment:
2007
Information
and
communi- Bus
trans- Travel
Invest- Property Hotels cations
ment developAnd
techno- portation and
Eliminaholding
ment
Resorts
logy
services tours Others tions
Total
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Revenue
External
Inter-segment
6,195
680
22,871
78
82,299
-
56,713
-
10,511
-
28,093
336
17,033
1
- 223,715
(1,095)
-
Total revenue
6,875
22,949
82,299
56,713
10,511
28,429
17,034
(1,095) 223,715
Results
Segment results
2,531
913
12,896
(10,372)
(20,342)
1,099 (11,257)
(383) (24,915)
Share of profits
in associates
10,243
10,243
Consolidated loss
before tax
(14,672)
Tax expense
(3,131)
Net loss for the
financial year
(17,803)
Attributable to:
Minority interests
Equity holders of
the Company
Other information
Segment assets
Investment in
associates
Unallocated
corporate assets
(3,588)
(14,215)
157,138
65,125
214,112
132,298
12,231
6,660
19,083
-
606,647
73,132
-
-
-
-
-
-
-
73,132
5,635
Total assets
Segment liabilities
Unallocated
corporate liabilities
685,414
59,285
10,131
100,390
30,369
1,597
2,507
17,343
-
221,622
4,542
Total liabilities
226,164
advance synergy berhad (1225-D)
annual report 2007
109
Notes To The Financial Statements
31 December 2007 (continued)
49. SEGMENT REPORTING (continued)
Information
and
communi- Bus
Invest- Property Hotels cations
trans- Travel
ment developAnd
techno- portation and
Eliminaholding
ment
Resorts
logy
services tours Others tions
Total
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
2007
Other information
(continued)
Capital expenditure
Depreciation
Amortisation of
prepaid lease
payments for land
Impairment loss on:
- property, plant
and equipment
- purchased goodwill
Write back of
impairment loss on
investment of
securities
Amortisation of
intangible assets
Non-cash expenses
other than
depreciation,
amortisation and
impairment loss
110
advance synergy berhad (1225-D)
annual report 2007
1,190
1,362
923
213
3,575
5,422
1,882
4,135
546
5,475
38
84
116
480
-
8,270
17,171
-
-
-
-
20
-
-
-
20
-
-
-
-
7,540
-
-
1,346
-
7,540
1,346
4,340
-
-
-
-
-
-
-
4,340
-
-
-
1,782
-
-
-
-
1,782
127
-
259
10,035
2,065
56
495
-
13,037
Notes To The Financial Statements
31 December 2007 (continued)
49. SEGMENT REPORTING (continued)
2006
Information
and
communi- Bus
Invest- Property Hotels cations
trans- Travel
ment developAnd
techno- portation and
Eliminaholding
ment
Resorts
logy
services tours Others tions
Total
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Revenue
External
Inter-segment
4,116
3,979
39,075
78
81,101
-
36,903
99
20,196
-
23,418
406
25,865
-
- 230,674
(4,562)
-
Total revenue
8,095
39,153
81,101
37,002
20,196
23,824
25,865
(4,562) 230,674
(27,970)
2,394
20,063
(11,580)
(42,623)
Results (restated)
Segment results
Share of profits
in associates
831
(701)
(3,407) (62,993)
8,002
8,002
Consolidated loss
before tax
(54,991)
Tax income
254
Net loss for the
financial year
(54,737)
Attributable to:
Minority interests
Equity holders of
the Company
Other information
(restated)
Segment assets
Investment in
associates
Unallocated
corporate assets
(27,732)
(27,005)
172,591
82,073
211,766
124,504
26,516
6,870
24,314
-
648,634
74,598
-
-
-
-
-
-
-
74,598
17,603
Total assets
Segment liabilities
Unallocated
corporate liabilities
740,835
79,360
23,632
111,299
13,667
5,449
2,927
25,018
-
261,352
9,567
Total liabilities
270,919
advance synergy berhad (1225-D)
annual report 2007
111
Notes To The Financial Statements
31 December 2007 (continued)
49. SEGMENT REPORTING (continued)
Information
and
communi- Bus
Invest- Property Hotels cations
trans- Travel
ment developAnd
techno- portation and
Eliminaholding
ment
Resorts
logy
services tours Others tions
Total
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
2006
Other information
(restated) (continued)
Capital expenditure
3,752
Depreciation
1,237
Amortisation of
prepaid lease
payments for land
Impairment loss on:
- property, plant
and equipment
- investment
securities
12,393
- associates
5,458
Amortisation on
intangible assets
Non-cash expenses
other than
depreciation,
amortisation and
impairment loss
1,146
230
241
2,869
6,014
1,258
4,572
7,857
7,119
43
107
376
1,503
-
16,385
20,793
-
52
-
18
-
-
-
70
-
1,621
441
15,334
-
-
-
17,396
-
-
-
-
-
-
-
12,393
5,458
-
-
1,396
-
-
-
-
1,396
-
235
2,780
100
4
19
-
4,284
The following table provides an analysis of the Group’s revenue, segment assets and capital expenditure by
geographical segment:
Malaysia
Singapore
Africa and Middle East
Europe
Australia
Others
112
advance synergy berhad (1225-D)
annual report 2007
Revenue
2007
2006
RM’000
RM’000
Segment assets
2007
2006
RM’000
RM’000
(restated)
Capital expenditure
2007
2006
RM’000
RM’000
145,891
19,764
19,229
16,400
19,096
3,335
142,623
22,699
23,335
13,384
25,602
3,031
471,220
26,677
43,542
18,505
23,539
23,164
519,547
25,158
39,867
14,411
26,183
23,468
7,076
220
301
411
34
228
14,465
762
528
285
345
223,715
230,674
606,647
648,634
8,270
16,385
Notes To The Financial Statements
31 December 2007 (continued)
50. FINANCIAL INSTRUMENTS
The Group’s financial risk management objective is to optimise value creation for shareholders whilst minimising
the potential adverse impact arising from fluctuations in foreign currency exchange and interest rates and the
unpredictability of the financial markets.
The Group operates within an established risk management framework and clearly defined guidelines that are
regularly reviewed by the Board of Directors and does not trade in derivative financial instruments. Financial risk
management is carried out through risk review programmes, internal control systems, insurance programmes and
adherence to the Group financial risk management policies. The Group is exposed mainly to foreign currency
risk, liquidity risk, interest rate risk and credit risk. Information on the management of the related exposures are
detailed below.
(a)
Foreign currency risk
The Group is exposed to foreign currency exchange risk as a result of the Group’s transactions with
foreign trade receivables and payables. The Group monitors the movement in foreign currency exchange
rates closely to ensure its exposures are minimised.
The net unhedged financial assets and liabilities of the Group that are not denominated in their functional
currencies are as follows:
Group
31 December 2007
[----------------------------------- Functional currencies ----------------------------------]
Ringgit
US
Singapore
HK
Thai
Malaysia Dollar
Dollar
Dollar
Baht
Total
RM’000 RM’000
RM’000
RM’000
RM’000
RM’000
Financial assets and
liabilities not held in
functional currency
Investment securities
US Dollar
14,809
-
-
-
-
14,809
192
472
485
179
1,310
36
1,195
33,890
-
11,010
4,208
-
192
472
485
179
1,310
36
1,195
49,108
37,759
-
11,010
4,208
-
52,977
Trade receivables
Australia Dollar
Brunei Dollar
Euro
Indonesia Rupiah
Pound Sterling
Renminbi
Sudanese Dinar
US Dollar
advance synergy berhad (1225-D)
annual report 2007
113
Notes To The Financial Statements
31 December 2007 (continued)
50. FINANCIAL INSTRUMENTS (continued)
(a)
Foreign currency risk (continued)
Group
31 December 2007
[----------------------------------- Functional currencies ----------------------------------]
Ringgit
US
Singapore
HK
Thai
Malaysia Dollar
Dollar
Dollar
Baht
Total
RM’000 RM’000
RM’000
RM’000
RM’000
RM’000
Other receivables
Phillipine Peso
Renminbi
Singapore Dollar
US Dollar
Others
58
31
74
6
-
-
-
415
140
-
58
31
489
6
140
169
-
-
555
-
724
74
84
52
30
15
31
341
83
74
-
555
50
38
122
-
74
84
52
104
15
31
934
255
710
74
605
160
-
1,549
1,323
783
28
896
1,700
4
23
80
368
365
-
9,474
-
4,880
118
78
146
1
15,677
861
146
28
896
1,700
4
23
80
368
484
5,570
-
9,474
4,998
225
20,267
30,809
-
-
-
-
30,809
Cash and bank balances
Australian Dollar
Euro
Hong Kong Dollar
Pound Sterling
Renminbi
Singapore Dollar
US Dollar
Others
Trade payables
US Dollar
Singapore Dollar
Ringgit Malaysia
Australia Dollar
Pound Sterling
Euro
Thai Baht
Indonesia Rupiah
Brunei Dollar
Sudanese Dinar
Others
Group
31 December 2006
Financial assets and
liabilities not held in
functional currency
Investment securities
US Dollar
114
advance synergy berhad (1225-D)
annual report 2007
Notes To The Financial Statements
31 December 2007 (continued)
50. FINANCIAL INSTRUMENTS (continued)
(a)
Foreign currency risk (continued)
Group
31 December 2006
[----------------------------------- Functional currencies ----------------------------------]
Ringgit
US
Singapore
HK
Thai
Malaysia Dollar
Dollar
Dollar
Baht
Total
RM’000 RM’000
RM’000
RM’000
RM’000
RM’000
Trade receivables
Australia Dollar
Brunei Dollar
Euro
Indonesia Rupiah
Pound Sterling
Sudanese Dinar
US Dollar
148
294
485
367
1,259
1,242
20,746
-
6,107
4,455
-
148
294
485
367
1,259
1,242
31,308
24,541
-
6,107
4,455
-
35,103
94
306
-
-
-
-
94
306
400
-
-
-
-
400
74
84
51
30
60
69
338
82
20
-
2
156
-
54
67
-
74
84
51
50
62
69
548
149
788
20
158
121
-
1,087
1,190
3
29
239
469
32
28
84
496
-
-
2,966
7
145
-
3,318
595
365
43
75
194
1
7,474
673
566
29
239
614
32
28
84
496
44
2,570
-
3,118
4,321
270
10,279
Other receivables
Renminbi
US Dollar
Cash and bank balances
Australian Dollar
Euro
Hong Kong Dollar
Pound Sterling
Renminbi
Singapore Dollar
US Dollar
Others
Trade Payables
US Dollar
Singapore Dollar
Renminbi
Ringgit Malaysia
Australia Dollar
Pound Sterling
Philipines Peso
Euro
Thai Baht
Hong Kong Dollar
Indonesia Rupiah
Brunei Dollar
Sudanese Dinar
Others
advance synergy berhad (1225-D)
annual report 2007
115
Notes To The Financial Statements
31 December 2007 (continued)
50. FINANCIAL INSTRUMENTS (continued)
(b)
Interest rate risk
The Group’s income and operating cash flows are substantially independent of changes in market interest
rates. Interest rate exposure arises from the Group’s borrowings and is managed through the use of fixed
and floating rate debts. The Group does not use derivative financial instruments to hedge its risk.
The following tables set out the carrying amounts, the weighted average effective interest rates as at the
balance sheet date and the remaining maturities of the Group’s and the Company’s financial instruments
that are exposed to interest rate risk:
2007
Effective Within
interest rate 1 year
Note
%
RM’000
1-2
years
RM’000
2-3
3-4
4-5 More than
years
years
years 5 years Total
RM’000 RM’000 RM’000 RM’000 RM’000
Fixed rate
Group
Finance lease
receivables
Finance lease
creditor
Hire purchase
creditors
Term loans
24.1
12.40
334
-
-
-
-
-
334
32
7.32
(1,512)
(1,419)
(1,330)
(1,245)
33
31
5.58
7.70
(449)
(30,302)
(359)
(5,213)
(243)
-
(101)
-
(39)
-
- (1,191)
- (35,515)
31
7.78
(30,302)
-
-
-
-
- (30,302)
26
34
4.12
7.34
35,533
(600)
-
-
-
-
-
35
31
9.43
8.31
(1,794)
(20,679)
(8,931)
(9,336)
31
8.23
(13,456)
-
-
(1,167) (15,482) (22,155)
Company
Term loans
Floating rate
Group
Short term
deposits
Bank overdrafts
Bankers’
acceptance and
trust receipts
Term loans
(8,037)
35,533
(600)
- (1,794)
(9,361) (26,700) (83,044)
Company
Term loans
116
advance synergy berhad (1225-D)
annual report 2007
-
-
- (13,456)
Notes To The Financial Statements
31 December 2007 (continued)
50. FINANCIAL INSTRUMENTS (continued)
(b)
Interest rate risk (continued)
The following tables set out the carrying amounts, the weighted average effective interest rates as at the
balance sheet date and the remaining maturities of the Group’s and the Company’s financial instruments
that are exposed to interest rate risk (continued):
2006
Effective Within
interest rate 1 year
Note
%
RM’000
1-2
years
RM’000
2-3
3-4
4-5 More than
years
years
years 5 years Total
RM’000 RM’000 RM’000 RM’000 RM’000
Fixed rate
Group
Finance lease
receivables
Finance lease
creditor
Hire purchase
creditors
Short term loan
Term loans
24.1
12.40
1,087
472
-
-
(1,409)
(1,322)
(1,239)
(478)
(1,636)
(200)
(1,746)
(136)
(1,689)
-
-
1,559
32
7.32
(1,502)
33
35
31
5.62
8.00
6.96
(511)
(16,000)
(40,450)
31
7.00
(31,041)
-
-
-
-
- (31,041)
26
34
4.07
8.04
33,772
(8,367)
-
-
-
-
-
35
31
9.28
8.40
(1,563)
(12,509)
(13,846)
31
7.88
(5,423)
(10,562)
(1,160) (15,376) (22,008)
(89)
-
(104) (1,518)
- (16,000)
- (45,521)
Company
Term loans
Floating rate
Group
Short term
deposits
Bank overdrafts
Bankers’
acceptance and
trust receipts
Term loans
(6,304)
(6,326)
33,772
(8,367)
- (1,563)
(9,348) (39,433) (87,766)
Company
Term loans
-
-
-
- (15,985)
advance synergy berhad (1225-D)
annual report 2007
117
Notes To The Financial Statements
31 December 2007 (continued)
50. FINANCIAL INSTRUMENTS (continued)
(c)
Credit risk
Cash deposits and trade receivables may rise to credit risk which requires the loss to be recognised if a
counter party fails to perform as contracted. It is the Group’s policy to monitor the financial standing of
these receivables on an ongoing basis to ensure that the Group is exposed to minimal credit risk.
As at balance sheet date, the Group has no significant concentration of credit risk other than an amount
owing from a receivable of RM27.2 million (2006: RM12.1 million). The Group does not anticipate the
carrying amounts as at the balance sheet date to be significantly different from the values that would
eventually be received.
The maximum exposures to credit risk are represented by the carrying amounts of the financial assets in
the balance sheet.
(d)
Fair values
The carrying amounts of the financial instruments of the Group and of the Company as at the balance
sheet date approximate their fair values due to the relatively short term maturing of the financial
instruments except as set out below:
Group
Company
Carrying
Fair
Carrying
Fair
amount
value
amount
Value
RM’000
RM’000
RM’000
RM’000
As at 31 December 2007
Investment in securities:
- quoted shares in Malaysia
- unquoted shares in Malaysia
- unquoted shares outside Malaysia
Term loans
Hire purchase creditors
Finance lease creditor
12,236
35,179
14,809
118,559
1,191
22,155
12,232
*
*
118,578
1,191
22,155
35,175
43,578
-
*
43,578
-
7,896
35,179
30,809
16,000
133,287
1,518
22,155
7,892
*
*
16,000
133,211
1,518
22,155
35,175
47,026
-
*
47,026
-
As at 31 December 2006
Investment securities:
- quoted shares in Malaysia
- unquoted shares in Malaysia
- unquoted shares outside Malaysia
Short term loan
Term loans
Hire purchase creditors
Finance lease creditor
*
118
It is not practical to estimate the fair value of the unquoted investment in securities due to the excessive
costs involved. The Directors believe that the carrying amount represents the recoverable value.
advance synergy berhad (1225-D)
annual report 2007
Notes To The Financial Statements
31 December 2007 (continued)
50. FINANCIAL INSTRUMENTS (continued)
(d)
Fair values (continued)
The methods and assumptions used by management to determine the fair value of the financial instruments
are as follows:
(i)
The carrying amounts of financial assets and liabilities maturing within 12 months approximate their
fair values due to the relatively short term maturity of these financial instruments.
(ii)
The fair values of quoted investments is determined by reference to the stock exchange quoted market
bid prices at the close of the business on the balance sheet date.
(iii) The fair values of the financial liabilities are estimated by discounting future contractual cash flows at
the current market interest rate available to the Group for similar financial instruments.
(iv) Term loans and hire purchase and lease creditors
Fair value of these borrowings are estimated by discounting future contractual cash flows at the
current market interest rate available to the Group for similar financial instruments.
51. SUBSIDIARIES AND ASSOCIATES
The subsidiaries and associates, which are incorporated in Malaysia (other than those specified otherwise), are
as follows:
Group’s
Name of company
Principal activities
effective interest
2007
2006
Subsidiaries of the Company
Advance Synergy Capital Berhad
Investment holding
52.76%
52.76%
Advance Synergy Properties Sdn. Bhd.
Investment holding
100%
100%
*Advance Synergy Realty Sdn. Bhd.
Property development
100%
100%
Advance Synergy Timber Sdn. Bhd.
Dormant
100%
100%
Alam Samudera Corporation Sdn. Bhd.
Inactive
100%
100%
Alangka-Suka Hotels & Resorts Berhad
Investment holding
99.63%
99.63%
*Ausborn Sawmill Sdn. Bhd.
Inactive
100%
100%
*Bornion Sawmill Sdn. Bhd.
Inactive
100%
100%
Calmford Incorporated
(Incorporated in the British Virgin Islands)
Investment holding
100%
100%
Diversified Gain Sdn. Bhd.
Investment holding
100%
100%
Excellent Arch Sdn. Bhd.
Investment holding
100%
100%
Excellent Display Sdn. Bhd.
Investment holding
100%
100%
advance synergy berhad (1225-D)
annual report 2007
119
Notes To The Financial Statements
31 December 2007 (continued)
51. SUBSIDIARIES AND ASSOCIATES (continued)
Name of company
Principal activities
Group’s
effective interest
2007
2006
Subsidiaries of the Company (continued)
** iSynergy Sdn. Bhd.
Provision of payment related
products and services
66.30%
66.30%
Nagapura Management Corporation
Sdn. Bhd.
Provision of management services
100%
100%
* P.T. Asbindo Infocitra
(Incorporated in the Republic of Indonesia)
Inactive
51%
51%
Sadong Development Sdn. Bhd.
Property development
100%
100%
Strategic Research & Consultancy
Sdn. Bhd.
Inactive
100%
100%
** Synergy Cards Sdn. Bhd.
Provision of designated payment
instruments and products
66.30%
66.30%
Synergy Gold Incorporated
(Incorporated in the British Virgin Islands)
Investment holding
100%
100%
Synergy Petroleum Incorporated
(Incorporated in the British Virgin Islands)
Investment holding
100%
100%
Worldwide Matrix Sdn. Bhd.
Investment holding
100%
100%
Subsidiaries of Advance Synergy
Capital Berhad
120
AESBI Power Systems Sdn. Bhd.
Property investment and
management services
52.76%
52.76%
ASC Credit Sdn. Bhd.
Credit and leasing
52.76%
52.76%
ASC Equities Sdn. Bhd.
Investment holding and venture
capital
52.76%
52.76%
Quality Bus & Coach (M) Sdn. Bhd.
Design, building and fabrication of
coaches
32.18%
32.18%
Triton Commuter Sdn. Bhd.
Provision of stage bus services
52.76%
52.76%
Triton Engineering Sdn. Bhd.
Provision of bus repair and
maintenance services
52.76%
52.76%
Triton Excursions Sdn. Bhd.
Dormant
52.76%
52.76%
Triton Express Sdn. Bhd.
Provision of express bus services
52.76%
52.76%
Triton Express Holdings Sdn. Bhd.
Dormant
52.76%
52.76%
Triton Feeder Services Sdn. Bhd.
Dormant
52.76%
52.76%
advance synergy berhad (1225-D)
annual report 2007
Notes To The Financial Statements
31 December 2007 (continued)
51. SUBSIDIARIES AND ASSOCIATES (continued)
Name of company
Group’s
effective interest
2007
2006
Principal activities
Subsidiaries of Advance Synergy
Capital Berhad (continued)
Triton-K Sdn. Bhd.
Management services
52.76%
52.76%
Triton Khidmat Sdn. Bhd.
Provision of manpower
management services
52.76%
52.76%
Triton Synergy Holdings Sdn. Bhd.
Investment holding
52.76%
52.76%
Triton Terminal Management Sdn. Bhd.
Dormant
52.76%
52.76%
Provision of express bus services
52.76%
52.76%
Production and marketing of
electronic audio and visual media
36.93%
36.93%
* Southern Investment Bank Berhad
Merchant banking business
10.55%
10.55%
* Kumpulan Powernet Berhad
Investment holding
10.55%
10.55%
* ACE Synergy Insurance Berhad
General insurance business
25.85%
25.85%
* Hicom Australia Pty. Ltd.
Design, building and fabrication of
coaches
26.38%
26.38%
Alangka-Suka International Limited
(Incorporated in the British Virgin Islands)
Investment holding
99.63%
99.63%
Alor Setar Holiday Villa Sdn. Bhd.
Operates Holiday Villa Hotel &
Suites Alor Setar
99.63%
99.63%
Antara Holiday Villas Sdn. Bhd.
Hotel management services
99.63%
99.63%
Asbina Hotel & Property Sdn. Bhd.
Leasehold owner of Holiday Villa
Hotel & Suites Phnom Penh
99.63%
99.63%
Cherating Holiday Villa Berhad
Operates Holiday Villa Beach
Resort Cherating
99.63%
99.63%
Grand Hotel Sudan Limited
(Incorporated in the British Virgin Islands)
Leasehold owner of Grand Holiday
Villa Hotel & Suites Khartoum
99.63%
99.63%
Subsidiary of Triton Express Sdn. Bhd.
* Triton Express (S) Pte. Ltd.
(Incorporated in Singapore)
Subsidiary of Triton Synergy Holdings
Sdn. Bhd.
Transit Vision Holdings Sdn. Bhd.
Associates of Advance Synergy
Capital Berhad
Subsidiaries of Alangka-Suka
Hotels & Resorts Berhad
advance synergy berhad (1225-D)
annual report 2007
121
Notes To The Financial Statements
31 December 2007 (continued)
51. SUBSIDIARIES AND ASSOCIATES (continued)
Name of company
Principal activities
Group’s
effective interest
2007
2006
Subsidiaries of Alangka-Suka
Hotels & Resorts Berhad (continued)
Holiday Villa Subang Sdn. Bhd.
Dormant
99.63%
99.63%
Holiday Villa Travel & Tours Sdn. Bhd.
Inactive
99.63%
99.63%
Holiday Villas International Limited
(Incorporated in the British Virgin Islands)
Hotel management services
99.63%
99.63%
Langkawi Holiday Villa Sdn. Bhd.
Operates Holiday Vila Beach Resort 99.63%
& Spa Langkawi
99.63%
Mayor Hotels Berhad
Owns and operates City Villa
Kuala Lumpur
99.63%
99.63%
100%
-
◆
Super Leisure Sdn. Bhd.
Restaurant management
Associates of Alangka-Suka
Hotels & Resorts Berhad
* Suntop Corporation Sdn. Bhd.
Inactive
39.85%
99.63%
Holiday Villa Kuala Lumpur Sdn. Bhd.
(formerly known as Greenvox
Development Sdn. Bhd.)
Investment holding
39.85%
-
Holiday Villa Hotels & Resorts Sdn. Bhd.
Dormant
39.85%
-
Asbina Shenzhen Limited
(Incorporated in the British Virgin Islands)
Dormant
89.67%
89.67%
* Grand Holiday Villa Khartoum Co. Ltd.
(Incorporated in the Republic of Sudan)
Operates Grand Holiday Villa Hotel
& Suites Khartoum
99.63%
99.63%
* Interwell Management Limited
(Incorporated in England and Wales)
Dormant
99.63%
99.63%
Larkswood Assets Limited
(Incorporated in the British Virgin Islands)
Investment holding
99.63%
99.63%
* P.T. Diwangkara Holiday Villa Bali
(Incorporated in the Republic of Indonesia)
Operates and manages Diwangkara
Holiday Villa Beach Resort Bali
89.67%
89.67%
Operates Holiday Villa Hotel &
Suites Phnom Penh
99.63%
99.63%
Subsidiaries of Alangka-Suka
International Limited
Subsidiary of Asbina Hotel &
Property Sdn. Bhd.
Asbina Hotel & Property (Cambodia)
Pte. Ltd.
(Incorporated in the Kingdom of Cambodia)
122
advance synergy berhad (1225-D)
annual report 2007
Notes To The Financial Statements
31 December 2007 (continued)
51. SUBSIDIARIES AND ASSOCIATES (continued)
Name of company
Principal activities
Group’s
effective interest
2007
2006
Subsidiary of Holiday Villa China
International Limited (formerly known
as Holiday Villa China Limited)
* Changshu Holiday Villa Hotel
Management Co. Ltd.
(Incorporated in the People’s Republic of China)
Hotel management services
69.74%
69.74%
Holiday Villa China International Limited
(formerly known as Holiday Villa China Limited)
(Incorporated in the British Virgin Islands)
Hotel management services
69.74%
69.74%
Holiday Villa Middle East Limited
(Incorporated in the British Virgin Islands)
Hotel management services
69.74%
69.74%
* Holiday Villa (UK) Ltd.
(Incorporated in England and Wales)
Operates Holiday Villa Hotel &
Suites London
99.63%
99.63%
* Alangka-Suka Australia Pty. Ltd.
(Incorporated in Australia)
Owns Manor House Boutique
Hotel Sydney
99.63%
99.63%
* Holiday Villa Australia Pty. Ltd.
(Incorporated in Australia)
Hotel management services
99.63%
99.63%
Inactive
100%
100%
* Advansa Pty. Ltd.
(Incorporated in Australia)
Manufacturing and marketing of
builder hardware products
100%
100%
* Home Cinema Studio Pty. Ltd.
(Incorporated in Australia)
Retailer of home entertainment
products
100%
100%
Travel and tour agent, licensed money 100%
changer and the provision of travel
related services
100%
Subsidiaries of Holiday Villas International
Limited
Subsidiaries of Larkswood Assets Limited
Subsidiary of Advance Synergy Properties
Sdn. Bhd.
Synergy Realty Incorporated
(Incorporated in the British Virgin Islands)
Subsidiaries of Calmford Incorporated
Subsidiary of Diversified Gain Sdn. Bhd.
Orient Escape Travel Sdn. Bhd.
advance synergy berhad (1225-D)
annual report 2007
123
Notes To The Financial Statements
31 December 2007 (continued)
51. SUBSIDIARIES AND ASSOCIATES (continued)
Name of company
Principal activities
Group’s
effective interest
2007
2006
Subsidiaries of Orient Escape Travel
Sdn. Bhd.
Columbus Travel & Tours Sdn. Bhd.
Travel and tour agent
100%
100%
Motorsports Adventure Sdn. Bhd.
Inactive
100%
100%
Marketing and Event Management
Integrated Sdn. Bhd.
Inactive
100%
100%
Orient Escape Travel (Penang) Sdn. Bhd.
Inactive
100%
100%
Orient Escape Travel (Sabah) Sdn. Bhd.
Inactive
100%
100%
In liquidation
100%
100%
-
100%
100%
100%
Subsidiary of Excellent Arch Sdn. Bhd.
Advance Synergy Furniture Sdn. Bhd.
Subsidiaries of Excellent Display Sdn. Bhd.
◆
Super Leisure Sdn. Bhd.
Visage Synergy Sdn. Bhd.
Restaurant management
Dormant
Subsidiaries of iSynergy Sdn. Bhd.
Cosmocourt.com (Malaysia) Sdn. Bhd.
Inactive
66.30%
66.30%
Rewardstreet.com (Malaysia) Sdn. Bhd.
Inactive
66.30%
66.30%
Datakey Sdn. Bhd.
Dormant
66.30%
66.30%
Subsidiaries of Nagapura Management
Corporation Sdn. Bhd.
Acrylic Synergy Sdn. Bhd.
Inactive
81%
81%
Syarikat Fit and Weld Engineering (M) Sdn. Bhd.
In liquidation
70%
70%
Xgo Technik Sdn. Bhd.
Inactive
100%
100%
Property development
95%
95%
Property development
95%
95%
100%
100%
Subsidiary of Sadong Development Sdn. Bhd.
Hotel Golden Dragon Sdn. Bhd.
Subsidiary of Hotel Golden Dragon Sdn. Bhd.
Simpang Tiga Realty Sdn. Bhd.
Subsidiary of Synergy Realty Incorporated
* Builderworks Pty. Ltd.
(Incorporated in Australia)
124
advance synergy berhad (1225-D)
annual report 2007
Inactive
Notes To The Financial Statements
31 December 2007 (continued)
51. SUBSIDIARIES AND ASSOCIATES (continued)
Name of company
Group’s
effective interest
2007
2006
Principal activities
Subsidiary of Worldwide Matrix Sdn. Bhd.
# Unified Communications Holdings Limited
(Incorporated in Singapore)
Investment holding and provides
management services
58.30%
58.30%
Unified Communications Sdn. Bhd.
Research and development,
58.30%
software engineering, system
integration, project management,
distribution of telecommunications
products and maintenance
and support services for
telecommunications industry
58.30%
# Unified Communications Pte. Ltd.
(Incorporated in Singapore)
Distribution of telecommunications 58.30%
products, design and development
of telecommunications solutions,
project management and
maintenance and support services
for telecommunications industry
58.30%
AttrixTech Sdn. Bhd.
Distribution of telecommunications
products
58.30%
58.30%
GlobeOSS Sdn. Bhd.
Provision of operations support
system, consultancy, system
design and project management
services
29.73%
29.73%
* Unified Communications (Shenzhen)
Private Limited
(Incorporated in the People’s Republic
of China)
Distribution of telecommunications
products, development of
localised solutions and support
and maintenance services for
telecommunications industry
58.30%
58.30%
# Attrix Technology Pte. Ltd.
(Incorporated in Singapore)
Distribution of telecommunications
products
58.30%
58.30%
* Unified Communications Limited
(Incorporated in Hong Kong)
Distribution of telecommunications 29.73%
products, design and development
of telecommunications solutions,
project management and
maintenance and support services
for telecommunications industry
29.73%
Subsidiaries of Unified Communications
Holdings Limited
Subsidiaries of Unified Communications
Sdn. Bhd.
Subsidiaries of Unified Communications
Pte. Ltd.
advance synergy berhad (1225-D)
annual report 2007
125
Notes To The Financial Statements
31 December 2007 (continued)
51. SUBSIDIARIES AND ASSOCIATES (continued)
Name of company
Principal activities
Group’s
effective interest
2007
2006
Subsidiaries of Unified Communications
Pte. Ltd. (continued)
* Unified (Thailand) Ltd.
(Incorporated in Thailand)
Distribution of telecommunications 51.89%
products, design and development
of telecommunications solutions,
project management and
maintenance and support services
for telecommunications industry
51.89%
Subsidiary of GlobeOSS Sdn. Bhd.
# GlobeOSS Pte. Ltd.
(Incorporated in Singapore)
Provision of operations support
systems, consultancy, system
design and project management
services
29.73%
-
Software engineering, system
23.32%
integration, project management,
and maintenance and support
services for the telecommunications
industry
23.32%
Associate of Unified Communications
Sdn. Bhd.
Ahead Mobile Sdn. Bhd.
*
#
**
◆
Companies not audited by BDO Binder.
Companies audited by BDO Raffles, Singapore.
29% of the equity interest of these companies are held by ASC, a 52.76%-owned subsidiary of the Company.
100%-owned subsidiary of Excellent Display Sdn. Bhd. in the previous financial year.
52. SIGNIFICANT EVENTS DURING THE FINANCIAL YEAR
Group
ASC had on 18 April 2007 announced that Bank Negara Malaysia (“BNM”) has no objection in principle for ASC to
commence negotiations with interested parties to dispose off its 20% equity interest comprising 15,580,000
ordinary shares of RM1.00 each in SIBB (“Proposed Disposal of SIBB’s shares”).
On 22 October 2007, ASC announced that SIBB has on 19 October 2007 submitted an application to BNM for the
proposed disposal of certain of its assets and liabilities to HLG Credit Sdn. Bhd. for a total cash consideration to
be determined based on the aggregate sum of the net book value of the disposed SIBB’s assets and liabilities
(“NBV”) plus a premium to the NBV. This application will replace the Proposed Disposal of SIBB’s shares
originally announced by the ASC. As a result, the Proposed Disposal by SIBB’s shares by ASC has been aborted.
126
advance synergy berhad (1225-D)
annual report 2007
Notes To The Financial Statements
31 December 2007 (continued)
52. SIGNIFICANT EVENTS DURING THE FINANCIAL YEAR (continued)
Company
(a)
On 20 February 2006, 22 June 2006 and 5 April 2007, CIMB Investment Bank Berhad (“CIMB”) announced
on the Company’s behalf that the Company is proposing to implement the following:
(i)
(ii)
Capital Reduction which comprises:
-
reduction of the issued and paid-up share capital of the Company from a maximum of
RM506,690,428 comprising 506,690,428 ordinary stock units in the Company (“ASB Stock Units”)
of RM1.00 each (assuming that all of the Company’s 168,896,809 Warrants constituted by Deed
Poll dated 28 April 2000 and Supplemental Deed Poll dated 24 July 2003 (“ASB Warrants”) are
exercised and 168,896,809 new ASB Stock Units arising therefrom are issued before the cutoff date for the Capital Reduction) to RM152,007,128 comprising 506,690,428 ASB Stock Units of
RM0.30 each, by cancelling RM0.70 of par value from every ASB Stock Unit of RM1.00 each to
reduce the accumulated losses in the Company; and
-
reduction of up to the entire amount in the share premium account of the Company to reduce the
accumulated losses in the Company.
Renounceable rights issue of up to RM266,012,475 nominal value of 2% 10-year irredeemable
convertible unsecured loan stocks (“ICULS”) at 100% of the nominal amount of RM0.15 each (or
equivalent of up to 1,773,416,498 ICULS) on the basis of RM0.525 nominal value of ICULS (or
equivalent to 3.5 ICULS) for every one (1) ASB Stock Unit held, which may be implemented on a
two (2)-call basis (where the first call will be settled via cash payment while the second call will be
settled via capitalisation of the Company’s share premium account) on an entitlement date and at a
cash call amount to be determined and announced later (“Rights Issue”);
(iii) Increase in the authorised share capital of the Company from RM800,000,000 divided into 800,000,000
ordinary shares of RM1.00 each to RM900,000,000 divided into 900,000,000 ordinary shares of
RM1.00 each (“Increase in Authorised Share Capital”); and
(iv) Conversion of stock units to ordinary shares (“Conversion to Shares”).
(v)
On 5 December 2007, CIMB announced on behalf of the Company that the Company has resolved to
do the following:
-
to implement the Rights Issue on a two (2)-call basis;
-
to fix the first cash call amount at RM0.07 per ICULS; and
-
to fix the second non-cash call amount at RM0.08 per ICULS which will be paid out of the share
premium account of the Company.
(Collectively, referred to as the “Proposals”).
The Increase in Authorised Share Capital and the Conversion to Shares were effected on 29 June 2007
upon the shareholders of the Company approving all the resolutions pertaining to the Proposals at the
Extraordinary General Meeting held on the same day.
(b)
On 10 December 2007, the Company announced the Adjustment to the ASB Warrant Exercise Price as
detailed in Note 28 to the financial statements.
On 31 December 2007, the Company announced the Further Extension of ASB Warrants Exercise Period
as detailed in Note 28 to the financial statements.
advance synergy berhad (1225-D)
annual report 2007
127
Notes To The Financial Statements
31 December 2007 (continued)
53. SIGNIFICANT EVENTS SUBSEQUENT TO THE BALANCE SHEET DATE
(a)
On 17 January 2008, a Notice to Warrantholders was despatched to the Company’s Warrantholders in
relation to the Further Extension of ASB Warrants Exercise Period and the Adjustment to the ASB Warrant
Exercise Price as detailed in Note 28 to the financial statements.
(b)
On 31 January 2008, the 1,182,277,666 ICULS issued pursuant to the Rights Issue were listed on the Main
Board of Bursa Securities.
In view of the above, the Capital Reduction and Rights Issue have been completed.
Details on the Right Issues and Capital Reduction are set out in Note 52 to the financial statements.
54. COMPARATIVE FIGURES
Certain figures for the year ended 31 December 2006 have been reclassified or adjusted, as compared to the
original statutory accounts, due to the reasons below:
-
Consistent presentation with the financial statements disclosure requirements for the financial year ended
31 December 2007; and
-
Prior year adjustments arising from certain changes in accounting treatment as described in Note 7.1 to the
financial statements.
The effect of the change in accounting policy and the reclassification described above are as detailed below:
As
previously
reported
RM’000
Group
FRS 117
RM’000
Prior
year
adjustments
RM’000
As
restated
RM’000
Balance Sheets
Non current assets
Property, plant and equipment
Prepaid lease payments for land
354,176
-
(8,707)
8,707
(102,482)
(7,478)
242,987
1,229
Non current liabilities
Deferred tax liabilities
Current tax payable
Finance lease creditor
6,952
2,615
108,008
-
(3,099)
3,099
(86,000)
3,853
5,714
22,008
Equity
Revaluation reserves
Minority interests
Accumulated losses
43,436
144,653
461,194
-
(30,711)
(114)
(6,865)
12,725
144,539
454,329
50,966
19,402
17,815
-
2,152
242
(2,808)
53,118
19,644
15,007
Income Statements
Administrative expenses
Other operating income
Finance costs
128
advance synergy berhad (1225-D)
annual report 2007
Statement on Directors’ Interests in the Company
and related corporations as at 6 May 2008
➀
Direct Interest in the Company
Dato’ Ahmad Sebi Bakar *
Datin Masri Khaw Binti Abdullah
Ordinary shares of RM0.30 each
Number
Percentage
15,203,509
3.29
1,000,000
0.22
Indirect Interest in the Company
Dato’ Ahmad Sebi Bakar *
Datin Masri Khaw Binti Abdullah
Lee Su Nie
Direct Interest in the Company
Dato’ Ahmad Sebi Bakar
Datin Masri Khaw Binti Abdullah
➁
95,057,609
20.60
3,531,000
0.77
➂
365,000
0.08
Warrants 2000/2010
Number
Percentage
7,010,005
4.15
3,000
0.002
Indirect Interest in the Company
Dato’ Ahmad Sebi Bakar
Direct Interest in the Company
Dato’ Ahmad Sebi Bakar
Datin Masri Khaw Binti Abdullah
Yong Teck Ming
➃
21,465,000
12.71
ICULS**
Percentage
Number
123,212,999
13.18
3,500,000
0.37
500,000
0.05
Indirect Interest in the Company
Dato’ Ahmad Sebi Bakar
Datin Masri Khaw Binti Abdullah
➄
149,602,489
16.00
5,000,000
0.53
* By virtue of his interest in the Company, Dato’ Ahmad Sebi Bakar is also deemed to be interested in the shares of all investee
companies (including subsidiaries) to the extent that the Company has an interest.
** 2% 10-Year Irredeemable Convertible Unsecured Loan Stocks at 100% of the Nominal Value of RM0.15 each.
Note:➀ Following the completion of the Capital Reduction as detailed in Notes 52(a) and 53(b) to the financial statements, the par value per ordinary share of
the Company has been reduced from RM1.00 to RM0.30.
➁ This includes his son’s interest in 6,000,000 ordinary shares of the Company which shall be treated as his interest in the ordinary shares of the
Company pursuant to Section 134(12)(c) of the Companies Act, 1965 which came into effect on 15 August 2007.
➂ This is her spouse’s interest in the ordinary shares of the Company which shall be treated as her interest in the ordinary shares of the Company
pursuant to Section 134(12)(c) of the Companies Act, 1965 which came into effect on 15 August 2007.
➃ This includes his son’s interest in 7,738,000 warrants of the Company which shall be treated as his interest in the warrants of the Company pursuant
to Section 134(12)(c) of the Companies Act, 1965 which came into effect on 15 August 2007.
➄ This includes his son’s interest in 48,934,000 ICULS of the Company which shall be treated as his interest in the ICULS of the Company pursuant
to Section 134(12)(c) of the Companies Act, 1965 which came into effect on 15 August 2007.
advance synergy berhad (1225-D)
annual report 2007
129
Statistics on Shareholdings
as at 6 May 2008
AUTHORISED SHARE CAPITAL
: RM900,000,000 divided into 3,000,000,000 ordinary shares of RM0.30 each.
ISSUED AND FULLY PAID-UP CAPITAL : RM138,441,263.10 divided into 461,470,877 ordinary shares of RM0.30 each.
VOTING RIGHT
: 1 vote per ordinary share.
ANALYSIS OF SHAREHOLDINGS
Size of shareholdings
No. of
shareholders
Less than 100 shares
100 - 1,000 shares
1,001 - 10,000 shares
10,001 - 100,000 shares
100,001 - less than 5% of issued shares
5% and above of issued shares
% of
shareholders
No. of
% of issued
shares held share capital
243
6,356
14,319
3,634
394
1
0.97
25.48
57.40
14.57
1.58
-
6,247
5,966,735
61,862,261
109,859,492
206,257,543
77,518,599
1.29
13.40
23.81
44.70
16.80
24,947
100.00
461,470,877
100.00
LIST OF TOP 30 SHAREHOLDERS
No. Name
No. of shares held
Percentage
1.
SJ Sec Nominees (Tempatan) Sdn Bhd
Suasana Dinamik Sdn Bhd
77,518,599
16.80
2.
Dato’ Ahmad Sebi Bakar
15,203,509
3.29
3.
SJ Sec Nominees (Tempatan) Sdn Bhd
Bright Existence Sdn Bhd
11,539,010
2.50
4.
SJ Sec Nominees (Tempatan) Sdn Bhd
Eighth Review (M) Sdn Bhd
6,000,000
1.30
5.
Tan Yu Wei
5,980,039
1.30
6.
Tan Pak Nang
5,840,000
1.27
7.
Chew Lee Hwa
5,489,000
1.19
8.
PM Nominees (Tempatan) Sdn Bhd
Malpac Management Sdn Bhd
4,990,191
1.08
9.
CIMB Group Nominees (Tempatan) Sdn Bhd
Pledged Securities Account for Malpac Management Sdn Bhd
4,884,170
1.06
10.
SJ Sec Nominees (Tempatan) Sdn Bhd
Pledged Securities Account for Chan Sai Kim
4,166,600
0.90
11.
HDM Nominees (Tempatan) Sdn Bhd
Pledged Securities Account for Lawerence Lee
3,810,500
0.83
12.
Tay Teck Ho
3,655,000
0.79
13.
ASH Holdings Sdn Bhd
3,531,000
0.77
130
advance synergy berhad (1225-D)
annual report 2007
LIST OF TOP 30 SHAREHOLDERS (continued)
No. Name
No. of shares held
Percentage
14.
PM Nominees (Tempatan) Sdn Bhd
PCB Asset Management Sdn Bhd for Ng Faai @ Ng Yoke Pei
3,000,000
0.65
15.
Choo Keng Kit
2,551,800
0.55
16.
Toh Hooi Hak
2,499,501
0.54
17.
Toh Ean Hai
2,407,350
0.52
18.
Goh Geok Choo
2,398,600
0.52
19.
Othman Bin Merican
2,318,250
0.50
20.
HSBC Nominees (Asing) Sdn Bhd
RBS Coutts SG for Quek Leng Chye
2,216,500
0.48
21.
Tan Kim Wah
2,072,000
0.45
22.
Neoh Choo Ee & Company, Sdn Berhad
2,046,000
0.44
23.
Perbadanan Kemajuan Negeri Kedah
2,013,090
0.44
24.
Goh Boon Seng
1,875,000
0.41
25.
MKW Jaya Sdn Bhd
1,800,000
0.39
26.
Foo Choon Tow
1,600,000
0.35
27.
Wong Ten An
1,530,000
0.33
28.
Lai Seow Kian
1,500,000
0.33
29.
Lim Seng Chee
1,400,000
0.30
30.
HDM Nominees (Tempatan) Sdn Bhd
Pledged Securities Account for Loo Kok Kuan
1,400,000
0.30
187,235,709
40.58
SUBSTANTIAL SHAREHOLDERS
Name of substantial shareholders
No. of shares held
% of issued share capital
Direct
Indirect
Direct
Indirect
Dato’ Ahmad Sebi Bakar
15,203,509
89,057,609
3.29
19.30
Suasana Dinamik Sdn Bhd
77,518,599
-
16.80
-
advance synergy berhad (1225-D)
annual report 2007
131
Statistics on Warrantholdings
as at 6 May 2008
NO. OF WARRANTS 2000/2010 (“WARRANTS”) IN ISSUE
:
168,896,809
VOTING RIGHT
:
1 vote per Warrant in respect of Warrantholders’
Meeting.
ANALYSIS OF WARRANTHOLDINGS
Size of warrantholdings
No. of
warrantholders
Less than 100 warrants
100 - 1,000 warrants
1,001 - 10,000 warrants
10,001 - 100,000 warrants
100,001 - less than 5% of the warrants in issue
5% and above of the warrants in issue
% of
No. of
% of
warrantholders warrants held warrantholdings
25
3,235
4,717
1,280
213
-
0.26
34.16
49.81
13.52
2.25
-
1,046
3,065,192
19,755,415
42,745,985
103,329,171
-
1.81
11.70
25.31
61.18
-
9,470
100.00
168,896,809
100.00
LIST OF TOP 30 WARRANTHOLDERS
No. Name
Number of warrants held
Percentage
1.
SJ Sec Nominees (Tempatan) Sdn Bhd
Suasana Dinamik Sdn Bhd
7,957,000
4.71
2.
SJ Sec Nominees (Tempatan) Sdn Bhd
Eighth Review (M) Sdn Bhd
7,738,000
4.58
3.
Dato’ Ahmad Sebi Bakar
7,010,005
4.15
4.
Mayban Securities Nominees (Tempatan) Sdn Bhd
Pledged Securities Account for Chai Yeng Sun
6,242,000
3.70
5.
SJ Sec Nominees (Tempatan) Sdn Bhd
Bright Existence Sdn Bhd
5,770,000
3.42
6.
Pushpamalar A/P Janarthanan
3,023,600
1.79
7.
Phoon Kien Choong
2,000,000
1.18
8.
Cheong Kai Kee
1,885,200
1.12
9.
Chong Peck Yuen
1,764,000
1.04
10.
Choo Keng Kit
1,500,900
0.89
11.
Mayban Securities Nominees (Tempatan) Sdn Bhd
Pledged Securities Account for Jamaliah Bt Abu Bakar
1,400,000
0.83
12.
Chan Lai Yee
1,350,000
0.80
13.
ECMl Nominees (Tempatan) Sdn Bhd
Pledged Securities Account for Chan Chai Kok
1,280,000
0.76
14.
Chan Kim Gek
1,221,000
0.72
132
advance synergy berhad (1225-D)
annual report 2007
LIST OF TOP 30 WARRANTHOLDERS (continued)
No. Name
Number of warrants held
Percentage
15.
Hong Eng Kwee @ Hong Eng Hwe
1,047,300
0.62
16.
Cheng Loo Yuen
1,000,000
0.59
17.
Indar Kaur A/P Dan Singh
946,200
0.56
18.
Lim Seng Nip
928,000
0.55
19.
Mohd Fauzi Bin Mohd Anuar
900,000
0.53
20.
Trade Pioneer Limited
827,400
0.49
21.
Ke-Zan Nominees (Tempatan) Sdn Bhd
Pledged Securities Account for Lim Pheik Kheng
750,000
0.44
22.
RHB Capital Nominees (Tempatan) Sdn Bhd
Pledged Securities Account for Wong Chan Thong
730,000
0.43
23.
RHB Capital Nominees (Tempatan) Sdn Bhd
Pledged Securities Account for Sim Mui Khee
700,000
0.41
24.
Amsec Nominees (Tempatan) Sdn Bhd
Pledged Securities Account for Tan Chau
700,000
0.41
25.
SJ Sec Nominees (Tempatan) Sdn Bhd
Pledged Securities Account for Chan Sai Kim
668,000
0.40
26.
Woon Wee Tam
651,200
0.39
27.
Lau Siew Hua
650,000
0.38
28.
SJ Sec Nominees (Tempatan) Sdn Bhd
Pledged Securities Account for Chan Sai Kim
646,000
0.38
29.
Khong Peck Fah
604,880
0.36
30.
Ong Kim Chai
600,000
0.36
62,490,685
36.99
advance synergy berhad (1225-D)
annual report 2007
133
Statistics on ICULS Holdings
as at 6 May 2008
NO. OF ICULS IN ISSUE
:
934,923,150
VOTING RIGHT
:
1 vote per ICULS in respect of ICULS holders’ Meeting.
ANALYSIS OF ICULS HOLDINGS
Size of ICULS holdings
Less than 100 ICULS
100 - 1,000 ICULS
1,001 - 10,000 ICULS
10,001 - 100,000 ICULS
100,001 - less than 5% of the ICULS in issue
5% and above of the ICULS in issue
No. of ICULS
Holders
% of ICULS
Holders
No. of
ICULS held
2
41
1,759
3,064
798
4
0.04
0.72
31.03
54.06
14.08
0.07
128
22,943
10,250,465
105,969,903
503,573,877
315,105,834
1.10
11.34
53.86
33.70
5,668
100.00
934,923,150
100.00
% of ICULS
Holdings
LIST OF TOP 30 ICULS HOLDERS
No. Name
Number of ICULS held
1.
Dato’ Ahmad Sebi Bakar
2.
Percentage
123,212,999
13.18
SJ Sec Nominees (Tempatan) Sdn Bhd
Bright Existence Sdn Bhd
94,105,835
10.07
3.
SJ Sec Nominees (Tempatan) Sdn Bhd
Eighth Review (M) Sdn Bhd
48,934,000
5.23
4.
Citigroup Nominess (Asing) Sdn Bhd
Exempt An for Citibank NA, Singapore
48,853,000
5.23
5.
Lim Hong Liang
46,071,200
4.93
6.
SJ Sec Nominees (Tempatan) Sdn Bhd
Pledged Securities Account for Chan Sai Kim
33,411,100
3.57
7.
Chew Lee Hwa
28,728,000
3.07
8.
Malpac Capital Sdn Bhd
22,538,300
2.41
9.
Growthfolio Sdn Bhd
8,581,300
0.92
10.
PM Nominees (Tempatan) Sdn Bhd
PCB Asset Management Sdn Bhd for Ng Faai @ Ng Yoke Pei
8,000,000
0.86
11.
Goh Geok Choo
7,668,900
0.82
12.
SJ Sec Nominees (Tempatan) Sdn Bhd
Suasana Dinamik Sdn Bhd
6,562,654
0.70
13.
Ong Wan Chin
5,200,000
0.56
14.
ASH Holdings Sdn Bhd
5,000,000
0.53
134
advance synergy berhad (1225-D)
annual report 2007
LIST OF TOP 30 ICULS HOLDERS (continued)
No. Name
Number of ICULS held
Percentage
15.
Lim Seng Chee
4,553,150
0.49
16.
TBR Shopping Centre (M) Sdn Bhd
4,500,000
0.48
17.
Onn Kok Puay
4,495,000
0.48
18.
Goh Boon Seng
4,112,500
0.44
19.
Fong Chiew Hean
4,000,000
0.43
20.
SJ Securities Sdn Bhd
3,783,500
0.40
21.
Wong Ten An
3,575,000
0.38
22.
HSBC Nominees (Asing) Sdn Bhd
Exempt An for Credit Suisse
3,542,000
0.38
23.
JF Apex Nominees (Tempatan) Sdn Bhd
Pledged Securities Account for Voon Sze Lin
3,500,000
0.37
24.
Datin Masri Khaw Binti Abdullah
3,500,000
0.37
25.
Muhammad Syafiq Baljit Bin Abdullah
3,300,000
0.35
26.
Khoo Keat
3,000,000
0.32
27.
Tan Ah Chai
3,000,000
0.32
28.
Tan Kim Tee
3,000,000
0.32
29.
Ong Sheok Kheng
3,000,000
0.32
30.
SJ Sec Nominees (Tempatan) Sdn Bhd
Pledged Securities Account for Chan Sai Kim
2,935,550
0.31
544,663,988
58.24
advance synergy berhad (1225-D)
annual report 2007
135
List of Properties
The top 10 properties of the Group in terms of net book value as at 31 December 2007 are as follows :Location
* GM1126 Lot 1301,
GM424 Lot 1302,
GM857 Lot 1303,
GM405 Lot 1305,
HS(M) 1096 PT 1300 &
HS(M) 1082 PT 1303
Mukim Sungai Karang
Cherating
Pahang Darul Makmur
Description
Land
area
Land with hotel building,
15
recreational facilities,
acres
restaurants and
apartment block
Approx. age
of building
(Years)
Tenure
14 1/2 -20
Freehold
34,014
28.03.2005
Net book Date of last
revaluation/
value
(RM ‘000) acquistion
Geran 85, Lot 2034
69, Jalan Haji Hussein
50300 Kuala Lumpur
18 storey hotel building
3,214
sq. m.
32
Freehold
31,147
25.03.2005
89, Monivong Blvd.
Sangkat Monorom
Khan 7 Makara
Phnom Penh
Cambodia
Hotel building
750
sq. m.
8
Leasehold
expiring
in 2066
15,808
30.12.2005
Nile Avenue
Khartoum
Sudan
Land with hotel building, 30,550
recreational facilities
sq. m.
and restaurants
> 95
Leasehold
expiring
in 2039
36,626
30.12.2005
9, Evesham House
Hereford Road
London W2 4PD
United Kingdom
Apartment
120
sq. m.
17
Leasehold
expiring
in 2987
1,215
23.06.1995
86, Flinders Street
Darlinghurst
Sydney
NSW 2010
Australia
Hotel building
771
sq. m.
> 148
Freehold
9,842
02.12.2005
72, Pesiaran Jubli Perak
Seksyen 22
40000 Shah Alam
Selangor Darul Ehsan
Industrial land and
buildings
61,492
sq. m.
14
Freehold
32,510
03.06.2003
Lot PT 4251
Kawasan Perusahaan
Pengkalan Chepa II
Kelantan Darul Naim
Industrial land and
bus depot
19,350
sq. m.
2
Leasehold
expiring
in 2064
1,374
01.09.2004
136
advance synergy berhad (1225-D)
annual report 2007
The top 10 properties of the Group in terms of net book value as at 31 December 2007 are as follows :Location
Description
Land
area
Approx. age
of building
(Years)
Tenure
Net book Date of last
revaluation/
value
(RM ‘000) acquistion
Geran 25342
Lot No. 3786
Mukim Tebrau
Daerah Johor Bahru
Johor Darul Takzim
Industrial land
38,388
sq. m.
-
Freehold
8,114
26.04.2005
Geran 25343
Lot No. 3787
Mukim Tebrau
Daerah Johor Bahru
Johor Darul Takzim
Industrial land
bus depot
39,242
sq. m.
2
Freehold
9,638
26.04.2005
* Hotel Property under finance lease
advance synergy berhad (1225-D)
annual report 2007
137
This page has been intentionally left blank.
ADVANCE SYNERGY BERHAD (Company No.: 1225-D)
I/We
Proxy Form
Contact No.
(full name in block letters)
NRIC/Company No.
or CDS Account No.
(for nominee companies only)
of
(full address)
being a shareholder/shareholders of ADVANCE SYNERGY BERHAD, hereby appoint
NRIC No.
(full name in block letters)
of
(full address)
or failing him/her, THE CHAIRMAN OF THE MEETING as my/our proxy to vote for me/us on my/our behalf at the
Annual General Meeting of the Company to be held at Mezzanine Floor, Synergy Com Centre, No. 72, Pesiaran
Jubli Perak, Seksyen 22, 40000 Shah Alam, Selangor Darul Ehsan on Monday, 30 June 2008 at 2.00 p.m. and at
any adjournment thereof and thereat to vote as indicated below:Please indicate with (✓) how you wish to cast your vote. If neither “FOR” nor “AGAINST” is indicated, the proxy will
vote or abstain from voting at his/her discretion.
No.
RESOLUTION
1.
The adoption of the Financial Statements for the financial year ended 31
December 2007 and the Directors’ and Auditors’ reports thereon.
2.
To approve the payment of Directors’ fees.
3.
The re-election of Datin Masri Khaw Binti Abdullah as Director.
4.
The election of Dato’ Abdul Murad Bin Khalid as Director.
5.
The election of Lee Su Nie as Director.
6.
The election of Yong Teck Ming as Director.
7.
The appointment of Messrs Baker Tilly Monteiro Heng as auditors of the
Company and authorisation for the Directors to fix their remuneration.
8.
Authorisation for Directors to allot and issue new shares pursuant to
Section 132D of the Companies Act, 1965.
Dated this
day of
FOR
AGAINST
2008
Number of shares held
Signature
Note:(1) A member of the Company entitled to attend and vote at the general
meeting is entitled to appoint at least one (1) proxy but not more than
two (2) proxies to attend and vote in his/her stead. A proxy need not
be a member of the Company.
(2) A member of the Company who is an authorised nominee as defined
under the Securities Industry (Central Depositories Act), 1991 may
appoint at least one (1) proxy but not more than two (2) proxies in
respect of each securities account it holds with shares of the
Company standing to the credit of the said securities account.
(3) The instrument appointing a proxy in the case of an individual shall
be signed by the appointer or his/her attorney duly authorised and
in the case of a corporation, the instrument appointing a proxy must
be under its common seal or under the hand of an officer or attorney
duly authorised.
(4) The instrument appointing a proxy must be deposited at the Registered
Office of the Company at Level 3, Wisma ASCAP-QBC, No. 72, Pesiaran
Jubli Perak, Seksyen 22, 40000 Shah Alam, Selangor Darul Ehsan not
less than 48 hours before the time appointed for holding the meeting
or any other adjournment thereof.
Fold this flap for sealing
Fold here
STAMP
THE SECRETARY
ADVANCE SYNERGY BERHAD
LEVEL 3, WISMA ASCAP - QBC
NO. 72, PESIARAN JUBLI PERAK
SEKSYEN 22
40000 SHAH ALAM, SELANGOR.
Fold here
advance synergy berhad • annual report 2007
ADVANCE SYNERGY BERHAD
Level 3, Wisma ASCAP - QBC
No. 72, Pesiaran Jubli Perak
Seksyen 22, 40000 Shah Alam
Selangor Darul Ehsan, Malaysia.
(1225-D)