Asas Dunia Berhad
(Company No. 94528 - T)
(Incorporated in Malaysia)
and its subsidiaries
Financial statements for the year
ended 31 December 2012
1
Asas Dunia Berhad
(Company No. 94528 - T)
(Incorporated in Malaysia)
and its subsidiaries
Directors’ report for the year ended 31 December 2012
The Directors have pleasure in submitting their report and the audited financial statements of the
Group and of the Company for the financial year ended 31 December 2012.
Principal activities
The principal activities of the Company are property development, building construction, investment
holding and property investment.
The principal activities of the subsidiaries are stated in Note 7 to the financial statements.
There has been no significant change in the nature of these activities during the financial year.
Results
Group
RM
Profit for the year attributable to owners of the Company
27,251,450
Company
RM
43,555,236
Reserves and provisions
There were no material transfers to or from reserves and provisions during the financial year under
review except as disclosed in the financial statements.
Dividend
Since the end of the previous financial year, the Company paid a first and final dividend of 5% per
ordinary share less 25% tax totalling RM7,154,242 in respect of the year ended 31 December 2011
on 6 September 2012.
The Directors recommend a first and final dividend of 5% less 25% tax totalling RM7,154,242 in
respect of the year ended 31 December 2012, which is subject to the approval of shareholders at the
forthcoming Annual General Meeting of the Company.
Company No. 94528 - T
2
Directors of the Company
Directors who served since the date of the last report are :
Chan Leong Foon
Dato’ Chan Fook Sing
Chan Fook Sun
Chan Fook Hean
Diong Chin Teck
Moo Shiew Ming
Teoh Choo Ee
-
Executive Chairman
Managing Director
Executive Director
Executive Director
In accordance with Article 93 of the Company’s Articles of Association, Mr Chan Fook Sun retires
by rotation from the Board at the forthcoming Annual General Meeting and, being eligible offer
himself for re-election.
In accordance with Section 129 (6) of the Companies Act, 1965, Messrs. Chan Leong Foon, Diong
Chin Teck and Moo Shiew Ming retire at the forthcoming Annual General Meeting and, offer
themselves for re-election as Directors of the Company until the conclusion of the next Annual
General Meeting.
Directors’ interests
The interests and deemed interests in the ordinary shares of the Company and of its related
corporations (other than wholly-owned subsidiaries) of those who were Directors at financial year
end (including the interests of the spouses or children of the Directors) as recorded in the Register of
Directors’ Shareholdings are as follows :
Company
Number of ordinary shares of RM1 each
Balance at
Balance at
1.1.2012
Bought
Sold
31.12.2012
Chan Leong Foon :
Direct interest :
- own
Deemed interest :
- own
- others *
211,000
-
-
211,000
78,467,610
374,400
74,000
-
78,467,610
448,400
244,300
64,000
-
308,300
-
-
78,467,610
Dato’ Chan Fook Sing :
Direct interest :
- own
Deemed interest :
- own
78,467,610
Company No. 94528 - T
3
Directors’ interests (continued)
Number of ordinary shares of RM1 each
Balance at
Balance at
1.1.2012
Bought
Sold
31.12.2012
Chan Fook Sun :
Direct interest :
- own
Deemed interest :
- own
55,000
10,000
-
65,000
78,467,610
-
-
78,467,610
22,000
-
-
22,000
78,467,610
-
-
78,467,610
20,000
-
-
20,000
10,000
-
-
10,000
5,000
-
-
5,000
2
-
-
2
Chan Fook Hean :
Direct interest :
- own
Deemed interest :
- own
Diong Chin Teck :
Direct interest :
- own
Moo Shiew Ming :
Direct interest :
- own
Teoh Choo Ee :
Direct interest :
- own
Subsidiary
- Asas Land Development Sdn. Bhd.
Chan Leong Foon :
Direct interest :
- own
*
these are shares held in the name of the spouse and children in accordance with Section
134(12)(c) of the Companies Act, 1965.
Company No. 94528 - T
4
Directors’ interests (continued)
By virtue of their interests of more than 15% in the shares of the Company, Mr. Chan Leong Foon,
Dato’ Chan Fook Sing, Mr. Chan Fook Sun and Mr. Chan Fook Hean are also deemed to have
interests in the shares of all its subsidiaries to the extent the Company has an interest.
Directors’ benefits
Since the end of the previous financial year, no Director of the Company has received nor become
entitled to receive any benefit (other than a benefit included in the aggregate amount of emoluments
received or due and receivable by Directors as shown in the financial statements) by reason of a
contract made by the Company or a related company 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 those transactions entered in the ordinary course of business between certain companies in
the Group and companies in which certain Directors have substantial financial interests as disclosed
in Note 27 to the financial statements.
There were no arrangements during and at the end of the financial year which had the object of
enabling Directors of the Company to acquire benefits by means of the acquisition of shares in or
debentures of the Company or any other body corporate.
Issue of shares and debentures
There were no changes in the authorised, issued and paid-up capital of the Company during the
financial year.
There were no debentures in issue 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.
Company No. 94528 - T
5
Other statutory information
Before the financial statements of the Group and of the Company were made out, the Directors took
reasonable steps to ascertain that:
i) all known bad debts have been written off and adequate provision made for doubtful debts, and
ii) any current assets which were unlikely to be realised in the ordinary course of business have
been written down to an amount which they might be expected so to realise.
At the date of this report, the Directors are not aware of any circumstances:
i) that would render the amount written off for bad debts, or the amount of the provision for
doubtful debts, in the Group and in the Company inadequate to any substantial extent, or
ii) that would render the value attributed to the current assets in the financial statements of the
Group and of the Company misleading, or
iii) which have arisen which render adherence to the existing method of valuation of assets or
liabilities of the Group and of the Company misleading or inappropriate, or
iv) not otherwise dealt with in this report or the financial statements, that would render any amount
stated in the financial statements of the Group and of the Company misleading.
At the date of this report, there does not exist :
i) any charge on the assets of the Group or of the Company that has arisen since the end of the
financial year and which secures the liabilities of any other person, or
ii) any contingent liability in respect of the Group or of the Company that has arisen since the end
of the financial year.
No contingent liability or other liability of any company in the Group has become enforceable, or is
likely to become enforceable within the period of twelve months after the end of the financial year
which, in the opinion of the Directors, will or may substantially affect the ability of the Group and of
the Company to meet their obligations as and when they fall due.
In the opinion of the Directors, except for those disclosed in the financial statements, the financial
performance of the Group and of the Company for the financial year ended 31 December 2012 have
not been substantially affected by any item, transaction or event of a material and unusual nature nor
has any such item, transaction or event occurred in the interval between the end of that financial year
and the date of this report.
Company No. 94528 - T
Auditors
The auditors, Messrs KPMG, have indicated their willingness to accept re-appointment.
Signed on behalf of the Board of Directors in accordance with a resolution of the Directors :
……………………………
Chan Leong Foon
……………………………
Dato’ Chan Fook Sing
Penang,
Date : 10 April 2013
6
7
Asas Dunia Berhad
(Company No. 94528 - T)
(Incorporated in Malaysia)
and its subsidiaries
Consolidated statement of financial position as at 31 December
2012
Note
2012
RM
2011
RM
3
4
5
6
14
8,525,580
1,441,116
219,889,683
2,445,345
834,000
8,627,510
1,441,116
217,459,418
2,627,878
132,000
233,135,724
230,287,922
62,770,625
33,996,406
67,537,724
4,912,723
19,882,132
84,295,697
24,746,041
74,551,510
1,645,233
9,051,149
Total current assets
189,099,610
194,289,630
Total assets
422,235,334
424,577,552
Assets
Property, plant and equipment
Intangible assets
Land held for property development
Investment properties
Deferred tax assets
Total non-current assets
Property development costs
Receivables, deposits and prepayments
Inventories
Current tax assets
Cash and cash equivalents
8
9
10
11
Company No. 94528 - T
8
Consolidated statement of financial position as at 31
December 2012 (continued)
Note
2012
RM
2011
RM
191,595,776
213,279,001
191,595,776
193,267,982
12
404,874,777
384,863,758
13
14
41,000
8,628,599
41,000
41,000
8,669,599
17,319,557
5,777,393
1,840,450
23,426,352
Total current liabilities
17,319,557
31,044,195
Total liabilities
17,360,557
39,713,794
422,235,334
424,577,552
Equity
Share capital
Reserves
Total equity
Liabilities
Borrowings
Deferred tax liabilities
Total non-current liabilities
Borrowings
Provisions
Trade and other payables
Total equity and liabilities
13
15
16
The notes on pages 20 to 76 are an integral part of these financial statements.
9
Asas Dunia Berhad
(Company No. 94528 - T)
(Incorporated in Malaysia)
and its subsidiaries
Consolidated statement of comprehensive income for the year
ended 31 December 2012
Note
2012
RM
2011
RM
Revenue
17
135,874,831
112,047,186
Cost of sales
18
(83,054,250)
(66,618,515)
52,820,581
45,428,671
(14,960,385)
(11,031,133)
(2,925,084)
(2,489,403)
1,726,024
978,549
Continuing operations
Gross profit
Administrative expenses
Selling and marketing expenses
Other income
Operating profit
19
36,661,136
32,886,684
Finance costs
22
(513,322)
(716,982)
36,147,814
32,169,702
(8,896,364)
(8,627,828)
27,251,450
23,541,874
14.28
12.34
Profit before tax
Income tax expense
23
Profit and total comprehensive income for the year
attributable to owners of the Company
Earnings per ordinary share
24
The notes on pages 20 to 76 are an integral part of these financial statements.
10
Asas Dunia Berhad
(Company No. 94528 - T)
(Incorporated in Malaysia)
and its subsidiaries
Consolidated statement of changes in equity for the year ended 31 December 2012
Share
capital
RM
At 1 January 2011
191,595,776
Share
premium
RM
15,960,000
Attributable to owners of the Company
Non-distributable
Distributable
Asset
revaluation
Capital
Treasury
Retained
reserve
reserve
shares
earnings
RM
RM
RM
RM
818,502
500,000
(781,600) 160,386,185
Total
equity
RM
368,478,863
Profit and total comprehensive
income for the year
-
-
-
-
-
23,541,874
23,541,874
Total transactions with owners of the
Company
- Dividend paid to owners of the
Company (Note 26)
-
-
-
-
-
(7,156,979)
(7,156,979)
818,502
500,000
At 31 December 2011
191,595,776
15,960,000
(781,600) 176,771,080
384,863,758
Company No. 94528 - T
11
Consolidated statement of changes in equity for the year ended 31 December 2012
(continued)
Share
capital
RM
At 1 January 2012
Profit and total comprehensive
income for the year
Treasury shares acquired
Dividend paid to owners of the
Company (Note 26)
Total transactions with owners of the
Company
At 31 December 2012
191,595,776
Share
premium
RM
15,960,000
Attributable to owners of the Company
Non-distributable
Distributable
Asset
revaluation
Capital
Treasury
Retained
reserve
reserve
shares
earnings
RM
RM
RM
RM
818,502
500,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
818,502
500,000
191,595,776
15,960,000
The notes on pages 20 to 76 are an integral part of these financial statements.
(781,600) 176,771,080
-
(86,189)
-
(86,189)
27,251,450
-
Total
equity
RM
384,863,758
27,251,450
(86,189)
(7,154,242)
(7,154,242)
(7,154,242)
(7,240,431)
(867,789) 196,868,288
404,874,777
12
Asas Dunia Berhad
(Company No. 94528 - T)
(Incorporated in Malaysia)
and its subsidiaries
Consolidated statement of cash flows for the year ended
31 December 2012
Note
2012
RM
2011
RM
Cash flows from operating activities
Profit before tax from continuing operations
Adjustments for :
Depreciation - property, plant and equipment
- investment properties
Interest expense
Interest income
Plant and equipment written off
Reversal of provisions
Gain on disposal of :
- land held for property development
- property, plant and equipment
- investment property
Operating profit before changes in working capital
Changes in working capital :
Property development costs
Receivables, deposits and prepayments
Inventories
Trade and other payables
Cash generated from operations
Tax paid
Net cash from operating activities
3
6
22
36,147,814
32,169,702
895,185
17,389
513,322
(554,097)
3,307
(1,840,450)
758,317
18,251
716,982
(265,217)
(153,225)
(11,810,029)
(118,307)
(114,856)
(816,985)
(86,297)
-
23,139,278
32,341,528
9,873,144
(9,250,365)
16,288,218
(6,106,795)
(19,499,322)
(10,845,560)
19,080,906
7,733,092
33,943,480
28,810,644
(12,865,854)
(10,038,620)
21,077,626
18,772,024
Company No. 94528 - T
13
Consolidated statement of cash flows for the year ended 31
December 2012 (continued)
Note
2012
RM
2011
RM
Cash flows from investing activities
Interest received
Proceeds from disposal of :
- investment property
- land held for property development
- property, plant and equipment
Addition of land held for property development
Purchase of property, plant and equipment
5
Net cash from/(used in) investing activities
554,097
265,217
280,000
16,279,178
124,900
(4,521,918)
(803,155)
1,185,157
86,300
(9,780,684)
(2,014,497)
11,913,102
(10,258,507)
(7,154,242)
(513,322)
(13,824,263)
(571,432)
(10,297)
(86,189)
(7,156,979)
(716,982)
(2,195,664)
(5,000,000)
(571,428)
(41,191)
-
(22,159,745)
(15,682,244)
10,830,983
(7,168,727)
9,051,149
16,219,876
19,882,132
9,051,149
Cash flows from financing activities
Dividend paid to owners of the Company
Interest paid
Repayment of term loan, net
Repayment of revolving credit
Repayment of BBA-TF
Repayment of finance lease liabilities
Repurchase of treasury shares
Net cash used in financing activities
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at 1 January
Cash and cash equivalents at 31 December
26
NOTES
Cash and cash equivalents
Cash and cash equivalents included in the consolidated statement of cash flows are as shown in Note
11 to the financial statements.
The notes on pages 20 to 76 are an integral part of these financial statements.
14
Asas Dunia Berhad
(Company No. 94528 - T)
(Incorporated in Malaysia)
Statement of financial position as at 31 December 2012
Note
2012
RM
2011
RM
3
5
6
7
14
7,505,107
192,619,139
2,445,345
22,346,659
338,000
7,573,772
189,844,666
2,462,447
22,346,659
132,000
225,254,250
222,359,544
51,482,186
38,666,720
49,563,388
3,710,423
18,207,526
77,770,085
33,643,812
54,394,944
762,849
8,526,397
Total current assets
161,630,243
175,098,087
Total assets
386,884,493
397,457,631
Assets
Property, plant and equipment
Land held for property development
Investment properties
Investments in subsidiaries
Deferred tax assets
Total non-current assets
Property development costs
Receivables, deposits and prepayments
Inventories
Current tax assets
Cash and cash equivalents
8
9
10
11
Company No. 94528 - T
15
Statement of financial position as at 31 December 2012
(continued)
Note
2012
RM
2011
RM
191,595,776
165,721,495
191,595,776
129,406,690
357,317,271
321,002,466
Equity
Share capital
Reserves
Total equity
12
Liabilities
Borrowings
13
-
8,628,599
-
8,628,599
29,567,222
5,777,393
1,840,450
60,208,723
Total current liabilities
29,567,222
67,826,566
Total liabilities
29,567,222
76,455,165
386,884,493
397,457,631
Total non-current liabilities
Borrowings
Provisions
Trade and other payables
Total equity and liabilities
13
15
16
The notes on pages 20 to 76 are an integral part of these financial statements.
16
Asas Dunia Berhad
(Company No. 94528 - T)
(Incorporated in Malaysia)
Statement of comprehensive income for the year ended 31
December 2012
Note
2012
RM
2011
RM
Revenue
17
155,172,537
106,906,727
Cost of sales
18
(84,091,609)
(68,507,126)
71,080,928
38,399,601
(10,775,033)
(9,035,403)
(2,738,010)
(2,387,218)
1,047,806
829,639
Continuing operations
Gross profit
Administrative expenses
Selling and marketing expenses
Other income
Operating profit
19
58,615,691
27,806,619
Finance costs
22
(513,322)
(716,982)
58,102,369
27,089,637
(14,547,133)
(7,291,914)
43,555,236
19,797,723
Profit before tax
Income tax expense
Profit and total comprehensive income for the year
attributable to owners of the Company
23
The notes on pages 20 to 76 are an integral part of these financial statements.
17
Asas Dunia Berhad
(Company No. 94528 - T)
(Incorporated in Malaysia)
Statement of changes in equity for the year ended 31 December 2012
Share
capital
RM
At 1 January 2011
191,595,776
Attributable to owners of the Company
Non-distributable
Distributable
Asset
Share
revaluation
Treasury
Retained
premium
reserve
shares
earnings
RM
RM
RM
RM
15,960,000
818,502
(781,600) 100,769,044
Total
equity
RM
308,361,722
Profit and total comprehensive income for the year
-
-
-
-
19,797,723
19,797,723
Total transactions with owners of the Company
- Dividend paid to owners of the Company (Note 26)
-
-
-
-
(7,156,979)
(7,156,979)
At 31 December 2011/1 January 2012
191,595,776
15,960,000
818,502
Profit and total comprehensive income for the year
-
-
-
Treasury shares acquired
Dividend paid to owners of the Company (Note 26)
-
-
-
Total transactions with owners of the Company
-
-
-
At 31 December 2012
191,595,776
15,960,000
The notes on pages 20 to 76 are an integral part of these financial statements.
818,502
(781,600) 113,409,788
-
321,002,466
43,555,236
43,555,236
(86,189)
-
(7,154,242)
(86,189)
(7,154,242)
(86,189)
(7,154,242)
(7,240,431)
(867,789) 149,810,782
357,317,271
18
Asas Dunia Berhad
(Company No. 94528 - T)
(Incorporated in Malaysia)
Statement of cash flows for the year ended 31 December 2012
Note
2012
RM
2011
RM
Cash flows from operating activities
Profit before tax from continuing operations
Adjustments for :
Depreciation - property, plant and equipment
- investment properties
Dividend income from subsidiaries
Interest expense
Interest income
Plant and equipment written off
Reversal of provisions
Gain on disposal of :
- land held for property development
- property, plant and equipment
Operating profit before changes in working capital
Changes in working capital :
Property development costs
Receivables, deposits and prepayments
Inventories
Trade and other payables
Cash generated from operations
Tax paid
Dividend received
Net cash from operating activities
3
6
17
22
58,102,369
27,089,637
621,756
17,102
(33,500,443)
513,322
(552,729)
3,307
(1,840,450)
539,316
17,102
(600,000)
716,982
(264,199)
(153,225)
(8,673,097)
(118,592)
(816,985)
(86,297)
14,572,545
26,442,331
15,637,439
(5,022,908)
14,130,363
(30,641,501)
(18,163,410)
(6,663,339)
18,052,910
3,503,879
8,675,938
23,172,371
(9,325,597)
25,125,333
(8,558,332)
450,000
24,475,674
15,064,039
Company No. 94528 - T
19
Statement of cash flows for the year ended 31 December 2012
(continued)
Note
2012
RM
2011
RM
Cash flows from investing activities
Interest received
Proceeds from disposal of :
- land held for property development
- property, plant and equipment
Additions of land held for property development
Purchase of property, plant and equipment
552,729
264,199
12,743,096
118,600
(5,492,819)
(556,406)
1,185,157
86,300
(6,867,713)
(1,519,631)
7,365,200
(6,851,688)
(7,154,242)
(513,322)
(13,824,263)
(571,432)
(10,297)
(86,189)
(7,156,979)
(716,982)
(2,195,664)
(5,000,000)
(571,428)
(41,191)
-
(22,159,745)
(15,682,244)
Net increase/(decrease) in cash and cash equivalents
9,681,129
(7,469,893)
Cash and cash equivalents at 1 January
8,526,397
15,996,290
18,207,526
8,526,397
5
Net cash from/(used in) investing activities
Cash flows from financing activities
Dividend paid to owners of the Company
Interest paid
Repayment of term loan, net
Repayment of revolving credit
Repayment of BBA-TF
Repayment of finance lease liabilities
Repurchase of treasury shares
Net cash used in financing activities
Cash and cash equivalents at 31 December
26
NOTES
Cash and cash equivalents included in the statement of cash flows are as shown in Note 11 to the
financial statements.
The notes on pages 20 to 76 are an integral part of these financial statements.
20
Asas Dunia Berhad
(Company No. 94528 - T)
(Incorporated in Malaysia)
and its subsidiaries
Notes to the financial statements
Asas Dunia Berhad is a public limited liability company, incorporated and domiciled in Malaysia
and is listed on the Main Market of Bursa Malaysia Securities Berhad. The address of its registered
office and principal place of business is as follows :
Wisma Asas
No. 228-B Lebuh Chulia
10200 Penang
The consolidated financial statements of the Company as at and for the financial year ended 31
December 2012 comprise the Company and its subsidiaries (together referred to as the Group and
individually referred to as “Group entities”).
The principal activities of the Company are property development, building construction, investment
holding and property investment.
The principal activities of its subsidiaries are set out in Note 7 to the financial statements.
These financial statements were authorised for issue by the Board of Directors on 10 April 2013.
1. Basis of preparation
(a) Statement of compliance
These financial statements of the Group and of the Company have been prepared in
accordance with Financial Reporting Standards (FRS), generally accepted accounting
principles and the requirements of the Companies Act, 1965 in Malaysia.
The following are accounting standards, amendments and interpretations of the FRS
framework that have been issued by the Malaysian Accounting Standards Board (MASB)
but have not been adopted by the Group and the Company :
FRSs, Interpretations and amendments effective for annual periods beginning on or
after 1 July 2012
 Amendments to FRS 101, Presentation of Financial Statements - Presentation of
Items of Other Comprehensive Income
Company No. 94528 - T
1. Basis of preparation (continued)
(a) Statement of compliance (continued)
FRSs, Interpretations and amendments effective for annual periods beginning
on or after 1 January 2013
 FRS 10, Consolidated Financial Statements
 FRS 11, Joint Arrangements
 FRS 12, Disclosure of Interests in Other Entities
 FRS 13, Fair Value Measurement
 FRS 119, Employee Benefits (2011) *
 FRS 127, Separate Financial Statements (2011)
 FRS 128, Investments in Associates and Joint Ventures (2011) *
 IC Interpretation 20, Stripping Costs in the Production Phase of a Surface Mine*
 Amendments to FRS 7, Financial Instruments : Disclosures - Offsetting
Financial Assets and Financial Liabilities
 Amendments to FRS 1, First-time Adoption of Financial Reporting Standards Government Loans
 Amendments to FRS 1, First-time Adoption of Financial Reporting Standards
(Annual Improvements 2009-2011 Cycle)
 Amendments to FRS 101, Presentation of Financial Statement (Annual
Improvements 2009-2011 Cycle)
 Amendments to FRS 116, Property, Plant and Equipment (Annual
Improvements 2009-2011 Cycle)
 Amendments to FRS 132, Financial Instruments: Presentation (Annual
Improvements 2009-2011 Cycle)
 Amendments to FRS 134, Interim Financial Reporting (Annual Improvements
2009-2011 Cycle)
 Amendments to FRS 10, Consolidated Financial Statements: Transition
Guidance
 Amendments to FRS 11, Joint Arrangements: Transition Guidance
 Amendments to FRS 12, Disclosure of Interests in Other Entities: Transition
Guidance
FRSs, Interpretations and amendments effective for annual periods beginning
on or after 1 January 2014
 Amendments to FRS 10, Consolidated Financial Statements: Investment
Entities
 Amendments to FRS 12, Disclosure of Interests in Other Entities: Investment
Entities
 Amendments to FRS 127, Separate Financial Statements (2011): Investment
Entities
 Amendments to FRS 132, Financial Instruments : Presentation – Offsetting
Financial Assets and Financial Liabilities
FRSs, Interpretations and amendments effective for annual periods beginning
on or after 1 January 2015
 FRS 9, Financial Instruments (2009)
 FRS 9, Financial Instrument (2010)
 Amendments to FRS 7, Financial Instruments : Disclosures - Mandatory Date
of FRS 9 and Transition Disclosures
21
Company No. 94528 - T
22
1. Basis of preparation (continued)
(a) Statement of compliance (continued)
The Group and the Company plan to apply the abovementioned standards, amendments
and interpretations from the annual period beginning 1 January 2013 for those standards,
amendments or interpretations that are effective for annual periods beginning on or after
1 July 2012 and 1 January 2013, except for those marked “ * ” which are not applicable
to the Group and the Company from the annual period beginning on 1 January 2013.
The initial application of a standard, an amendment or an interpretation, which will be
applied prospectively or which requires extended disclosures, is not expected to have any
financial impacts to the current and prior periods financial statements upon their first
adoption.
The initial applications of the other standards, amendments and interpretations are not
expected to have any material impact on the financial statements of the Group and the
Company.
The Group’s and the Company’s financial statements for annual period beginning on 1
January 2014 will be prepared in accordance with the Malaysian Financial Reporting
Standards (MFRS) issued by the MASB and International Financial Reporting Standards
(IFRS). As a result, the Group and the Company will not be adopting the above FRSs,
Interpretations and amendments that are effective for annual periods beginning on or after
1 January 2014.
(b) Basis of measurement
The financial statements have been prepared on the historical cost basis other than as
disclosed in Note 2.
(c) Functional and presentation currency
These financial statements are presented in Ringgit Malaysia (RM), which is the
Company’s functional currency.
(d) Use of estimates and judgements
The preparation of the financial statements is conformity with FRSs requires
management to make judgements, estimates and assumptions that affect the application
of accounting policies and the reported amounts of assets, liabilities, income and
expenses. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to
accounting estimates are recognised in the period in which the estimates are revised and
in any future periods affected.
Company No. 94528 - T
23
1. Basis of preparation (continued)
(d) Use of estimates and judgements (continued)
The key assumptions concerning the future and other key sources of estimation
uncertainty at the end of the reporting period that have a significant risk of causing a
material adjustment to the carrying amounts of assets and liabilities within the next
financial year are discussed below :
(i)
Property development
The Group recognises property development revenue and expenses in profit or loss
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.
(ii)
Inventories
The Directors are of the opinion that no further write down is required for the
unsold units of the Group’s completed development properties as they are confident
of realising those units at a price which is higher than the carrying amount.
(iii) Measurement of recoverable amounts of cash generating units - goodwill
For the purpose of impairment testing, goodwill is allocated to the Group’s CashGenerating Units (“CGUs”) identified.
2. Significant accounting policies
The accounting policies set out below have been applied consistently to the periods presented
in these financial statements, and have been applied consistently by the Group entities, unless
otherwise stated.
(a) Basis of consolidation
(i)
Subsidiaries
Subsidiaries are entities, including unincorporated entities, controlled by the Group.
The financial statements of subsidiaries are included in the consolidated financial
statements from the date that control commences until the date that control ceases.
Control exists when the Group has the ability to exercise its power to govern the
financial and operating policies of an entity so as to obtain benefits from its
activities. In assessing control, potential voting rights that presently are exercisable
are taken into account.
Company No. 94528 - T
24
2. Significant accounting policies (continued)
(a) Basis of consolidation (continued)
(i)
Subsidiaries (continued)
Investments in subsidiaries are measured in the Company’s statement of financial
position at cost less any impairment losses, unless the investment is classified as
held for sale or distribution. The cost of investments includes transaction costs.
(ii)
Business combinations
Business combinations are accounted for using the acquisition method from the
acquisition date, which is the date on which control is transferred to the Group.
Acquisitions on or after 1 January 2011
For acquisitions on or after 1 January 2011, the Group measures goodwill at the
acquisition date as :




the fair value of the consideration transferred; plus
the recognised amount of any non-controlling interests in the acquiree; plus
if the business combination is achieved in stages, the fair value of the existing
equity interest in the acquiree; less
the net recognised amount (generally fair value) of the identifiable assets
acquired and liabilities assumed.
When the excess is negative, a bargain purchase gain is recognised immediately in
profit or loss.
The consideration transferred does not include amounts related to the settlement of
pre-existing relationships. Such amounts are generally recognised in profit or loss.
Costs related to the acquisition, other than those associated with the issue of debt or
equity securities, that the Group incurs in connection with a business combination
are expensed as incurred.
Any contingent consideration payable is recognised at fair value at the acquisition
date. If the contingent consideration is classified as equity, it is not remeasured and
settlement is accounted for within equity. Otherwise, subsequent changes to the fair
value of the contingent consideration are recognised in profit or loss.
When share-based payment awards (replacement awards) are required to be
exchanged for awards held by the acquiree’s employees (acquiree’s awards) and
relate to past services, then all or a portion of the amount of the acquirer’s
replacement awards is included in measuring the consideration transferred in the
business combination. This determination is based on the market-based value of the
replacement awards compared with the market-based value of the acquiree’s awards
and the extent to which the replacement awards relate to past and/or future service.
Company No. 94528 - T
25
2. Significant accounting policies (continued)
(a) Basis of consolidation (continued)
(ii)
Business combinations (continued)
Acquisitions between 1 January 2006 and 1 January 2011
For acquisitions between 1 January 2006 and 1 January 2011, goodwill represents
the excess of the cost of the acquisition over the Group’s interest in the recognised
amount (generally fair value) of the identifiable assets, liabilities and contingent
liabilities of the acquiree. When the excess is negative, a bargain purchase gain is
recognised immediately in profit or loss.
Transaction costs, other than those associated with the issue of debt or equity
securities, that the Group incurred in connection with business combinations were
capitalised as part of the cost of the acquisition.
Acquisitions prior to 1 January 2006
For acquisitions prior to 1 January 2006, goodwill represents the excess of the cost
of the acquisition over the Group’s interest in the fair values of the net identifiable
assets and liabilities.
(iii) Acquisitions of non-controlling interests
The Group treats all changes in its ownership interest in a subsidiary that do not
result in a loss of control as equity transactions between the Group and its noncontrolling interest holders. Any difference between the Group’s share of net assets
before and after the change, and any consideration received or paid, is adjusted to or
against Group reserves.
(iv) Loss of control
Upon the loss of control of a subsidiary, the Group derecognises the assets and
liabilities of the subsidiary, any non-controlling interests and the other components
of equity related to the subsidiary. Any surplus or deficit arising on the loss of
control is recognised in profit or loss. If the Group retains any interest in the
previous subsidiary, then such interest is measured at fair value at the date that
control is lost. Subsequently it is accounted for as an equity accounted investee or
as an available-for-sale financial asset depending on the level of influence retained.
(v)
Non-controlling interests
Non-controlling interest at the end of the reporting period, being the equity in a
subsidiary not attributable directly or indirectly to the equity holders of the
Company, are presented in the consolidated statement of financial position and
statement of changes in equity within equity, separately from equity attributable to
the owners of the Company. Non-controlling interests in the results of the Group is
presented in the consolidated statement of comprehensive income as an allocation
of the profit or loss and the comprehensive income for the year between noncontrolling interests and the owners of the Company.
Company No. 94528 - T
26
2. Significant accounting policies (continued)
(a) Basis of consolidation (continued)
(v)
Non-controlling interests (continued)
Losses applicable to the non-controlling interests in a subsidiary are allocated to the
non-controlling interests even if doing so causes the non-controlling interests to
have a deficit balance.
(vi) Transactions eliminated on consolidation
Intra-group balances and transactions, and any unrealised income and expenses
arising from intra-group transactions, are eliminated in preparing the consolidated
financial statements.
Unrealised gains arising from transactions with equity-accounted investees are
eliminated against the investment to the extent of the Group’s interest in the
investees. Unrealised losses are eliminated in the same way as unrealised gains, but
only to the extent that there is no evidence of impairment.
(b) Property, plant and equipment
(i)
Recognition and measurement
Freehold land are measured at cost/valuation. All other property, plant and
equipment are measured at cost less accumulated depreciation and accumulated
impairment losses, if any.
The Group has availed itself to the transitional provision when the MASB first
adopted IAS 16, Property, Plant and Equipment in 1998. Certain properties were
revalued in 1994 and no later valuation has been recorded for these properties.
Cost includes expenditures that are directly attributable to the acquisition of the
asset and any other costs directly attributable to bringing the asset to working
condition for its intended use, and the costs of dismantling and removing the items
and restoring the site on which they are located. The cost of self-constructed assets
includes the cost of materials and direct labour. For qualifying assets, borrowing
costs are capitalised in accordance with the accounting policy on borrowing costs.
Purchased software that is integral to the functionality of the related equipment is
capitalised as part of that equipment.
The cost of property, plant and equipment recognised as a result of a business
combination is based on fair value at acquisition date. The fair value of property is
the estimated amount for which a property could be exchanged between
knowledgeable willing parties in an arm’s length transaction after proper marketing
wherein the parties had each acted knowledgeably, prudently and without
compulsion. The fair value of other items of plant and equipment is based on the
quoted market prices for similar items when available and replacement cost when
appropriate.
Company No. 94528 - T
27
2. Significant accounting policies (continued)
(b) Property, plant and equipment (continued)
(i)
Recognition and measurement (continued)
When significant parts of an item of property, plant and equipment have different
useful lives, they are accounted for as separate items (major components) of
property, plant and equipment.
The gain or loss on disposal of an item of property, plant and equipment is
determined by comparing the proceeds from disposal with the carrying amount of
property, plant and equipment and is recognised net within “other income” and
“other expenses” respectively in the profit or loss. When revalued assets are sold,
the amounts included in the asset revaluation reserve are transferred to retained
earnings.
(ii) Subsequent costs
The cost of replacing a part of an item of property, plant and equipment is
recognised in the carrying amount of the item if it is probable that the future
economic benefits embodied within the part will flow to the Group or the Company,
and its cost can be measured reliably. The carrying amount of the replaced part is
derecognised to profit or loss. The costs of the day-to-day servicing of property,
plant and equipment are recognised in profit or loss as incurred.
(iii) Depreciation
Depreciation is calculated over the depreciable amount, which is the cost of an
asset, or other amount substituted for cost, less its residual value.
Depreciation is recognised in profit or loss on a straight-line basis over the
estimated useful lives of each part of an item of property, plant and equipment.
Leased assets are depreciated over the shorter of the lease term and their useful
lives unless it is reasonably certain that the Group will obtain ownership by the end
of the lease term. Freehold land is not depreciated. Property, plant and equipment
under construction are not depreciated until the assets are ready for their intended
use.
The estimated useful lives for the current and comparative periods are as follows :
Buildings
Plant and machinery
Motor vehicles
Renovation
Furniture, fittings and equipment
50 years
4 - 5 years
5 years
10 years
2.5 - 12.5 years
Depreciation methods, useful lives and residual values are reviewed, and adjusted
as appropriate at the end of the reporting period.
Company No. 94528 - T
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2. Significant accounting policies (continued)
(c) Leased assets
(i)
Finance lease
Leases in terms of which the Group or the Company assume substantially all the
risks and rewards of ownership are classified as finance leases. On initial
recognition, the leased asset is measured at an amount equal to the lower of its fair
value and the present value of the minimum lease payments. Subsequent to initial
recognition, the asset is accounted for in accordance with the accounting policy
applicable to that asset.
Minimum lease payments made under finance leases are apportioned between the
finance expense and the reduction of the outstanding liability. The finance expense
is allocated to each period during the lease term so as to produce a constant periodic
rate of interest on the remaining balance of the liability. Contingent lease payments
are accounted for by revising the minimum lease payments over the remaining term
of the lease when the lease adjustment is confirmed.
(ii)
Operating lease
Leases, where the Group or the Company does not assume substantially all the risks
and rewards of ownership are classified as operating leases and, except for property
interest held under operating lease, the leased assets are not recognised in the
statement of financial position.
Payments made under operating leases are recognised in profit or loss on a straightline basis over the term of the lease. Lease incentives received are recognised in
profit or loss as an integral part of the total lease expense, over the term of the lease.
Contingent rentals are charged to profit or loss in the reporting period in which they
are incurred.
(d) Intangible assets
Goodwill
Goodwill arises on business combinations is measured at cost less any accumulated
impairment losses. In respect of equity-accounted investees, the carrying amount of
goodwill is included in the carrying amount of the investment and an impairment loss on
such an investment is not allocated to any asset, including goodwill, that forms part of
the carrying amount of the equity-accounted investee.
Goodwill is not amortised but is tested for impairment annually and whenever there is an
indication that it may be impaired.
Company No. 94528 - T
29
2. Significant accounting policies (continued)
(e) Land held for property development
Land held for property development consists of land or such portions thereof on which no
development activities have been carried out or where development activities are not
expected to be completed within the Group’s normal operating cycle of 2 to 3 years. Such
land is classified as non-current asset and is measured at cost less accumulated
impairment losses.
Land held for property development is reclassified as property development costs at the
point when development activities have commenced and where it can be demonstrated
that the development activities can be completed within the Group’s normal operating
cycle of 2 to 3 years.
Cost associated with the acquisition of land includes the purchase price of the land,
professional fees, stamp duties, commissions, conversion fees and other relevant levies.
(f) Investment properties
Investment properties are properties which are owned to earn rental income or for capital
appreciation or for both, but not for sale in the ordinary course of business, use in the
production or supply of goods or services or for administrative purposes.
Investment properties are measured at cost less accumulated depreciation and impairment
losses, consistent with the accounting policy for property, plant and equipment as stated
in accounting policy Note 2(b).
Transfers between investment properties, property, plant and equipment and inventories
do not change the carrying amount and the cost of the property transferred.
Depreciation is charged to profit or loss on a straight-line basis over the estimated useful
lives of 50 years for buildings. Freehold land is not depreciated.
The Directors estimate the fair values of the Group’s investment properties without
involvement of independent valuers.
The fair values are based on market values, being the estimated amount for which a
property could be exchanged on the date of the valuation between a willing buyer and a
willing seller in an arm’s length transaction after proper marketing wherein the parties
had each acted knowledgeably.
(g) Financial instruments
(i) Initial recognition and measurement
A financial asset or a financial liability is recognised in the statement of financial
position when, and only when, the Group or the Company becomes a party to the
contractual provisions of the instrument.
Company No. 94528 - T
30
2. Significant accounting policies (continued)
(g) Financial instruments (continued)
(i)
Initial recognition and measurement (continued)
A financial instrument is recognised initially, at its fair value plus, in the case of a
financial instrument not at fair value through profit or loss, transaction costs that
are directly attributable to the acquisition or issue of the financial instrument.
An embedded derivative is recognised separately from the host contract and
accounted for as a derivative if, and only if, it is not closely related to the economic
characteristics and risks of the host contract and the host contract is not categorised
at fair value through profit or loss. The host contract, in the event an embedded
derivative is recognised separately, is accounted for in accordance with policy
applicable to the nature of the host contract.
(ii)
Financial instrument categories and subsequent measurement
The Group and the Company categorise financial instruments as follows:
Financial assets
(a)
Loans and receivables
Loans and receivables category comprises debt instruments that are not
quoted in an active market.
Financial assets categorised as loans and receivables are subsequently
measured at amortised cost using the effective interest method.
(b)
Available-for-sale financial assets
Available-for-sale category comprises investment in equity and debt securities
instruments that are not held for trading.
Investments in equity instruments that do not have a quoted market price in an
active market and whose fair value cannot be reliably measured are measured
at cost. Other financial assets categorised as available-for-sale are
subsequently measured at their fair values with the gain or loss recognised in
other comprehensive income, except for impairment losses, foreign exchange
gains and losses arising from monetary items and gains and losses of hedged
items attributable to hedge risks of fair value hedges which are recognised in
profit or loss. On derecognition, the cumulative gain or loss recognised in
other comprehensive income is reclassified from equity into profit or loss.
Interest calculated for a debt instrument using the effective interest method is
recognised in profit or loss.
All financial assets, except for those measured at fair value through profit or loss,
are subject to review for impairment (see Note 2(k)(i)).
Company No. 94528 - T
31
2. Significant accounting policies (continued)
(g) Financial instruments (continued)
(ii) Financial instrument categories and subsequent measurement (continued)
Financial liabilities
All financial liabilities are subsequently measured at amortised cost other than those
categorised as fair value through profit or loss.
Fair value through profit or loss category comprises financial liabilities that are held
for trading, derivatives (except for a derivative that is a financial guarantee contract
or a designated and effective hedging instrument) or financial liabilities that are
specifically designated into this category upon initial recognition.
Derivatives that are linked to and must be settled by delivery of unquoted equity
instruments whose fair values cannot be reliably measured are measured at cost.
Other financial liabilities categorised as fair value through profit or loss are
subsequently measured at their fair values with the gain or loss recognised in profit
or loss.
(iii) Regular way purchase or sale of financial assets
A regular way purchase or sale is a purchase or sale of a financial asset under a
contract whose terms require delivery of the asset within the time frame established
generally by regulation or convention in the marketplace concerned.
A regular way purchase or sale of financial assets is recognised and derecognised, as
applicable, using trade date accounting. Trade date accounting refers to:
(a)
(b)
the recognition of an asset to be received and the liability to pay for it on the
trade date, and
derecognition of an asset that is sold, recognition of any gain or loss on
disposal and the recognition of a receivable from the buyer for payment on
the trade date.
(iv) Derecognition
A financial asset or part of it is derecognised when, and only when the contractual
rights to the cash flows from the financial asset expire or the financial asset is
transferred to another party without retaining control or substantially all risks and
rewards of the asset. On derecognition of a financial asset, the difference between
the carrying amount and the sum of the consideration received (including any new
asset obtained less any new liability assumed) and any cumulative gain or loss that
had been recognised in equity is recognised in profit or loss.
Company No. 94528 - T
32
2. Significant accounting policies (continued)
(g) Financial instruments (continued)
(iv) Derecognition (continued)
A financial liability or a part of it is derecognised when, and only when, the
obligation specified in the contract is discharged or cancelled or expires. On
derecognition of a financial liability, the difference between the carrying amount of
the financial liability extinguished or transferred to another party and the
consideration paid, including any non-cash assets transferred or liabilities assumed,
is recognised in profit or loss.
(h) Property development costs
Property development costs comprise costs associated with the acquisition of land and all
costs that are directly attributable to development activities or that can be allocated on a
reasonable basis to such activities, including interest expense incurred during the period
of active development.
Property development costs not recognised as an expense is recognised as an asset and is
stated at the lower of cost and net realisable value.
The excess of revenue recognised in profit or loss over billings to purchasers is shown as
accrued billings under receivables, deposits and prepayments and the excess of billings to
purchasers over revenue recognised in profit or loss is shown as progress billings under
trade and other payables.
(i)
Inventories
i) Completed development properties
Completed development properties are stated at the lower of cost and net realisable
value. Cost is determined on the specific identification basis and includes costs of
land, direct building costs and other related development costs.
ii) Building materials
Building materials are stated at the lower of cost and net realisable value. The cost of
building materials is measured based on the first-in first-out principle and comprises
the original purchase price plus incidental costs in bringing these inventories to their
present location and conditions.
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.
The fair value of inventories acquired in a business combination is determined based on
the estimated selling price in the ordinary course of business less the estimated costs of
completion and sale, and a reasonable profit margin based on the effort required to
complete and sell the inventories.
Company No. 94528 - T
33
2. Significant accounting policies (continued)
(j) Cash and cash equivalents
Cash and cash equivalents consist of cash in hand, balances and deposits with banks and
highly liquid investments which have an insignificant risk of changes in value with
original maturities of three months or less (including the accounts maintained pursuant to
the Housing Developers (Housing Development Account) (Amendment) Regulations
2002). For the purpose of the statements of cash flows, cash and cash equivalents are
presented net of bank overdrafts and pledged deposits, if any.
(k) Impairment
(i) Financial assets
All financial assets (except for financial assets categorised as fair value through
profit or loss and investments in subsidiaries) are assessed at each reporting date
whether there is any objective evidence of impairment as a result of one or more
events having an impact on the estimated future cash flows of the asset. Losses
expected as a result of future events, no matter how likely, are not recognised. For
an investment in as equity instrument, a significant or prolonged decline in the fair
value below its cost is an objective evidence of impairment. If any such objective
evidence exists, then the financial assets recoverable amount is estimated.
An impairment loss in respect of loans and receivables is recognised in profit or loss
and is measured as the difference between the asset’s carrying amount and the
present value of estimated future cash flows discounted at the asset’s original
effective interest rate. The carrying amount of the asset is reduced through the use
of an allowance account.
An impairment loss in respect of available-for-sale financial assets is recognised in
profit or loss and is measured as the difference between the asset’s acquisition cost
(net of any principal repayment and amortisation) and the asset’s current fair value,
less any impairment loss previously recognised. Where a decline in the fair value of
an available-for-sale financial asset has been recognised in the other comprehensive
income, the cumulative loss in other comprehensive income is reclassified from
equity to profit or loss.
An impairment loss in respect of unquoted equity instrument that is carried at cost is
recognised in profit or loss and is measured as the difference between the financial
asset’s carrying amount and the present value of estimated future cash flows
discounted at the current market rate of return for a similar financial asset.
Impairment losses recognised in profit or loss for an investment in an equity
instrument classified as available for sale is not reversed through profit or loss.
If, in a subsequent period, the fair value of a debt instrument increases and the
increase can be objectively related to an event occurring after the impairment loss
was recognised in profit or loss, the impairment loss is reversed, to the extent that
the asset’s carrying amount does not exceed what the carrying amount would have
been had the impairment not been recognised at the date the impairment is reversed.
The amount of the reversal is recognised in profit or loss.
Company No. 94528 - T
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2. Significant accounting policies (continued)
(k) Impairment (continued)
(ii) Other assets
The carrying amounts of other assets (except for inventories and deferred tax assets)
are reviewed at the end of each reporting period to determine whether there is any
indication of impairment. If any such indication exists, then the asset’s recoverable
amount is estimated. For goodwill, and intangible assets that have indefinite useful
lives or that are not yet available for use, the recoverable amount is estimated each
period at the same time.
For the purpose of impairment testing, assets are grouped together into the smallest
group of assets that generates cash inflows from continuing use that are largely
independent of the cash inflows of other assets or cash-generating units. Subject to
an operating segment ceiling test, for the purpose of goodwill impairment testing,
cash-generating units to which goodwill has been allocated are aggregated so that the
level at which impairment testing is performed reflects the lowest level at which
goodwill is monitored for internal reporting purposes. The goodwill acquired in a
business combination, for the purpose of impairment testing, is allocated to group of
cash-generating units that are expected to benefit from the synergies of the
combination.
The recoverable amount of an asset or cash-generating unit is the greater of its value
in use and its fair value less costs to sell. In assessing value in use, the estimated
future cash flows are discounted to their present value using a pre-tax discount rate
that reflects current market assessments of the time value of money and the risks
specific to the asset or cash-generating unit.
An impairment loss is recognised if the carrying amount of an asset or its related
cash-generating unit exceeds its estimated recoverable amount.
Impairment losses are recognised in profit or loss. Impairment losses recognised in
respect of cash-generating units are allocated first to reduce the carrying amount of
any goodwill allocated to the cash-generating unit or the group of cash-generating
units and then to reduce the carrying amount of the other assets in the cashgenerating unit (or a group of cash-generating units) on a pro rata basis.
An impairment loss in respect of goodwill is not reversed. In respect of other assets,
impairment losses recognised in prior periods are assessed at the end of each
reporting period for any indications that the loss has decreased or no longer exists.
An impairment loss is reversed if there has been a change in the estimates used to
determine the recoverable amount since the last impairment loss was recognised. An
impairment loss is reversed only to the extent that the asset’s carrying amount does
not exceed the carrying amount that would have been determined, net of
depreciation or amortisation, if no impairment loss had been recognised. Reversals
of impairment losses are credited to profit or loss in the financial year in which the
reversals are recognised.
Company No. 94528 - T
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2. Significant accounting policies (continued)
(l) Equity instruments
Instruments classified as equity are measured at cost on initial recognition and are not remeasured subsequently.
(i)
Issue expenses
Costs directly attributable to issue of instruments classified as equity are recognised
as a deduction from equity.
(ii)
Ordinary shares
Ordinary shares are classified as equity.
(iii) Repurchase, disposal and reissue of share capital (treasury share)
When share capital recognised as equity is repurchased, the amount of the
consideration paid, including directly attributable costs, net of any tax effects, is
recognised as a deduction from equity. Repurchased shares that are not
subsequently cancelled are classified as treasury shares in the statement of changes
in equity.
Where treasury shares are distributed as share dividends, the cost of the treasury
shares is applied in the reduction of the share premium account or distributable
reserves, or both.
Where treasury shares are sold or reissued subsequently, the difference between the
sales consideration net of directly attributable costs and the carrying amount of the
treasury shares is recognised in equity, and the resulting surplus or deficit on the
transaction is presented in share premium.
(m) Provisions
A provision is recognised if, as a result of a past event, the Group has a present legal or
constructive obligation that can be estimated reliably, and it is probable that an outflow of
economic benefits will be required to settle the obligation. Provisions are determined by
discounting the expected future cash flows at a pre-tax rate that reflects current market
assessments of the time value of money and the risks specific to the liability. The
unwinding of the discount is recognised as finance cost.
Contingent liabilities
Where it is not probable that an outflow of economic benefits will be required, or the
amount cannot be estimated reliably, the obligation is disclosed as a contingent liability,
unless the probability of outflow of economic benefits is remote. Possible obligations,
whose existence will only be confirmed by the occurrence or non-occurrence of one or
more future events, are also disclosed as contingent liabilities unless the probability of
outflow of economic benefits is remote.
Company No. 94528 - T
36
2. Significant accounting policies (continued)
(n) Employee benefits
Short-term employee benefit obligations in respect of salaries, annual bonuses, paid
annual leave and sick leave are measured on an undiscounted basis and are expensed as
the related service is provided.
A liability is recognised for the amount expected to be paid under short-term cash bonus
or profit-sharing plans if the Group has a present legal or constructive obligation to pay
this amount as a result of past service provided by the employee and the obligation can be
estimated reliably.
The Group’s contribution to statutory pension funds are charged to profit or loss in the
financial year to which they relate. Once the contributions have been paid, the Group has
no further payment obligations.
(o) Revenue and other income
(i)
Property development
Revenue from property development activities is recognised based on the stage of
completion measured by reference to the proportion that property development
costs incurred for work performed to date bear to the estimated total property
development costs.
Where the financial outcome of a property development activity cannot be reliably
estimated, property development revenue is recognised only to the extent of
property development costs incurred that are probable to be recoverable, and
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, including costs to be incurred over the
defects liability period, is recognised immediately in profit or loss.
(ii)
Completed development properties and land
Revenue relating to sale of completed development properties and land is
recognised net of discounts when transfer of risks and rewards have been
completed.
(iii) Goods sold
Revenue from the sale of goods is measured at fair value of the consideration
received or receivable, net of returns and allowances, trade discounts and volume
rebates. Revenue is recognised when the significant risks and rewards of ownership
have been transferred to the buyer, recovery of the consideration is probable, the
associated costs and possible return of goods can be estimated reliably, and there is
no continuing management involvement with the goods, and the amount of revenue
can be measured reliably.
Company No. 94528 - T
37
2. Significant accounting policies (continued)
(o) Revenue and other income (continued)
(iv) Dividend income
Dividend income is recognised when the right to receive payment is established.
(v)
Rental income
Rental income is recognised in profit or loss on a straight-line basis over the term of
the lease. Lease incentives granted are recognised as an integral part of the total
rental income, over the term of the lease. Rental income from subleased property is
recognised as other income.
(vi) Interest income
Interest income is recognised as it accrues, using the effective interest method in
profit or loss.
(p) Borrowing costs
Borrowing costs that are not directly attributable to the acquisition, construction or
production of a qualifying assets are recognised in profit or loss using the effective
interest method.
Borrowing costs directly attributable to the acquisition, construction or production of
qualifying assets, which are assets that necessarily take a substantial period of time to get
ready for their intended use or sale, are capitalised as part of the cost of those assets.
The capitalisation of borrowing costs as part of the cost of a qualifying asset commences
when expenditure for the asset is being incurred, borrowing costs are being incurred and
activities that are necessary to prepare the asset for its intended use or sale are in
progress. Capitalisation of borrowing costs is suspended or ceases when substantially all
the activities necessary to prepare the qualifying asset for its intended use or sale are
interrupted or completed.
(q) Income tax
Income tax expense comprises current and deferred tax. Current tax and deferred tax are
recognised in profit or loss except to the extent that it relates to a business combination
items recognised directly in equity or other comprehensive income.
Current tax is the expected tax payable or receivable on the taxable income or loss for the
year, using tax rates enacted or substantively enacted by the end of the reporting period,
and any adjustment to tax payable in respect of previous financial years.
Company No. 94528 - T
38
2. Significant accounting policies (continued)
(q) Income tax (continued)
Deferred tax is recognised using the liability method, providing for temporary differences
between the carrying amounts of assets and liabilities in the statement of financial
position and tax bases. Deferred tax is not recognised for the following temporary
differences: the initial recognition of goodwill, and the initial recognition of assets or
liabilities in a transaction that is not a business combination and that affects neither
accounting nor taxable profit or loss. Deferred tax is measured at the tax rates that are
expected to be applied to the temporary differences when they reverse, based on the laws
that have been enacted or substantively enacted by the end of the reporting period.
Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset
current tax liabilities and assets, and they relate to income taxes levied by the same tax
authority on the same taxable entity, or on different tax entities, but they intend to settle
current tax liabilities and assets on a net basis or their tax assets and liabilities will be
realised simultaneously.
A deferred tax asset is recognised to the extent that it is probable that future taxable
profits will be available against which temporary difference can be utilised. Deferred tax
assets are reviewed at the end of each reporting period and are reduced to the extent that
it is no longer probable that the related tax benefit will be realised.
(r) Earnings per ordinary share
The Group presents basic earnings per ordinary share data for its ordinary shares (EPS).
Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders
of the Company by the weighted average number of ordinary shares outstanding during
the period, adjusted for own shares held.
(s)
Operating segments
An operating segments is a component of the Group that engages in business activities
from which it may earn revenues and incur expenses, including revenues and expenses
that relate to transactions with any of the Group’s other components. An operating
segment’s operating results are reviewed regularly by the chief operating decision maker,
which in this case is the Managing Director of the Group, to make decisions about
resources to be allocated to the segment and assess its performance, and for which
discrete financial information is available.
Company No. 94528 - T
39
3. Property, plant and equipment
Group
Total
RM
Freehold
land
RM
Buildings
RM
Plant and
machinery
RM
Cost/Valuation
At 1 January 2011
Additions
Disposals
4,024,771
-
2,352,828
60,876
-
3,596,762
-
3,492,379
1,668,163
(306,252)
215,382
154,516
-
1,800,642
130,942
-
15,482,764
2,014,497
(306,252)
At 31 December 2011/
1 January 2012
4,024,771
2,413,704
3,596,762
4,854,290
369,898
1,931,584
17,191,009
1,407
(186,700)
-
572,686
(122,916)
(4,724)
138,115
-
90,947
(8,560)
-
803,155
(318,176)
(4,724)
Additions
Disposal
Written off
-
-
Motor
Vehicles
RM
Furniture,
fittings and
equipment
RM
Renovation
RM
At 31 December 2012
4,024,771
2,413,704
3,411,469
5,299,336
508,013
2,013,971
17,671,264
Representing :
- At cost
- At valuation
162,771
3,862,000
2,413,704
-
3,411,469
-
5,299,336
-
508,013
-
2,013,971
-
13,809,264
3,862,000
4,024,771
2,413,704
3,411,469
5,299,336
508,013
2,013,971
17,671,264
Company No. 94528 - T
40
3. Property, plant and equipment (continued)
Group
Freehold
land
RM
Buildings
RM
Plant and
machinery
RM
Motor
Vehicles
RM
Renovation
RM
Furniture,
fittings and
equipment
RM
Total
RM
Accumulated depreciation
At 1 January 2011
Depreciation for the year
Disposal
-
661,700
47,258
-
3,524,802
21,998
-
2,129,445
613,968
(306,249)
95,570
25,743
-
1,699,914
49,350
-
8,111,431
758,317
(306,249)
At 31 December 2011/
1 January 2012
-
708,958
3,546,800
2,437,164
121,313
1,749,264
8,563,499
Depreciation for the year
Disposal
Written off
-
48,274
-
21,999
(184,057)
-
716,538
(122,913)
(1,417)
46,689
-
61,685
(4,613)
-
895,185
(311,583)
(1,417)
At 31 December 2012
-
757,232
3,384,742
3,029,372
168,002
1,806,336
9,145,684
Company No. 94528 - T
41
3. Property, plant and equipment (continued)
Group
Carrying amounts
At 1 January 2011
- At cost
- At valuation
At 31 December 2011/
1 January 2012
- At cost
- At valuation
At 31 December 2012
- At cost
- At valuation
Motor
Vehicles
RM
Furniture,
fittings and
equipment
RM
Freehold
land
RM
Buildings
RM
Plant and
machinery
RM
162,771
3,862,000
1,691,128
-
71,960
-
1,362,934
-
119,812
-
100,728
-
3,509,333
3,862,000
4,024,771
1,691,128
71,960
1,362,934
119,812
100,728
7,371,333
162,771
3,862,000
1,704,746
-
49,962
-
2,417,126
-
248,585
-
182,320
-
4,765,510
3,862,000
4,024,771
1,704,746
49,962
2,417,126
248,585
182,320
8,627,510
162,771
3,862,000
1,656,472
-
26,727
-
2,269,964
-
340,011
-
207,635
-
4,663,580
3,862,000
4,024,771
1,656,472
26,727
2,269,964
340,011
207,635
8,525,580
Renovation
RM
Total
RM
Company No. 94528 - T
42
3. Property, plant and equipment (continued)
Company
Total
RM
Freehold
land
RM
Buildings
RM
Plant and
machinery
RM
Cost/Valuation
At 1 January 2011
Additions
Disposal
4,014,200
-
2,123,378
60,876
-
3,298,690
-
2,482,272
1,372,800
(306,252)
-
1,637,138
85,955
-
13,555,678
1,519,631
(306,252)
At 31 December 2011/
1 January 2012
4,014,200
2,184,254
3,298,690
3,548,820
-
1,723,093
14,769,057
Additions
Disposal
Written off
-
-
(175,400)
-
Motor
Vehicles
RM
Furniture,
fittings and
equipment
RM
Renovation
RM
488,186
(122,916)
(4,724)
27,858
-
40,362
-
556,406
(298,316)
(4,724)
At 31 December 2012
4,014,200
2,184,254
3,123,290
3,909,366
27,858
1,763,455
15,022,423
Representing :
- At cost
- At valuation
152,200
3,862,000
2,184,254
-
3,123,290
-
3,909,366
-
27,858
-
1,763,455
-
11,160,423
3,862,000
4,014,200
2,184,254
3,123,290
3,909,366
27,858
1,763,455
15,022,423
Company No. 94528 - T
43
3. Property, plant and equipment (continued)
Company
Freehold
land
RM
Buildings
RM
Plant and
machinery
RM
Motor
Vehicles
RM
Renovation
RM
Furniture,
fittings and
equipment
RM
Total
RM
Accumulated depreciation
At 1 January 2011
Depreciation for the year
Disposal
-
597,025
42,670
-
3,232,090
20,759
-
1,576,751
431,081
(306,249)
-
1,556,352
44,806
-
6,962,218
539,316
(306,249)
At 31 December 2011/
1 January 2012
-
639,695
3,252,849
1,701,583
-
1,601,158
7,195,285
Depreciation for the year
Disposal
Written off
-
43,685
-
734
50,414
-
621,756
(298,308)
(1,417)
At 31 December 2012
-
683,380
734
1,651,572
7,517,316
20,525
(175,395)
3,097,979
506,398
(122,913)
(1,417)
2,083,651
-
Company No. 94528 - T
44
3. Property, plant and equipment (continued)
Company
Carrying amounts
At 1 January 2011
- At cost
- At valuation
At 31 December 2011/
1 January 2012
- At cost
- At valuation
At 31 December 2012
- At cost
- At valuation
Motor
Vehicles
RM
Furniture,
fittings and
equipment
RM
Freehold
land
RM
Buildings
RM
Plant and
machinery
RM
152,200
3,862,000
1,526,353
-
66,600
-
905,521
-
-
80,786
-
2,731,460
3,862,000
4,014,200
1,526,353
66,600
905,521
-
80,786
6,593,460
152,200
3,862,000
1,544,559
-
45,841
-
1,847,237
-
-
121,935
-
3,711,772
3,862,000
4,014,200
1,544,559
45,841
1,847,237
-
121,935
7,573,772
152,200
3,862,000
1,500,874
-
25,311
-
1,825,715
-
27,124
-
111,883
-
3,643,107
3,862,000
4,014,200
1,500,874
25,311
1,825,715
27,124
111,883
7,505,107
Renovation
RM
Total
RM
Company No. 94528 - T
45
3. Property, plant and equipment (continued)
3.1
Assets held in trust
Included in property, plant and equipment of the Group and of the Company are motor
vehicles with carrying amount of RM1,913,326 (2011 : RM2,245,404) and RM1,469,079
(2011 : RM1,675,516) respectively held in trust by the Directors.
3.2
Property, plant and equipment under the revaluation model
The freehold land of the Group and of the Company with carrying amount of
RM3,862,000 (2011 : RM3,862,000) was revalued in 1994 based on valuation by an
independent professional valuer on an open market value basis. The revaluation surplus
arising from the revaluation has been capitalised as asset revaluation reserve.
Had the freehold land been carried at historical cost, the carrying amount of the revalued
asset that would have been included in the financial statements of the Group and of the
Company at the end of the year would be RM1,000,000 (2011 : RM1,000,000).
3.3
Assets under finance lease
The carrying amount of plant and machinery acquired under finance lease instalment
plans is RMNil (2011 : RM45,496).
4. Intangible assets
Goodwill on consolidation
Group
2012
RM
At 1 January/31 December
4.1
1,441,116
2011
RM
1,441,116
Impairment testing for cash-generating units containing goodwill
For the purpose of impairment testing, goodwill is allocated to the Group’s CashGenerating Units (“CGUs”) identified.
Goodwill is tested for impairment on an annual basis by comparing the carrying amount
with the recoverable amount of the CGUs based on the value-in-use.
Value-in-use is determined by discounting the future cash flows generated from the
continuing use of the unit and is based on the recent financial projections approved by the
Management.
A weighted average cost of capital of 7.8% (2011 : 9.0%) has been applied to the cash
flow projections.
The gross margin used in the projections is based on past experience.
Company No. 94528 - T
46
5. Land held for property development
Group
Company
2012
RM
2011
RM
2012
RM
2011
RM
202,693,802
2,743,553
12,022,063
195,597,218
2,743,553
7,668,303
176,721,689
2,494,623
10,628,354
171,647,351
2,494,623
5,937,915
217,459,418
206,009,074
189,844,666
180,079,889
Cost
At 1 January
Freehold land
Leasehold land
Development expenditure
Transfer from property
development costs (Note 8)
Additions
Disposal
2,377,496
4,521,918
(4,469,149)
2,037,832
9,780,684
(368,172)
1,351,653
5,492,819
(4,069,999)
3,265,236
6,867,713
(368,172)
At 31 December
Freehold land
Leasehold land
Development expenditure
202,633,431
17,256,252
202,693,802
2,743,553
12,022,063
176,769,226
15,849,913
176,721,689
2,494,623
10,628,354
219,889,683
217,459,418
192,619,139
189,844,666
Included in additions of land held for property development cost incurred during the year of the
Group and of the Company are rental of plant and machinery of RM2,787,933 (2011 :
RM3,454,979).
6. Investment properties
Group
2012
RM
Company
2011
RM
2012
RM
2011
RM
Cost
At 1 January
Disposal
2,737,380
(172,325)
2,737,380
-
2,565,055
-
2,565,055
-
At 31 December
2,565,055
2,737,380
2,565,055
2,565,055
Company No. 94528 - T
47
6. Investment properties (continued)
Group
Company
2012
RM
2011
RM
2012
RM
2011
RM
Accumulated depreciation
At 1 January
Depreciation for the year
Disposal
109,502
17,389
(7,181)
91,251
18,251
-
102,608
17,102
-
85,506
17,102
-
At 31 December
119,710
109,502
119,710
102,608
2,445,345
2,627,878
2,445,345
2,462,447
1,709,997
735,348
1,824,880
802,998
1,709,997
735,348
1,709,997
752,450
2,445,345
2,627,878
2,445,345
2,462,447
Carrying amounts
Included in the above are :
Freehold land
Buildings
The fair value of investment properties of the Group and of the Company stated at Directors’
estimate amounted to of RM8,800,000 (2011 : RM9,080,000) and RM8,800,000 (2011 :
RM8,800,000) respectively.
The following are recognised in profit or loss in respect of investment properties :
Group
Rental income
Direct operating expenses :
- income generating
investment properties
- non-income generating
investment properties
Company
2012
RM
2011
RM
2012
RM
2011
RM
248,760
258,260
248,760
258,260
22,600
23,804
22,456
21,032
7,107
6,663
7,107
6,663
7. Investments in subsidiaries
Company
2012
RM
2011
RM
23,499,659
(1,153,000)
23,499,659
(1,153,000)
22,346,659
22,346,659
Unquoted shares
At cost
Less : Accumulated impairment losses
Company No. 94528 - T
48
7. Investments in subsidiaries (continued)
The subsidiaries, all of which are incorporated in Malaysia, are as follows :
Percentage of
Equity Held
2012
2011
%
%
Name of subsidiary
Principal Activities
Ultra-Bina Sdn. Berhad
100
100
Property development and building
construction
Fung Yik Sdn. Bhd.
100
100
Property development
Asas Mutiara Sdn. Bhd.
100
100
Property development
Permai Baru Sdn. Bhd.
100
100
Property development
Asas Land Development Sdn. Bhd.
* 99.9
* 99.9 Property development
Mastiara Construction Sdn. Bhd.
100
100
Property development and civil
construction
Asas Dunia Development &
Construction Sdn. Bhd.
100
100
Property development and
construction.
Asas Dunia Quarry Industries Sdn.
Bhd.
100
100
Trading of building materials
*
The remaining shares are held by non-controlling interests.
8. Property development costs
Group
2012
RM
Company
2011
RM
2012
RM
2011
RM
At 1 January
Freehold land
Development costs
Accumulated costs charged to
profit or loss
38,406,259
99,832,444
42,749,837
41,297,948
35,347,883
100,064,075
40,314,853
40,974,050
(53,943,006)
(13,487,985)
(57,641,873)
(14,029,915)
84,295,697
70,559,800
77,770,085
67,258,988
Company No. 94528 - T
49
8. Property development costs (continued)
Group
2012
RM
Company
2011
RM
2012
RM
2011
RM
-
-
-
Add :
Land costs incurred during
the year
Development costs incurred
during the year
800,360
56,058,480
66,204,438
53,283,694
67,782,884
56,858,840
66,204,438
53,283,694
67,782,884
(66,626,936)
(9,274,432)
(44,309,362)
(3,725,593)
(68,675,340)
(9,298,807)
(47,335,790)
(4,387,077)
(2,377,496)
(105,048)
(2,037,832)
(2,395,754)
(1,351,653)
(245,793)
(3,265,236)
(2,283,684)
(78,383,912)
(52,468,541)
(79,571,593)
(57,271,787)
30,227,849
99,107,426
38,406,259
99,832,444
26,369,113
94,434,461
35,347,883
100,064,075
(66,564,650)
(53,943,006)
(69,321,388)
(57,641,873)
62,770,625
84,295,697
51,482,186
77,770,085
Less :
Costs charged to profit or
loss
Transfer to inventories
Transfer to land held for
property development
(Note 5)
Disposal
At 31 December
Freehold land
Development costs
Accumulated costs charged
to profit or loss
8.1
Included in development costs of the Group and of the Company is :
i) rental of plant and machinery for the year amounting to RM270,343 (2011 :
RM920,464) and RM283,484 (2011 : RM867,241) respectively.
Company No. 94528 - T
50
8. Property development costs (continued)
ii) property development costs in respect of joint-venture projects are as follows :
Group
2012
RM
Company
2011
RM
2012
RM
2011
RM
Project
Taman Impian Indah *
Taman Sungai Duri
Indah II *
2,495,581
4,220,535
-
-
2,495,581
*
4,220,535
2,972,409
4,775,225
795,174
1,135,052
3,767,583
5,910,277
The joint-venture partner is entitled to 20% to 30% of gross sales proceeds.
9. Receivables, deposits and prepayments
Note
Group
2012
RM
Company
2011
RM
2012
RM
2011
RM
Trade
Trade receivables
Accrued billings
9.1
20,789,802
12,039,976
11,957,638
11,552,301
17,033,344
13,412,971
10,153,851
14,170,715
32,829,778
23,509,939
30,446,315
24,324,566
8,267,206
753,872
225,884
72,284
Non-trade
Amount due from
subsidiaries
Other receivables
Deposits
Prepayments
9.1
-
-
106,525
925,163
134,940
788,325
242,434
205,343
7,296,000
76,944
776,734
70,727
1,166,628
1,236,102
8,220,405
9,319,246
33,996,406
24,746,041
38,666,720
33,643,812
9.2
Trade receivables
Trade receivables are denominated in functional currency.
9.2
Amount due from subsidiaries
The non-trade receivables due from subsidiaries are unsecured, interest-free and
repayable on demand.
Company No. 94528 - T
51
10. Inventories
Group
2012
RM
Completed development
properties
Building materials
Company
2011
RM
2012
RM
2011
RM
67,498,768
38,956
74,508,761
42,749
49,524,432
38,956
54,352,195
42,749
67,537,724
74,551,510
49,563,388
54,394,944
The amount of inventories written down to profit or loss of the Group and of the Company
during the financial year under review amounted to RM4,553,993 (2011 : RMNil) and
RM2,570,998 (2011 : RMNil) respectively.
11. Cash and cash equivalents
Group
2012
RM
Deposits with a licensed bank
Cash and bank balances
Short term investments
Company
2011
RM
2012
RM
2011
RM
14,272,690
3,329,872
2,279,570
3,771,909
3,913,076
1,366,164
14,272,690
1,655,266
2,279,570
3,771,909
3,388,324
1,366,164
19,882,132
9,051,149
18,207,526
8,526,397
Included in cash and bank balances of the Group and of the Company is an amount of
RM2,467,213 (2011 : RM1,200,816) and RM1,442,369 (2011 : RM1,198,814) respectively
held under Housing Development Account as required under the Housing Developers
(Housing Development Account) (Amendment) Regulations 2002.
12. Capital and reserves
Share capital
2012
2011
Amount
RM
Number of
shares
Amount
RM
Number of
shares
Authorised
500,000,000
500,000,000
500,000,000
500,000,000
Issued and fully paid
191,595,776
191,595,776
191,595,776
191,595,776
Ordinary shares of RM1 each
Company No. 94528 - T
52
12. Capital and reserves (continued)
Reserves
Note
Group
Company
2012
RM
2011
RM
2012
RM
2011
RM
15,960,000
15,960,000
15,960,000
15,960,000
818,502
500,000
(867,789)
818,502
500,000
(781,600)
818,502
(867,789)
818,502
(781,600)
16,410,713
16,496,902
15,910,713
15,996,902
196,868,288
176,771,080
149,810,782
113,409,788
213,279,001
193,267,982
165,721,495
129,406,690
Non-distributable :
Share premium
Asset revaluation
reserve
Capital reserve
Treasury shares
12.1
12.2
Distributable :
Retained earnings
The movements in the reserves are disclosed in the statements of changes in equity.
12.1 Asset revaluation reserve
The asset revaluation reserve represents surplus arising from the revaluation of certain
freehold land.
12.2 Treasury shares
The shareholders of the Company, by a special resolution passed in a general meeting
held on 18 June 2012, approved the Company’s plan to repurchase its own shares. The
Directors of the Company are committed to enhance the value of the Company to its
shareholders and believe that the repurchase plan can be applied in the best interests of
the Company and its shareholders.
During the financial year, the Company repurchased 73,000 of its issued share capital
from then open market at an average price of RM1.18 per share. The total consideration
paid was RM86,189 including transaction costs of RM640. The repurchase transactions
were financed by internal generated funds. The shares repurchased are retained as
treasury shares.
At 31 December 2012, the Group held 816,000 (2011 : 743,000) of the Company’s
shares.
Company No. 94528 - T
53
12. Capital and reserves (continued)
12.3 Section 108 tax credit
Subject to agreement with the Inland Revenue Board, the Company has Section 108 tax
credit and tax exempt income to frank and distribute approximately RM98.0 million and
RM0.9 million respectively from its retained earnings at 31 December 2012 if paid out as
dividends.
The Finance Act, 2007 introduced a single tier company income tax system with effect
from year of assessment 2008. As such, the Section 108 tax credit as at 31 December
2012 will be available to the Company until such time the credit is fully utilised or upon
expiry of the six-year transitional period on 31 December 2013, whichever is earlier.
13. Borrowings
Group/Company
2012
2011
RM
RM
Non-current (unsecured)
Term loan
-
8,628,599
-
571,432
5,195,664
10,297
-
5,777,393
-
14,405,992
Current (unsecured)
Al-Bai Bithaman Ajil Term Financing (BBA - TF)
Term loan
Finance lease liabilities
The borrowings are denominated in functional currency.
Term and debt repayment schedule
Total
RM
Under 1
year
RM
1 - 2 years
RM
2 - 5 years
RM
571,432
13,824,263
571,432
5,195,664
5,195,664
3,432,935
2011
BBA - TF
Term loan
Company No. 94528 - T
54
13. Borrowings (continued)
Finance lease liabilities
Finance lease liabilities are payable as follows :
2012
2011
Minimum
lease
payments
RM
Interest
RM
Principal
RM
-
-
-
Less than 1 year
Minimum
lease
payments
RM
Interest
RM
Principal
RM
611
10,297
10,908
14. Deferred tax (assets)/liabilities
Recognised deferred tax (assets)/liabilities
Deferred tax (assets)/liabilities are attributable to the following :
Assets
Group
2012
RM
2011
RM
Liabilities
2012
2011
RM
RM
Net
2012
RM
2011
RM
Property, plant
and equipment
- revaluation
- capital
allowance
(1,144,095)
Provisions
-
143,095
143,095
143,095
143,095
(460,095)
208,000
-
226,000
208,000
(1,144,095)
226,000
(460,095)
Tax (assets)/
liabilities
Set-off of tax
(460,095)
328,095
351,095
(310,095)
369,095
(328,095)
(793,000)
-
(91,000)
-
41,000
41,000
(793,000)
(91,000)
(1,144,095)
310,095
(834,000)
(132,000)
Assets
Company
2012
RM
2011
RM
Property, plant and equipment
- revaluation
- capital allowance
Provisions
143,095
167,000
(648,095)
143,095
185,000
(460,095)
(338,000)
(132,000)
Company No. 94528 - T
55
14. Deferred tax (assets)/liabilities (continued)
The components and movements of deferred tax (assets)/liabilities during the year are as
follows :
Group
Property, plant and
equipment
- revaluation
- capital allowance
Provisions
At 1
January
2011
RM
At 31
Recognised December Recognised
in profit or
2011/
in profit or
At 31
loss
1 January
loss
December
(Note 23)
2012
(Note 23)
2012
RM
RM
RM
RM
-
-
143,095
32,500
(483,595)
193,500
23,500
143,095
226,000
(460,095)
143,095
(18,000)
208,000
(684,000) (1,144,095)
(308,000)
217,000
(91,000)
(702,000)
(793,000)
143,095
17,500
(483,595)
143,095
185,000
(460,095)
-
167,500
23,500
(18,000)
(188,000)
143,095
167,000
(648,095)
(323,000)
191,000
(132,000)
(206,000)
(338,000)
Company
Property, plant and
equipment
- revaluation
- capital allowance
Provisions
-
Unrecognised deferred tax assets
Deferred tax assets have not been recognised in respect of the following items (stated at gross) :
Group
2012
RM’000
Unutilised tax losses
Unabsorbed capital allowance
2011
RM’000
88
940
88
940
1,028
1,028
The unutilised tax losses and unabsorbed capital allowance do not expire under current tax
legislation. Deferred tax assets have not been recognised in respect of this item because it is
not probable that future taxable profit will be available against which the Group can utilise the
benefit there from.
Company No. 94528 - T
56
15. Provisions
Group/Company
2012
2011
RM
RM
At 1 January
Provision reversed during the year
1,840,450
(1,840,450)
At 31 December
1,993,675
(153,225)
-
1,840,450
-
1,813,026
27,424
-
1,840,450
This represents the provisions for :
Interest and legal fees payable
Liquidated ascertained damages
Provision for interest and legal fees payable were made in respect of the legal suits filed by
certain purchasers against the Company to rescind the Sale and Purchase Agreements for retail
units in a shopping complex.
Provision for liquidated ascertained damages was in respect of projects undertaken by the
Group and the Company.
On 29 November 2012, the Federal Court has dismissed the appeal of purchasers following the
decision to file an appeal as the Courts of Appeal has ruled in the Group’s and the Company’s
favour.
16. Trade and other payables
Note
Group
Company
2012
RM
2011
RM
2012
RM
2011
RM
16.1
11,823,276
15,564,946
4,459,632
6,641,674
16.2
1,359,351
2,180,767
15,824,160
1,359,351
42,423,465
2,180,767
13,182,627
17,745,713
21,643,143
51,245,906
Trade
Trade payables
Amount due to
subsidiaries
Progress billings
Company No. 94528 - T
57
16. Trade and other payables (continued)
Note
Group
2012
RM
Company
2011
RM
2012
RM
2011
RM
Non-trade
Amount due to
subsidiaries
Other payables
Accrued expenses
16.2
3,251,456
885,474
4,861,639
819,000
3,978,501
3,139,712
805,866
3,960,310
4,252,836
749,671
4,136,930
5,680,639
7,924,079
8,962,817
17,319,557
23,426,352
29,567,222
60,208,723
16.1 Trade payables
Trade payables are denominated in functional currency.
Included in trade payables of the Group and of the Company are amounts of
RM4,057,763 (2011 : RM6,732,934) and RM3,875,771 (2011 : RM5,147,908)
respectively representing amount due to related parties.
16.2 Amount due to subsidiaries
The trade payables to subsidiaries are subject to the normal trade terms.
The non-trade amount due to subsidiaries is unsecured, interest-free and payable on
demand.
17. Revenue
Revenue of the Group and of the Company consist of the following :
Group
Gross dividend income from
subsidiaries (unquoted)
Property development
revenue
Rental income from
properties
Sale of land
Sale of completed
development properties
Sale of building materials
Company
2012
RM
2011
RM
-
-
2012
RM
2011
RM
33,500,443
600,000
98,747,261
74,160,667
91,067,087
75,530,451
1,511,172
17,022,038
1,274,897
3,839,586
1,364,580
13,556,956
1,132,257
3,091,296
18,257,500
336,860
32,726,536
45,500
15,665,150
18,321
26,507,223
45,500
135,874,831
112,047,186
155,172,537
106,906,727
Company No. 94528 - T
58
18. Cost of sales
Cost of sales of the Group and of the Company include the following :
Group
Property development
expenses
Cost of land
Cost of completed
development properties
Building materials
Post completion expenses
Company
2012
RM
2011
RM
2012
RM
2011
RM
66,626,936
4,808,457
44,309,362
2,763,926
68,675,340
4,315,792
47,335,790
2,651,856
10,720,752
294,006
604,099
19,075,219
2,729
467,279
10,545,890
239
554,348
18,049,472
2,729
467,279
83,054,250
66,618,515
84,091,609
68,507,126
19. Operating profit
Operating profit is arrived at after charging/(crediting) :
Group
Auditors’ remuneration :
- Statutory audit
- KPMG
- current year
- prior year
- Other services
- KPMG
- Affiliates of KPMG
Bad debt written off
Depreciation
- property, plant and
equipment (Note 3)
- investment properties
(Note 6)
Plant and equipment written
off
Inventories written down
Interest income
Company
2012
RM
2011
RM
103,000
103,000
(1,000)
52,000
3,000
34,790
1,950
3,000
30,300
3,900
3,000
19,000
-
-
895,185
758,317
621,756
539,316
17,389
18,251
17,102
17,102
-
3,307
4,553,993
(554,097)
-
(265,217)
2012
RM
-
3,307
2,570,998
(552,729)
2011
RM
52,000
(1,000)
3,000
16,000
-
(264,199)
Company No. 94528 - T
59
19. Operating profit (continued)
Group
2012
RM
Gain on disposal of :
- land held for property
development
- property, plant and
equipment
- investment property
Reversal of impairment loss
on trade receivables
Rental of premise
Reversal of provisions
Management fees received
and receivable
Compensation claims
Company
2011
RM
2012
RM
2011
RM
(11,810,029)
(816,985)
(8,673,097)
(816,985)
(118,307)
(114,856)
(86,297)
(118,592)
(86,297)
-
-
-
-
(86,944)
(86,944)
(4,000)
(1,840,450)
(205,760)
(412,856)
-
-
(153,225)
(1,840,450)
(153,225)
(107,856)
(99,464)
(79,224)
-
-
-
The estimated monetary value of benefits-in-kind receivable by certain Directors otherwise
than in cash of the Group and of the Company amounted to RM75,900 (2011 : RM71,908).
20. Employee information
Group
Staff costs (excluding
Directors’ remuneration)
Company
2012
RM
2011
RM
2012
RM
2011
RM
4,040,443
3,880,291
2,673,073
2,617,071
Staff costs of the Group and of the Company include contributions to the Employees Provident
Fund of RM390,019 (2011 : RM382,429) and RM271,631 (2011 : RM263,057) respectively.
Company No. 94528 - T
60
21. Key management personnel compensation – Group/Company
The key management personnel compensation are as follows :
2012
RM
2011
RM
Directors of the Company
Executive :
Salaries and other emoluments
Fees
3,788,520
102,000
4,046,520
86,000
3,890,520
4,132,520
18,450
60,000
13,900
50,000
78,450
63,900
3,968,970
4,196,420
847,930
948,969
4,816,900
5,145,389
Non-executive :
Other emoluments
Fees
Other key management personnel
Salaries and other emoluments
The number of Directors of the Company whose total remuneration during the year fall within
the following bands are as follows :
Number of Directors
2012
2011
Executive Directors :
RM350,001- RM500,000
RM500,001 - RM650,000
RM650,001 - RM800,000
RM800,001 - RM950,000
RM950,001 - RM1,050,000
RM1,050,001 - RM1,200,000
RM1,200,001 - RM1,350,000
2
1
1
1
1
1
1
3
3
Non-executive Directors :
Below RM50,000
Company No. 94528 - T
61
22. Finance costs
Group/Company
2012
2011
RM
RM
Interest expense
BBA - TF
Revolving credit
Term loan
Finance lease liabilities
177,376
335,336
610
177,432
27,744
509,365
2,441
513,322
716,982
23. Income tax expense
Recognised in profit or loss
Group
2012
RM
Company
2011
RM
2012
RM
2011
RM
Current tax expense
Current year
Prior year
9,841,754
(243,390)
8,559,980
(149,152)
15,000,000
(246,867)
7,258,000
(157,086)
9,598,364
8,410,828
14,753,133
7,100,914
(706,000)
4,000
10,000
207,000
(210,000)
4,000
191,000
(702,000)
217,000
(206,000)
191,000
8,896,364
8,627,828
14,547,133
7,291,914
2012
RM
2011
RM
2012
RM
2011
RM
36,147,814
32,169,702
58,102,369
27,089,637
Deferred tax expense
Current year
Prior year
Reconciliation of effective tax expense
Group
Profit before tax
Company
Company No. 94528 - T
62
23. Income tax expense (continued)
Reconciliation of effective tax expense (continued)
Group
2012
RM
Tax at Malaysian tax rate of
25%
Non-deductible expenses
Income not subject to tax
Changes in unrecognised
deferred tax assets
Under/(Over) provided in
prior years
Tax expense
9,036,954
280,728
(181,928)
Company
2011
RM
2012
RM
2011
RM
8,042,426
533,388
-
14,525,592
264,408
-
6,772,409
485,591
-
-
(5,834)
-
(239,390)
57,848
(242,867)
33,914
8,896,364
8,627,828
14,547,133
7,291,914
-
24. Basic earnings per ordinary share - Group
The calculation of basic earnings per ordinary share was based on the profit for the year
attributable to ordinary shareholders and a weighted average number of ordinary shares
outstanding calculated as follows :
2012
RM
Profit for the year attributable to ordinary shareholders
2011
RM
27,251,450
23,541,874
Issued ordinary shares at 1 January
Effect of treasury shares held
191,595,776
(785,167)
191,595,776
(743,000)
Weighted average number of ordinary shares at 31
December
190,810,609
190,852,776
2012
Sen
2011
Sen
Weighted average number of ordinary shares
Basic earnings per ordinary share
From continuing operations
14.28
12.34
Company No. 94528 - T
63
25. Operating segment
The Group has one operating segment comprises mainly including the property development
and construction. Accordingly, information by operating segment on the Group’s operations as
required by FRS 8 is as disclosed in the statement of financial position and statement of
comprehensive income.
Major customer
During the year, there were no revenue from one single customer that contribute to more than
10% of the Group’s revenue.
26. Dividend - Group/Company
Sen per
share
(net of tax)
2012
In respect of financial year ended
31 December 2011
First and final dividend of 5% less 25% tax
3.75
Total
amount
RM
Date of payment
7,154,242
6 September 2012
7,156,979
8 September 2011
2011
In respect of financial year ended
31 December 2010
First and final dividend of 5% less 25% tax
3.75
At the forthcoming Annual General Meeting, a first and final dividend of 5% less 25% tax in
respect of the financial year ended 31 December 2012 will be proposed for shareholders’
approval. These financial statements do not reflect this final dividend which will be accounted
for as an appropriation of retained earnings from shareholders’ funds in the financial year
ending 31 December 2013 when approved by shareholders.
27. Related parties - Group/Company
For the purposes of these financial statements, parties are considered to be related to the Group
or the Company if the Group or the Company has the ability, directly or indirectly, to control
the party or exercise significant influence over the party in making financial and operating
decisions, or vice versa, or where the Group or the Company and the party are subject to
common control or common significant influence. Related parties may be individuals or other
entities.
Key management personnel are defined as those persons having authority and responsibility for
planning, directing and controlling the activities of the Group either directly or indirectly. Key
management personnel include all the Directors of the Company, and certain members of
senior management of the Group.
Company No. 94528 - T
64
27. Related parties - Group/Company (continued)
27.1 Identity of related parties
i) Its subsidiaries as disclosed in Note 7.
ii) Tony Chan Holdings Sendirian Berhad, a substantial shareholder of the Company in
which the Directors, Mr. Chan Leong Foon, Dato’ Chan Fook Sing, Mr. Chan Fook
Sun and Mr. Chan Fook Hean have substantial financial interests.
iii) The Company also has a related party relationship with its Directors and key
management personnel and the close members of their families. The Directors and
key management personnel of the Group are :
- Chan Leong Foon
- Ooi Cheng Sim
- Dato’ Chan Fook Sing
- Chan Fook Sun
- Chan Fook Hee
- Chan Fook Hean
- Chan Fook Moon
- Chan Min Chwen
iv) The Group also has a related party relationship with Dyner Resources Sdn. Bhd.,
Solid Block Sdn. Bhd., and Asas Dunia Properties Sdn. Bhd., companies in which
Dato’ Chan Fook Sing, Mr. Chan Fook Sun and Mr. Chan Fook Hean have
substantial financial interests.
27.2 Related party transactions
27.2.1 Transactions with Directors and key management personnel
The remuneration packages paid to them in accordance with the terms and
conditions of their appointment as disclosed in Note 21.
27.2.2 Significant related party transactions other than those disclosed elsewhere in the
financial statements are as follows :
Group
2012
RM
Sale of completed development property to
key management personnel
3,300,000
Proceeds of sales due and payable to the
landowner pursuant to the joint venture
agreements signed :
- Dyner Resources Sdn. Bhd.
- Asas Dunia Properties Sdn. Bhd.
3,259,872
-
2011
RM
-
2,840,165
1,255,742
Company No. 94528 - T
65
27. Related parties - Group/Company (continued)
27.2 Related party transactions (continued)
Group
Purchase of bricks from :
- Solid Block Sdn. Bhd.
2012
RM
2011
RM
703,026
1,639,062
Company
Sale of completed development property to
key management personnel
3,300,000
-
Progress billings from :
- Ultra-Bina Sdn. Berhad
- Mastiara Construction Sdn. Bhd.
Proceeds of sales receivable by the Company
as landowner pursuant to the joint venture
agreement signed :
- Asas Mutiara Sdn. Bhd.
Proceeds of sales due and payable to the
landowner pursuant to the joint venture
agreements signed :
- Mastiara Construction Sdn. Bhd.
- Dyner Resources Sdn. Bhd.
- Asas Dunia Properties Sdn. Bhd.
Purchase of bricks from :
- Solid Block Sdn. Bhd.
28,613,041
17,955,707
-
36,909,447
23,057,406
57,000
871,288
2,946,213
-
380
1,347,148
2,318,898
1,255,742
-
27.3 Non-trade balance with subsidiaries and related parties are disclosed in Notes 9 and 16 to
the statements of financial position.
All the amounts outstanding are unsecured and expected to be settled in cash. The Directors of
the Company are of the opinion that the above transactions were in the normal course of
business and the terms of which have been established on a negotiated basis.
Company No. 94528 - T
66
28. Capital commitments
Group/Company
2012
2011
RM
RM
Property, plant and equipment
Authorised but not contracted for
Contracted but not provided for
2,607,000
393,000
-
29. Financial instruments
29.1 Categories of financial instruments
The table below provides an analysis of financial instruments categorised as follows:
(a) Loans and receivables (L&R); and
(b) Financial liabilities measured at amortised cost (FL).
Carrying
amount
RM
L&R/(FL)
RM
33,861,466
19,882,132
33,861,466
19,882,132
53,743,598
53,743,598
38,595,993
18,207,526
38,595,993
18,207,526
56,803,519
56,803,519
2012
Financial assets
Group
Trade and other receivables
Cash and cash equivalents
Company
Trade and other receivables
Cash and cash equivalents
Company No. 94528 - T
67
29. Financial instruments (continued)
29.1 Categories of financial instruments (continued)
Carrying
amount
RM
L&R/(FL)
RM
24,540,698
9,051,149
24,540,698
9,051,149
33,591,847
33,591,847
33,571,528
8,526,397
33,571,528
8,526,397
42,097,925
42,097,925
(17,319,557)
(17,319,557)
(29,567,222)
(29,567,222)
2011
Financial assets
Group
Trade and other receivables
Cash and cash equivalents
Company
Trade and other receivables
Cash and cash equivalents
2012
Financial liabilities
Group
Trade and other payables
Company
Trade and other payables
Company No. 94528 - T
68
29. Financial instruments (continued)
29.1 Categories of financial instruments (continued)
Carrying
amount
RM
L&R/(FL)
RM
(14,405,992)
(23,426,352)
(14,405,992)
(23,426,352)
(37,832,344)
(37,832,344)
(14,405,992)
(60,208,723)
(14,405,992)
(60,208,723)
(74,614,715)
(74,614,715)
2011
Financial liabilities
Group
Borrowings
Trade and other payables
Company
Borrowings
Trade and other payables
29.2 Net gains and (losses) arising from financial instruments
Group
2011
RM
Company
2012
2011
RM
RM
86,944
554,097
265,217
86,944
552,729
264,199
(513,322)
(716,982)
(513,322)
(716,982)
127,719
(451,765)
126,351
(452,783)
2012
RM
Loans and receivables
- Reversal of impairment
loss on trade receivables
- Interest income
Financial liabilities
- Interest expenses
-
29.3 Financial risk management
The Group has exposure to the following risks from its use of financial instruments:
 Credit risk
 Liquidity risk
 Market risk
Company No. 94528 - T
69
29. Financial instruments (continued)
29.4 Credit risk
Credit risk is the risk of a financial loss to the Group if a customer or counterparty to a
financial instrument fails to meet its contractual obligations. The Group’s exposure to
credit risk arises principally from its receivables from customers. The Company’s
exposure to credit risk arises principally from its receivables from customers, loans and
advances to subsidiaries.
Receivables
Risk management objectives, policies and processes for managing the risk
Management has a credit policy in place and the exposure to credit risk is monitored on
an ongoing basis.
Exposure to credit risk, credit quality and collateral
As at the end of the reporting period, the maximum exposure to credit risk arising from
receivables is represented by the carrying amounts in the statements of financial
position.
Management has taken reasonable steps to ensure that receivables that are neither past
due nor impaired are stated at their realisable values. The Group uses ageing analysis to
monitor the credit quality of the receivables.
Impairment losses
The ageing of receivables as at the end of the reporting period was :
Group
Gross
RM
Individual
impairment
RM
Net
RM
2012
Not past due
Past due 1 - 30 days
Past due 31 - 60 days
Past due more than 60 days
-
9,391,167
2,949,858
7,462,767
2,023,226
(930,691)
9,391,167
2,949,858
7,462,767
1,092,535
21,827,018
(930,691)
20,896,327
Company No. 94528 - T
70
29. Financial instruments (continued)
29.4 Credit risk (continued)
Receivables (continued)
Impairment losses (continued)
Group
Gross
RM
Individual
impairment
RM
Net
RM
2011
Not past due
Past due 1 - 30 days
Past due 31 - 60 days
Past due more than 60 days
-
8,459,152
2,388,663
532,323
2,383,460
(1,017,635)
8,459,152
2,388,663
532,323
1,365,825
13,763,598
(1,017,635)
12,745,963
Company
2012
Not past due
Past due 1 - 30 days
Past due 31 - 60 days
Past due more than 60 days
-
6,333,558
2,358,988
7,462,767
1,311,626
(356,651)
6,333,558
2,358,988
7,462,767
954,975
17,466,939
(356,651)
17,110,288
6,695,192
2,355,937
509,153
1,791,036
-
(443,595)
6,695,192
2,355,937
509,153
1,347,441
11,351,318
(443,595)
10,907,723
2011
Not past due
Past due 1 - 30 days
Past due 31 - 60 days
Past due more than 60 days
Company No. 94528 - T
71
29. Financial instruments (continued)
29.4 Credit risk (continued)
Receivables (continued)
Impairment losses (continued)
The movements in the allowance for impairment losses of receivables during the year
were :
Group
At 1 January
Impairment loss written off
Reversal of impairment loss
At 31 December
Company
2012
2011
RM
RM
2012
RM
2011
RM
1,017,635
1,022,150
(4,515)
443,595
-
-
448,110
(4,515)
(86,944)
-
(86,944)
-
356,651
443,595
930,691
1,017,635
The allowance account in respect of receivables is used to record impairment losses.
Unless the Group is satisfied that recovery of the amount is possible, the amount
considered irrecoverable is written off against the receivable directly.
Inter company balances
Risk management objectives, policies and processes for managing the risk
The Company provides unsecured loans and advances to subsidiaries. The Company
monitors the results of the subsidiaries regularly.
Exposure to credit risk, credit quality and collateral
As at the end of the reporting period, the maximum exposure to credit risk is represented
by their carrying amounts in the statement of financial position.
Loans and advances are only provided to subsidiaries which are wholly-owned by the
Company.
Impairment losses
As at the end of the reporting period, there was no indication that the loans and
advances to the subsidiaries are not recoverable. The Company does not specifically
monitor the ageing of the current advances to the subsidiaries. Nevertheless, these
advances are repayable on demand.
Company No. 94528 - T
72
29. Financial instruments (continued)
29.5 Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations
as they fall due. The Group’s exposure to liquidity risk arises principally from its
various payables, loans and borrowings.
The Group maintains a level of cash and cash equivalents and bank facilities deemed
adequate by the management to ensure, as far as possible, that it will have sufficient
liquidity to meet its liabilities when they fall due.
Company No. 94528 - T
73
29. Financial instruments (continued)
29.5 Liquidity risk (continued)
Maturity analysis
The table below summarises the maturity profile of the Group’s and the Company’s financial liabilities as at the end of the
reporting period based on undiscounted contractual payments :
Carrying
amount
RM
Contractual Contractual
interest rate cash flows
%
RM
Under
1 year
RM
1 - 2 years
RM
2 - 5 years
RM
More than
5 years
RM
2012
Group
Non-derivative financial
liabilities
Trade and other payables
17,319,557
-
17,319,557
17,319,557
-
-
-
29,567,222
-
29,567,222
29,567,222
-
-
-
Company
Non-derivative financial
liabilities
Trade and other payables
Company No. 94528 - T
74
29. Financial instruments (continued)
29.5 Liquidity risk (continued)
Maturity analysis (continued)
Carrying
amount
RM
Contractual Contractual
interest rate cash flows
%
RM
Under
1 year
RM
1 - 2 years
RM
2 - 5 years
RM
More than
5 years
RM
748,807
14,518,239
10,908
23,426,352
748,807
5,615,405
10,908
23,426,352
5,423,901
-
3,478,933
-
-
38,704,306
29,801,472
5,423,901
3,478,933
-
748,807
14,518,239
10,908
60,208,723
748,807
5,615,405
10,908
60,208,723
5,423,901
-
3,478,933
-
-
75,486,677
66,583,843
5,423,901
3,478,933
-
2011
Group
Non-derivative financial
liabilities
BBA-TF
Term loan
Finance lease liabilities
Trade and other payables
571,432
13,824,263
10,297
23,426,352
8.00
3.66
2.97
-
37,832,344
Company
Non-derivative financial
liabilities
BBA-TF
Term loan
Finance lease liabilities
Trade and other payables
571,432
13,824,263
10,297
60,208,723
74,614,715
8.00
3.66
2.97
-
Company No. 94528 - T
75
29. Financial instruments (continued)
29.6.1 Market risk
Market risk is the risk that changes in market prices, such as interest rates and other
prices will affect the Group’s financial position or cash flows.
29.6.2 Interest rate risk
The Group’s primary interest rate risk is related to debt obligations and deposits,
which are mainly confined to bank borrowings, deposits with a licensed bank and
short term investments.
Bank borrowings are on fixed and floating rates.
Cash flows interest rate risk is the risk that the future cash flows of a financial
instrument will fluctuate because of changes in market interest rates. The Group’s and
the Company’s interest-earning financial assets are mainly short term in nature and
have been mostly placed in deposits and short term investments.
Risk management objectives, policies and processes for managing the risk
The Group’s exposure to interest rate risk is not material. Hence, sensitivity analysis is
not disclosed.
29.7
Fair value of financial instruments
The carrying amounts of cash and cash equivalents, short term receivables and
payables and short term borrowings approximate fair values due to the relatively short
term nature of these financial instruments.
The Directors are of the opinion that there is no significant difference between the fair
value and carrying amount of BBA - TF, term loan and finance lease liabilities.
30. Capital management
The Group’s objectives when managing capital is to maintain a strong capital base and
safeguard the Group’s ability to continue as a going concern, so as to maintain investor,
creditor and market confidence and to sustain future development of the business. The Group
currently does not adopt any dividend policy.
There were no changes in the Group’s approach to capital management during the financial
year.
Company No. 94528 - T
76
31. Supplementary information on the breakdown of realised and
unrealised profits or losses
The breakdown of the retained earnings of the Group and of the Company as at 31 December,
into realised and unrealised profits, pursuant to Paragraphs 2.06 and 2.23 of Bursa Malaysia
Main Market Listing Requirements, are as follows :
Group
Company
2012
RM
2011
RM
2012
RM
2011
RM
202,048,913
936,095
187,991,996
(1,606,355)
149,329,687
481,095
114,975,125
(1,565,337)
202,985,008
186,385,641
149,810,782
113,409,788
(6,116,720)
(9,614,561)
196,868,288
176,771,080
Total retained earnings
of the Company and
its subsidiaries
- realised
- unrealised
Less : Consolidation
adjustments
Total retained earnings
149,810,782
133,409,788
The determination of realised and unrealised profits is based on the Guidance of Special Matter
No. 1, Determination of Realised and Unrealised Profit or Losses in the Context of Disclosure
Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, issued by Malaysian
Institute of Accountants on 20 December 2010.
77
Asas Dunia Berhad
(Company No. 94528 - T)
(Incorporated in Malaysia)
and its subsidiaries
Statement by Directors pursuant to
Section 169(15) of the Companies Act, 1965
In the opinion of the Directors, the financial statements set out on pages 7 to 75 are drawn up in
accordance with Financial Reporting Standards and the requirements of the Companies Act, 1965 in
Malaysia so as to give a true and fair view of the financial position of the Group and of the Company
as at 31 December 2012 and of their financial performance and cash flows for the year ended on that
date.
In the opinion of the Directors, the information set out in Note 31 on page 76 to the financial
statements has been compiled in accordance with the Guidance on Special Matter No. 1
Determination of Realised and Unrealised Profits or Losses in the Context of Disclosures Pursuant
to Bursa Malaysia Securities Berhad Listing Requirements, issued by the Malaysian Institute of
Accountants, and presented based on the format prescribed by Bursa Malaysia Securities Berhad.
Signed on behalf of the Board of Directors in accordance with a resolution of the Directors :
……………………………
Chan Leong Foon
……………………………
Dato’ Chan Fook Sing
Penang,
Date : 10 April 2013
78
Asas Dunia Berhad
(Company No. 94528 - T)
(Incorporated in Malaysia)
and its subsidiaries
Statutory declaration pursuant to
Section 169(16) of the Companies Act, 1965
I, Chan Fook Sun, the Director primarily responsible for the financial management of Asas Dunia
Berhad, do solemnly and sincerely declare that the financial statements set out on pages 7 to 76 are,
to the best of my knowledge and belief, correct and I make this solemn declaration conscientiously
believing the same to be true, and by virtue of the provisions of the Statutory Declarations Act, 1960.
Subscribed and solemnly declared by the abovenamed at Georgetown in the State of Penang on 10
April 2013.
………………………………
Chan Fook Sun
Before me :
DATO’ DR. CHELVARAI @ SELVARAJOO A/L ERULANDY (No. P-099)
DBBS, PhD (HONS)
Pesuruhjaya Sumpah
(Commissioner for Oaths)
Penang
79
Independent auditors’ report to the members of
Asas Dunia Berhad
(Company No. 94528 - T)
(Incorporated in Malaysia)
Report on the Financial Statements
We have audited the financial statements of Asas Dunia Berhad, which comprise the statements of
financial position as at 31 December 2012 of the Group and of the Company, and the statements of
comprehensive income, changes in equity and cash flows of the Group and of the Company for the
year then ended, and a summary of significant accounting policies and other explanatory
information, as set out on pages 7 to 75.
Directors’ Responsibility for the Financial Statements
The Directors of the Company are responsible for the preparation of financial statements so as to
give a true and fair view in accordance with Financial Reporting Standards and the requirements of
the Companies Act, 1965 in Malaysia. The Directors are also responsible for such internal control as
the Directors determine is necessary to enable the preparation of financial statements that are free
from material misstatement, whether due to fraud or error.
Auditors’ Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We
conducted our audit in accordance with approved standards on auditing in Malaysia. Those standards
require that we comply with ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures
in the financial statements. The procedures selected depend on our judgment, including the
assessment of risks of material misstatement of the financial statements, whether due to fraud or
error. In making those risk assessments, we consider internal control relevant to the entity’s
preparation of the financial statements that give a true and fair view in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the
appropriateness of accounting policies used and the reasonableness of accounting estimates made by
the Directors, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our audit opinion.
80
Company No. 94528 - T
Opinion
In our opinion, the financial statements give a true and fair view of the financial position of the
Group and of the Company as of 31 December 2012, and of their financial performance and cash
flows for the year then ended in accordance with Financial Reporting Standards and the
requirements of the Companies Act, 1965 in Malaysia.
Report on Other Legal and Regulatory Requirements
In accordance with the requirements of the Companies Act, 1965 in Malaysia, we also report the
following:
a) In our opinion, the accounting and other records and the registers required by the Act to be kept
by the Company and its subsidiaries have been properly kept in accordance with the provisions
of the Act.
b) We are satisfied that the accounts of the subsidiaries that have been consolidated with the
Company’s financial statements are in form and content appropriate and proper for the purposes
of the preparation of the financial statements of the Group and we have received satisfactory
information and explanations required by us for those purposes.
c) Our audit reports of the accounts of the subsidiaries did not contain any qualification or any
adverse comment made under Section 174(3) of the Act.
Other Reporting Responsibilities
Our audit was made for the purpose of forming an opinion on the financial statements taken as a
whole. The information set out in Note 31 on page 76 to the financial statements has been compiled
by the Company as required by the Bursa Malaysia Securities Berhad Listing Requirements and is
not required by the Financial Reporting Standards in Malaysia. We have extended our audit
procedures to report on the process of compilation of such information. In our opinion, the
information has been properly compiled, in all material respects, in accordance with the Guidance on
Special Matter No. 1, Determination of Realised and Unrealised Profits or Losses in the Context of
Disclosures Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, issued by the
Malaysian Institute of Accountants, and presented based on the format prescribed by Bursa Malaysia
Securities Berhad.
81
Company No. 94528 - T
Other Matters
This report is made solely to the members of the Company, as a body, in accordance with Section
174 of the Companies Act, 1965 in Malaysia and for no other purpose. We do not assume
responsibility to any other person for the content of this report.
KPMG
AF 0758
Chartered Accountants
Date : 10 April 2013
Penang
Ow Peng Li
Approval Number: 2999/09/13 (J)
Chartered Accountant