1
Asas Dunia Berhad
(Company No. 94528 - T)
(Incorporated in Malaysia)
and its subsidiaries
Directors’ report for the year ended 31 December 2007
The Directors have pleasure in submitting their report and the audited financial statements of the
Group and of the Company for the year ended 31 December 2007.
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 have been no significant changes in the nature of these activities during the financial year.
Results
Profit attributable to shareholders of the Company
Group
RM
Company
RM
7,716,440
2,919,663
Reserves and provisions
There were no material transfers to or from reserves and provisions during the year except as
disclosed in Note 13 to the financial statements.
Dividends
Since the end of the previous financial year, the Company paid a first and final dividend of 5% less
27% tax totalling RM6,972,368 in respect of the year ended 31 December 2006 on 8 August 2007.
The Directors do not recommend any dividend to be paid for the year under review.
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
- Executive Chairman
- Managing Director
- Executive Director
- Executive Director
In accordance with Article 93 of the Company’s Articles of Association, Mr. Moo Shiew Ming and
Mr. Chan Fook Hean retire by rotation from the Board at the forthcoming Annual General Meeting
and, being eligible offer themselves for re-election.
In accordance with Section 129 (6) of the Companies Act, 1965, Mr. Chan Leong Foon and Mr.
Diong Chin Teck retire at the forthcoming Annual General Meeting and, offer themselves for reelection as Directors of the Company until the conclusion of the next Annual General Meeting.
Directors’ interests
The interests and deemed interests in the shares of the Company and of its related companies (other
than wholly-owned subsidiaries) of those who were Directors at year end (including the interests of
the spouses or children of the Directors) as recorded in the Register of Directors’ Shareholdings are
as follows :
Number of ordinary shares of RM1 each
Balance at
Balance at
1.1.2007
Bought
Sold
31.12.2007
Chan Leong Foon :
Interest in the Company :
- own
Deemed interest in the Company :
- own
- others *
Dato’ Chan Fook Sing :
Interest in the Company :
- own
Deemed interest in the Company :
- own
Chan Fook Sun :
Interest in the Company :
- own
Deemed interest in the Company :
- own
20,000
191,000
-
211,000
78,467,610
144,100
78,300
-
78,467,610
222,400
66,000
78,300
-
144,300
78,467,610
-
-
78,467,610
20,000
-
-
20,000
78,467,610
-
-
78,467,610
Company No. 94528 - T
3
Directors’ interests (Cont’d)
Number of ordinary shares of RM1 each
Balance at
Balance at
1.1.2007
Bought
Sold
31.12.2007
Chan Fook Hean :
Interest in the Company :
- own
Deemed interest in the Company :
- own
5,000
-
-
5,000
78,467,610
-
-
78,467,610
-
20,000
-
10,000
Diong Chin Teck :
Interest in the Company :
- own
10,000
Moo Shiew Ming :
Interest in the Company :
- own
10,000
*
10,000
-
Ms. Ooi Cheng Sim is the wife of Mr. Chan Leong Foon while Dato’ Chan Fook Sing, Mr.
Chan Fook Sun, Mr. Chan Fook Hean, Mr. Chan Fook Hee and Mr. Chan Min Chwen are the
children of Mr. Chan Leong Foon. In accordance with Section 134(12)(c) of the Companies
Act, 1965, their interests and deemed interests in the shares of the Company and of its related
corporations (other than wholly-owned subsidiaries) shall be treated as the interests of Mr.
Chan Leong Foon also.
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 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 28.
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 issued and paid-up capital of the Company during the financial year.
Company No. 94528 - T
4
Options granted over unissued shares
No options were granted to any person to take up unissued shares of the Company during the
financial year.
Other statutory information
Before the balance sheets and income 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) all current assets have been stated at the lower of cost and net realisable value.
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, the results of the operations of the Group and of the Company for the
financial year ended 31 December 2007 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 : 3 April 2008
5
6
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 10 to 64 are drawn up in
accordance with the provisions of the Companies Act, 1965 and applicable approved Financial
Reporting Standards issued by the Malaysian Accounting Standards Board so as to give a true and
fair view of the state of affairs of the Group and of the Company at 31 December 2007 and of the
results of their operations and cash flows for the year ended on that date.
Signed in accordance with a resolution of the Directors :
……………………………
Chan Leong Foon
……………………………
Dato’ Chan Fook Sing
Penang,
Date : 3 April 2008
7
Asas Dunia Berhad
(Company No. 94528 - T)
(Incorporated in Malaysia)
Statutory declaration pursuant to
Section 169(16) of the Companies Act, 1965
I, Lim Lian Kin, the officer primarily responsible for the financial management of Asas Dunia
Berhad, do solemnly and sincerely declare that the financial statements set out on pages 10 to 64 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 3
April 2008.
………………………………
Lim Lian Kin
Before me :
SEELVARAJOO A/L ERULANDY
Commissioner for Oaths
Penang
8
Report of the auditors to the members of
Asas Dunia Berhad
(Company No. 94528 - T)
(Incorporated in Malaysia)
We have audited the financial statements set out on pages 10 to 64. The preparation of the financial
statements is the responsibility of the Company’s Directors.
It is our responsibility to form an independent opinion, based on our audit, on the financial
statements and to report our opinion to you, as a body, in accordance with Section 174 of the
Companies Act, 1965 and for no other purpose. We do not assume responsibility to any other person
for the content of this report.
We conducted our audit in accordance with approved Standards on Auditing in Malaysia. Those
standards require that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial statements. An audit also
includes assessing the accounting principles used and significant estimates made by the Directors, as
well as evaluating the overall financial statements presentation. We believe our audit provides a
reasonable basis for our opinion.
In our opinion :
(a) the financial statements are properly drawn up in accordance with the provisions of the
Companies Act, 1965 and applicable approved Financial Reporting Standards issued by the
Malaysian Accounting Standards Board so as to give a true and fair view of :
i) the state of affairs of the Group and of the Company at 31 December 2007 and of the results
of their operations and cash flows for the year ended on that date; and
ii) the matters required by Section 169 of the Companies Act, 1965 to be dealt with in the
financial statements of the Group and of the Company;
and
(b) the accounting and other records and the registers required by the Companies Act, 1965 to be
kept by the Company and its subsidiaries have been properly kept in accordance with the
provisions of the said Act.
9
Company No. 94528 - T
We are satisfied that the financial statements of the subsidiaries that have been consolidated with the
Company’s financial statements are in form and content appropriate and proper for the purposes of
the preparation of the consolidated financial statements and we have received satisfactory
information and explanations required by us for those purposes.
The audit reports on the financial statements of the subsidiaries were not subject to any qualification
and did not include any comment made under sub-section (3) of Section 174 of the Act.
KPMG
Firm Number : AF 0758
Chartered Accountants
Penang,
Date : 3 April 2008
Lee Kean Teong
Partner
Approval Number : 1857/02/10 (J)
10
Asas Dunia Berhad
(Company No. 94528 - T)
(Incorporated in Malaysia)
and its subsidiaries
Consolidated balance sheet at 31 December 2007
Note
2007
RM
2006
RM
3
4
5
6
8
7,959,490
1,441,116
181,308,179
8,485,613
1,149,105
8,321,648
1,441,116
179,871,870
8,645,275
1,149,105
200,343,503
199,429,014
91,894,383
24,635,827
58,668,941
1,117,833
976,391
83,533,930
21,512,434
63,783,176
2,199,943
1,221,216
Total current assets
177,293,375
172,250,699
Total assets
377,636,878
371,679,713
Assets
Property, plant and equipment
Intangible assets
Land held for property development
Investment properties
Other investments
Total non-current assets
Property development costs
Receivables, deposits and prepayments
Inventories
Current tax assets
Cash and bank balances
9
10
11
12
Company No. 94528 - T
11
Consolidated balance sheet (Cont’d)
Note
2007
RM
2006
RM
13
13
191,595,776
142,278,911
191,595,776
142,316,439
333,874,687
333,912,215
2,285,716
59,221
2,866,490
59,221
2,344,937
2,925,711
27,424
17,268,397
24,121,433
27,424
27,824,458
6,989,905
Total current liabilities
41,417,254
34,841,787
Total liabilities
43,762,191
37,767,498
377,636,878
371,679,713
Equity
Share capital
Reserves
Total equity
Liabilities
Borrowings
Deferred tax liabilities
14
15
Total non-current liabilities
Provision
Payables and accruals
Borrowings
Total equity and liabilities
16
17
14
The notes on pages 24 to 64 are an integral part of these financial statements.
12
Asas Dunia Berhad
(Company No. 94528 - T)
(Incorporated in Malaysia)
and its subsidiaries
Consolidated income statement for the year ended
31 December 2007
Note
2007
RM
2006
RM
Continuing operations
Revenue
18
41,106,659
45,137,665
Cost of goods sold
19
(22,250,737)
(29,720,616)
18,855,922
15,417,049
Gross profit
Selling and marketing expenses
Administrative expenses
Other operating income
(606,101)
(580,689)
(7,258,755)
(6,847,367)
993,929
507,408
8,496,401
Operating profit
20
11,984,995
Finance costs
23
(1,085,578)
Profit before tax
Tax expense
24
Profit for the year
(347,805)
10,899,417
8,148,596
(3,182,977)
(2,234,152)
7,716,440
5,914,444
7,716,440
5,914,444
Attributable to :
Shareholders of the Company
Basic earnings per ordinary share (sen)
25
4.04
3.09
Net dividend per ordinary share (sen)
26
-
3.65
The notes on pages 24 to 64 are an integral part of these financial statements.
13
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 2007
Attributable to shareholders of the Company
Non-distributable
At 1 January 2006
Share
capital
RM
Share
premium
RM
191,595,776
15,960,000
Asset
revaluation
reserve
RM
Capital
reserve
RM
Distributable
Treasury
shares
RM
Retained
profits
RM
Total
RM
818,502
500,000
-
124,104,983
332,979,261
Profit for the year
-
-
-
-
-
5,914,444
5,914,444
Dividend (Note 26)
-
-
-
-
-
(4,981,490)
(4,981,490)
818,502
500,000
-
At 31 December 2006
191,595,776
15,960,000
125,037,937
333,912,215
Treasury shares
purchased
-
-
-
-
(781,600)
-
Profit for the year
-
-
-
-
-
7,716,440
7,716,440
Dividend (Note 26)
-
-
-
-
-
(6,972,368)
(6,972,368)
818,502
500,000
(781,600)
At 31 December 2007
191,595,776
15,960,000
The notes on pages 24 to 64 are an integral part of these financial statements.
125,782,009
(781,600)
333,874,687
14
Asas Dunia Berhad
(Company No. 94528 - T)
(Incorporated in Malaysia)
and its subsidiaries
Consolidated cash flow statement for the year ended
31 December 2007
Note
2007
RM
2006
RM
Cash flows from operating activities
Profit before tax from continuing operations
Adjustments for:
Depreciation - property, plant and equipment
- investment properties
Dividend income
Interest expense
Interest income
Inventories written down
Gain on disposal of :
- land held for property development
- investment properties
- plant and equipment
Release of unused provision
Operating profit before changes in working capital
Changes in working capital :
Inventories
Receivables, deposits and prepayments
Property development costs
Payables and accruals
Cash (used in)/generated from operations
Interest paid
Tax paid
Net cash (used in)/generated from operating
activities
3
6
16
10,899,417
8,148,596
512,404
57,854
(22,810)
1,085,578
(25,010)
-
561,559
58,025
(17,810)
347,805
(99,946)
177,853
(760,000)
(118,192)
(26,999)
-
(55,173)
(54,999)
(53,618)
11,602,242
9,012,292
5,114,235
(2,439,393)
(8,360,453)
(10,556,061)
(19,782,050)
1,240,970
18,852,570
2,480,012
(4,639,430)
11,803,794
(1,085,578)
(2,094,708)
(347,805)
(2,083,675)
(7,819,716)
9,372,314
Company No. 94528 - T
15
Consolidated cash flow statement (Cont’d)
Note
2007
RM
2006
RM
Cash flows from investing activities
Dividends received
Interest received
Proceeds from disposal of :
- land held for property development
- investment properties
- plant and equipment
Purchase of land held for property development
Purchase of property, plant and equipment
16,651
25,010
12,823
99,946
76,000
220,000
27,000
(1,436,309)
(150,247)
126,570
55,000
(17,475,319)
(415,394)
(1,221,895)
(17,596,374)
Dividend paid to shareholders of the Company
Repayment of BBA-TF
Repayment of lease payables
Repurchase of treasury shares
(6,972,368)
(571,428)
(65,000)
(781,600)
(4,981,490)
(571,428)
(112,495)
-
Net cash used in financing activities
(8,390,396)
(5,665,413)
Net decrease in cash and cash equivalents
(17,432,007)
(13,889,473)
(5,130,774)
8,758,699
(22,562,781)
(5,130,774)
5
A
Net cash used in investing activities
Cash flows from financing activities
Cash and cash equivalents at 1 January
Cash and cash equivalents at 31 December
B
NOTES
A. Purchase of property, plant and equipment
During the year, the Group acquired property, plant and equipment with an aggregate cost of
RM150,247 (2006 : RM545,394), of which RM Nil (2006 : RM130,000) was acquired by means
of finance leases. The balance of RM150,247 (2006 : RM415,394) was paid via cash payments.
Company No. 94528 - T
16
Consolidated cash flow statement (Cont’d)
B. Cash and cash equivalents
Cash and cash equivalents included in the consolidated cash flow statement comprise the
following consolidated balance sheet amounts :
2007
RM
Cash and bank balances
Bank overdrafts
2006
RM
976,391
(23,539,172)
1,221,216
(6,351,990)
(22,562,781)
(5,130,774)
The notes on pages 24 to 64 are an integral part of these financial statements.
17
Asas Dunia Berhad
(Company No. 94528 - T)
(Incorporated in Malaysia)
Balance sheet at 31 December 2007
Note
2007
RM
2006
RM
3
5
6
7
8
7,384,441
148,665,424
8,315,587
22,346,659
1,149,105
7,716,849
147,361,704
8,474,100
22,346,659
1,149,105
187,861,216
187,048,417
94,181,702
55,662,097
25,006,337
177,782
211,711
80,002,873
54,008,571
23,563,238
394,770
481,655
Total current assets
175,239,629
158,451,107
Total assets
363,100,845
345,499,524
Assets
Property, plant and equipment
Land held for property development
Investment properties
Investments in subsidiaries
Other investments
Total non-current assets
Property development costs
Receivables, deposits and prepayments
Inventories
Current tax assets
Cash and bank balances
9
10
11
12
Company No. 94528 - T
18
Balance sheet (Cont’d)
Note
2007
RM
2006
RM
13
13
191,595,776
92,538,423
191,595,776
97,372,728
284,134,199
288,968,504
2,285,716
50,766
2,866,490
50,766
2,336,482
2,917,256
27,424
52,481,307
24,121,433
27,424
46,596,435
6,989,905
Total current liabilities
76,630,164
53,613,764
Total liabilities
78,966,646
56,531,020
363,100,845
345,499,524
Equity
Share capital
Reserves
Total equity
Liabilities
Borrowings
Deferred tax liabilities
14
15
Total non-current liabilities
Provision
Payables and accruals
Borrowings
Total equity and liabilities
16
17
14
The notes on pages 24 to 64 are an integral part of these financial statements.
19
Asas Dunia Berhad
(Company No. 94528 - T)
(Incorporated in Malaysia)
Income statement for the year ended 31 December 2007
Note
2007
RM
2006
RM
Continuing operations
Revenue
18
22,684,576
23,192,812
Cost of goods sold
19
(12,466,771)
(15,164,142)
10,217,805
8,028,670
Gross profit
Selling and marketing expenses
Administrative expenses
Other operating income
(414,795)
(266,301)
(5,427,821)
(5,120,401)
934,677
420,217
3,062,185
Operating profit
20
5,309,866
Finance costs
23
(1,085,578)
4,224,288
Profit before tax
Tax expense
24
2,919,663
Profit for the year
Net dividend per ordinary share (sen)
(1,304,625)
26
-
The notes on pages 24 to 64 are an integral part of these financial statements.
(342,484)
2,719,701
(886,281)
1,833,420
3.65
20
Asas Dunia Berhad
(Company No. 94528 - T)
(Incorporated in Malaysia)
Statement of changes in equity for the year ended
31 December 2007
At 1 January 2006
Share
capital
RM
Share
premium
RM
191,595,776
15,960,000
Non-distributable
Asset
revaluation
reserve
RM
Distributable
Treasury
shares
RM
Retained
profits
RM
Total
RM
818,502
-
83,742,296
292,116,574
Profit for the year
-
-
-
-
1,833,420
1,833,420
Dividend (Note 26)
-
-
-
-
(4,981,490)
(4,981,490)
818,502
-
80,594,226
At 31 December 2006
191,595,776
15,960,000
Treasury shares purchased
-
-
-
(781,600)
Profit for the year
-
-
-
-
2,919,663
2,919,663
Dividend (Note 26)
-
-
-
-
(6,972,368)
(6,972,368)
818,502
(781,600)
At 31 December 2007
191,595,776
15,960,000
The notes on pages 24 to 64 are an integral part of these financial statements.
-
288,968,504
76,541,521
(781,600)
284,134,199
21
Asas Dunia Berhad
(Company No. 94528 - T)
(Incorporated in Malaysia)
Cash flow statement for the year ended 31 December 2007
Note
2007
RM
2006
RM
Cash flows from operating activities
Profit before tax from continuing operations
Adjustments for:
Depreciation - property, plant and equipment
- investment properties
Dividend income
Interest expense
Interest income
Gain on disposal of :
- land held for property development
- investment properties
- plant and equipment
Release of unused provision
Operating profit before changes in working capital
Changes in working capital :
Inventories
Receivables, deposits and prepayments
Property development costs
Payables and accruals
Cash (used in)/generated from operations
Interest paid
Tax paid
Net cash (used in)/generated from operating
activities
3
6
16
4,224,288
2,719,701
381,252
56,705
(22,810)
1,085,578
(11,657)
463,697
56,877
(17,810)
342,484
(40,132)
(118,192)
(26,999)
-
(55,173)
(54,999)
(53,618)
5,568,165
3,361,027
(1,443,099)
(1,653,526)
(14,178,829)
5,884,872
(9,171,487)
(3,806,741)
(1,701,677)
25,578,358
(5,822,417)
14,259,480
(1,085,578)
(1,081,478)
(342,484)
(718,451)
(7,989,473)
13,198,545
Company No. 94528 - T
22
Cash flow statement (Cont’d)
Note
2007
RM
2006
RM
Cash flows from investing activities
Dividends received
Interest received
Proceeds from disposal of :
- land held for property development
- investment properties
- plant and equipment
Purchase of land held for property development
Purchase of property, plant and equipment
16,651
11,657
12,823
40,132
220,000
27,000
(1,303,720)
(48,845)
126,570
55,000
(17,194,683)
(152,821)
(1,077,257)
(17,112,979)
Dividend paid to shareholders of the Company
Repayment of BBA-TF
Repayment of lease payables
Repurchase of treasury shares
(6,972,368)
(571,428)
(65,000)
(781,600)
(4,981,490)
(571,428)
(54,167)
-
Net cash used in financing activities
(8,390,396)
(5,607,085)
Net decrease in cash and cash equivalents
(17,457,126)
(9,521,519)
(5,870,335)
3,651,184
(23,327,461)
(5,870,335)
5
A
Net cash used in investing activities
Cash flows from financing activities
Cash and cash equivalents at 1 January
Cash and cash equivalents at 31 December
B
NOTES
A. Purchase of property, plant and equipment
During the year, the Company acquired property, plant and equipment with an aggregate cost of
RM48,845 (2006 : RM282,821) of which RM Nil (2006 : RM130,000) was acquired by means
of hire purchase. The balance of RM48,845 (2006 : RM152,821) was paid via cash payments.
Company No. 94528 - T
23
Cash flow statement (Cont’d)
B. Cash and cash equivalents
Cash and cash equivalents included in the cash flow statement comprise the following balance
sheet amounts :
2007
RM
Cash and bank balances
Bank overdrafts
2006
RM
211,711
(23,539,172)
481,655
(6,351,990)
(23,327,461)
(5,870,335)
The notes on pages 24 to 64 are an integral part of these financial statements.
24
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 Board 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 as at and for the year ended 31 December 2007 comprise the
Company and its subsidiaries (together referred to as the Group).
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.
The financial statements were approved by the Board of Directors on 3 April 2008.
1. Basis of preparation
(a) Statement of compliance
The financial statements of the Group and of the Company have been prepared in
accordance with applicable approved Financial Reporting Standards (“FRS”) issued by
the Malaysian Accounting Standards Board (MASB), accounting principles generally
accepted in Malaysia and the provisions of the Companies Act, 1965.
The MASB has also issued the following FRSs and Interpretations that are effective for
annual periods beginning after 1 January 2007 and that have not been applied in
preparing these financial statements :
FRSs/Interpretations
Effective date
FRS 107, Cash Flow Statements
1 July 2007
FRS 111, Construction Contracts
1 July 2007
FRS 112, Income Taxes
1 July 2007
FRS 118, Revenue
1 July 2007
Company No. 94528 - T
25
1. Basis of preparation (Cont’d)
(a) Statement of compliance (Cont’d)
FRSs/Interpretations
Effective date
FRS 120, Accounting for Government Grants and Disclosure of
Government Assistance
1 July 2007
Amendment to FRS 121, The Effects of Changes in Foreign
Exchange Rates - Net Investment in a Foreign Operation
1 July 2007
FRS 134, Interim Financial Reporting
1 July 2007
FRS 137, Provisions, Contingent Liabilities and Contingent Assets
1 July 2007
FRS 139, Financial Instruments : Recognition and Measurement
To be announced
IC Interpretation 1, Changes in Existing Decommissioning,
Restoration and Similar Liabilities
1 July 2007
IC Interpretation 2, Members’ Shares in Co-operative Entities and
Similar Instruments
1 July 2007
IC Interpretation 5, Rights to Interests arising from
Decommissioning, Restoration and Environmental Rehabilitation
Funds
1 July 2007
IC Interpretation 6, Liabilities arising from Participating in a
Specific Market - Waste Electrical and Electronic Equipment
1 July 2007
IC Interpretation 7, Applying the Restatement Approach under
FRS 129 Financial Reporting in Hyperinflationary Economies
1 July 2007
IC Interpretation 8, Scope of FRS 2
1 July 2007
The Group and the Company plan to apply the rest of the above-mentioned FRSs and
Interpretations, where applicable, for the annual period beginning 1 January 2008 except
for FRS 139, Financial Instruments : Recognition and Measurement which the effective
date has yet to be announced.
The impact of applying FRS 139 on the financial statements upon first adoption as
required by paragraph 30(b) of FRS 108, Accounting Policies, Changes in Accounting
Estimates and Errors is not disclosed by virtue of the exemption given in FRS
139.103AB.
Company No. 94528 - T
26
1. Basis of preparation (Cont’d)
(a) Statement of compliance (Cont’d)
The initial application of the other FRSs and Interpretations are not expected to have any
material impact on the financial statements of the Group and of the Company.
(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 financial statements 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 estimate is revised and in
any future periods affected.
There are no significant areas of estimation uncertainty and critical judgements in
applying accounting policies that have significant effect on the amounts recognised in the
financial statements.
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 Group entities, unless
otherwise stated.
(a) Basis of consolidation
(i)
Subsidiaries
Subsidiaries are entities, including unincorporated entities, controlled by the Group.
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. Subsidiaries are consolidated using the purchase method of
accounting.
Company No. 94528 - T
27
2. Significant accounting policies (Cont’d)
(a) Basis of consolidation (Cont’d)
Under the purchase method of accounting, the financial statements of subsidiaries
are included in the consolidated financial statements from the date that control
commences until the date that control ceases.
Investments in subsidiaries are stated in the Company’s balance sheet at cost less
impairment losses, unless the investment is classified as held for sale (or included in
a disposal group that is classified as held for sale).
(ii)
Changes in Group composition
Where a subsidiary issues new equity shares to minority interest for cash
consideration and the issue price has been established at fair value, the reduction in
the Group’s interests in the subsidiary is accounted for as a disposal of equity
interest with the corresponding gain or loss recognised in the income statements.
When a group purchases a subsidiary’s equity shares from minority interest for cash
consideration and the purchase price has been established at fair value, the accretion
of the Group’s interests in the subsidiary is accounted for as a purchase of equity
interest for which the acquisition method of accounting is applied.
The Group treats all other changes in group composition as equity transactions
between the Group and its minority shareholders. 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.
(iii) Minority interest
Minority interest at the balance sheet date, being the portion of the net identifiable
assets (excluding goodwill) of subsidiaries attributable to equity interests that are
not owned by the Company, whether directly or indirectly through subsidiaries, are
presented in the consolidated balance sheet and statement of changes in equity
within equity, separately from equity attributable to the equity shareholders of the
Company. Minority interest in the results of the Group is presented on the face of
the consolidated income statement as an allocation of the total profit or loss for the
year between minority interest and the equity shareholders of the Company.
Where losses applicable to the minority exceed the minority’s interest in the equity
of a subsidiary, the excess, and any further losses applicable to the minority, are
charged against the Group’s interest except to the extent that the minority has a
binding obligation to, and is able to, make additional investment to cover the losses.
If the subsidiary subsequently reports profits, the Group’s interest is allocated with
all such profits until the minority’s share of losses previously absorbed by the
Group has been recovered.
Company No. 94528 - T
28
2. Significant accounting policies (Cont’d)
(a) Basis of consolidation (Cont’d)
(iv) Transactions eliminated on consolidation
Intra-group balances, and any unrealised income and expenses arising from intragroup transactions, are eliminated in preparing the consolidated financial
statements.
(b) Property, plant and equipment
(i)
Recognition and measurement
Freehold land are stated at cost/valuation. All other property, plant and equipment
are stated at cost less accumulated depreciation and accumulated impairment losses.
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. 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 a willing
buyer and a willing seller 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 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.
Gains and losses on disposal of an item of property, plant and equipment are
determined by comparing the proceeds from disposal with the carrying amount of
property, plant and equipment and are recognised net within “other income” or
“other operating expenses” respectively in the income statements. When revalued
assets are sold, the amounts included in the asset revaluation reserve are transferred
to retained profits.
Company No. 94528 - T
29
2. Significant accounting policies (Cont’d)
(b) Property, plant and equipment (Cont’d)
(ii)
Reclassification to investment property
Property that is being constructed for future use as investment property is accounted
for as property, plant and equipment until construction or development is complete,
at which time it is reclassified as investment property.
When the use of a property changes from owner-occupied to investment property,
the property is reclassified as investment property.
(iii) Subsequent costs
The cost of replacing 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 and its cost can be measured
reliably. The carrying amount of those parts that are replaced is derecognised. The
costs of the day-to-day servicing of property, plant and equipment are recognised in
the income statements as incurred.
(iv) Depreciation
Depreciation is recognised in the income statements 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
Renovation
Furniture, fittings and equipment
Motor vehicles
50 years
4 - 5 years
10 years
2.5 - 12.5 years
5 years
Depreciation methods, useful lives and residual values are reassessed at the balance
sheet date.
Company No. 94528 - T
30
2. Significant accounting policies (Cont’d)
(c) Leased assets
(i)
Finance lease
Leases in terms of which the Group assumes substantially all the risks and rewards
of ownership are classified as finance leases. Upon 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
Other leases are operating leases and the leased assets are not recognised on the
Group’s balance sheet.
Payments made under operating leases are recognised in the income statements on a
straight-line basis over the term of the lease. Lease incentives received are
recognised as an integral part of the total lease expense, over the term of the lease.
(d) Intangible assets
Goodwill
Goodwill arises on business combinations and is measured at cost less any accumulated
impairment losses.
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.
With the adoption of FRS 3 beginning 1 January 2006, goodwill represents the excess of
the cost of the acquisition over the Group’s interest in the net fair value of the identifiable
assets, liabilities and contingent liabilities of the acquiree.
Any excess of the Group’s interest in the net fair value of acquiree’s identifiable assets,
liabilities and contingent liabilities over the cost of acquisition is recognised immediately
in income statements.
Goodwill is tested for impairment annually and whenever there is an indication that it
may be impaired.
Company No. 94528 - T
31
2. Significant accounting policies (Cont’d)
(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 stated 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. These include land held for a currently undetermined future use.
Properties that are occupied by the companies in the Group are accounted for as owneroccupied rather than as investment properties.
Investment properties are stated 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 property, property, plant and equipment and inventories do
not change the carrying amount and the cost of the property transferred.
Depreciation is charged to the income statements 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, prudently and without compulsion.
(g) Investments in equity securities
Investments in equity securities are recognised initially at fair value plus attributable
transaction costs.
Subsequent to initial recognition, investments in non-current equity securities other than
investments in subsidiaries, are stated at cost less allowance for diminution in value.
Company No. 94528 - T
32
2. Significant accounting policies (Cont’d)
(g) Investments in equity securities (Cont’d)
Where in the opinion of the Directors, there is a decline other than temporary in the value
of non-current equity securities other than investments in subsidiaries, the allowance for
diminution in value is recognised as an expense in the financial year in which the decline
is identified.
On disposal of an investment, the difference between net disposal proceeds and its
carrying amount is recognised in the income statements.
All investments in equity securities are accounted for using settlement date accounting.
Settlement date accounting refers to:
a) the recognition of an asset on the day it is received by the entity, and
b) the derecognition on an asset and recognition of any gain or loss on disposal on the
date it is delivered.
(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 the income statements 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 the income statements is shown as
progress billings under payables and accruals.
(i)
Receivables
Receivables are initially recognised at their cost when the contractual right to receive
cash or another financial asset from another entity is established.
Subsequent to initial recognition, receivables are stated at cost less allowance for
doubtful debts.
Receivables are not held for the purpose of trading.
Company No. 94528 - T
33
2. Significant accounting policies (Cont’d)
(j) 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 cost.
ii)
Building materials
Building materials are stated at the lower of cost and net realisable value. The cost
of building materials 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
its 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.
(k) Cash and cash equivalents
Cash and cash equivalents consist of cash on hand, balances and deposits with banks and
highly liquid investments which have an insignificant risk of changes in value. For the
purpose of the cash flow statement, cash and cash equivalents are presented net of bank
overdrafts and pledged deposits.
(l)
Impairment of assets
The carrying amounts of assets, other than inventories, property development costs and
financial assets, are reviewed at each reporting date to determine whether there is any
indication of impairment. If any such indication exists, then the asset’s recoverable
amount is estimated. For goodwill, recoverable amount is estimated at each reporting
date.
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.
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 groups of assets (the “cash-generating unit”). The
goodwill acquired in a business combination, for the purpose of impairment testing, is
allocated to cash-generating units that are expected to benefit from the synergies of the
combination.
Company No. 94528 - T
34
2. Significant accounting policies (Cont’d)
(l)
Impairment of assets (Cont’d)
An impairment loss is recognised if the carrying amount of an asset or its cash-generating
unit exceeds its recoverable amount unless the asset is carried at a revalued amount, in
which case the impairment loss is recognised directly against any revaluation surplus for
the asset to the extent that the impairment loss does not exceed the amount in the
revaluation surplus for that same asset. Impairment losses are recognised in the income
statements. Impairment losses recognised in respect of cash-generating units are allocated
first to reduce the carrying amount of any goodwill allocated to the units and then to
reduce the carrying amount of the other assets in the unit (groups of 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 each reporting date for any
indications that the loss has decreased or no longer exists. An impairment loss is reversed
if there has been a change in the estimates used to determine the recoverable amount. 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 the income statements in the year in which the reversals are recognised,
unless it reverses an impairment loss on a revalued asset, in which case it is credited
directly to revaluation surplus. Where an impairment loss on the same revalued asset was
previously recognised in the income statements, a reversal of that impairment loss is also
recognised in the income statements.
(m) Share capital
(i)
Shares issue expenses
Incremental costs directly attributable to issue of shares are recognised as a
deduction from equity.
(ii)
Repurchase of share capital
When share capital recognised as equity is repurchased, the amount of the
consideration paid, including directly attributable costs, is recognised as a deduction
from equity and is not re-valued for subsequent changes in the fair value or market
price of shares. Repurchased shares are classified as treasury shares and are
presented as a deduction from total 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 reissued by re-sale in the open market, the difference
between the sales consideration net of directly attributable costs and the carrying
amount of the treasury shares is recognised in equity.
Company No. 94528 - T
35
2. Significant accounting policies (Cont’d)
(n) Borrowings
Borrowings are stated at amortised cost with any difference between cost and redemption
value being recognised in the income statements over the period of the borrowings using
the effective interest method.
(o) 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.
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.
Where the Company enters into financial guarantee contracts to guarantee the
indebtedness of other companies within its group, the Company considers these to be
insurance arrangements, and accounts for them as such. In this respect, the Company
treats the guarantee contract as a contingent liability until such time as it becomes
probable that the Company will be required to make a payment under the guarantee.
(p) Payables
Payables are measured initially and subsequently at cost. Payables are recognised when
there is a contractual obligation to deliver cash or another financial asset to another
entity.
(q) 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 provision 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 the income statements
in the year to which they relate. Once the contributions have been paid, the Group has no
further payment obligations.
Company No. 94528 - T
36
2. Significant accounting policies (Cont’d)
(r) Revenue recognition
(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 is probable will 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 the income statements.
(ii)
Completed development properties
Revenue relating to sale of completed development properties 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.
(iv) Dividend income
Dividend income is recognised when the right to receive payment is established.
(v)
Rental income
Rental income is recognised in the income statements 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.
(s) Interest income and borrowing costs
Interest income is recognised as it accrues, using the effective interest method.
All borrowing costs are recognised in the income statements using the effective interest
method, in the period in which they are incurred except to the extent that they are
capitalised as being directly attributable to property development costs (refer Note 2(h)).
Company No. 94528 - T
37
2. Significant accounting policies (Cont’d)
(s) Interest income and borrowing costs (Cont’d)
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 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 sale are interrupted or
completed.
(t) Tax expense
Tax expense comprises current and deferred tax. Tax expense is recognised in the income
statements except to the extent that it relates to items recognised directly in equity, in
which case it is recognised in equity.
Current tax is the expected tax payable on the taxable income for the year, using tax rates
enacted or substantively enacted at the balance sheet date, and any adjustment to tax
payable in respect of previous years.
Deferred tax is recognised using the balance sheet method, providing for temporary
differences between the carrying amounts of assets and liabilities for reporting purposes
and the amounts used for taxation purposes. Deferred tax is not recognised for the
following temporary differences: the initial recognition of goodwill, the initial
recognition of assets or liabilities in a transaction that is not a business combination and
that affects neither accounting nor taxable profit (tax 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 balance
sheet date.
Deferred tax liability is recognised for all taxable temporary differences.
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 each reporting date and are reduced to the extent that it is no longer
probable that the related tax benefit will be realised.
(u) Earnings per share
The Group presents basic earnings per share (EPS) data for its ordinary shares. 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.
(v) Segment reporting
A segment is a distinguishable component of the Group that is engaged either in
providing products or services (business segment), or in providing products or services
within a particular economic environment (geographical segment), which is subject to
risks and rewards that are different from those of other segments.
Company No. 94528 - T
38
3. Property, plant and equipment
Freehold
land
RM
Buildings
RM
Plant and
machinery
RM
Cost/Valuation
At 1 January 2006
Additions
Disposal
4,994,104
-
2,819,495
134,350
-
At 31 December 2006/
1 January 2007
4,994,104
2,953,845
Group
Additions
Disposal
Reclassification
-
69,667
-
Other
assets *
RM
Total
RM
3,636,183
185,000
(133,000)
4,244,512
226,044
-
15,694,294
545,394
(133,000)
3,688,183
4,470,556
16,106,688
2,697
(175,000)
77,883
(127,842)
175,000
150,247
(127,842)
-
At 31 December 2007
4,994,104
3,023,512
3,515,880
4,595,597
16,129,093
Representing :
- At cost
- At valuation
1,132,104
3,862,000
3,023,512
-
3,515,880
-
4,595,597
-
12,267,093
3,862,000
4,994,104
3,023,512
3,515,880
4,595,597
16,129,093
Accumulated depreciation
At 1 January 2006
Depreciation for the year
Disposal
-
551,747
59,749
-
3,381,547
178,250
(132,999)
3,423,186
323,560
-
7,356,480
561,559
(132,999)
At 31 December 2006/
1 January 2007
-
611,496
3,426,798
3,746,746
7,785,040
Depreciation for the year
Disposal
Reclassification
-
76,034
-
At 31 December 2007
-
687,530
3,409,264
4,072,809
8,169,603
1,132,104
3,862,000
2,267,748
-
254,636
-
821,326
-
4,475,814
3,862,000
4,994,104
2,267,748
254,636
821,326
8,337,814
1,132,104
3,862,000
2,342,349
-
261,385
-
723,810
-
4,459,648
3,862,000
4,994,104
2,342,349
261,385
723,810
8,321,648
1,132,104
3,862,000
2,335,982
-
106,616
-
522,788
-
4,097,490
3,862,000
4,994,104
2,335,982
106,616
522,788
7,959,490
Carrying amounts
At 1 January 2006
- At cost
- At valuation
At 31 December 2006/
1 January 2007
- At cost
- At valuation
At 31 December 2007
- At cost
- At valuation
84,549
(102,083)
351,821
(127,841)
102,083
512,404
(127,841)
-
Company No. 94528 - T
39
3. Property, plant and equipment (Cont’d)
Freehold
land
RM
Buildings
RM
Plant and
machinery
RM
Cost/Valuation
At 1 January 2006
Additions
Disposal
4,983,533
-
2,590,045
-
At 31 December 2006/
1 January 2007
4,983,533
2,590,045
-
-
At 31 December 2007
4,983,533
2,590,045
3,217,808
3,932,594
14,723,980
Representing :
- At cost
- At valuation
1,121,533
3,862,000
2,590,045
-
3,217,808
-
3,932,594
-
10,861,980
3,862,000
4,983,533
2,590,045
3,217,808
3,932,594
14,723,980
Company
Additions
Disposal
Other
assets *
RM
Total
RM
3,163,111
185,000
(133,000)
3,916,467
97,821
-
14,653,156
282,821
(133,000)
3,215,111
4,014,288
14,802,977
2,697
-
46,148
(127,842)
48,845
(127,842)
Accumulated depreciation
At 1 January 2006
Depreciation for the year
Disposal
-
510,020
51,801
-
3,036,702
133,260
(132,999)
3,208,708
278,636
-
6,755,430
463,697
(132,999)
At 31 December 2006/
1 January 2007
-
561,821
3,036,963
3,487,344
7,086,128
Depreciation for the year
Disposal
-
51,801
-
83,309
-
At 31 December 2007
-
613,622
3,120,272
3,605,645
7,339,539
1,121,533
3,862,000
2,080,025
-
126,409
-
707,759
-
4,035,726
3,862,000
4,983,533
2,080,025
126,409
707,759
7,897,726
1,121,533
3,862,000
2,028,224
-
178,148
-
526,944
-
3,854,849
3,862,000
4,983,533
2,028,224
178,148
526,944
7,716,849
1,121,533
3,862,000
1,976,423
-
97,536
-
326,949
-
3,522,441
3,862,000
4,983,533
1,976,423
97,536
326,949
7,384,441
Carrying amounts
At 1 January 2006
- At cost
- At valuation
At 31 December 2006/
1 January 2007
- At cost
- At valuation
At 31 December 2007
- At cost
- At valuation
*
246,142
(127,841)
381,252
(127,841)
Other assets comprise renovation, furniture, fittings and equipment and motor vehicles.
Company No. 94528 - T
40
3. Property, plant and equipment (Cont’d)
3.1
Leased plant and machinery
Included in property, plant and equipment of the Group and of the Company are motor
vehicles with carrying value of RM248,379 (2006 : RM392,804) and RM156,485 (2006 :
RM275,266) respectively held in trust by the Directors and plant and machinery with
carrying value of RM92,518 (2006 : RM174,183) held under finance lease arrangements.
3.2
Property, plant and equipment under the revaluation model
The freehold land of the Group and of the Company with carrying value of RM3,862,000
(2006 : 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 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 is RM1,000,000 (2006 : RM1,000,000).
4. Intangible assets
Goodwill on consolidation
Group
2007
RM
At 1 January/31 December
4.1
1,441,116
2006
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 accrual 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.
The gross margin used in the projections is based on past experience.
Company No. 94528 - T
41
5. Land held for property development
Group
Company
2007
RM
2006
RM
2007
RM
2006
RM
174,289,476
2,441,217
3,141,177
157,268,681
2,441,217
2,758,050
143,448,518
2,192,287
1,720,899
126,563,762
2,192,287
1,482,369
179,871,870
162,467,948
147,361,704
130,238,418
Cost
At 1 January
Freehold land
Leasehold land
Development expenditure
Additions
Disposal
1,436,309
*-
17,475,319
(71,397)
1,303,720
-
17,194,683
(71,397)
174,772,165
2,441,217
4,094,797
174,289,476
2,441,217
3,141,177
143,920,208
2,192,287
2,552,929
143,448,518
2,192,287
1,720,899
181,308,179
179,871,870
148,665,424
147,361,704
At 31 December
Freehold land
Leasehold land
Development expenditure
*
During the year, there was disposal of a piece of land for which the carrying amount is
RM Nil.
6. Investment properties
Group
2007
RM
Company
2006
RM
2007
RM
2006
RM
Cost
At 1 January
Disposal
8,703,300
(103,010)
8,703,300
-
8,530,977
(103,010)
8,530,977
-
At 31 December
8,600,290
8,703,300
8,427,967
8,530,977
58,025
-
56,877
56,705
(1,202)
56,877
-
58,025
112,380
56,877
Accumulated depreciation
At 1 January
Depreciation
Disposal
At 31 December
58,025
57,854
(1,202)
114,677
Company No. 94528 - T
42
6. Investment properties (Cont’d)
Group
Carrying amounts
Company
2007
RM
2006
RM
2007
RM
2006
RM
8,485,613
8,645,275
8,315,587
8,474,100
5,733,350
2,752,263
5,802,023
2,843,252
5,618,467
2,697,120
5,687,140
2,786,960
8,485,613
8,645,275
8,315,587
8,474,100
Included in the above are :
Freehold land
Buildings
The fair value of investment properties are as follows :
Group
Description of freehold land
and buildings
Company
2007
RM
2006
RM
2007
RM
2006
RM
1,183,000
1,382,000
1,183,000
1,382,000
600,000
600,000
600,000
600,000
1,948,000
1,948,000
1,948,000
1,948,000
3,975,000
3,975,000
3,975,000
3,975,000
1,827,000
1,827,000
1,827,000
1,827,000
359,000
359,000
-
-
650,000
650,000
650,000
650,000
10,542,000
10,741,000
10,183,000
10,382,000
i) based on valuation by
independent professional
valuers in 2002 on an open
market value basis
Shoplots at Georgetown,
North East District, Penang
Land and residential house
at Georgetown, North East
District, Penang
Double storey detached
building at Georgetown,
North East District, Penang
Double storey detached
residential house at North
East District, Penang
Double storey prewar
terraced buildings at
Georgetown, North East
District, Penang
Land and industrial
building at Province
Wellesley Central, Penang
ii) based on Directors’
estimate
Land and residential house
at Georgetown, North East
District, Penang
Company No. 94528 - T
43
6. Investment properties (Cont’d)
All the investment properties are determined based on market values.
The following are recognised in the income statement in respect of investment properties :
Group
Rental income
Direct operating expenses :
- income generating
investment properties
- non-income generating
investment properties
Company
2007
RM
2006
RM
2007
RM
2006
RM
284,110
324,860
284,110
324,860
37,943
38,893
37,943
38,893
23,890
7,780
21,118
4,436
7. Investments in subsidiaries
Company
2007
RM
2006
RM
Unquoted shares
At cost
Less : Impairment losses
23,499,659
(1,153,000)
23,499,659
(1,153,000)
22,346,659
22,346,659
The subsidiaries, all of which are incorporated in Malaysia, are as follows :
Name of subsidiary
Percentage of
Equity Held
2007
2006
%
%
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.
Mastiara Construction Sdn. Bhd.
* 99.9
100
* 99.9 Property development
100
Property development and civil
construction
Company No. 94528 - T
44
7. Investments in subsidiaries (Cont’d)
Name of subsidiary
Percentage of
Equity Held
2007
2006
%
%
Principal Activities
Asas Dunia Development &
Construction Sdn. Bhd.
100
100
Property development and
construction
Asas Dunia Capital Sdn. Bhd.
100
100
Trading of building materials and
provision of financial services
*
The remaining shares are held by minority shareholders.
8. Other investments
Group/Company
2007
2006
RM
RM
In Malaysia:
Quoted shares, at cost
Less : Allowance for diminution in value
Market value of quoted investments
7,006,866
(5,857,761)
7,006,866
(5,857,761)
1,149,105
1,149,105
1,180,000
1,030,000
Company No. 94528 - T
45
9. Property development costs
Group
2007
RM
Company
2006
RM
2007
RM
2006
RM
35,768,081
100,134,204
30,423,528
62,446,473
33,820,828
66,971,898
(33,515,785)
(12,867,128)
(22,491,530)
83,533,930
102,386,500
80,002,873
78,301,196
24,757,038
30,332,508
27,464,645
26,175,977
(6,635,786)
(9,760,799)
(22,736,777)
(26,448,301)
(4,675,661)
(8,610,155)
(12,284,260)
(12,190,040)
(16,396,585)
(49,185,078)
(13,285,816)
(24,474,300)
30,501,946
66,041,764
29,259,245
78,172,647
30,423,528
62,446,473
(13,009,780)
(13,250,190)
(12,867,128)
83,533,930
94,181,702
80,002,873
At 1 January
Freehold land
30,501,946
Development costs
66,041,764
Accumulated costs charged to
income statements
(13,009,780)
Add :
Development costs incurred
during the year
Less :
Costs charged to income
statements
Transfer to inventories
At 31 December
Freehold land
29,312,421
Development costs
75,167,038
Accumulated costs charged to
income statements
(12,585,076)
91,894,383
Company No. 94528 - T
46
9. Property development costs (Cont’d)
9.1
Included in development costs of the Group and of the Company are :
i) rental of plant and machinery for the year amounting to RM583,133 (2006 :
RM331,817) and RM479,812 (2006 : RM308,006) respectively.
ii) property development costs in respect of joint-venture projects are as follows :
Group
Company
2007
RM
2006
RM
2007
RM
2006
RM
35,103,772
28,027,815
35,091,915
25,382,763
7,134,577
4,704,509
8,322,069
5,424,311
1,089,263
2,206,561
-
-
43,327,612
34,938,885
Project
Asas Murni and
Asas Parade **
Taman Impian
Indah *
Taman Jawi Indah
***
43,413,984
30,807,074
*
The joint-venture partner is entitled to 20% to 30% of gross sales proceeds.
** The joint-venture partner is entitled to 5% to 30% of gross sales proceeds.
*** The joint-venture partner is entitled to 15% to 35% of gross sales proceeds. On 31
January 2007, the Group entered into a Supplementary Joint Venture Agreement
with the joint-venture partner to vary the entitlement of gross sales proceeds to
15%.
10. Receivables, deposits and prepayments
Note
Group
Company
2007
RM
2006
RM
2007
RM
2006
RM
15,283,805
14,194,440
4,060,514
6,420,469
Trade
Trade receivables
Less : Allowance for
doubtful debts
Amount due from
subsidiaries
Accrued billings
(300,000)
(300,000)
-
-
10.1
14,983,805
13,894,440
4,060,514
6,420,469
10.2
688,810
177,473
7,407,344
-
7,155,225
-
15,672,615
14,071,913
11,467,858
13,575,694
Company No. 94528 - T
47
10. Receivables, deposits and prepayments (Cont’d)
Note
Group
2007
RM
Company
2006
RM
2007
RM
2006
RM
Non-trade
Amount due from
subsidiaries
Other receivables
Joint-venture
deposits
Deposits
Prepayments
10.2
77,784
46,044
35,557,564
49,798
35,188,669
21,450
5,259,791
3,526,005
99,632
7,129,791
176,775
87,911
5,068,213
3,491,075
27,589
5,068,213
132,635
21,910
8,963,212
7,440,521
44,194,239
40,432,877
24,635,827
21,512,434
55,662,097
54,008,571
10.1 Trade receivables
Trade receivables are denominated in functional currency.
10.2 Amount due from subsidiaries
The trade receivables from subsidiaries are subject to the normal trade terms.
The non-trade receivables due from subsidiaries are unsecured, interest free and
repayable on demand.
11. Inventories
Group
Completed development
properties :
- At cost
- At net realisable value
Building materials
Company
2007
RM
2006
RM
2007
RM
2006
RM
58,268,180
108,205
292,556
62,660,589
882,324
240,263
24,824,931
108,203
73,203
22,585,288
880,000
97,950
58,668,941
63,783,176
25,006,337
23,563,238
Company No. 94528 - T
48
11. Inventories (Cont’d)
Included in the completed development properties of the Group and of the Company are
completed development properties relating to joint-venture projects as follows :
Group
Company
2007
RM
2006
RM
2007
RM
2006
RM
2,646,080
5,036,849
2,545,952
8,424,095
2,802,283
5,036,849
3,797,966
13,400,685
2,761,989
5,036,849
3,039,284
-
2,924,173
5,036,849
4,536,979
-
18,652,976
25,037,783
10,838,122
12,498,001
Project
Asas Murni *
Menara Asas **
Taman Impian Indah *
Taman Jawi Indah ***
*
The joint-venture partner is entitled to 20% to 30% of gross sales proceeds.
** The Group and the Company is entitled to a net profit of RM6,500,000 of the project.
*** The joint-venture partner is entitled to 15% to 35% of gross sales proceeds. On 31
January 2007, the Group entered into a Supplementary Joint Venture Agreement with the
joint-venture partner to vary the entitlement of gross sales proceeds to 15%.
The joint-venture partner of Menara Asas is Asas Dunia Properties Sdn. Bhd., a company in
which Mr. Chan Leong Foon has substantial financial interests. Other Directors i.e. Dato’ Chan
Fook Sing, Mr. Chan Fook Sun and Mr. Chan Fook Hean are also deemed interested in Asas
Dunia Properties Sdn. Bhd. by virtue of their family relationship with Mr. Chan Leong Foon.
The joint-venture partner of Asas Murni, Taman Impian Indah and Taman Jawi Indah is Dyner
Resources Sdn. Bhd., a company in which Dato’ Chan Fook Sing, Mr. Chan Fook Sun and Mr.
Chan Fook Hean have substantial financial interests.
12. Cash and bank balances
Included in cash and bank balances of the Group and of the Company are amounts of
RM143,022 (2006 : RM539,653) and RM139,749 (2006 : RM270,889) respectively held under
Housing Development Account as required under the Housing Developers (Housing
Development Account) (Amendment) Regulations 2002.
Company No. 94528 - T
49
13. Capital and reserves
Share capital
Group/Company
2007
2006
RM
Number of
shares
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
Reserves
Note
Group
Company
2007
RM
2006
RM
2007
RM
2006
RM
15,960,000
15,960,000
15,960,000
15,960,000
818,502
500,000
-
818,502
(781,600)
818,502
-
Non-distributable :
Share premium
Asset revaluation
reserve
Capital reserve
Treasury shares
13.1
13.2
13.3
818,502
500,000
(781,600)
16,496,902
17,278,502
15,996,902
16,778,502
125,782,009
125,037,937
76,541,521
80,594,226
142,278,911
142,316,439
92,538,423
97,372,728
Distributable :
Retained profits
13.1 Asset revaluation reserve
The asset revaluation reserve represents surplus arising from the revaluation of certain
freehold land and building.
13.2 Capital reserve
The capital reserve arose as a result of bonus issue by a subsidiary through capitalisation
of its retained profits.
Company No. 94528 - T
50
13. Capital and reserves (Cont’d)
13.3 Treasury shares
The shareholders of the Company, by a special resolution passed in a general meeting
held on 16 June 2006, approved the Company’s plan to repurchase its own shares. The
Directors of the Company are committed to enhancing 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 743,000 of its issued share capital
from the open market at an average price of RM1.05 per share. The total consideration
paid was RM781,600 including transaction costs of RM4,066. The repurchase
transactions were financed by internally generated funds. The shares repurchased are
retained as treasury shares.
13.4 Section 108 tax credit
Subject to agreement with the Inland Revenue Board, the Company has sufficient Section
108 tax credit and tax exempt income to frank/distribute its entire retained profits at 31
December 2007 if paid out as dividends.
The Malaysian Budget 2008 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 2007 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.
14. Borrowings
Group/Company
2007
2006
RM
RM
Non-Current
Lease payables (secured)
Al-Bai Bithaman Ajil Term Financing (“BBA-TF”)
(unsecured)
-
9,346
2,285,716
2,857,144
2,285,716
2,866,490
10,833
571,428
23,539,172
66,487
571,428
6,351,990
24,121,433
6,989,905
Current
Lease payables (secured)
BBA-TF (unsecured)
Bank overdrafts (unsecured)
Company No. 94528 - T
51
14. Borrowings (Cont’d)
The borrowings are denominated in functional currency.
The secured lease payables bear interest of 7.39% (2006 : 7.39%) per annum.
The BBA-TF is payable on a monthly basis over a period of 7 years at a profit margin of
4.63% per annum.
Lease liabilities are payable as follows :
Payment
RM
2007
Interest
RM
Principal
RM
Payment
RM
2006
Interest
RM
Principal
RM
11,608
775
10,833
69,648
3,161
66,487
9,439
93
9,346
79,087
3,254
75,833
Group/Company
Less than 1 year
Between 1 year and 5
years
11,608
-
775
10,833
15. Deferred tax liabilities
Recognised deferred tax liabilities
Deferred tax liabilities are attributable to the following :
2007
RM
2006
RM
Group
Property, plant and equipment - revaluation
- capital allowance
Provisions
143,095
8,455
(92,329)
143,095
8,455
(92,329)
59,221
59,221
143,095
(92,329)
143,095
(92,329)
50,766
50,766
Company
Property, plant and equipment - revaluation
Provisions
Company No. 94528 - T
52
15. Deferred tax liabilities (Cont’d)
The components and movements of deferred tax liabilities during the year are as follows :
Recognised
At 1 January in the income
statement
2006
RM
RM
At 31
December
2006
RM
Recognised
in the income
statement
RM
At 31
December
2007
RM
Group
Property, plant and equipment
- revaluation
- capital allowance
Provisions
143,095
8,455
(92,329)
-
143,095
8,455
(92,329)
-
143,095
8,455
(92,329)
59,221
-
59,221
-
59,221
143,095
(92,329)
-
143,095
(92,329)
-
143,095
(92,329)
50,766
-
50,766
-
50,766
Company
Property, plant and equipment
- revaluation
Provisions
16. Provision
This represents the provision for liquidated ascertained damages.
Group/Company
2007
2006
RM
RM
At 1 January
Release of unused provision
27,424
-
81,042
(53,618)
At 31 December
27,424
27,424
Provision for liquidated ascertained damages is in respect of projects undertaken by the Group
and the Company. The provision is recognised for expected liquidated ascertained damages
claims based on the sale and purchase agreements.
Company No. 94528 - T
53
17. Payables and accruals
Note
Group
Company
2007
RM
2006
RM
2007
RM
2006
RM
11,124,068
20,127,459
3,774,012
14,365,574
5,099,852
6,366,368
39,129,417
5,124,299
21,166,559
6,319,802
16,223,920
26,493,827
48,027,728
41,851,935
1,021,372
23,105
1,293,581
37,050
4,092,256
361,323
-
4,095,080
649,420
-
1,044,477
1,330,631
4,453,579
4,744,500
17,268,397
27,824,458
52,481,307
46,596,435
Trade
Trade payables
Amount due to
subsidiaries
Progress billings
17.1
Non-trade
Amount due to
subsidiaries
Other payables
Accrued expenses
17.2
17.1 Trade payables
Trade payables are denominated in functional currency.
Included in trade payables of the Group and of the Company are amount of RM3,625,932
(2006 : RM3,322,904) and RM793,873 (2006 : RM1,067,129) respectively representing
amount due to related parties.
17.2 Amount due to subsidiaries
The non-trade amount due to subsidiaries is unsecured, interest-free and repayable on
demand.
Company No. 94528 - T
54
18. Revenue
Revenue of the Group and of the Company consist of the following :
Group
2007
RM
Company
2006
RM
2007
RM
2006
RM
Dividend income
22,810
Property development revenue 12,325,402
Rental income
653,635
Sale of land
760,000
Sale of completed
development properties
27,102,602
Sale of building materials
242,210
17,810
34,568,316
745,669
126,570
22,810
8,821,666
579,775
-
17,810
19,425,623
670,549
126,570
9,391,582
287,718
13,060,231
200,094
2,702,350
249,910
41,106,659
45,137,665
22,684,576
23,192,812
19. Cost of goods sold
Cost of goods sold of the Group and of the Company include the following :
Group
Property development
expenses
Cost of land
Cost of completed
development properties
Purchase of building materials
Post completion expenses
Company
2007
RM
2006
RM
2007
RM
2006
RM
6,635,786
-
22,736,777
71,397
4,675,661
-
12,284,260
71,397
14,927,327
230,865
456,759
6,564,565
244,146
103,731
7,142,311
192,040
456,759
2,461,021
243,733
103,731
22,250,737
29,720,616
12,466,771
15,164,142
Company No. 94528 - T
55
20. Operating profit
Operating profit is arrived at after charging/(crediting) :
Group
2007
RM
Auditors’ remuneration
- current year
- Audit services by auditors
of the Company
- Other services by auditors
of the Company
- prior year
- Audit services by auditors
of the Company
Depreciation
- property, plant and
equipment (Note 3)
- investment properties
(Note 6)
Directors' remuneration
(Note 22)
Bad debts written off
Inventories written down
Insurance claim received
Interest income
Gain on disposal of :
- land held for property
development
- investment properties
- plant and equipment
Management fees received
and receivable
Release of unused provision
Company
2006
RM
2007
RM
2006
RM
71,600
72,400
43,500
43,500
19,700
24,300
10,000
10,000
(6,500)
-
(6,500)
(800)
512,404
561,559
381,252
463,697
57,854
58,025
56,705
56,877
2,400,955
12,730
(105,411)
(25,010)
2,218,239
177,853
(1,535)
(99,946)
2,348,320
12,730
(105,411)
(11,657)
2,165,604
(1,535)
(40,132)
(760,000)
(118,192)
(26,999)
(55,173)
(54,999)
(118,192)
(26,999)
(55,173)
(54,999)
(123,193)
-
(115,140)
(53,618)
(108,127)
-
(119,628)
(53,618)
21. Employee information
Group
Staff costs
Company
2007
RM
2006
RM
2007
RM
2,232,523
2,085,257
1,519,285
2006
RM
1,338,963
Staff costs of the Group and of the Company include contributions to the Employees’
Provident Fund of RM235,559 (2006 : RM203,716) and RM160,152 (2006 : RM129,155)
respectively.
Company No. 94528 - T
56
22. Key management personnel compensation
The key management personnel compensation are as follows :
Group
Company
2007
RM
2006
RM
2007
RM
2006
RM
2,230,020
78,000
2,047,454
78,000
2,230,020
78,000
2,047,454
78,000
2,308,020
2,125,454
2,308,020
2,125,454
10,300
30,000
10,150
30,000
10,300
30,000
10,150
30,000
40,300
40,150
40,300
40,150
52,635
52,635
-
-
2,400,955
2,218,239
2,348,320
2,165,604
283,281
222,331
283,281
222,331
2,684,236
2,440,570
2,631,601
2,387,935
Directors of the Company
Executive :
Salaries and other
emoluments
Fees
Non-executive :
Other emoluments
Fees
Other Directors
Executive :
Salaries and other
emoluments
Total excluding benefits-inkind
Other key management
personnel
Salaries and other
emoluments
Company No. 94528 - T
57
22. Key management personnel compensation (Cont’d)
The number of Directors of the Company whose total remuneration during the year fall within
the following bands are as follows :
Number of Directors
2007
2006
Executive Directors :
RM250,001 - RM300,000
RM350,001 - RM400,000
RM400,001 - RM450,000
RM700,001 - RM750,000
RM750,001 - RM800,000
RM800,001 - RM850,000
1
1
1
1
1
1
1
1
-
2
2
Non-executive Directors :
Below RM50,000
23. Finance costs
Group
Company
2007
RM
2006
RM
2007
RM
2006
RM
177,432
4,648
903,498
177,432
9,194
161,179
177,432
4,648
903,498
177,432
3,873
161,179
1,085,578
347,805
1,085,578
342,484
Interest expense
Term loan
Lease
Bank overdrafts
24. Tax expense
Recognised in the income statements
Group
Company
2007
RM
2006
RM
2007
RM
2006
RM
Current year
Prior year
2,933,730
249,247
2,192,710
41,442
1,199,952
104,673
850,000
36,281
Total tax expense
3,182,977
2,234,152
1,304,625
886,281
Current tax expense
Company No. 94528 - T
58
24. Tax expense (Cont’d)
Recognised in the income statements
Group
Profit before tax
Tax at Malaysian tax rate of
27% (2006 : 28%)
Effect of lower tax rate for
certain subsidiaries *
Non-deductible expenses
Tax exempt income
Under provided in prior years
Tax expense
*
Company
2007
RM
2006
RM
2007
RM
2006
RM
10,899,417
8,148,596
4,224,288
2,719,701
2,942,843
2,281,607
1,140,558
761,517
98,596
(39,202)
104,673
103,883
(15,400)
36,281
1,304,625
886,281
(81,509)
110,834
(38,438)
249,247
3,182,977
(75,174)
21,692
(35,415)
41,442
2,234,152
With effect from year of assessment 2004, companies with paid-up capital of RM2.5
million and below at the beginning of the basis period for a year of assessment are subject
to corporate tax at 20% on chargeable income up to RM500,000.
25. Basic earnings per ordinary share - Group
The calculation of basic earnings per ordinary share was based on the profit attributable to
ordinary shareholders and a weighted average number of ordinary shares outstanding
calculated as follows :
2007
RM
Profit attributable to ordinary shareholders
7,716,440
2006
RM
5,914,444
Weighted average number of ordinary shares
2007
’000
2006
’000
Issued ordinary shares at 1 January
Effect of treasury shares held
191,596
(398)
191,596
-
Weighted average number of ordinary shares at 31
December
191,198
191,596
Company No. 94528 - T
59
25. Basic earnings per ordinary share - Group (Cont’d)
Basic earnings per ordinary share
2007
Sen
From continuing operations
4.04
2006
Sen
3.09
26. Dividend - Group/Company
2007
RM
2006
RM
Paid :
2006 Final dividend of 5% less 27% tax (2005 : 2.6%
tax exempt)
6,972,368
4,981,490
27. Segmental information
No segmental information is presented as the Group’s business segment is confined to one
segment, property development and construction which is operated solely in Malaysia.
28. 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. The
key management personnel include all the Directors of the Company, and certain members of
senior management of the Group.
Company No. 94528 - T
60
28. Related parties - Group/Company (Cont’d)
28.1 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 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
iv) The Group also has a related party relationship with Dyner Resources Sdn. Bhd., a
company in which Dato’ Chan Fook Sing, Mr. Chan Fook Sun and Mr. Chan Fook
Hean have substantial financial interests.
v) The Group also has a related party relationship with Solid Block Sdn. Bhd., a
company in which Dato’ Chan Fook Sing, Mr. Chan Fook Sun and Mr. Chan Fook
Hean have substantial financial interests.
28.2 Related party transactions
28.2.1 Transactions with Directors and key management personnel
The remuneration packages paid to them in accordance with the terms and
conditions of their appointment.
28.2.2 Significant related party transactions other than those disclosed elsewhere in the
financial statements are as follows :
2007
RM
2006
RM
Group
Proceeds of sales due and payable to the
landowner pursuant to the joint venture
agreements signed :
- Dyner Resources Sdn. Bhd.
3,312,848
5,761,530
Company No. 94528 - T
61
28. Related parties - Group/Company (Cont’d)
2007
RM
2006
RM
Group
Purchase of bricks from :
- Solid Block Sdn. Bhd.
565,230
643,845
Company
Progress billings from :
- Ultra-Bina Sdn. Berhad
- Mastiara Construction Sdn. Bhd.
19,046,418
3,800,162
14,874,665
767,028
Management fees receivable from :
- Asas Dunia Development &
Construction Sdn. Bhd.
-
15,000
Proceeds of sales receivable by the
Company as landowner pursuant to the
joint venture agreement signed :
- Asas Mutiara Sdn. Bhd.
420,150
1,691,847
981,175
2,022,080
49,074
95,164
67,685
493,823
Proceeds of sales due and payable to the
landowner pursuant to the joint venture
agreements signed :
- Dyner Resources Sdn. Bhd.
Purchase of bricks from :
- Solid Block Sdn. Bhd.
Progress billings to :
- Asas Mutiara Sdn. Bhd.
The terms and conditions for the above transactions are based on normal trade terms.
Company No. 94528 - T
62
29. Contingent liability, unsecured
Group/Company
Certain purchasers have initiated legal suits against the Company to rescind the Sale and
Purchase Agreements for retail units in shopping complex and to seek refund of the progress
payments totalling RM2,601,649 (2006 : RM2,601,649) paid by the said purchasers. The
Company is disputing and contesting the claim. The case is pending court hearing and the
outcome of the matter cannot be ascertained and quantified at this juncture. Total outstanding
progress billings, including late payment interest, owing to the Company by these purchasers
amounted to RM2,377,374 (2006 : RM2,068,467).
30. Financial instruments
Financial risk management objectives and policies
Exposure to credit, interest rate and liquidity risk arises in the normal course of the Group and
of the Company’s business. The Group and the Company have risk management policies and
guidelines which sets out their overall business strategies, their tolerance to risk and their
general risk management philosophy.
Credit risk
Credit risk is monitored on an ongoing basis.
At balance sheet date, there were no significant concentrations of credit risk. The maximum
exposure to credit risk is represented by the carrying amount of each financial asset in the
balance sheet.
Interest rate risk
The Group’s primary interest rate risk is related to debt obligations and deposits, which are
mainly confined to short term bank borrowings and short term deposits with licensed banks.
Bank borrowings are on fixed and floating rates terms. The interest rates are negotiated in
order to ensure that the Group benefits from the lowest possible financing costs.
Company No. 94528 - T
63
30. Financial instruments (Cont’d)
Effective interest rates and repricing analysis
In respect of interest-bearing financial liability, the following table indicates their effective
interest rates at balance sheet date and the periods in which they reprice or mature, whichever
is earlier :
Effective
interest rate
per annum
%
Total
RM
Within 1
year
RM
8.00 - 8.25
23,539,172
23,539,172
-
8.00 - 8.25
6,351,990
6,351,990
-
8.00 - 8.25
23,539,172
23,539,172
-
8.00 - 8.25
6,351,990
6,351,990
-
1-5
years
RM
Group
2007
Financial liability
Bank overdrafts
2006
Financial liability
Bank overdrafts
Company
2007
Financial liability
Bank overdrafts
2006
Financial liability
Bank overdrafts
Liquidity risk
The Group monitors and maintains a level of cash and cash equivalents deemed adequate by
management to finance the Group’s operations and to mitigate the effects of fluctuations in
cash flows.
Company No. 94528 - T
64
30. Financial instruments (Cont’d)
Fair values
The carrying amounts approximate fair value due to the relatively short term nature of these
financial instruments in respect of cash and bank balances, receivables, deposits and
prepayments, payables and accruals, and short term borrowings.
The fair value of the quoted investments is disclosed in Note 8.
The Company provides financial guarantee to a leasing company for facility granted to a
subsidiary. The fair value of such financial guarantee is not expected to be material as the
probability of the subsidiary defaulting on the facility line is remote.
There is no disclosure of fair value for long term BBA-TF procured under Islamic banking
principles as FRS132, Financial Instruments : Disclosure and Presentation does not apply to
the recognition, measurement and disclosure of transactions and events conducted on the basis
of Islamic banking principles.
There were no unrecognised financial instruments at balance sheet date.
31. Capital commitment
Group/Company
2007
2006
RM’000
RM’000
Land held for property development
Contracted but not provided for
30,150
-
Asas Dunia Berhad
(Company No. 94528 - T)
(Incorporated in Malaysia)
and its subsidiaries
Financial statements for the year
ended 31 December 2007