ANNUAL REPORT 2012 - Wawasan TKH Holdings Berhad
ANNUAL REPORT 2012 - Wawasan TKH Holdings Berhad
ANNUAL REPORT 2012 - Wawasan TKH Holdings Berhad
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WAWASAN <strong>TKH</strong> HOLDINGS BERHAD (540218-A) | <strong>ANNUAL</strong> <strong>REPORT</strong> <strong>2012</strong><br />
WAWASAN <strong>TKH</strong> HOLDINGS BERHAD<br />
(540218-A)<br />
Wisma <strong>TKH</strong>, Lot 6, Jalan Teknologi,<br />
Taman Sains Selangor 1, Kota Damansara,<br />
47810 Petaling Jaya, Selangor Darul Ehsan.<br />
Tel : 03 6286 0888 Fax : 03 6286 0997 <strong>ANNUAL</strong> <strong>REPORT</strong> <strong>2012</strong>
CONTENTS<br />
2<br />
3<br />
5<br />
6<br />
9<br />
10<br />
15<br />
17<br />
19<br />
101<br />
102<br />
103<br />
Corporate Information<br />
Chairman’s Statement<br />
5-Year Financial Highlights<br />
Directors’ Profile<br />
Corporate Structure<br />
Statement on Corporate Governance<br />
Statement on Risk Management<br />
& Internal Control<br />
Audit Committee Report<br />
Financial Statements<br />
Properties of the Group<br />
Statement of Directors’ Shareholdings<br />
Statistics on Shares<br />
Notice of Annual General Meeting<br />
• Proxy Form
002<br />
CORPORATE INFORMATION<br />
BOARD<br />
OF DIRECTORS<br />
Dato’ Tan Kim Hor<br />
Executive Chairman<br />
Dato’ Tan Boon Pun<br />
Dato’ Tan Hoe Pin<br />
Executive Director<br />
Dr. Tan Ban Leong<br />
Executive Director<br />
Michael Lim Hee Kiang<br />
Independent Non-Executive Director<br />
YAM Datuk Seri Tengku Ahmad Shah Al-Haj<br />
Ibni Almarhum Sultan Salahuddin Abdul<br />
Aziz Shah Al-Haj<br />
Independent Non-Executive Director<br />
Geh Cheng Hooi<br />
Independent Non-Executive Director<br />
AUDIT<br />
COMMITTEE<br />
Geh Cheng Hooi (Chairman)<br />
Independent Non-Executive Director<br />
Michael Lim Hee Kiang<br />
Independent Non-Executive Director<br />
YAM Datuk Seri Tengku Ahmad Shah Al-Haj<br />
Ibni Almarhum Sultan Salahuddin Abdul<br />
Aziz Shah Al-Haj<br />
Independent Non-Executive Director<br />
COMPANY<br />
SECRETARIES<br />
Ng Yen Hoong<br />
(LS 008016)<br />
REGISTERED<br />
OFFICE<br />
SHARE<br />
REGISTRAR<br />
PRINCIPAL PLACE<br />
OF BUSINESS<br />
Wong Peir Chyun<br />
(MAICSA 7018710)<br />
Level 18, The Gardens North Tower<br />
Mid Valley City, Lingkaran Syed Putra<br />
59200 Kuala Lumpur<br />
T 03 – 2264 8888<br />
F 03 – 2282 2733<br />
Tricor Investor Services Sdn. Bhd.<br />
Level 17,The Gardens North Tower<br />
Mid Valley City, Lingkaran Syed Putra<br />
59200 Kuala Lumpur<br />
T 03 – 2264 3883<br />
F 03 – 2282 1886<br />
Wisma <strong>TKH</strong>, Lot 6, Jalan Teknologi<br />
Taman Sains Selangor 1,Kota Damansara<br />
47810 Petaling Jaya, Selangor Darul Ehsan<br />
T 03 – 6286 0888<br />
F 03 – 6286 0997<br />
REMUNERATION<br />
COMMITTEE<br />
Michael Lim Hee Kiang (Chairman)<br />
Independent Non-Executive Director<br />
YAM Datuk Seri Tengku Ahmad Shah Al-Haj<br />
Ibni Almarhum Sultan Salahuddin Abdul<br />
Aziz Shah Al-Haj<br />
Independent Non-Executive Director<br />
NOMINATION<br />
COMMITTEE<br />
Michael Lim Hee Kiang (Chairman)<br />
Independent Non-Executive Director<br />
YAM Datuk Seri Tengku Ahmad Shah Al-Haj<br />
Ibni Almarhum Sultan Salahuddin Abdul<br />
Aziz Shah Al-Haj<br />
Independent Non-Executive Director<br />
AUDITORS<br />
BDO (AF 0206)<br />
Chartered Accountants<br />
12th Floor Menara Uni.Asia<br />
1008 Jalan Sultan Ismail<br />
50250 Kuala Lumpur Malaysia<br />
T 03 – 2616 2888<br />
F 03 – 2616 3190, 2616 3191<br />
PRINCIPAL<br />
BANKERS<br />
Malayan Banking <strong>Berhad</strong><br />
Public Bank <strong>Berhad</strong><br />
Hong Leong Bank <strong>Berhad</strong><br />
AmBank (M) <strong>Berhad</strong><br />
STOCK EXCHANGE LISTING<br />
Main Market of<br />
Bursa Malaysia Securities <strong>Berhad</strong>
CHAIRMAN’S STATEMENT<br />
003<br />
Dear Shareholders,<br />
On behalf of the Board of Directors, it gives me great pleasure to present the<br />
Annual Report of <strong>Wawasan</strong> <strong>TKH</strong> <strong>Holdings</strong> <strong>Berhad</strong> for the financial year ended<br />
31 December <strong>2012</strong>.<br />
BUSINESS AND FINANCIAL REVIEW<br />
Year <strong>2012</strong> was another challenging year for<br />
<strong>Wawasan</strong> <strong>TKH</strong> <strong>Holdings</strong> <strong>Berhad</strong> amid increased<br />
global uncertainty and the ongoing Euro zone<br />
debt crises. The prevailing volatility in foreign<br />
currency exchange rates, escalating crude<br />
oil prices and energy cost continue to pose a<br />
threat to the Group’s business and bottom line.<br />
For the financial year ended 31 December<br />
<strong>2012</strong>, the Group recorded revenue of RM54.4<br />
million as compared to the revenue of RM70.3<br />
million registered in the preceding financial year.<br />
On the back of the lower revenue, the Group<br />
recorded a lower loss before taxation of RM10.5<br />
million vis-a-vis loss before taxation of RM15.1<br />
million incurred in the preceding financial year.<br />
Disposable foodwares business remains the<br />
main contributor to the Group’s turnover. The<br />
business continues to operate in a challenging<br />
environment impacted by escalating prices of<br />
petrochemical resin materials, rising fuel and<br />
energy cost. Turnover for the financial year<br />
ended 31 December <strong>2012</strong> was RM41.7 million<br />
as opposed to RM57.5 million achieved in the<br />
preceding financial year. The lower sales were<br />
confined by production constraints. Nonetheless,<br />
stronger sales were registered in the last quarter<br />
of the financial year ended 31 December <strong>2012</strong><br />
as a result of higher productivity pursuant to the<br />
renewal program for its machineries and moulds.<br />
Loss before taxation registered for the financial<br />
year ended 31 December <strong>2012</strong> was RM9.9 million<br />
and is higher than the loss before taxation for<br />
the preceding financial year of RM8.3 million,<br />
mainly contributed by repeated breakdown<br />
of production facilities especially in the first<br />
half of the financial year ended 31 December<br />
<strong>2012</strong>. The division recorded a lower pretax loss<br />
towards second half of the financial year ended<br />
31 December <strong>2012</strong> in tandem with the ongoing<br />
cost rationalisation exercise and machineries<br />
and moulds renewal programs. It is very<br />
encouraging to see that the ongoing initiatives<br />
implemented had led to a lower cost, higher<br />
productivity and improved efficiency environment.<br />
The kaolin mining business recorded a<br />
marginally lower turnover of RM12.7 million<br />
in the financial year ended 31 December<br />
<strong>2012</strong> as compared to a turnover of RM12.8<br />
million achieved in the preceding financial<br />
year. In spite of lower sales, pretax loss for<br />
the financial year ended 31 December <strong>2012</strong><br />
of RM1.9 million was lower than the preceding<br />
financial year, demonstrating an improvement<br />
of RM0.8 million from pretax loss of RM2.7<br />
million recorded in the preceding financial year.<br />
The continuous effort of cost rationalisation and<br />
the operation of the new plant in the financial<br />
year ended 31 December <strong>2012</strong> had resulted in<br />
higher productivity and lower cost of production<br />
amid the threat of higher fuel and energy costs.<br />
A new kaolin product mix was introduced in<br />
the third quarter of financial year ended 31<br />
December <strong>2012</strong> which carries a higher margin<br />
despite a lower selling price and had received<br />
encouraging response from the market. The<br />
production process was temporarily disrupted<br />
in the last quarter of the financial year ended<br />
31 December <strong>2012</strong> as a result of unexpected<br />
breakdown of production equipment. Necessary<br />
actions were taken to rectify the disruption and<br />
production activity has since been operating<br />
normally.<br />
DIVIDEND<br />
No dividend was paid since the end of the<br />
previous financial year. The Board of Directors<br />
did not recommend any dividend for the<br />
financial year ended 31 December <strong>2012</strong>.<br />
CORPORATE DEVELOPMENT<br />
On 24 April <strong>2012</strong> and 14 December <strong>2012</strong>,<br />
<strong>Wawasan</strong> <strong>TKH</strong> Sdn. Bhd., a major shareholder<br />
of the Company exercised 5 million and<br />
11 million detachable warrants 2008/2013<br />
respectively at exercise price of RM0.21<br />
per warrant on the basis of one (1) new<br />
ordinary share for every one (1) warrant<br />
exercised pursuant to the Deed Poll dated<br />
24 July 2008. The new ordinary shares of<br />
RM0.10 each rank pari passu in all respect<br />
with the existing shares of the Company.
004<br />
CHAIRMAN’S STATEMENT (cont’d)<br />
CORPORATE SOCIAL RESPONSIBILITY<br />
The Group recognises the importance of<br />
Corporate Social Responsibility in the process of<br />
pursuing its business objectives. Subsequent to<br />
the introduction of JASA Eco in year 2010, the<br />
disposable foodwares division namely Greatpac<br />
Sdn. Bhd., had further expanded the range of<br />
environment friendly products. In addition to<br />
the starch based biodegradable and bio-based<br />
products, we have expanded into additive based<br />
foam and plastic products which are 100%<br />
biodegradable and blended starch with poly<br />
lactic acid (PLA) range of compostable products.<br />
The continuous innovation efforts have enabled<br />
the division to produce new products which are<br />
recyclable and environment friendly.<br />
The Group provides and maintains a safe and<br />
healthy workplace for its employees and visitors.<br />
Continuous staff development efforts are being<br />
taken to equip employees with the necessary<br />
skills and knowledge to create a highly efficient<br />
and productive work force. Compliance with the<br />
food safety management system (FSMS) and<br />
hazard analysis critical control point (HACCP)<br />
with the accreditation of ISO 22000:2005<br />
provide assurance of our continuous commitment<br />
to product quality.<br />
ACKNOWLEDGEMENT<br />
I wish to express my sincere gratitude and<br />
appreciation to my fellow Board members for<br />
their invaluable contribution and wisdom in<br />
steering the Group towards achievement of<br />
our objectives.<br />
On behalf of the Board, I wish to express<br />
our gratitude and appreciation to all our<br />
shareholders for your continued support<br />
and confidence in our business and the<br />
management. I would also like to thank the<br />
management and staff for their unwavering<br />
dedications and commitments.<br />
Finally, I would like to extend my appreciation<br />
to the Government, Bursa Malaysia, Securities<br />
Commission, our customers, suppliers, bankers,<br />
auditors, advisors, business associates for their<br />
continuous support and trust to the Group.<br />
Dato’ Tan Kim Hor<br />
Executive Chairman<br />
FUTURE PROSPECTS<br />
The Group expects to gain a bigger share of the<br />
export market with the introduction of more<br />
environmental friendly products range for its<br />
disposable foodwares division. The JASA Eco<br />
products had received favorable response in the<br />
market and the Group anticipates penetration<br />
of more market segment moving forward.<br />
With the recent upgrading of the production<br />
capacity, operation of a new plant, cost<br />
rationalisation and introduction of new products,<br />
the kaolin mining business is expected to achieve<br />
a higher productivity and turnover in the coming<br />
months.<br />
The prolonged uncertainties of the global<br />
economic environment and prevalent volatile raw<br />
material prices and energy costs are significant<br />
factors that could impact the performance of the<br />
Group in the coming years. Nevertheless, the<br />
Group will continue to enhance its competitive<br />
edge, productivity and also strategic marketing<br />
efforts to increase its market share with the<br />
ultimate view to turn the business around.
FIVE-YEAR FINANCIAL HIGHLIGHTS<br />
005<br />
<strong>2012</strong><br />
2011<br />
2010<br />
2009<br />
2008<br />
RM'000<br />
RM'000<br />
RM'000<br />
RM'000<br />
RM'000<br />
Revenue<br />
54,407<br />
70,340<br />
69,574<br />
82,796<br />
91,586<br />
Loss before tax<br />
(10,538)<br />
(15,129)<br />
(17,554)<br />
(28,860)<br />
(24,462)<br />
- continuing operations<br />
(10,538)<br />
(15,129)<br />
(17,554)<br />
(28,860)<br />
(30,725)<br />
- discoutinued operations<br />
-<br />
-<br />
-<br />
-<br />
6,263<br />
Net loss attributable to<br />
owners of the parent<br />
(10,245)<br />
(14,784)<br />
(16,576)<br />
(28,527)<br />
(24,372)<br />
- continuing operations<br />
(10,245)<br />
(14,784)<br />
(16,576)<br />
(28,527)<br />
(30,635)<br />
- discoutinued operations<br />
-<br />
-<br />
-<br />
-<br />
6,263<br />
Shareholders' equity<br />
15,356<br />
22,236<br />
20,863<br />
21,763<br />
50,375<br />
Basic (loss)/earnings per share (sen)<br />
- continuing operations<br />
(2.27)<br />
(3.56)<br />
(5.75)<br />
(9.89)<br />
(15.44)<br />
- discontinued operations<br />
-<br />
-<br />
-<br />
-<br />
3.16<br />
Net assets per share (RM)<br />
0.03<br />
0.05<br />
0.07<br />
0.08<br />
0.17<br />
54,407<br />
REVENUE RM’000<br />
70,340 69,574<br />
82,796 91,586<br />
LOSS BEFORE TAX RM’000<br />
<strong>2012</strong> 2011 2010 2009 2008<br />
(10,538)<br />
(15,129)<br />
(17,554)<br />
(28,860)<br />
(24,462)<br />
<strong>2012</strong> 2011 2010 2009 2008
006<br />
DIRECTORS' PROFILE ___________________________________<br />
DATO’ TAN KIM HOR<br />
Executive Chairman<br />
Dato’ Tan Kim Hor, a Malaysian, aged 90, is the<br />
Executive Chairman of the Company and was<br />
appointed to the Board on 3 May 2006. He is<br />
the co-founder of Tan Chong Motor Group which<br />
includes Tan Chong International Limited, Tan<br />
Chong Motor <strong>Holdings</strong> <strong>Berhad</strong>, APM Automotive<br />
<strong>Holdings</strong> <strong>Berhad</strong> and Warisan TC <strong>Berhad</strong>.<br />
His leadership has seen the expansion and<br />
development through several significant phases<br />
of the Tan Chong Motor Group’s growth and<br />
history, developed from a humble startup to a<br />
prominent Malaysian conglomerate.<br />
In recognition for his entrepreneurship<br />
achievements and contributions to the nation,<br />
he was awarded the title JP and also KMN by the<br />
Yang di-Pertuan Agong in 1976. He was further<br />
honoured with the DPMS title from the Sultan of<br />
Selangor on 8 March 1981.<br />
As an entrepreneur with over 7 decades of<br />
extensive experience, and after his departure<br />
from Tan Chong Group, he founded <strong>Wawasan</strong><br />
<strong>TKH</strong> Sdn. Bhd. in 2004. Dato’ Tan is also greatly<br />
involved in community work and philanthropy<br />
and is currently serving on boards of many<br />
educational and charitable organisations.<br />
Dato’ Tan is the father of Dato’ Tan Boon Pun,<br />
Dato’ Tan Hoe Pin and Dr. Tan Ban Leong and<br />
is a substantial shareholder of the Company.<br />
Dato’ Tan attended all of the 5 Board of<br />
Directors’ meetings held during the financial<br />
year ended 31 December <strong>2012</strong>. He has never<br />
been convicted for any offence within the past<br />
10 years.<br />
DATO’ TAN BOON PUN<br />
Executive Director / Chief Executive Officer<br />
Dato’ Tan Boon Pun, a Malaysian, aged 56,<br />
is the Executive Director and Chief Executive<br />
Officer of the Company and was appointed to<br />
the Board on 30 August 2005. He graduated<br />
from the University of Warwick, United Kingdom<br />
with a Bachelor of Science (Honours) Degree in<br />
Management Science.<br />
Dato’ Tan is widely regarded as a prominent<br />
personality in the motor assembly, cosmetic,<br />
lingerie, and tour businesses. In recognition<br />
for his outstanding entrepreneurship and<br />
contribution to the society at large, he was<br />
being conferred Darjah Dato’ Paduka Tuanku<br />
Ja’afar (D.P.T.J) by the Yang di-Pertuan Besar of<br />
Negeri Sembilan on 19 July 2005.<br />
Dato’ Tan is the son of Dato’ Tan Kim Hor and<br />
the brother of Dato’ Tan Hoe Pin and Dr. Tan Ban<br />
Leong. Dato’ Tan attended all of the 5 Board of<br />
Directors’ meetings held during the financial year<br />
ended 31 December <strong>2012</strong>. He is a substantial<br />
shareholder of the Company and has never been<br />
convicted for any offence within the past 10<br />
years.<br />
DATO’ TAN HOE PIN<br />
Executive Director<br />
Dato’ Tan Hoe Pin, a Malaysian, aged 55, is the<br />
Executive Director of the Company and was<br />
appointed to the Board on 5 September 2005.<br />
He holds a Bachelor of Arts (Honours) Degree<br />
in Management Science with Computing from<br />
the University of Kent at Canterbury, United<br />
Kingdom.<br />
Dato’ Tan has more than 20 years experience<br />
in the automotive industry beginning in 1980<br />
when he joined Tan Chong Motor <strong>Holdings</strong><br />
Bhd in Malaysia before transferring to its<br />
subsidiary in Singapore, Tan Chong & Sons<br />
Motor Co (Singapore) Pte. Ltd. He returned to<br />
Tan Chong Malaysia in 1986 as the Marketing<br />
Director and was subsequently appointed as<br />
the Deputy Managing Director. In 2003, Dato’<br />
Tan joined DaimlerChrysler Malaysia as Vice<br />
President, Mitsubishi Operation. Following this,<br />
he was appointed as Advisor to DaimlerChrysler<br />
Malaysia in June 2004 for a year.<br />
Dato’ Tan began his career in 1978 in Tan Chong<br />
Group and had served in several capacities<br />
within the Tan Chong Group of Companies<br />
for over 25 years. During his tenure in the<br />
Tan Chong Group, he had spearheaded the<br />
automotive assembly business in his capacity<br />
as Managing Director of Tan Chong Motor<br />
Assemblies Sdn. Bhd.. In addition, he was<br />
instrumental in building the cosmetic, lingerie<br />
and tour businesses into prominent market<br />
leaders in their respective industry in the Tan<br />
Chong Group.
__________________________________ DIRECTORS' PROFILE<br />
007<br />
Dato’ Tan is widely regarded as a prominent<br />
personality in the automotive industry in the<br />
country. In recognition of his achievement and<br />
contribution to society at large, he was conferred<br />
Darjah Setia Pangkuan Negeri (D.S.P.N.) by the<br />
Yang di-Pertua Negeri Pulau Pinang on 8 July<br />
2006.<br />
Dato’ Tan is the son of Dato’ Tan Kim Hor and<br />
the brother of Dato’ Tan Boon Pun and Dr. Tan<br />
Ban Leong. Dato’ Tan attended all the 5 Board of<br />
Directors’ meetings held during the financial year<br />
ended 31 December <strong>2012</strong>. He is a substantial<br />
shareholder of the Company and has never been<br />
convicted for any offence within the past 10<br />
years.<br />
In 2005, he joined a new group of companies<br />
comprising of <strong>TKH</strong> Auto Parts Sdn Bhd., <strong>TKH</strong><br />
Manufacturing Sdn. Bhd., Automotive Design<br />
Services Sdn. Bhd. and Automotive Seat<br />
Assembly Sdn. Bhd. focusing on automotive seat<br />
manufacture, supplying passenger vehicle seats<br />
to local car assemblers and commercial vehicle<br />
seats for both domestic and export markets.<br />
Dr. Tan is the son of Dato’ Tan Kim Hor and the<br />
brother of Dato’ Tan Boon Pun and Dato’ Tan Hoe<br />
Pin. Dr. Tan attended all 5 Board of Directors<br />
meetings held during the financial year ended 31<br />
December <strong>2012</strong>. He is a substantial shareholder<br />
of the Company and has never been convicted<br />
for any offence within the past 10 years.<br />
DR. TAN BAN LEONG<br />
Executive Director<br />
Dr. Tan Ban Leong, a Malaysian, aged 52, is<br />
the Executive Director of the Company and was<br />
appointed to the Board on 5 September 2005. He<br />
holds a Bachelor of Dental Surgery (1983) from<br />
the University of Dundee, Scotland and received<br />
the Master of Science (Children’s Dentistry) from<br />
University of London in 1986.<br />
Dr. Tan has more than 20 years of extensive<br />
experience in the automotive industry. He<br />
started his career in the automotive industry in<br />
1988 as Operations Manager with Motor Image<br />
Enterprises Pte. Ltd., the sole distributor for<br />
Subaru cars, in Singapore. From 1994 to 1998,<br />
he held several senior positions at Motor Ultima<br />
Pte. Ltd. and Auto GTI Pte. Ltd. (sole distributor<br />
of Audi and Volkswagen in Singapore), including<br />
serving as the Deputy General Manager and<br />
subsequently as the General Manager.<br />
In 1998, he returned to Malaysia to join<br />
the Automotive Parts Manufacturer (‘APM’)<br />
Group as the General Manager for Auto Parts<br />
Manufacturers Co. Sdn. Bhd..<br />
MICHAEL LIM HEE KIANG<br />
Independent Non-Executive Director<br />
Michael Lim Hee Kiang, a Malaysian, aged 65,<br />
is the Independent Non-Executive Director of<br />
the Company and was appointed to the Board<br />
on 30 August 2005. He holds a LLB Degree with<br />
Honours and LLM Degree with Distinction from<br />
Victoria University of Wellington, New Zealand<br />
in 1972/1973.<br />
Mr. Lim was admitted as a Barrister and Solicitor<br />
to the Supreme Court of New Zealand in 1973.<br />
Upon returning to Malaysia in 1974, he was<br />
admitted to the High Court of Sarawak and<br />
Brunei and subsequently to the High Court of<br />
Malaya in 1978. He was a lecturer at the Law<br />
Faculty of the University of Malaya from 1975 to<br />
1977.<br />
Mr. Lim was a partner and then a consultant<br />
of Shearn Delamore & Co , a leading law firm,<br />
for 30 years. Mr. Lim is presently a consultant<br />
to Jeff Leong, Poon and Wong, another leading<br />
law firm in Malaysia. He also sits on the Boards<br />
of Selangor Properties <strong>Berhad</strong>, DKSH <strong>Holdings</strong><br />
(Malaysia) <strong>Berhad</strong>, Major Team <strong>Holdings</strong> <strong>Berhad</strong><br />
and Paragon Union <strong>Berhad</strong>, all of which are listed<br />
on Bursa Malaysia Securities <strong>Berhad</strong>.<br />
Mr. Lim is the Chairman of the Remuneration<br />
and Nomination Committee and is a member<br />
of the Audit Committee of the Company. Mr.<br />
Lim attended all of the 5 Board of Directors’<br />
meetings held during the financial year ended<br />
31 December <strong>2012</strong>.<br />
He has no family relationship with any Directors<br />
or major shareholders of the Company. He has<br />
never been convicted for any offence within the<br />
past ten (10) years.
008<br />
DIRECTORS' PROFILE (cont’d)<br />
Y.A.M DATUK SERI TENGKU AHMAD<br />
SHAH AL-HAJ IBNI ALMARHUM<br />
SULTAN SALAHUDDIN ABDUL AZIZ<br />
SHAH AL-HAJ<br />
Independent Non-Executive Director<br />
YAM Datuk Seri Tengku Ahmad Shah Ibni<br />
Almarhum Sultan Salahuddin Abdul Aziz Shah,<br />
a Malaysian, aged 58, is the Independent<br />
Non-Executive Director of the Company and<br />
was appointed to the Board on 15 February<br />
2006. He completed his Diploma in Business<br />
Administration from University Teknologi MARA<br />
in 1974.<br />
YAM Datuk Seri Tengku Ahmad Shah started<br />
his career in Charles Bradburne (1930) Sdn.<br />
Bhd. as a broker from 1974 to 1981. He was a<br />
Director of TTDI Development Sdn. Bhd. from<br />
1978 to 2000 and a Director of Sime UEP <strong>Berhad</strong><br />
from 1983 to 1987. In 1987, he was appointed<br />
as a Chairman of Sime Darby Medical Centre<br />
Subang Jaya, a position which he is still holding<br />
until now.<br />
Currently, YAM Datuk Seri Tengku Ahmad Shah<br />
also sits on the Boards of Global Oriental <strong>Berhad</strong><br />
(formerly known as Equine Capital <strong>Berhad</strong>),<br />
Melewar Industrial Group <strong>Berhad</strong> and Dutaland<br />
<strong>Berhad</strong>, all of which are listed on Bursa Malaysia<br />
Securities <strong>Berhad</strong>. He is a member of the Board<br />
of Directors of Sime Darby Property <strong>Berhad</strong>,<br />
Sime Darby Healthcare Sdn. Bhd. and Recycle<br />
Energy Sdn. Bhd.. He is also involved in welfare<br />
organisations and is a member of the Board<br />
of Trustees of the Cancer Research Initiatives<br />
Foundation (CARIF).<br />
GEH CHENG HOOI<br />
Independent Non-Executive Director<br />
Geh Cheng Hooi, a Malaysian, aged 78, is the<br />
Independent Non-Executive Director of the<br />
Company and was appointed to the Board on 12<br />
June 2007. He is a Certified Public Accountant<br />
and a Fellow of the Institute of Chartered<br />
Accountants of England and Wales.<br />
Prior to his current appointment, Mr. Geh was<br />
a partner in KPMG Peat Marwick, Kuala Lumpur<br />
from 1964 to 1989 when he retired as the<br />
Senior Partner. He had also served as Chairman<br />
and member of several Malaysian Institute of<br />
Certified Public Accountants’ committees. He<br />
was the Chairman of the technical committee<br />
at the time of and was actively involved in the<br />
introduction of the International Accounting<br />
Standards (IAS) in Malaysia.<br />
Mr. Geh also sits on the Boards of Malayan<br />
Flour Mills <strong>Berhad</strong> and Paramount Corporation<br />
<strong>Berhad</strong>, all of which are listed on Bursa Malaysia<br />
Securities <strong>Berhad</strong>.<br />
Mr. Geh is the Chairman of the Audit Committee<br />
of the Company. He attended all the 5 Board<br />
of Directors’ meetings held during the financial<br />
year ended 31 December <strong>2012</strong>. He has no<br />
family relationship with any Directors or major<br />
shareholders of the Company. He has never<br />
been convicted for any offence within the past<br />
10 years.<br />
YAM Datuk Seri Tengku Ahmad Shah is a<br />
member of the Audit Committee as well as the<br />
Remuneration and Nomination Committee of the<br />
Company. He attended all of the 5 Board of<br />
Directors meetings held during the financial<br />
year ended 31 December <strong>2012</strong>. He has no<br />
family relationship with any Directors or major<br />
shareholders of the Company. He has never<br />
been convicted for any offence within the past<br />
10 years.
CORPORATE STRUCTURE<br />
009<br />
WAWASAN <strong>TKH</strong> HOLDINGS BERHAD<br />
(540218-A)<br />
DISPOSABLE FOODWARES<br />
DIVISION<br />
KAOLIN<br />
DIVISION<br />
100%<br />
Greatpac Sdn. Bhd.<br />
100%<br />
Associated Kaolin<br />
Industries Sdn. Bhd.<br />
{<br />
100%<br />
Greatpac (S)<br />
Pte. Ltd.<br />
100%<br />
Greatpac Trading<br />
Sdn. Bhd.
010 STATEMENT ON CORPORATE GOVERNANCE<br />
The Board of Directors (“the Board”) of <strong>Wawasan</strong> <strong>TKH</strong> <strong>Holdings</strong> <strong>Berhad</strong> continues its dedication and<br />
commitment to high standards of corporate governance within the Company and its subsidiaries (“the<br />
Group”).The Board vows to continue with its primary objectives of enhancing shareholders’ value,<br />
in addition to safeguarding the interests of all. It is the aim of the Board to maintain and uphold the<br />
Principles and Recommendations of the Malaysian Code on Corporate Governance <strong>2012</strong> (“the MCCG<br />
<strong>2012</strong>”).<br />
The Board is pleased to report its commitment on the corporate governance practices applied throughout<br />
the financial year under review.<br />
THE BOARD OF DIRECTORS<br />
Roles and Responsibilities of the Board<br />
The Board is spearheaded by experienced and capable Directors who are responsible for determining the<br />
Group’s visions and business strategy whilst maintaining the highest level of business conduct. The Board’s<br />
duties and responsibilities include the followings, amongst others:<br />
• Review and adoption of long term objectives and business strategies<br />
• Review the adequacy and integrity of the internal control system<br />
• Succession planning for Senior Management<br />
• Approve annual budget and financial results<br />
• Ensuring the Group has sufficient resources to meet its objectives<br />
• Approve the appointment and remuneration of Directors<br />
Appointment and Re-election of Directors<br />
The process for the appointment and re-election of Directors to the Board are strict and transparent. The<br />
appointments of Directors are firstly considered by the Nomination and Remuneration Committee. The<br />
Committee undertakes to evaluate and scrutinise the candidates’ credibility, ability, expertise and industry<br />
knowledge that can further fortify the composition of the Board. The Board is constantly looking out for<br />
suitable candidates to join the Board regardless of one’s gender.<br />
During the financial year under review, five (5) Board meetings were held and the record of attendance<br />
for the Directors who held office during the financial year is set out below:<br />
Directors<br />
Number of<br />
Meetings Held<br />
During Director’s<br />
Tenure In Office<br />
Number of<br />
Meetings<br />
Attended<br />
Percentage<br />
of<br />
Attendance<br />
Dato’ Tan Kim Hor<br />
5<br />
5<br />
100%<br />
Dato’ Tan Boon Pun<br />
5<br />
5<br />
100%<br />
Dato’ Tan Hoe Pin<br />
5<br />
5<br />
100%<br />
Dr. Tan Ban Leong<br />
5<br />
5<br />
100%<br />
Michael Lim Hee Kiang<br />
5<br />
5<br />
100%<br />
YAM Datuk Seri Tengku Ahmad Shah Al-Haj Ibni<br />
Almarhum Sultan Salahuddin Abdul Aziz Shah Al-Haj<br />
5<br />
5<br />
100%<br />
Geh Cheng Hooi<br />
5<br />
5<br />
100%<br />
BOARD BALANCE AND COMPOSITION<br />
The Board currently has seven (7) members, comprising three (3) Independent Non-Executive Directors<br />
and four (4) Executive Directors (including the Chairman). The number of Independent Directors mentioned<br />
above complies with the Main Market Listing Requirements of Bursa Malaysia Securities <strong>Berhad</strong> (“Bursa<br />
Securities”) which requires at least two (2) directors or one-third of the Board, whichever is higher, to<br />
comprise of independent directors.<br />
The Board comprises members with broad spectrum of knowledge, skills and experiences in engineering,<br />
marketing, management, administration, legal practice and finance. Their industry specific knowledge<br />
plus broad business and commercial experience, provide unbiased, fully balanced and independent views,<br />
advice and judgement to many aspects of the Group’s strategy to provide clear and effective leadership<br />
to the Group and to ensure highest standard of conduct and integrity within the Board. A brief profile of<br />
each Director is presented on pages 6 to 8 of this Annual Report.
STATEMENT ON CORPORATE GOVERNANCE (cont’d)<br />
011<br />
There is also a clear division of responsibility between the Chairman and Chief Executive Officer to ensure a<br />
proper balance of power and authority. The Chairman is responsible for the orderly conduct and working of<br />
the Board and the Chief Executive Officer is responsible for the running of the business, implementation of<br />
policies and strategies adopted by the Board. Decisions made by the Board are communicated through the<br />
Chief Executive Officer to the senior management team.<br />
The presence of Independent Non-Executive Directors fulfils a pivotal role in corporate governance<br />
accountability, as they provide unbiased and independent views and advice in ensuring that the strategies<br />
proposed by the management are fully deliberated and examined in the long-term interests of the Group,<br />
as well as the shareholders, employees, customers, suppliers and the many communities in which the<br />
Group conducts its business.<br />
The Nomination Committee will conduct an annual assessment on the Independent Non-Executive Directors<br />
to determine whether the Board has an appropriate number of Independent Non-Executive Directors as well<br />
as fitting balance of expertise, skills and competencies.<br />
The three Independent Non-Executive Directors continue to display their independence through their<br />
continuous commitments in meetings and formulating practical solutions adopted by the Board.<br />
Michael Lim Hee Kiang, the Senior Independent Non-Executive Director is the Referral Director to whom<br />
all shareholders’ concerns may be conveyed.<br />
SUPPLY OF INFORMATION<br />
The Directors have full and unrestricted access to all information pertaining to the Group’s business and<br />
affairs, whether as a full Board or in their individual capacity, in furtherance of their duties. All Directors are<br />
provided with agenda, minutes of previous meeting and a set of Board papers prior to Board meetings to<br />
enable the Directors to obtain further information or explanations to facilitate informed decision-making.<br />
The Board papers include reports on the Group’s financial, operational and corporate developments.<br />
The minutes of Board meetings are circulated to the Directors to be confirmed and noted at the following<br />
meeting. All minutes of Board meetings are kept in the Minutes Book at the Registered Office of the<br />
Company.<br />
All directors have full access to the advice and services of the Company Secretary who will be responsible<br />
to ensure that Board procedures are adhered to at all time during meetings and to advise the Board on<br />
matters including corporate governance issues and directors’ responsibilities in complying with relevant<br />
legislations and regulations.<br />
DIRECTORS’ TRAINING<br />
All Directors have attended and successfully completed the Mandatory Accreditation Programme. The Board<br />
recognizes the importance for the Directors to be provided with regular training and keep abreast with<br />
the latest development. As at the date of the Statement, the Directors have attended various trainings<br />
including the annual in-house directors’ training arranged by the Company on Green Technology Awareness<br />
Programme and the Malaysian Financial Reporting Standards (MFRSs) training. The Directors believe that<br />
continuous update, learning and effective training are crucial elements to further enhancing their skills and<br />
knowledge that will complement their services to the Group.<br />
RE-ELECTION AND RE-APPOINTMENT OF DIRECTORS<br />
In accordance with the Company’s Articles of Association, one third (1/3) of the Board members shall retire<br />
from office and be eligible for re-election. The Directors shall retire from office at least once in every three<br />
years.<br />
Pursuant to Section 129 of the Companies Act, 1965, Directors who are over the age of seventy (70) years<br />
are required to retire from office at every Annual General Meeting (“AGM”) and may offer themselves for<br />
re-appointment and to hold office until the conclusion of the next AGM.
012<br />
STATEMENT ON CORPORATE GOVERNANCE (cont’d)<br />
DIRECTORS’ REMUNERATION<br />
The benchmark for the remuneration of the Executive and Non-Executive Directors is aligned with the<br />
market practice. The remuneration package of the Executive Directors includes basic salary, incentive<br />
and other benefits. Non-Executive Directors’ remuneration is based on standard fixed fees and meeting<br />
allowances for each Board and Committee meeting they attend.<br />
The aggregate remuneration of Directors received from the Company and the subsidiaries for the financial<br />
year ended 31 December <strong>2012</strong> is as follows:<br />
Fees<br />
Salaries, Bonuses & EPF<br />
Allowances<br />
Executive Directors<br />
RM<br />
-<br />
-<br />
-<br />
Non-Executive Directors<br />
RM<br />
90,000<br />
-<br />
26,500<br />
The number of Directors of the Company whose total remuneration falls within the following bands is as<br />
follows:<br />
Range of remuneration Executive Directors Non-Executive Directors<br />
Below RM50,000<br />
RM50,001 – RM100,000<br />
RM100,001 – RM150,000<br />
RM300,001 – RM350,000<br />
RM500,001 – RM550,000<br />
-<br />
-<br />
-<br />
-<br />
-<br />
3<br />
-<br />
-<br />
-<br />
-<br />
BOARD COMMITTEES<br />
The Board has delegated specific responsibilities to three (3) committees, which operate within approved<br />
terms of reference, to assist in the Board in carrying out its duties and responsibilities. Notwithstanding<br />
the above, the ultimate responsibility for the final decision lies with the full Board.<br />
NOMINATION COMMITTEE<br />
Duties and Responsibilities<br />
The role of the Nomination Committee is to identify and nominating suitable candidates with balance mix of<br />
qualifications, skills and experience to the Board. In addition to that, the Nomination Committee also carries<br />
out annual evaluation on the effectiveness of the Board as a whole, the various Committees of the Board<br />
and each individual Director’s contribution to the effectiveness of the Board’s decision making process.<br />
The members of the Nomination Committee are:<br />
• Michael Lim Hee Kiang (Chairman of Committee)<br />
• YAM Datuk Seri Tengku Ahmad Shah Al-Haj Ibni Almarhum Sultan Salahuddin Abdul Aziz Shah Al-Haj<br />
REMUNERATION COMMITTEE<br />
The Remuneration Committee is tasked at reviewing, assessing and recommending remuneration packages<br />
of the Executive Directors with the independent professional advice when such need arises.<br />
The members of the Remuneration Committee are:<br />
• Michael Lim Hee Kiang (Chairman of Committee)<br />
• YAM Datuk Seri Tengku Ahmad Shah Al-Haj Ibni Almarhum Sultan Salahuddin Abdul Aziz Shah Al-Haj<br />
AUDIT COMMITTEE<br />
The duties and responsibilities as reflected in the terms of reference of the Committee as well as the<br />
members of the Committee are set out on pages 17 to 18 of this Annual Report.
STATEMENT ON CORPORATE GOVERNANCE (cont’d)<br />
013<br />
RELATIONS WITH SHAREHOLDERS AND INVESTORS<br />
The Board maintains a good rapport with shareholders and recognises the importance of proper and timely<br />
dissemination of information to the shareholders and investors. The distribution of annual reports, the<br />
release of financial results on a quarterly basis and announcement to Bursa Securities provides shareholders<br />
and the investing public with an overview of the Group’s performance and operations.<br />
The Annual General Meeting (“AGM”) is the principal forum for dialogue with public shareholders. The<br />
Board encourages participation from shareholders by having a question and answer session during the<br />
AGM whereby Directors are available to discuss aspects of the Group’s performance and its business<br />
activities.<br />
The Company's website, www.wwtkh.com, serves as an additional and useful medium for communication<br />
and as a source of updated information to our shareholders and the general public. Together with links to<br />
the subsidiaries’ websites, all relevant information on the Group is now easily accessible.<br />
ACCOUNTABILITY AND AUDIT<br />
Relationship with the Auditors<br />
Through the Audit Committee, the Company has established a transparent and appropriate relationship<br />
with the Group’s external auditors in seeking their professional advice towards ensuring compliance with<br />
the relevant accounting standards.<br />
The role of the Audit Committee in relation to external auditors is stated under the terms of reference of<br />
the Audit Committee on pages 17 to 18 of this Annual Report.<br />
Statement on Risk Management and Internal Control<br />
The Board acknowledges its overall responsibility for maintaining a consistent system of risk management<br />
and internal control to manage principal risks and to safeguard shareholders’ investment and the Group’s<br />
assets. The Board’s Statement on Risk Management and Internal Control is as set out in pages 15 to 16 of<br />
this Annual Report.<br />
Financial Reporting and Directors’ Responsibilities Statement<br />
The Directors are responsible for ensuring that financial statements are drawn up in accordance with<br />
Malaysian Financial Reporting Standards, International Financial Reporting standards and the provisions of<br />
the Companies Act, 1965 in Malaysia. In presenting the financial statements that gives a true and fair view<br />
of the financial positions of the Company and of the Group, the Board has used appropriate accounting<br />
policies, consistently applied and supported by reasonable and prudent judgements and estimates.<br />
The Directors also strive to ensure that financial reporting present a fair and understandable assessment of<br />
the Group’s and the Company’s position and prospects. Quarterly financial statements were reviewed by the<br />
Audit Committee and approved by the Board prior to the release to the Bursa Securities. The statement by<br />
Directors made pursuant to Section 169 of the Companies Act, 1965 in Malaysia is set out on page 25 of<br />
this Annual Report.
014<br />
STATEMENT ON CORPORATE GOVERNANCE (cont’d)<br />
OTHER INFORMATION<br />
Non-audit fees<br />
The non-audit fees paid to external auditors by the Company and its subsidiaries during the financial year<br />
ended 31 December <strong>2012</strong> amounted to RM22,000.<br />
Share Buy-Back<br />
During the financial year, the Company did not enter into any share buyback transactions.<br />
Depository Receipt (“DR”) Programme<br />
During the financial year, the Company did not sponsor any DR Programme.<br />
Sanctions and / or Penalties<br />
There were no sanctions or penalties imposed on the Company by the relevant regulatory bodies during<br />
the financial year.<br />
Variation in Results<br />
There was no variance between the results for the financial year and the unaudited results announced.<br />
Profit Guarantee<br />
During the financial year, there was no profit guarantee given by the Company<br />
Material Contracts or Loans<br />
There was no material contract entered into by the Company and/or its subsidiaries involving Directors’<br />
and major shareholders’ interests during the financial year.<br />
Recurrent Related Party Transactions (“RRPT”)<br />
The information on RRPT for the financial year is presented in the Audited Financial Statements in the<br />
Annual Report.
STATEMENT ON RISK MANAGEMENT & INTERNAL CONTROL<br />
015<br />
INTRODUCTION<br />
Pursuant to paragraph 15.26(b) of the Main Market Listing Requirement of Bursa Malaysia Securities <strong>Berhad</strong><br />
(“Bursa Securities”), the Board of Directors of public listed companies shall include in its annual reports a<br />
statement about the risk management and internal control of the Company prepared in accordance with<br />
the guidelines on Statement on Risk Management and Internal Control: Guidelines for Directors of Listed<br />
Issuers.<br />
RESPONSIBILITIES OF THE BOARD<br />
The Board is responsible and committed to fulfill its responsibility to maintain a sound system of risk<br />
management and internal control in compliance with the Malaysian Code on Corporate Governance <strong>2012</strong><br />
to safeguard the interest of the shareholders and the assets of the Group.<br />
Risk management and internal control form the integral part of the overall management process. In view<br />
of the limitations inherent in any system of risk management and internal controls, the system is designed<br />
to identify, assess and respond to risk to achieve the Group’s objectives rather than to eliminate risk in<br />
totality. Therefore the system can only provide reasonable but not absolute assurance against the likelihood<br />
of material misstatement, fraud and loss.<br />
The Board has established an ongoing process to continuously identify, evaluate and manage the<br />
significant risks faced by the Group. This process has been in place for the year under review and up to<br />
the date of approval of this statement. In addition, the Board regularly reviews the adequacy, integrity<br />
and effectiveness of the Group’s system of risk management and internal control.<br />
RISK MANAGEMENT<br />
The Board is committed to ensure that the implementation of appropriate processes to effectively identify,<br />
evaluate and manage practical risks of the Group and to mitigate the effects of the key risks on the Group’s<br />
business and corporate objectives.<br />
Whilst the Board has established key risk management and internal control policies and maintains ultimate<br />
control over risk and control matters, the implementation of the risk management and internal control<br />
system within the established framework has been delegated to the executive management. The Board is<br />
being assisted by the Audit Committee in reviewing the adequacy and effectiveness of the risk management<br />
and internal control system.<br />
INTERNAL AUDIT FUNCTION<br />
The Group’s internal audit function has been outsourced to an independent professional firm, who reports<br />
directly to the Audit Committee and administratively to the Management.<br />
The internal auditors carried out periodic internal audit on the internal control system and reported the<br />
findings to the Audit Committee. Significant non-compliances and internal control weaknesses noted<br />
during the audit were reported to the Audit Committee. This will ensure the business processes and<br />
internal controls of the Group are continuously assessed and evaluated for statutory compliance and data<br />
integrity in addition to ensure compliance with applicable laws and regulations. The Audit Committee<br />
reports to the Board on significant audit findings and recommends the necessary rectification actions.<br />
The total cost incurred for the internal audit function of the Group for the financial year ended 31 December<br />
<strong>2012</strong> amounted to RM24,000.
016<br />
STATEMENT ON RISK MANAGEMENT & INTERNAL CONTROL<br />
INTERNAL CONTROL<br />
The key elements of the Group’s system of internal controls are elaborated below:<br />
(a) Authority and responsibility<br />
There is a properly defined management structure with formally defined lines of responsibility and<br />
delegation of authority for all aspect of the Group’s activities including the delegation of responsibilities<br />
to the committees of the Board, the management and the operating units. Assessment of the<br />
effectiveness of the structure is carried out on a continuous basis.<br />
(b) Policies and procedures<br />
Written policies and procedures are being established and properly disseminated. Regular reviews are<br />
carried out to update the policies and procedures with changing operating and risk environment.<br />
(c) Regular review by management<br />
Management conducts review of subsidiaries’ results and performances via management meetings<br />
on an ongoing basis where key areas of concern will be highlighted to the Board.<br />
(d) Internal audit<br />
Review by internal auditors of the internal control system of the Group in managing the key risks<br />
identified and also to ensure compliance with the policies and procedures of the Group.<br />
(e) Planning, monitoring and reporting<br />
The Audit Committee comprises all independent non-executive directors of the Board and is<br />
responsible for reviewing quarterly announcement, statutory annual financial statements prior to<br />
submission for Board’s approval, internal and external audit reports and also ensure legal updates<br />
are highlighted and followed through. The Audit Committee has unrestricted access to both the<br />
internal and external auditors to discuss the areas of concern in discharging their responsibilities.<br />
ASSURANCE TO THE BOARD<br />
Pursuant to the requirement of the guidelines, the Board has obtained assurance from the Chief Executive<br />
Officer and Chief Financial Officer that the risk management and internal control system of the Group is<br />
operating adequately and satisfactory, in all material aspects, to meet the Group’s objectives during the<br />
financial year.<br />
REVIEW OF THE STATEMENT BY EXTERNAL AUDITORS<br />
Pursuant to paragraph 15.23 of the Main Market Listing Requirement of Bursa Securities, this statement has<br />
been reviewed by the external auditors for the inclusion in the annual report of the Group for the financial<br />
year ended 31 December <strong>2012</strong>.<br />
CONCLUSION<br />
The Board is of the opinion that the risk management and internal control system is sufficient to provide a<br />
reasonable assurance that the system is adequate and satisfactory and have not resulted in any material<br />
losses, fraud or misstatement that would require disclosure in the annual report of the Group. As the<br />
development of an effective and efficient risk management and internal control system is an ongoing<br />
process, the Board reaffirmed their commitments to take the necessary measures to strengthen the risk<br />
management and internal control environment of the Group.<br />
This statement is made in accordance with the resolution of the Board of Directors dated 25 April 2013.
AUDIT COMMITTEE <strong>REPORT</strong><br />
017<br />
MEMBERS OF THE AUDIT COMMITTEE<br />
The Committee currently has three (3) members, all of whom are Independent Non-Executive Directors as<br />
follows:<br />
• Geh Cheng Hooi<br />
Chairman / Independent Non-Executive Director<br />
• Michael Lim Hee Kiang<br />
Member / Independent Non-Executive Director<br />
• YAM Datuk Seri Tengku Ahmad Shah Al-Haj Ibni Almarhum Sultan Salahuddin Abdul Aziz Shah Al-Haj<br />
Member / Independent Non-Executive Director<br />
Responsibility<br />
The Committee is to serve as a focal point for communication between non-Committee Directors, the<br />
external auditors, internal auditors and the Management on matters in connection with the financial<br />
accounting, reporting and controls. The Committee is to assist the Board in fulfilling its fiduciary<br />
responsibility as to accounting policies and reporting practices of the Company and all subsidiaries<br />
and the sufficiency of auditing relative thereto. It is to be the Board’s principal agent in assuring the<br />
independence of the Company’s external auditors, the integrity of the management and the adequacy<br />
of disclosures to shareholders.<br />
If the Committee is of the view that a matter reported to the Board has not been satisfactorily resolved<br />
resulting in breach of the Main Market Listing Requirements of Bursa Securities, the Committee shall<br />
promptly report such matter to Bursa Securities.<br />
Functions of the Committee<br />
The functions of the Committee are as follows:<br />
(1) to review with the external auditors, their audit plan;<br />
(2) to review with the external auditors, their evaluation of the system of internal controls;<br />
(3) to review the assistance given by the Company’s officers to the external auditors;<br />
(4) to review the adequacy of the scope, functions, competency and resources of the internal audit<br />
functions and that it has the necessary authority to carry out its work;<br />
(5) to review the internal audit programme, processes, the results of the internal audit programme,<br />
processes or investigation undertaken and whether or not appropriate action is taken on the<br />
recommendations of the internal audit functions;<br />
(6) to review the quarterly results and year end financial statements, prior to the approval by the Board,<br />
focusing particularly on:<br />
(a) changes in or implementation of major accounting policy changes;<br />
(b) significant and unusual events; and<br />
(c) compliance with accounting standards and other legal requirements;<br />
(7) to review any related party transaction and conflict of interest situation that may arise within the<br />
Company or the Group including any transaction, procedure or course of conduct that raises questions<br />
of management integrity;<br />
(8) to consider the nomination, appointment and re-appointment of external auditors, their audit fees<br />
and any resignation or removal and in the case of re-appointment, whether there is reason (supported<br />
by grounds) to believe that the external auditors is not suitable for re-appointment;<br />
(9) to review any appraisal or assessment of the performance of members of the internal audit function;<br />
(10) to approve any appointment or termination of senior staff members of the internal audit function;<br />
and<br />
(11) to take cognisance of resignations of internal audit staff members and provide the resigning staff<br />
member an opportunity to submit his reasons for resigning.
018<br />
AUDIT COMMITTEE <strong>REPORT</strong> (cont’d)<br />
SUMMARY OF ACTIVITIES OF THE AUDIT COMMITTEE<br />
During the financial year ended 31 December <strong>2012</strong>, the Committee held six (6) meetings. The followings<br />
are the details of attendance by individual Committee members:<br />
Name of Committee Members<br />
Total Meetings in<br />
Financial Year<br />
During Committee<br />
Member’s Tenure<br />
Number of<br />
Meetings<br />
Attended<br />
Percentage<br />
of<br />
Attendance<br />
Geh Cheng Hooi<br />
6<br />
6<br />
100%<br />
Michael Lim Hee Kiang<br />
6<br />
6<br />
100%<br />
YAM Datuk Seri Tengku Ahmad Shah Al-Haj Ibni<br />
Almarhum Sultan Salahuddin Abdul Aziz Shah Al-Haj<br />
6<br />
6<br />
100%<br />
In line with the terms of reference of the Committee, the following activities were carried out by the<br />
Committee during the year:<br />
• Reviewed the quarterly and annual financial statements prior to submission to the Board for<br />
consideration and approval;<br />
• Reviewed the audit report for the Group prepared by external auditors and internal auditors, their<br />
findings and Management’s responses thereto;<br />
• Reviewed the audit plans for the Group prepared by both external auditors and internal auditors;<br />
• Reviewed related party transactions entered into by the Group; and<br />
• Reviewed and approved minutes of the Committee’s meetings.<br />
INTERNAL AUDIT FUNCTION<br />
In discharging its duties, the Committee is strongly supported by the internal audit function undertaken by<br />
the firm engaged to provide outsourced internal audit services to the Group.<br />
The internal audit function is independent of the activities or operations of the Group. The principal role<br />
of the function is to independently review and assess the effectiveness of the Group’s systems of internal<br />
controls so as to provide reasonable assurance that such systems continue to operate satisfactorily and<br />
effectively to manage the key business risks of the Group.<br />
It is the responsibility of the internal audit function to provide the Committee with independent and<br />
objective reports on the state on internal control of various operating units within the Group and the<br />
extent of compliance of the units with the Group’s policies and procedures.
FINANCIAL<br />
STATEMENTS<br />
20<br />
25<br />
25<br />
26<br />
28<br />
31<br />
32<br />
33<br />
37<br />
39<br />
DIRECTORS’ <strong>REPORT</strong><br />
STATEMENT BY DIRECTORS<br />
STATUTORY DECLARATION<br />
INDEPENDENT AUDITORS’ <strong>REPORT</strong><br />
CONSOLIDATED STATEMENTS OF<br />
FINANCIAL POSITION<br />
INCOME STATEMENTS<br />
STATEMENTS OF COMPREHENSIVE INCOME<br />
STATEMENTS OF CHANGES IN EQUITY<br />
STATEMENTS OF CASH FLOWS<br />
NOTES TO THE FINANCIAL STATEMENTS
020<br />
WAWASAN <strong>TKH</strong> HOLDINGS BERHAD (540218-A)<br />
<strong>ANNUAL</strong> <strong>REPORT</strong> <strong>2012</strong><br />
DIRECTORS’ <strong>REPORT</strong><br />
The Directors hereby submit their report and the audited financial statements of the Group and of the Company<br />
for the financial year ended 31 December <strong>2012</strong>.<br />
PRINCIPAL ACTIVITIES<br />
The Company is principally engaged in investment holding whilst the principal activities of the subsidiaries<br />
are set out in Note 9 to the financial statements. There have been no significant changes in the nature of these<br />
activities during the financial year.<br />
RESULTS<br />
Loss for the financial year attributable to owners of the parent<br />
Group<br />
RM’000<br />
(10,245)<br />
Company<br />
RM’000<br />
(3,334)<br />
DIVIDEND<br />
No dividend has been paid, declared or proposed by the Company since the end of the previous financial year.<br />
The Directors do not recommend any dividend in respect of the financial year ended 31 December <strong>2012</strong>.<br />
RESERVES AND PROVISIONS<br />
There were no material transfers to or from reserves or provisions during the financial year other than those<br />
disclosed in the financial statements.<br />
ISSUE OF SHARES AND DEBENTURES<br />
During the current financial year, the Company increased its issued and paid-up share capital by issuance<br />
of 16 million new ordinary shares of RM0.10 each for cash via the exercise of 16 million detachable warrants<br />
2008/2013 (‘Warrants’) at exercise price of RM0.21 per Warrant on the basis of one (1) new ordinary share<br />
for every one (1) Warrant exercised pursuant to the Deed Poll dated 24 July 2008.<br />
The newly issued shares rank pari passu in all respects with the existing shares of the Company. There were<br />
no other issues of shares during the financial year.<br />
There were no issues of debentures during the financial year.<br />
OPTIONS GRANTED OVER UNISSUED SHARES<br />
No options were granted to any person to take up unissued shares of the Company during the financial year.<br />
DIRECTORS<br />
The Directors who have held for office since the date of the last report are:<br />
Dato’ Tan Kim Hor<br />
Dato’ Tan Boon Pun<br />
Dato’ Tan Hoe Pin<br />
Dr. Tan Ban Leong<br />
YAM Datuk Seri Tengku Ahmad Shah Al-Haj Ibni Almarhum Sultan Salahuddin Abdul Aziz Shah Al-Haj<br />
Michael Lim Hee Kiang<br />
Geh Cheng Hooi
WAWASAN <strong>TKH</strong> HOLDINGS BERHAD (540218-A)<br />
<strong>ANNUAL</strong> <strong>REPORT</strong> <strong>2012</strong> 021<br />
DIRECTORS’ <strong>REPORT</strong> (cont’d)<br />
DIRECTORS’ INTERESTS<br />
The Directors holding office at the end of the financial year and their beneficial interests in ordinary shares and<br />
options over ordinary shares in the Company and of its related corporations during the financial year ended 31<br />
December <strong>2012</strong> as recorded in the Register of Directors’ Shareholdings kept by the Company under Section<br />
134 of the Companies Act, 1965 were as follows:<br />
Shares in the Company<br />
Balance<br />
as at<br />
1.1.<strong>2012</strong><br />
Number of ordinary shares of RM0.10 each<br />
Bought<br />
Sold<br />
Balance<br />
as at<br />
31.12.<strong>2012</strong><br />
Shareholdings in which Directors<br />
have direct interests<br />
Dato’ Tan Kim Hor<br />
Dato’ Tan Boon Pun<br />
Dato’ Tan Hoe Pin<br />
Dr. Tan Ban Leong<br />
95,792,743<br />
37,950,344<br />
27,690,543<br />
30,149,999<br />
-<br />
500,000<br />
-<br />
-<br />
-<br />
-<br />
-<br />
-<br />
95,792,743<br />
38,450,344<br />
27,690,543<br />
30,149,999<br />
Shareholdings in which Directors<br />
have indirect interests<br />
Dato’ Tan Kim Hor<br />
Dato’ Tan Boon Pun<br />
Dato’ Tan Hoe Pin<br />
Dr. Tan Ban Leong<br />
136,627,871<br />
136,627,871<br />
136,627,871<br />
136,627,871<br />
16,000,000<br />
16,000,000<br />
16,000,000<br />
16,000,000<br />
-<br />
-<br />
-<br />
-<br />
152,627,871<br />
152,627,871<br />
152,627,871<br />
152,627,871<br />
The Company<br />
Balance<br />
as at<br />
1.1.<strong>2012</strong><br />
Number of warrants* of RM0.21 each<br />
Bought<br />
Sold<br />
Balance<br />
as at<br />
31.12.<strong>2012</strong><br />
Dato’ Tan Kim Hor<br />
Dato’ Tan Boon Pun<br />
Dato’ Tan Hoe Pin<br />
Dr. Tan Ban Leong<br />
9,238,095<br />
5,811,905<br />
5,761,905<br />
7,908,333<br />
-<br />
-<br />
-<br />
-<br />
-<br />
-<br />
-<br />
-<br />
9,238,095<br />
5,811,905<br />
5,761,905<br />
7,908,333<br />
* Issuance of warrants pursuant to the renounceable rights issue of 143,713,530 new ordinary shares of the<br />
Company on 29 August 2008 on the basis of two (2) new ordinary shares together with one (1) free warrant<br />
for every two (2) existing ordinary shares held.<br />
By virtue of their interests in the ordinary shares of the Company, Dato’ Tan Kim Hor, Dato’ Tan Boon Pun,<br />
Dato’ Tan Hoe Pin and Dr. Tan Ban Leong are also deemed to be interested in the ordinary shares of all the<br />
subsidiaries to the extent that the Company has an interest.<br />
None of the other Directors holding office at the end of the financial year held any interest in the ordinary<br />
shares and options over ordinary shares in the Company or ordinary shares, options over ordinary shares<br />
and debentures of its related corporations during the financial year.
022<br />
WAWASAN <strong>TKH</strong> HOLDINGS BERHAD (540218-A)<br />
<strong>ANNUAL</strong> <strong>REPORT</strong> <strong>2012</strong><br />
DIRECTORS’ <strong>REPORT</strong> (cont‘d)<br />
DIRECTORS’ BENEFITS<br />
Since the end of the previous financial year, none of the Directors has received or become entitled to receive any<br />
benefit (other than a benefit included in the aggregate amount of emoluments received or due and receivable by<br />
the Directors as shown in the financial statements) by reason of a contract made by the Company or a related<br />
corporation with the Director or with a firm of which the Director is a member, or with a company in which the<br />
Director has a substantial financial interest other than those remunerations received by certain Directors as<br />
directors/executives of the subsidiaries and those transactions entered into in the ordinary course of business<br />
with companies in which certain Directors of the Company have substantial interests as disclosed in Note 24(b)<br />
to the financial statements.<br />
There were no arrangements during and at the end of the financial year, to which the Company is a party, which<br />
had the object of enabling Directors to acquire benefits by means of the acquisition of shares in or debentures<br />
of the Company or any other body corporate except for the warrants issued as disclosed in Note 14.2(b) to the<br />
financial statements.<br />
OTHER STATUTORY INFORMATION REGARDING THE GROUP AND THE COMPANY<br />
(I) AS AT THE END OF THE FINANCIAL YEAR<br />
(a) Before the income statements, statements of comprehensive income and statements of financial position<br />
of the Group and of the Company were made out, the Directors took reasonable steps:<br />
(i) to ascertain that proper action had been taken in relation to the writing off of bad debts and the<br />
making of provision for doubtful debts and satisfied themselves that there are no known bad debts<br />
and that provision need not be made for doubtful debts; and<br />
(ii) to ensure that any current assets other than debts, which were unlikely to realise their book values<br />
in the ordinary course of business had been written down to their estimated realisable values.<br />
(b) In the opinion of the Directors, the results of the operations of the Group and of the Company during<br />
the financial year have not been substantially affected by any item, transaction or event of a material and<br />
unusual nature except for:<br />
(i) the effects arising from impairment loss on investments in subsidiaries resulting in an increase in<br />
the Company’s loss for the financial year by RM4,700,000 as disclosed in Note 9 to the financial<br />
statements; and<br />
(ii) the effects arising from waiver of amount owing to and interest charged by a related party resulting<br />
in a decrease in the Group’s and the Company’s loss for the financial year by RM2,000,000 and<br />
RM2,429,000 respectively as disclosed in Note 15 to the financial statements.<br />
(II) FROM THE END OF THE FINANCIAL YEAR TO THE DATE OF THIS <strong>REPORT</strong><br />
(c) The Directors are not aware of any circumstances:<br />
(i) which would necessitate the writing off of bad debts or the making of provision for doubtful debts in<br />
the financial statements of the Group and of the Company; and<br />
(ii) which would render the values attributed to current assets in the financial statements of the Group<br />
and of the Company misleading; and<br />
(iii) which have arisen which would render adherence to the existing method of valuation of assets or<br />
liabilities of the Group and of the Company misleading or inappropriate.<br />
(d) In the opinion of the Directors:<br />
(i) there has not arisen any item, transaction or event of a material and unusual nature likely to affect<br />
substantially the results of the operations of the Group and of the Company for the financial year in<br />
which this report is made; and<br />
(ii) no contingent or other liability has become enforceable, or is likely to become enforceable, within<br />
the period of twelve (12) months after the end of the financial year which will or may affect the ability<br />
of the Group or of the Company to meet their obligations as and when they fall due.
WAWASAN <strong>TKH</strong> HOLDINGS BERHAD (540218-A)<br />
<strong>ANNUAL</strong> <strong>REPORT</strong> <strong>2012</strong><br />
023<br />
OTHER STATUTORY INFORMATION REGARDING THE GROUP AND THE COMPANY (cont’d)<br />
(III) AS AT THE DATE OF THIS <strong>REPORT</strong><br />
(e)<br />
There are no charges on the assets of the Group and of the Company which have arisen since<br />
the end of the financial year to secure the liabilities of any other person.<br />
(f)<br />
There are no contingent liabilities of the Group and of the Company which have arisen since the<br />
end of the financial year.<br />
(g)<br />
The Directors are not aware of any circumstances not otherwise dealt with in the report or financial<br />
statements which would render any amount stated in the financial statements of the Group and of<br />
the Company misleading.<br />
SIGNIFICANT EVENTS DURING THE FINANCIAL YEAR<br />
(a)<br />
(b)<br />
On 24 April <strong>2012</strong>, a major shareholder of the Company, namely <strong>Wawasan</strong> <strong>TKH</strong> Sdn. Bhd. (‘W<strong>TKH</strong>SB’),<br />
exercised 5 million detachable warrants 2008/2013 (‘Warrants’) at exercise price of RM0.21 per Warrant<br />
on the basis of one (1) new ordinary share for every one (1) Warrant exercised pursuant to the Deed<br />
Poll dated 24 July 2008. The new ordinary shares of RM0.10 each rank pari passu in all respects with<br />
the existing shares of the Company.<br />
On 14 December <strong>2012</strong>, a major shareholder of the Company, namely W<strong>TKH</strong>SB, exercised 11 million<br />
detachable warrants 2008/2013 (‘Warrants’) at exercise price of RM0.21 per Warrant on the basis of<br />
one (1) new ordinary share for every one (1) Warrant exercised pursuant to the Deed Poll dated 24 July<br />
2008. The new ordinary shares of RM0.10 each rank pari passu in all respects with the existing shares<br />
of the Company.
024<br />
WAWASAN <strong>TKH</strong> HOLDINGS BERHAD (540218-A)<br />
<strong>ANNUAL</strong> <strong>REPORT</strong> <strong>2012</strong><br />
AUDITORS<br />
The auditors, BDO, have expressed their willingness to continue in office.<br />
Signed on behalf of the Board of Directors in accordance with a resolution of the Directors.<br />
......................................... .........................................<br />
Dato’ Tan Boon Pun<br />
Dato’ Tan Hoe Pin<br />
Director<br />
Director<br />
Petaling Jaya, Selangor<br />
25 April 2013
WAWASAN <strong>TKH</strong> HOLDINGS BERHAD (540218-A)<br />
<strong>ANNUAL</strong> <strong>REPORT</strong> <strong>2012</strong><br />
025<br />
STATEMENT BY DIRECTORS AND STATUTORY DECLARATION<br />
STATEMENT BY DIRECTORS<br />
In the opinion of the Directors, the financial statements set out on pages 28 to 99 have been drawn up in<br />
accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards, and<br />
the provisions of the Companies Act, 1965 in Malaysia so as to give a true and fair view of the financial position<br />
of the Group and of the Company as at 31 December <strong>2012</strong> and of their financial performance and cash flows<br />
for the financial year then ended.<br />
In the opinion of the Directors, the information set out in Note 32 on page 100 to the financial statements<br />
has been compiled in accordance with the Guidance on Special Matter No.1, Determination of Realised<br />
and Unrealised Profits or Losses in the Context of Disclosures Pursuant to Bursa Malaysia Securities <strong>Berhad</strong><br />
Listing Requirements, issued by the Malaysian Institute of Accountants, and presented based on the format<br />
prescribed by Bursa Malaysia Securities <strong>Berhad</strong>.<br />
On behalf of the Board,<br />
......................................... .........................................<br />
Dato’ Tan Boon Pun<br />
Dato’ Tan Hoe Pin<br />
Director<br />
Director<br />
Petaling Jaya, Selangor<br />
25 April 2013<br />
STATUTORY DECLARATION<br />
We, Dato’ Tan Boon Pun and Ooi Chin Guan, being the respective Director and Officer primarily responsible<br />
for the financial management of <strong>Wawasan</strong> <strong>TKH</strong> <strong>Holdings</strong> <strong>Berhad</strong>, do solemnly and sincerely declare that the<br />
financial statements set out on pages 28 to 100 are, to the best of our knowledge and belief, correct and we<br />
make this solemn declaration conscientiously believing the same to be true and by virtue of the provisions of<br />
the Statutory Declarations Act, 1960.<br />
Subscribed and solemnly .........................................<br />
declared by the abovenamed at<br />
Dato’ Tan Boon Pun<br />
Kuala Lumpur this<br />
25 April 2013<br />
Before me:<br />
.........................................<br />
Ooi Chin Guan
026<br />
WAWASAN <strong>TKH</strong> HOLDINGS BERHAD (540218-A)<br />
<strong>ANNUAL</strong> <strong>REPORT</strong> <strong>2012</strong><br />
INDEPENDENT AUDITORS’ <strong>REPORT</strong><br />
TO THE MEMBERS OF WAWASAN <strong>TKH</strong> HOLDINGS BERHAD<br />
Report on the Financial Statements<br />
We have audited the financial statements of <strong>Wawasan</strong> <strong>TKH</strong> <strong>Holdings</strong> <strong>Berhad</strong>, which comprise statements<br />
of financial position as at 31 December <strong>2012</strong> of the Group and of the Company, and income statements,<br />
statements of comprehensive income, statements of changes in equity and statements of cash flows of<br />
the Group and of the Company for the financial year then ended, and a summary of significant accounting<br />
policies and other explanatory information, as set out on pages 28 to 99.<br />
Directors’ Responsibility for the Financial Statements<br />
The Directors of the Company are responsible for the preparation of financial statements so as to give a true<br />
and fair view in accordance with Malaysian Financial Reporting Standards, International Financial Reporting<br />
Standards, and the requirements of the Companies Act, 1965 in Malaysia. The Directors are also responsible for<br />
such internal control as the Directors determine is necessary to enable the preparation of financial statements<br />
that are free from material misstatement, whether due to fraud or error.<br />
Auditors’ Responsibility<br />
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our<br />
audit in accordance with approved standards on auditing in Malaysia. Those standards require that we comply<br />
with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the<br />
financial statements are free from material misstatement.<br />
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in<br />
the financial statements. The procedures selected depend on our judgement, including the assessment of<br />
risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk<br />
assessments, we consider internal control relevant to the entity’s preparation of the financial statements that<br />
give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but<br />
not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also<br />
includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting<br />
estimates made by the Directors, as well as evaluating the overall presentation of the financial statements.<br />
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our<br />
audit opinion.<br />
Opinion<br />
In our opinion, the financial statements give a true and fair view of the financial position of the Group and of the<br />
Company as of 31 December <strong>2012</strong> and of their financial performance and cash flows for the financial year then<br />
ended in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards<br />
and the requirements of the Companies Act, 1965 in Malaysia.<br />
Report on Other Legal and Regulatory Requirements<br />
In accordance with the requirements of the Companies Act, 1965 in Malaysia, we also report the following:<br />
(a)<br />
(b)<br />
(c)<br />
(d)<br />
In our opinion, the accounting and other records and the registers required by the Act to be kept by the<br />
Company and its subsidiaries of which we have acted as auditors have been properly kept in accordance<br />
with the provisions of the Act.<br />
We have considered the financial statements and auditors’ report of a subsidiary of which we have not acted<br />
as auditors, which is indicated in Note 9 to the financial statements.<br />
We are satisfied that the financial statements of the subsidiaries that have been consolidated with the<br />
Company’s financial statements are in form and content appropriate and proper for the purposes of the<br />
preparation of the financial statements of the Group and we have received satisfactory information and<br />
explanations required by us for those purposes.<br />
The audit reports on the financial statements of the subsidiaries did not contain any qualification or any<br />
adverse comment made under Section 174(3) of the Act.
WAWASAN <strong>TKH</strong> HOLDINGS BERHAD (540218-A)<br />
<strong>ANNUAL</strong> <strong>REPORT</strong> <strong>2012</strong><br />
027<br />
INDEPENDENT AUDITORS’ <strong>REPORT</strong><br />
TO THE MEMBERS OF WAWASAN <strong>TKH</strong> HOLDINGS BERHAD<br />
(cont’d)<br />
Other Reporting Responsibilities<br />
The supplementary information set out in Note 32 to the financial statements is disclosed to meet the<br />
requirement of Bursa Malaysia Securities <strong>Berhad</strong> and is not part of the financial statements. The Directors are<br />
responsible for the preparation of the supplementary information in accordance with Guidance on Special<br />
Matter No. 1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant<br />
to Bursa Malaysia Securities <strong>Berhad</strong> Listing Requirements, as issued by the Malaysian Institute of Accountants<br />
(‘MIA Guidance’) and the directive of Bursa Malaysia Securities <strong>Berhad</strong>. In our opinion, the supplementary<br />
information is prepared, in all material respects, in accordance with the MIA Guidance and the directive of<br />
Bursa Malaysia Securities <strong>Berhad</strong>.<br />
Other Matters<br />
As stated in Note 3 to the financial statements, <strong>Wawasan</strong> <strong>TKH</strong> <strong>Holdings</strong> <strong>Berhad</strong> adopted Malaysian Financial<br />
Reporting Standards on 1 January <strong>2012</strong> with a transition date of 1 January 2011. These Standards were<br />
applied retrospectively by Directors to the comparative information in these financial statements, including<br />
the statements of financial position as at 31 December 2011 and 1 January 2011, and the income statement,<br />
statement of comprehensive income, statement of changes in equity and statement of cash flows for the<br />
financial year then ended 31 December 2011 and related disclosures. We were not engaged to report on the<br />
restated comparative information, and it is unaudited. Our responsibilities as part of our audit of the financial<br />
statements of the Group and of the Company for the financial year ended 31 December <strong>2012</strong> have, in these<br />
circumstances, included obtaining sufficient appropriate audit evidence that the opening balances as at 1<br />
January <strong>2012</strong> do not contain misstatements that materially affect the financial position as of 31 December<br />
<strong>2012</strong> and financial performance and cash flows for the year then ended.<br />
This report is made solely to the members of the Company, as a body, in accordance with Section 174 of the<br />
Companies Act, 1965 in Malaysia and for no other purpose. We do not assume responsibility to any other<br />
person for the content of this report.<br />
BDO<br />
AF: 0206<br />
Chartered Accountants<br />
Tang Seng Choon<br />
2011/12/13 (J)<br />
Chartered Accountant<br />
Kuala Lumpur<br />
25 April 2013
028<br />
WAWASAN <strong>TKH</strong> HOLDINGS BERHAD (540218-A)<br />
<strong>ANNUAL</strong> <strong>REPORT</strong> <strong>2012</strong><br />
CONSOLIDATED STATEMENT OF FINANCIAL POSITION<br />
AS AT 31 DECEMBER <strong>2012</strong><br />
Note<br />
31.12.<strong>2012</strong><br />
RM’000<br />
Group<br />
31.12.2011<br />
RM’000<br />
1.1.2011<br />
RM’000<br />
ASSETS<br />
Non-current assets<br />
Property, plant and equipment<br />
Intangible assets<br />
Trade and other receivables<br />
7<br />
8<br />
11<br />
84,524<br />
11,062<br />
1,419<br />
88,623<br />
11,062<br />
1,502<br />
104,365<br />
11,062<br />
584<br />
97,005<br />
101,187<br />
116,011<br />
Current assets<br />
Inventories<br />
Trade and other receivables<br />
Derivative assets<br />
Current tax assets<br />
Cash and cash equivalents<br />
10<br />
11<br />
12<br />
13<br />
9,039<br />
7,716<br />
-<br />
18<br />
750<br />
9,563<br />
12,941<br />
14<br />
918<br />
2,151<br />
8,414<br />
10,520<br />
44<br />
1,170<br />
1,862<br />
17,523<br />
25,587<br />
22,010<br />
TOTAL ASSETS<br />
114,528<br />
126,774<br />
138,021<br />
The accompanying notes form an integral part of the financial statements.
WAWASAN <strong>TKH</strong> HOLDINGS BERHAD (540218-A)<br />
<strong>ANNUAL</strong> <strong>REPORT</strong> <strong>2012</strong><br />
029<br />
CONSOLIDATED STATEMENT OF FINANCIAL POSITION<br />
AS AT 31 DECEMBER <strong>2012</strong> (cont’d)<br />
EQUITY AND LIABILITIES<br />
Note<br />
31.12.<strong>2012</strong><br />
RM’000<br />
Group<br />
31.12.2011<br />
RM’000<br />
1.1.2011<br />
RM’000<br />
Equity attributable to owners<br />
of the parent<br />
Share capital<br />
Reserves<br />
Accumulated losses<br />
14<br />
14<br />
14<br />
46,444<br />
9,411<br />
(40,499)<br />
44,844<br />
7,646<br />
(30,254)<br />
57,688<br />
7,595<br />
(44,314)<br />
TOTAL EQUITY<br />
15,356<br />
22,236<br />
20,969<br />
LIABILITIES<br />
Non-current liabilities<br />
Trade and other payables<br />
Borrowings<br />
Deferred tax liabilities<br />
15<br />
16<br />
17<br />
38,996<br />
25,644<br />
6,770<br />
39,735<br />
22,834<br />
7,063<br />
33,552<br />
27,903<br />
7,355<br />
71,410<br />
69,632<br />
68,810<br />
Current liabilities<br />
Trade and other payables<br />
Derivative liabilities<br />
Borrowings<br />
Current tax liabilities<br />
15<br />
12<br />
16<br />
13,917<br />
23<br />
13,810<br />
12<br />
17,776<br />
46<br />
17,071<br />
13<br />
29,793<br />
1<br />
18,434<br />
14<br />
27,762<br />
34,906<br />
48,242<br />
TOTAL LIABILITIES<br />
99,172<br />
104,538<br />
117,052<br />
TOTAL EQUITY AND<br />
LIABILITIES<br />
114,528<br />
126,774<br />
138,021<br />
The accompanying notes form an integral part of the financial statements.
030<br />
WAWASAN <strong>TKH</strong> HOLDINGS BERHAD (540218-A)<br />
<strong>ANNUAL</strong> <strong>REPORT</strong> <strong>2012</strong><br />
STATEMENT OF FINANCIAL POSITION<br />
AS AT 31 DECEMBER <strong>2012</strong> (cont’d)<br />
Note<br />
31.12.<strong>2012</strong><br />
RM’000<br />
Company<br />
31.12.2011<br />
RM’000<br />
1.1.2011<br />
RM’000<br />
ASSETS<br />
Non-current assets<br />
Investments in subsidiaries<br />
9<br />
67,388<br />
72,088<br />
73,588<br />
Current assets<br />
Trade and other receivables<br />
Current tax assets<br />
Cash and cash equivalents<br />
11<br />
13<br />
9,650<br />
-<br />
11<br />
5,626<br />
904<br />
10<br />
8,260<br />
1,163<br />
14<br />
9,661<br />
6,540<br />
9,437<br />
TOTAL ASSETS<br />
77,049<br />
78,628<br />
83,025<br />
EQUITY AND LIABILITIES<br />
Equity attributable to owners<br />
of the parent<br />
Share capital<br />
Reserves<br />
Accumulated losses<br />
14<br />
14<br />
14<br />
46,444<br />
9,452<br />
(18,187)<br />
44,844<br />
7,692<br />
(14,853)<br />
57,688<br />
7,692<br />
(38,404)<br />
TOTAL EQUITY<br />
37,709<br />
37,683<br />
26,976<br />
LIABILITIES<br />
Non-current liabilities<br />
Trade and other payables<br />
15<br />
38,996<br />
39,735<br />
33,552<br />
Current liabilities<br />
Trade and other payables<br />
15<br />
344<br />
1,210<br />
22,497<br />
TOTAL LIABILITIES<br />
39,340<br />
40,945<br />
56,049<br />
TOTAL EQUITY AND<br />
LIABILITIES<br />
77,049<br />
78,628<br />
83,025<br />
The accompanying notes form an integral part of the financial statements.
WAWASAN <strong>TKH</strong> HOLDINGS BERHAD (540218-A)<br />
<strong>ANNUAL</strong> <strong>REPORT</strong> <strong>2012</strong><br />
031<br />
INCOME STATEMENTS<br />
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER <strong>2012</strong><br />
Note<br />
<strong>2012</strong><br />
RM’000<br />
Group<br />
2011<br />
RM’000<br />
<strong>2012</strong><br />
RM’000<br />
Company<br />
2011<br />
RM’000<br />
Revenue<br />
54,407<br />
70,340<br />
374<br />
614<br />
Cost of sales<br />
18<br />
(59,467)<br />
(75,647)<br />
-<br />
-<br />
Gross (loss)/profit<br />
(5,060)<br />
(5,307)<br />
374<br />
614<br />
Other operating income<br />
3,553<br />
7,336<br />
2,000<br />
-<br />
Administrative expenses<br />
(3,959)<br />
(5,393)<br />
(947)<br />
(1,830)<br />
Marketing expenses<br />
(1,818)<br />
(2,327)<br />
-<br />
-<br />
Other operating expenses<br />
(403)<br />
(3,939)<br />
(4,700)<br />
(1,766)<br />
Interest income<br />
17<br />
17<br />
159<br />
312<br />
Finance costs<br />
19<br />
(2,868)<br />
(5,516)<br />
(220)<br />
(2,676)<br />
Loss before tax<br />
20<br />
(10,538)<br />
(15,129)<br />
(3,334)<br />
(5,346)<br />
Taxation<br />
21<br />
293<br />
345<br />
-<br />
53<br />
Loss for the financial year<br />
(10,245)<br />
(14,784)<br />
(3,334)<br />
(5,293)<br />
Attributable to:<br />
Owners of the parent<br />
(10,245)<br />
(14,784)<br />
(3,334)<br />
(5,293)<br />
Basic and diluted loss per ordinary share attributable to equity holders of the Company (sen):<br />
Loss for the financial year 22 (2.27) (3.56)<br />
The accompanying notes form an integral part of the financial statements.
032<br />
WAWASAN <strong>TKH</strong> HOLDINGS BERHAD (540218-A)<br />
<strong>ANNUAL</strong> <strong>REPORT</strong> <strong>2012</strong><br />
STATEMENTS OF COMPREHENSIVE INCOME<br />
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER <strong>2012</strong><br />
Group<br />
<strong>2012</strong><br />
RM’000<br />
2011<br />
RM’000<br />
<strong>2012</strong><br />
RM’000<br />
Company<br />
2011<br />
RM’000<br />
Loss for the financial year<br />
(10,245)<br />
(14,784)<br />
(3,334)<br />
(5,293)<br />
Other comprehensive income:<br />
Foreign currency translations<br />
5<br />
51<br />
-<br />
-<br />
Other comprehensive income,<br />
net of tax<br />
5<br />
51<br />
-<br />
-<br />
Total comprehensive loss<br />
(10,240)<br />
(14,733)<br />
(3,334)<br />
(5,293)<br />
Attributable to:<br />
Owners of the parent<br />
(10,240)<br />
(14,733)<br />
(3,334)<br />
(5,293)<br />
The accompanying notes form an integral part of the financial statements.
WAWASAN <strong>TKH</strong> HOLDINGS BERHAD (540218-A)<br />
<strong>ANNUAL</strong> <strong>REPORT</strong> <strong>2012</strong><br />
033<br />
STATEMENTS OF CHANGES IN EQUITY<br />
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER <strong>2012</strong><br />
Group<br />
Note<br />
Share<br />
capital<br />
RM’000<br />
|---------------------------- Non-distributable------------------------------|<br />
Capital<br />
reserve<br />
RM’000<br />
Warrant<br />
reserve<br />
RM’000<br />
Exchange<br />
translation<br />
reserve<br />
RM’000<br />
Revaluation<br />
reserve<br />
RM’000<br />
Balance as at 1 January 2011<br />
57,688<br />
- 7,692<br />
(97) 24,736<br />
Effect of adoption of MFRS 1<br />
31 -<br />
-<br />
-<br />
- (24,736)<br />
Restated balance as at 1 January 2011<br />
57,688<br />
- 7,692<br />
(97)<br />
-<br />
Loss for the financial year<br />
Foreign currency translations<br />
-<br />
-<br />
-<br />
-<br />
-<br />
-<br />
-<br />
51<br />
-<br />
-<br />
Total comprehensive loss<br />
-<br />
-<br />
-<br />
51<br />
-<br />
Transactions with owners<br />
Par value reduction<br />
Issuance of ordinary shares<br />
14<br />
14<br />
(28,844)<br />
16,000<br />
28,844<br />
-<br />
-<br />
-<br />
-<br />
-<br />
-<br />
-<br />
Total transactions with owners<br />
(12,844) 28, 844<br />
-<br />
-<br />
-<br />
Elimination of accumulated losses 14 - (28,844)<br />
-<br />
-<br />
-<br />
Balance as at 31 December 2011<br />
44,844<br />
- 7,692<br />
(46)<br />
-<br />
The accompanying notes form an integral part of the financial statements.<br />
Accumulated<br />
losses<br />
RM’000<br />
(69,155)<br />
24,841<br />
(44,314)<br />
(14,784)<br />
-<br />
(14,784)<br />
-<br />
-<br />
-<br />
28,844<br />
(30,254)<br />
Total<br />
equity<br />
RM’000<br />
20,864<br />
105<br />
20,969<br />
(14,784)<br />
51<br />
(14,733)<br />
-<br />
16,000<br />
16,000<br />
-<br />
22,236
034<br />
WAWASAN <strong>TKH</strong> HOLDINGS BERHAD (540218-A)<br />
<strong>ANNUAL</strong> <strong>REPORT</strong> <strong>2012</strong><br />
STATEMENTS OF CHANGES IN EQUITY<br />
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER <strong>2012</strong> (cont’d)<br />
Group<br />
Note<br />
Share<br />
capital<br />
RM’000<br />
|---------------------------- Non-distributable------------------------------|<br />
Capital<br />
reserve<br />
RM’000<br />
Warrant<br />
reserve<br />
RM’000<br />
Exchange<br />
translation<br />
reserve<br />
RM’000<br />
Revaluation<br />
reserve<br />
RM’000<br />
Balance as at 31 December 2011<br />
44,844<br />
- 7,692<br />
(46)<br />
-<br />
Loss for the financial year<br />
Foreign currency translations<br />
-<br />
-<br />
-<br />
-<br />
-<br />
-<br />
-<br />
5<br />
-<br />
-<br />
Total comprehensive loss<br />
-<br />
-<br />
-<br />
5<br />
-<br />
Transactions with owners<br />
Exercise of warrants<br />
14<br />
1,600<br />
3,472<br />
(1,712)<br />
-<br />
-<br />
Total transactions with owners<br />
1,600 3,472 (1,712)<br />
-<br />
-<br />
Balance as at 31 December <strong>2012</strong><br />
46,444 3,472 5,980<br />
(41)<br />
-<br />
The accompanying notes form an integral part of the financial statements.<br />
Accumulated<br />
losses<br />
RM’000<br />
(30,254)<br />
(10,245)<br />
-<br />
(10,245)<br />
-<br />
-<br />
(40,499)<br />
Total<br />
equity<br />
RM’000<br />
22,236<br />
(10,245)<br />
5<br />
(10,240)<br />
3,360<br />
3,360<br />
15,356
WAWASAN <strong>TKH</strong> HOLDINGS BERHAD (540218-A)<br />
<strong>ANNUAL</strong> <strong>REPORT</strong> <strong>2012</strong><br />
035<br />
STATEMENTS OF CHANGES IN EQUITY<br />
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER <strong>2012</strong> (cont’d)<br />
Company<br />
Note<br />
Balance as at 1 January 2011<br />
Effect of adoption of MFRS 1<br />
31<br />
Restated balance as at 1 January 2011<br />
Loss for the financial year<br />
Total comprehensive loss<br />
Transactions with owners<br />
Par value reduction<br />
Issuance of ordinary shares<br />
14<br />
14<br />
Total transactions with owners<br />
Elimination of accumulated losses<br />
14<br />
Balance as at 31 December 2011<br />
The accompanying notes form an integral part of the financial statements.<br />
Share<br />
capital<br />
RM’000<br />
57,688<br />
-<br />
57,688<br />
-<br />
-<br />
-<br />
(28,844)<br />
16,000<br />
(12,844)<br />
-<br />
44,844<br />
|-------- Non-distributable-------|<br />
Capital<br />
reserve<br />
RM’000<br />
Warrant<br />
reserve<br />
RM’000<br />
-<br />
7,692<br />
-<br />
-<br />
-<br />
7,692<br />
-<br />
-<br />
-<br />
-<br />
-<br />
-<br />
28,844<br />
-<br />
-<br />
-<br />
28, 844<br />
-<br />
(28,844)<br />
-<br />
-<br />
7,692<br />
Accumulated<br />
losses<br />
RM’000<br />
(38,404)<br />
-<br />
(38,404)<br />
(5,293)<br />
(5,293)<br />
-<br />
-<br />
-<br />
28,844<br />
(14,853)<br />
Total<br />
equity<br />
RM’000<br />
26,976<br />
-<br />
26,976<br />
(5,293)<br />
(5,293)<br />
-<br />
16,000<br />
16,000<br />
-<br />
37,683
036<br />
WAWASAN <strong>TKH</strong> HOLDINGS BERHAD (540218-A)<br />
<strong>ANNUAL</strong> <strong>REPORT</strong> <strong>2012</strong><br />
STATEMENTS OF CHANGES IN EQUITY<br />
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER <strong>2012</strong> (cont’d)<br />
Company<br />
Note<br />
Balance as at 31 December 2011<br />
Loss for the financial year<br />
Total comprehensive loss<br />
Transactions with owners<br />
Exercise of warrants<br />
14<br />
Total transactions with owners<br />
Balance as at 31 December <strong>2012</strong><br />
The accompanying notes form an integral part of the financial statements.<br />
Share<br />
capital<br />
RM’000<br />
44,844<br />
-<br />
-<br />
1,600<br />
1,600<br />
46,444<br />
|-------- Non-distributable-------|<br />
Capital<br />
reserve<br />
RM’000<br />
Warrant<br />
reserve<br />
RM’000<br />
-<br />
7,692<br />
-<br />
-<br />
-<br />
-<br />
3,472<br />
(1,712)<br />
3,472<br />
(1,712)<br />
3,472<br />
5,980<br />
Accumulated<br />
losses<br />
RM’000<br />
(14,853)<br />
(3,334)<br />
(3,334)<br />
-<br />
-<br />
(18,187)<br />
Total<br />
equity<br />
RM’000<br />
37,683<br />
(3,334)<br />
(3,334)<br />
3,360<br />
3,360<br />
37,709
WAWASAN <strong>TKH</strong> HOLDINGS BERHAD (540218-A)<br />
<strong>ANNUAL</strong> <strong>REPORT</strong> <strong>2012</strong><br />
037<br />
STATEMENTS OF CASH FLOWS<br />
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER <strong>2012</strong><br />
CASH FLOWS FROM<br />
OPERATING ACTIVITIES<br />
Note<br />
Group<br />
<strong>2012</strong><br />
RM’000<br />
2011<br />
RM’000<br />
<strong>2012</strong><br />
RM’000<br />
Company<br />
2011<br />
RM’000<br />
Loss before tax<br />
(10,538)<br />
(15,129)<br />
(3,334)<br />
(5,346)<br />
Adjustments for:<br />
Depreciation of property, plant and<br />
equipment<br />
Fair value adjustments on<br />
derivative instruments<br />
Gain on disposal of property, plant<br />
and equipment<br />
Impairment losses on:<br />
- investments in subsidiaries<br />
- other receivables<br />
- property, plant and equipment<br />
- trade receivables<br />
Interest expense<br />
Interest income<br />
Inventories written down<br />
Reversal of inventories written<br />
down<br />
Inventories written off<br />
Property, plant and equipment<br />
written off<br />
Reversal of impairment loss on<br />
trade receivables<br />
Unrealised foreign exchange gain<br />
Waiver of amount owing to a<br />
related party<br />
Operating (loss)/profit before<br />
changes in working capital<br />
7<br />
12<br />
20<br />
9<br />
7<br />
11<br />
19<br />
10<br />
10<br />
10<br />
7<br />
11<br />
15<br />
8,156<br />
(9)<br />
(62)<br />
-<br />
-<br />
-<br />
-<br />
2,868<br />
(17)<br />
-<br />
(167)<br />
-<br />
-<br />
(87)<br />
(42)<br />
(2,000)<br />
(1,898)<br />
8,850<br />
74<br />
(2,472)<br />
-<br />
6<br />
2,000<br />
88<br />
5,516<br />
(17)<br />
408<br />
-<br />
1,400<br />
2<br />
(18)<br />
(101)<br />
-<br />
607<br />
-<br />
-<br />
-<br />
4,700<br />
-<br />
-<br />
-<br />
220<br />
(159)<br />
-<br />
-<br />
-<br />
-<br />
-<br />
-<br />
(2,000)<br />
(573)<br />
-<br />
-<br />
-<br />
1,500<br />
-<br />
-<br />
-<br />
2,676<br />
(312)<br />
-<br />
-<br />
-<br />
-<br />
-<br />
-<br />
-<br />
(1,482)<br />
Decrease/(Increase) in inventories<br />
Decrease/(Increase) in trade and<br />
other receivables<br />
(Decrease)/Increase in trade and<br />
other payables<br />
691<br />
5,452<br />
(4,095)<br />
(2,956)<br />
(2,224)<br />
3,825<br />
-<br />
-<br />
(255)<br />
-<br />
103<br />
(1,303)<br />
Cash generated from/(used in)<br />
operations<br />
150<br />
(748)<br />
(828)<br />
(2,682)<br />
Interest paid<br />
Tax paid<br />
Tax refunded<br />
(386)<br />
(5)<br />
904<br />
(371)<br />
(8)<br />
312<br />
-<br />
-<br />
904<br />
-<br />
-<br />
312<br />
Net cash from/(used in) operating<br />
activities<br />
663<br />
(815)<br />
76<br />
(2,370)<br />
The accompanying notes form an integral part of the financial statements.
038<br />
WAWASAN <strong>TKH</strong> HOLDINGS BERHAD (540218-A)<br />
<strong>ANNUAL</strong> <strong>REPORT</strong> <strong>2012</strong><br />
STATEMENTS OF CASH FLOWS<br />
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER <strong>2012</strong> (cont’d)<br />
CASH FLOWS FROM<br />
INVESTING ACTIVITIES<br />
Note<br />
<strong>2012</strong><br />
RM’000<br />
Group<br />
2011<br />
RM’000<br />
<strong>2012</strong><br />
RM’000<br />
Company<br />
2011<br />
RM’000<br />
Advances from a related party<br />
Advances to subsidiaries<br />
Interest received<br />
Proceeds from disposal of property,<br />
plant and equipment<br />
Purchase of property, plant and<br />
equipment<br />
Rentals paid in advance<br />
24<br />
24<br />
7<br />
1,104<br />
-<br />
17<br />
208<br />
(2,065)<br />
-<br />
3,670<br />
-<br />
17<br />
9,984<br />
(2,492)<br />
(1,000)<br />
1,104<br />
(4,540)<br />
1<br />
-<br />
-<br />
-<br />
3,670<br />
(1,304)<br />
-<br />
-<br />
-<br />
-<br />
Net cash (used in)/from investing<br />
activities<br />
(736)<br />
10,179<br />
(3,435)<br />
2,366<br />
CASH FLOWS FROM<br />
FINANCING ACTIVITIES<br />
Increase in deposits pledged with<br />
licensed banks<br />
Interest paid<br />
Proceeds from exercise of warrants<br />
(Repayments of)/Drawdowns of:<br />
- bankers’ acceptances<br />
- bank loans<br />
- hire purchase<br />
(15)<br />
(2,324)<br />
3,360<br />
(1,757)<br />
911<br />
(1,619)<br />
(15)<br />
(2,632)<br />
-<br />
388<br />
(3,804)<br />
(2,934)<br />
-<br />
-<br />
3,360<br />
-<br />
-<br />
-<br />
-<br />
-<br />
-<br />
-<br />
-<br />
-<br />
Net cash (used in)/from financing<br />
activities<br />
(1,444)<br />
(8,997)<br />
3,360<br />
-<br />
Net (decrease)/increase in cash and<br />
cash equivalents<br />
(1,517)<br />
367<br />
1<br />
(4)<br />
Effects of exchange rate changes on<br />
cash and cash equivalents<br />
6<br />
70<br />
-<br />
-<br />
Cash and cash equivalents at<br />
beginning of financial year<br />
(1,881)<br />
(2,318)<br />
10<br />
14<br />
Cash and cash equivalents at<br />
end of financial year<br />
13<br />
(3,392)<br />
(1,881)<br />
11<br />
10<br />
The accompanying notes form an integral part of the financial statements.
WAWASAN <strong>TKH</strong> HOLDINGS BERHAD (540218-A)<br />
<strong>ANNUAL</strong> <strong>REPORT</strong> <strong>2012</strong><br />
039<br />
NOTES TO THE FINANCIAL STATEMENTS<br />
31 DECEMBER <strong>2012</strong><br />
1. CORPORATE INFORMATION<br />
The Company is a public limited liability company, incorporated and domiciled in Malaysia, and is listed on<br />
the Main Market of Bursa Malaysia Securities <strong>Berhad</strong>.<br />
The registered office of the Company is located at Level 18, The Gardens North Tower, Mid Valley City,<br />
Lingkaran Syed Putra, 59200 Kuala Lumpur.<br />
The principal place of business of the Company is located at Wisma <strong>TKH</strong>, Lot 6, Jalan Teknologi, Taman Sains<br />
Selangor 1, Kota Damansara, 47810 Petaling Jaya, Selangor Darul Ehsan.<br />
The consolidated financial statements for the financial year ended 31 December <strong>2012</strong> comprise the Company<br />
and its subsidiaries. These financial statements are presented in Ringgit Malaysia (‘RM’), which is also the<br />
Company’s functional currency. All financial information presented in RM has been rounded to the nearest<br />
thousand, unless otherwise stated.<br />
The financial statements were authorised for issue in accordance with a resolution by the Board of Directors<br />
on 25 April 2013.<br />
2. PRINCIPAL ACTIVITIES<br />
The Company is principally engaged in investment holding whilst the principal activities of the subsidiaries<br />
are as stated in Note 9 to the financial statements. There have been no significant changes in the nature of<br />
these activities during the financial year.<br />
3. BASIS OF PREPARATION<br />
The financial statements of the Group and of the Company set out on pages 28 to 99 have been prepared<br />
in accordance with Malaysian Financial Reporting Standards (‘MFRSs’), International Financial Reporting<br />
Standards (‘IFRSs’) and the provisions of the Companies Act, 1965 in Malaysia.<br />
These are the Group’s and the Company’s first financial statements prepared in accordance with MFRSs,<br />
and MFRS 1 First-time Adoption of Malaysian Financial Reporting Standards has been applied. In the previous<br />
financial years, the financial statements of the Group and of the Company were prepared in accordance with<br />
Financial Reporting Standards (‘FRSs’) in Malaysia.<br />
The Group and Company have consistently applied the same accounting policies in its opening MFRS<br />
statements of financial position as at 1 January 2011 and throughout all financial years presented, as if these<br />
policies had always been in effect. Comparative figures for the financial year ended 2011 in these financial<br />
statements have been restated to give effect to these changes, and Note 31 to the financial statements<br />
discloses the impact of the transition to MFRS on the Group’s and the Company’s reported financial position,<br />
financial performance and cash flows for the financial year then ended.<br />
However, Note 32 to the financial statements set out on page 100 has been prepared in accordance with<br />
Guidance on Special Matter No.1, Determination of Realised and Unrealised Profits or Losses in the Context<br />
of Disclosure Pursuant to Bursa Malaysia Securities <strong>Berhad</strong> Listing Requirements, as issued by the Malaysian<br />
Institute of Accountants (‘MIA Guidance’) and the directive of Bursa Malaysia Securities <strong>Berhad</strong>.
040<br />
WAWASAN <strong>TKH</strong> HOLDINGS BERHAD (540218-A)<br />
<strong>ANNUAL</strong> <strong>REPORT</strong> <strong>2012</strong><br />
NOTES TO THE FINANCIAL STATEMENTS<br />
31 DECEMBER <strong>2012</strong>(cont’d)<br />
4. SIGNIFICANT ACCOUNTING POLICIES<br />
4.1 Basis of accounting<br />
The financial statements of the Group and of the Company have been prepared under the historical<br />
cost convention except as otherwise stated in the financial statements and on the basis of accounting<br />
principles applicable to a going concern.<br />
The Group and the Company have incurred net loss of RM10,245,000 and RM3,334,000 respectively<br />
during the financial year ended 31 December <strong>2012</strong>, and as of that date, the current liabilities of the<br />
Group exceeded the current assets by RM10,239,000. These conditions indicate the existence of a<br />
material uncertainty, which may cast significant doubts about the Group’s and the Company’s ability<br />
to achieve profitable operations in the foreseeable future, to meet their obligations as and when they<br />
fall due and to continue operations as going concerns.<br />
The continuation of the Group and of the Company as going concerns is dependent upon the Group’s<br />
and the Company’s ability to operate profitably in the foreseeable future and to receive continuous<br />
financial support from its corporate shareholder, <strong>Wawasan</strong> <strong>TKH</strong> Sdn. Bhd. (‘W<strong>TKH</strong>SB’).<br />
The Group will continue to pursue initiatives to increase revenue and margins progressively towards<br />
recovery. In relation to this, the Directors are of the view that the disposable foodwares unit will continue<br />
to invest in new machines and moulds, which would result in an increase in productivity and lower<br />
maintenance cost, while extending its product range and market reach towards improving gross margin.<br />
The mining unit is expected to introduce new improved products, while containing its operational cost<br />
through cost rationalisation. This will improve the results of the Group in the foreseeable future.<br />
In addition to the above, W<strong>TKH</strong>SB has agreed to provide the necessary continuous financial support<br />
to the Group and to the Company and it has also agreed to the Company’s request to subordinate the<br />
advances due to W<strong>TKH</strong>SB amounting to RM38,996,000 (2011: RM39,735,000) for the next twelve (12)<br />
months from the date of this report.<br />
W<strong>TKH</strong>SB had waived RM2,000,000 of the advances and RM2,429,000 of the interest charged during the<br />
current financial year. It has also committed to waive further amount of up to RM5,000,000 of the above<br />
advances as and when required to support the Group.<br />
During the current financial year, W<strong>TKH</strong>SB exercised 16 million detachable warrants 2008/2013<br />
(‘Warrants’) at exercise price of RM0.21 per Warrant on the basis of one (1) new ordinary share for<br />
every one (1) Warrant exercised pursuant to the Deed Poll dated 24 July 2008.<br />
Based on the latest financial position of W<strong>TKH</strong>SB, the Directors confirmed that W<strong>TKH</strong>SB is able to<br />
provide the necessary financial support to the Group and the Company to continue operations as<br />
going concerns in the next twelve (12) months from the date of this report.<br />
In view of the foregoing, the Directors consider that it is appropriate to prepare the financial statements of<br />
the Group and of the Company on a going concern basis, and accordingly, the financial statements do<br />
not include any adjustments relating to the recoverability and classification of recorded assets amounts,<br />
or to amounts or classification of liabilities that may be necessary if the going concern basis of preparing<br />
the financial statements of the Group and of the Company is not appropriate.<br />
The preparation of financial statements in conformity with MFRSs requires the Directors to make<br />
estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses<br />
and disclosure of contingent assets and contingent liabilities. In addition, the Directors are also required<br />
to exercise their judgement in the process of applying the accounting policies. The areas involving such<br />
judgements, estimates and assumptions are disclosed in Note 6 to the financial statements. Although<br />
these estimates and assumptions are based on the Directors’ best knowledge of events and actions,<br />
actual results could differ from those estimates.
WAWASAN <strong>TKH</strong> HOLDINGS BERHAD (540218-A)<br />
<strong>ANNUAL</strong> <strong>REPORT</strong> <strong>2012</strong><br />
041<br />
NOTES TO THE FINANCIAL STATEMENTS<br />
31 DECEMBER <strong>2012</strong>(cont’d)<br />
4. SIGNIFICANT ACCOUNTING POLICIES (cont’d)<br />
4.2 Basis of consolidation<br />
The consolidated financial statements incorporate the financial statements of the Company and all its<br />
subsidiaries. Subsidiaries are entities (including special purposes entities) over which the Company<br />
has the power to govern the financial operating policies, generally accompanied by a shareholding<br />
giving rise to the majority of the voting rights, as to obtain benefits from their activities.<br />
Subsidiaries are consolidated from the date on which control is transferred to the Group up to the<br />
effective date on which control ceases, as appropriate.<br />
Intragroup balances, transactions, income and expenses are eliminated on consolidation. Unrealised<br />
gains arising from transactions with associates and joint ventures are eliminated against the investment<br />
to the extent of the Group’s interest in the investee. Unrealised losses are eliminated in the same way<br />
as unrealised gains, but only to the extent that there is no impairment.<br />
The financial statements of the subsidiaries are prepared for the same reporting period as that of the<br />
Company, using consistent accounting policies. Where necessary, accounting policies of subsidiaries<br />
are changed to ensure consistency with the policies adopted by the other entities in the Group.<br />
Non-controlling interests represent the equity in subsidiaries that are not attributable, directly or<br />
indirectly, to owners of the Company, and is presented separately in the consolidated statement<br />
of comprehensive income and within equity in the consolidated statement of financial position,<br />
separately from equity attributable to owners of the Company. Profit or loss and each component of<br />
other comprehensive income are attributed to the owners of the parent and to the non-controlling<br />
interests. Total comprehensive income is attributed to non-controlling interests even if this results in<br />
the non-controlling interests having a deficit balance.<br />
Components of non-controlling interests in the acquiree that are present ownership interests and entitle<br />
their holders to a proportionate share of the entity’s net assets in the event of liquidation are initially<br />
measured at the present ownership instruments’ proportionate share in the recognised amounts of the<br />
acquiree’s identifiable net assets. All other components of non-controlling interests shall be measured at<br />
their acquisition-date fair values, unless another measurement basis is required by MFRSs. The choice of<br />
measurement basis is made on a combination-by-combination basis. Subsequent to initial recognition,<br />
the carrying amount of non-controlling interests is the amount of those interests at initial recognition plus<br />
the non-controlling interests’ share of subsequent changes in equity.<br />
Changes in the Company owners’ ownership interest in a subsidiary that do not result in a loss of control<br />
are accounted for as equity transactions. In such circumstances, the carrying amounts of the controlling<br />
and non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiary.<br />
Any difference between the amount by which the non-controlling interest is adjusted and the fair value of<br />
consideration paid or received is recognised directly in equity and attributed to owners of the parent.<br />
When the Group loses control of a subsidiary, the profit or loss on disposal is calculated as the difference<br />
between:<br />
(i) the aggregate of the fair value of the consideration received and the fair value of any retained interest;<br />
and<br />
(ii) the previous carrying amount of the assets (including goodwill), and liabilities of the subsidiary and<br />
any non-controlling interests.<br />
Amounts previously recognised in other comprehensive income in relation to the subsidiary are<br />
accounted for (i.e. reclassified to profit or loss or transferred directly to retained earnings) in the same<br />
manner as would be required if the relevant assets or liabilities were disposed of. The fair value of<br />
any investments retained in the former subsidiary at the date when control is lost is regarded as the<br />
fair value on initial recognition for subsequent accounting under MFRS 139 Financial Instruments:<br />
Recognition and Measurement or, where applicable, the cost on initial recognition of an investment in<br />
associate or jointly controlled entity.
042<br />
WAWASAN <strong>TKH</strong> HOLDINGS BERHAD (540218-A)<br />
<strong>ANNUAL</strong> <strong>REPORT</strong> <strong>2012</strong><br />
NOTES TO THE FINANCIAL STATEMENTS<br />
31 DECEMBER <strong>2012</strong>(cont’d)<br />
4. SIGNIFICANT ACCOUNTING POLICIES (cont’d)<br />
4.3 Business combinations<br />
Business combinations from 1 January 2011 onwards<br />
Business combinations are accounted for by applying the acquisition method of accounting.<br />
Identifiable assets acquired, liabilities and contingent liabilities assumed in a business combination are<br />
measured at their fair values at the acquisition date, except that:<br />
(a) Deferred tax assets or liabilities and liabilities or assets related to employee benefit arrangements<br />
are recognised and measured in accordance with MFRS 112 Income Taxes and MFRS 119 Employee<br />
Benefits respectively;<br />
(b) Liabilities or equity instruments related to share-based payment transactions of the acquiree or<br />
the replacements by the Group of an acquiree’s share-based payment transactions are measured in<br />
accordance with MFRS 2 Share-based Payment at the acquisition date; and<br />
(c) Assets (or disposal groups) that are classified as held for sale in accordance with MFRS 5 Non-current<br />
Assets Held for Sale and Discontinued Operations are measured in accordance with that Standard.<br />
Acquisition-related costs are recognised as expenses in the periods in which the costs are incurred and<br />
the services are received.<br />
Any contingent consideration payable is recognised at fair value at the acquisition date. Measurement<br />
period adjustments to contingent consideration are dealt with as follows:<br />
(a) If the contingent consideration is classified as equity, it is not remeasured and settlement is accounted<br />
for within equity.<br />
(b) Subsequent changes to contingent consideration classified as an asset or liability that is a financial<br />
instrument within the scope of MFRS 139 are recognised either in profit or loss or in other<br />
comprehensive income in accordance with MFRS 139. All other subsequent changes are recognised<br />
in profit or loss.<br />
In a business combination achieved in stages, previously held equity interests in the acquiree are<br />
remeasured to fair value at the acquisition date and any corresponding gain or loss is recognised in<br />
profits or loss.<br />
The Group elects for each individual business combination, whether non-controlling interest in the<br />
acquiree (if any) is recognised on the acquisition date at fair value, or at the non-controlling interest’s<br />
proportionate share of the acquiree’s net identifiable assets.<br />
Any excess of the sum of the fair value of the consideration transferred in the business combination, the<br />
amount of non-controlling interest in the acquiree (if any), and the fair value of the Group’s previously<br />
held equity interest in the acquiree (if any), over the net fair value of the acquiree’s identifiable assets and<br />
liabilities is recorded as goodwill in the statements of financial position. The accounting policy for goodwill<br />
is set out in Note 4.7(a) to the financial statements. In instances where the latter amount exceeds the<br />
former, the excess is recognised as a gain on bargain purchase in profit or loss on the acquisition date.<br />
Business combinations before 1 January 2011<br />
As part of its transition to MFRSs, the Group elected not to restate those business combinations that<br />
occurred before the date of transition to MFRSs, i.e. 1 January 2011. Goodwill represents the amount<br />
recognised under the previous FRS Framework in respect of acquisitions prior to 1 January 2011.
WAWASAN <strong>TKH</strong> HOLDINGS BERHAD (540218-A)<br />
<strong>ANNUAL</strong> <strong>REPORT</strong> <strong>2012</strong><br />
043<br />
NOTES TO THE FINANCIAL STATEMENTS<br />
31 DECEMBER <strong>2012</strong>(cont’d)<br />
4. SIGNIFICANT ACCOUNTING POLICIES (cont’d)<br />
4.4 Property, plant and equipment and depreciation<br />
All items of property, plant and equipment are initially measured at cost less any accumulated<br />
depreciation and any accumulated impairment losses. Cost includes expenditure that is directly<br />
attributable to the acquisition of the asset.<br />
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset,<br />
as appropriate, only when the cost is incurred and it is probable that the future economic benefits<br />
associated with the asset will flow to the Group and the cost of the asset can be measured reliably.<br />
The carrying amount of parts that are replaced is derecognised. The costs of the day-to-day servicing<br />
of property, plant and equipment are recognised in profit or loss as incurred. Cost also comprises the<br />
initial estimate of dismantling and removing the asset and restoring the site on which it is located for<br />
which the Group is obligated to incur when the asset is acquired, if applicable.<br />
Each part of an item of property, plant and equipment with a cost that is significant in relation to the total<br />
cost of the asset and which has different useful life, is depreciated separately.<br />
After initial recognition, property, plant and equipment except for freehold land are stated at cost less<br />
any accumulated depreciation and any accumulated impairment losses.<br />
Depreciation is calculated to write off the cost of the assets to their residual values on a straight line<br />
basis over their estimated useful lives. The estimated useful lives are as follows:<br />
Buildings<br />
Short term leasehold land<br />
Furniture, fittings and office equipment<br />
Motor vehicles<br />
Plant and machinery, tools and factory equipment, roads and<br />
bridges, mould and electrical installation<br />
25 - 50 years<br />
25 - 30 years<br />
2 - 10 years<br />
5 years<br />
10 - 16.67 years<br />
Freehold land has unlimited useful life and is not depreciated.<br />
At the end of each reporting period, the carrying amount of an item of property, plant and equipment<br />
is assessed for impairment when events or changes in circumstances indicate that its carrying amount<br />
may not be recoverable. A write down is made if the carrying amount exceeds the recoverable amount<br />
(see Note 4.8 to the financial statements on impairment of non-financial assets).<br />
The residual values, useful lives and depreciation method are reviewed at the end of each reporting<br />
period to ensure that the amount, method and period of depreciation are consistent with previous<br />
estimates and the expected pattern of consumption of the future economic benefits embodied in the<br />
items of property, plant and equipment. If expectations differ from previous estimates, the changes<br />
are accounted for as a change in an accounting estimate.<br />
The carrying amount of an item of property, plant and equipment is derecognised on disposal or when no<br />
future economic benefits are expected from its use or disposal. The difference between the net disposal<br />
proceeds, if any, and the carrying amount is included in profit or loss.<br />
4.5 Leases and hire purchase<br />
(a) Finance leases and hire purchase<br />
Assets acquired under finance leases and hire purchase which transfer substantially all the risks<br />
and rewards of ownership to the Group are recognised initially at amounts equal to the fair value of<br />
the leased assets or, if lower, the present value of the minimum lease payments, each determined at<br />
the inception of the lease. The discount rate used in calculating the present value of the minimum<br />
lease payments is the interest rate implicit in the leases, if this is practicable to determine; if not, the<br />
Group’s incremental borrowing rate is used. Any initial direct costs incurred by the Group are added<br />
to the amount recognised as an asset. The assets are capitalised as property, plant and equipment<br />
and the corresponding obligations are treated as liabilities. The property, plant and equipment<br />
capitalised are depreciated on the same basis as owned assets.
044<br />
WAWASAN <strong>TKH</strong> HOLDINGS BERHAD (540218-A)<br />
<strong>ANNUAL</strong> <strong>REPORT</strong> <strong>2012</strong><br />
NOTES TO THE FINANCIAL STATEMENTS<br />
31 DECEMBER <strong>2012</strong> (cont’d)<br />
4. SIGNIFICANT ACCOUNTING POLICIES (cont’d)<br />
4.5 Leases and hire purchase (cont’d)<br />
(a) Finance leases and hire purchase (cont’d)<br />
The minimum lease payments are apportioned between the finance charges and the reduction of the<br />
outstanding liability. The finance charges are recognised in profit or loss over the period of the lease<br />
term so as to produce a constant periodic rate of interest on the remaining lease and hire purchase<br />
liabilities.<br />
(b) Operating leases<br />
A lease is classified as an operating lease if it does not transfer substantially all the risks and rewards<br />
incidental to ownership.<br />
Lease payments under operating leases are recognised as an expense on a straight-line basis over<br />
the lease term.<br />
(c) Leases of land and buildings<br />
For leases of land and buildings, the land and buildings elements are considered separately for the<br />
purpose of lease classification and these leases are classified as operating or finance leases in the<br />
same way as leases of other assets.<br />
The minimum lease payments including any lump-sum upfront payments made to acquire the interest<br />
in the land and buildings are allocated between the land and the buildings elements in proportion to<br />
the relative fair values of the leasehold interest in the land element and the buildings element of the<br />
lease at the inception of the lease.<br />
For a lease of land and buildings in which the amount that would initially be recognised for the<br />
land element is immaterial, the land and buildings are treated as a single unit for the purpose of<br />
lease classification and is accordingly classified as a finance or operating lease. In such a case, the<br />
economic life of the buildings is regarded as the economic life of the entire leased asset.<br />
4.6 Investments in subsidiaries<br />
A subsidiary is an entity in which the Group and the Company have power to control the financial and<br />
operating policies so as to obtain benefits from its activities. The existence and effect of potential voting<br />
rights that are currently exercisable or convertible are considered when assessing whether the Group<br />
has such power over another entity.<br />
An investment in subsidiary, which is eliminated on consolidation, is stated in the Company’s separate<br />
financial statements at cost less impairment losses. Put options written over non-controlling interests on<br />
the acquisition of subsidiary shall be included as part of the cost of investment in the Company’s separate<br />
financial statements. Subsequent changes in the fair value of the written put options over non-controlling<br />
interests shall be recognised in profit or loss. Investments accounted for at cost shall be accounted for in<br />
accordance with MFRS 5 Non-current Assets Held for Sale and Discontinued Operations when they are<br />
classified as held for sale (or included in a disposal group that is classified as held for sale) in accordance<br />
with MFRS 5.<br />
When control of a subsidiary is lost as a result of a transaction, event or other circumstance, the Group<br />
would derecognise all assets, liabilities and non-controlling interests at their carrying amounts and to<br />
recognise the fair value of the consideration received. Any retained interest in the former subsidiary is<br />
recognised at its fair value at the date control is lost. The resulting difference is recognised as a gain or<br />
loss in profit or loss.
WAWASAN <strong>TKH</strong> HOLDINGS BERHAD (540218-A)<br />
<strong>ANNUAL</strong> <strong>REPORT</strong> <strong>2012</strong><br />
045<br />
NOTES TO THE FINANCIAL STATEMENTS<br />
31 DECEMBER <strong>2012</strong> (cont’d)<br />
4. SIGNIFICANT ACCOUNTING POLICIES (cont’d)<br />
4.7 Intangible assets<br />
(a) Goodwill<br />
Goodwill recognised in a business combination is an asset at the acquisition date and is initially<br />
measured at cost being the excess of the sum of the consideration transferred, the amount of any<br />
non-controlling interest in the acquiree and the fair value of the acquirer’s previously held equity<br />
interest (if any) in the entity over net of the acquisition-date amounts of the identifiable assets<br />
acquired and the liabilities assumed.<br />
If, after reassessment, the Group’s interest in the fair value of the acquiree’s identifiable net assets<br />
exceeds the sum of the consideration transferred, the amount of any non-controlling interest in the<br />
acquiree and the fair value of the acquirer’s previously held equity interest in the acquiree (if any),<br />
the excess is recognised immediately in profit or loss as a bargain purchase gain.<br />
After initial recognition, goodwill is measured at cost less accumulated impairment losses, if any.<br />
Goodwill is not amortised but instead tested for impairment annually or more frequently if events or<br />
changes in circumstances indicate that the carrying amount could be impaired. Objective events<br />
that would trigger a more frequent impairment review include adverse industry or economic trends,<br />
significant restructuring actions, significantly lowered projections of profitability, or a sustained<br />
decline in the acquiree’s market capitalisation. Gains and losses on the disposal of an entity include<br />
the carrying amount of goodwill relating to the entity sold.<br />
(b) Intangible assets<br />
Intangible assets are recognised only when the identifiability, control and future economic benefit<br />
probability criteria are met.<br />
Intangible assets, other than goodwill, that are acquired by the Group are stated at cost less any<br />
accumulated impairment loss.<br />
Subsequent expenditure on capitalised intangible assets is capitalised only when it increases the<br />
future economic benefits embodied in the specific asset to which it relates. All other expenditures<br />
are expensed as incurred.<br />
An intangible asset has an indefinite useful life when based on the analysis of all the relevant factors;<br />
there is no foreseeable limit to the period over which the asset is expected to generate net cash<br />
inflows to the Group. Intangible assets with indefinite useful lives are tested for impairment annually<br />
and wherever there is an indication that the carrying amount may be impaired. Such intangible<br />
assets are not amortised. Their useful lives are reviewed each period to determine whether events<br />
and circumstances continue to support the indefinite useful life assessment for the asset. If they do<br />
not, the change in the useful life assessment from indefinite to finite is accounted for as a change<br />
in accounting estimate in accordance with MFRS 108 Accounting Policies, Changes in Accounting<br />
Estimates and Errors. Intangible assets with indefinite useful life of the Group are trademarks.<br />
An intangible asset is derecognised on disposal or when no future economic benefits are expected<br />
from its use. The gain or loss arising from the derecognition determined as the difference between<br />
the net disposal proceeds, if any, and the carrying amount of the asset is recognised in profit or loss<br />
when the asset is derecognised.<br />
4.8 Impairment of non-financial assets<br />
The carrying amounts of assets, except for financial assets (excluding investments in subsidiaries) and<br />
inventories, are reviewed at the end of each reporting period to determine whether there is any indication<br />
of impairment. If any such indication exists, the asset’s recoverable amount is estimated.<br />
Goodwill and intangible assets that have an indefinite useful life are tested annually for impairment or<br />
more frequently if events or changes in circumstances indicate that the goodwill or intangible asset<br />
might be impaired.
046<br />
WAWASAN <strong>TKH</strong> HOLDINGS BERHAD (540218-A)<br />
<strong>ANNUAL</strong> <strong>REPORT</strong> <strong>2012</strong><br />
NOTES TO THE FINANCIAL STATEMENTS<br />
31 DECEMBER <strong>2012</strong>(cont’d)<br />
4. SIGNIFICANT ACCOUNTING POLICIES (cont’d)<br />
4.8 Impairment of non-financial assets (cont’d)<br />
The recoverable amount of an asset is estimated for an individual asset. Where it is not possible to<br />
estimate the recoverable amount of the individual asset, the impairment test is carried out on the cash<br />
generating unit (‘CGU’) to which the asset belongs. Goodwill acquired in a business combination is<br />
from the acquisition date, allocated to each of the Group’s CGU or groups of CGU that are expected<br />
to benefit from the synergies of the combination giving rise to the goodwill irrespective of whether<br />
other assets or liabilities of the acquiree are assigned to those units or groups of units.<br />
Goodwill acquired in a business combination shall be tested for impairment as part of the impairment<br />
testing of CGU to which it relates. The CGU to which goodwill is allocated shall represent the lowest<br />
level within the Group at which the goodwill is monitored for internal management purposes and not<br />
larger than an operating segment determined in accordance with MFRS 8 Operating Segments.<br />
The recoverable amount of an asset or CGU is the higher of its fair value less cost to sell and its value<br />
in use.<br />
In estimating the value in use, the estimated future cash inflows and outflows to be derived from<br />
continuing use of the asset and from its ultimate disposal are discounted to their present values<br />
using a pre-tax discount rate that reflects current market assessments of the time value of money<br />
and the risks specific to the asset for which the future cash flow estimates have not been adjusted.<br />
An impairment loss is recognised in profit or loss when the carrying amount of the asset or the CGU,<br />
including the goodwill or intangible asset, exceeds the recoverable amount of the asset or the CGU.<br />
The total impairment loss is allocated, first, to reduce the carrying amount of any goodwill allocated<br />
to the CGU and then to the other assets of the CGU on a pro-rata basis of the carrying amount of<br />
each asset in the CGU.<br />
The impairment loss is recognised in profit or loss immediately.<br />
An impairment loss on goodwill is not reversed in subsequent periods. An impairment loss for other<br />
assets is reversed if, and only if, there has been a change in the estimates used to determine the<br />
assets’ recoverable amounts since the last impairment loss was recognised.<br />
An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed<br />
the carrying amount that would have been determined, net of depreciation or amortisation, if no<br />
impairment loss had been recognised.<br />
Such reversals are recognised as income immediately in profit or loss.<br />
4.9 Inventories<br />
Inventories are stated at the lower of cost and net realisable value.<br />
Cost is based on the weighted average cost and standard costing principle, which approximates actual<br />
cost. The cost of raw materials comprises all costs of purchase, cost of conversion plus other costs<br />
incurred in bringing the inventories to their present location and condition. The cost of work-in-progress<br />
and finished goods includes the cost of raw materials, direct labour, other direct cost and a proportion<br />
of production overheads based on normal operating capacity of the production facilities.<br />
Net realisable value is the estimated selling price in the ordinary course of business, less the estimated<br />
costs of completion and the estimated costs necessary to make the sale.<br />
4.10 Financial instruments<br />
A financial instrument is any contract that gives rise to a financial asset of one enterprise and a financial<br />
liability or equity instrument of another enterprise.<br />
A financial asset is any asset that is cash, an equity instrument of another enterprise, a contractual<br />
right to receive cash or another financial asset from another enterprise, or a contractual right to<br />
exchange financial assets or financial liabilities with another enterprise under conditions that are<br />
potentially favourable to the Group.
WAWASAN <strong>TKH</strong> HOLDINGS BERHAD (540218-A)<br />
<strong>ANNUAL</strong> <strong>REPORT</strong> <strong>2012</strong><br />
047<br />
NOTES TO THE FINANCIAL STATEMENTS<br />
31 DECEMBER <strong>2012</strong> (cont’d)<br />
4. SIGNIFICANT ACCOUNTING POLICIES (cont’d)<br />
4.10 Financial instruments (cont’d)<br />
A financial liability is any liability that is a contractual obligation to deliver cash or another financial asset<br />
to another enterprise, or a contractual obligation to exchange financial assets or financial liabilities with<br />
another enterprise under conditions that are potentially unfavourable to the Group.<br />
Financial instruments are recognised on the statements of financial position when the Group has<br />
become a party to the contractual provisions of the instrument. At initial recognition, a financial<br />
instrument is recognised at fair value plus, in the case of a financial instrument not at fair value<br />
through profit or loss, transaction costs that are directly attributable to the acquisition or issuance of<br />
the financial instrument.<br />
An embedded derivative is separated from the host contract and accounted for as a derivative if, and<br />
only if the economic characteristics and risks of the embedded derivative is not closely related to the<br />
economic characteristics and risks of the host contract, a separate instrument with the same terms as<br />
the embedded derivative meets the definition of a derivative, and the hybrid instrument is not measured<br />
at fair value through profit or loss.<br />
(a)<br />
Financial assets<br />
A financial asset is classified into the following four (4) categories after initial recognition for the<br />
purpose of subsequent measurement:<br />
(i)<br />
Financial assets at fair value through profit or loss<br />
Financial assets at fair value through profit or loss comprise financial assets that are held for<br />
trading (i.e. financial assets acquired principally for the purpose of resale in the near term),<br />
derivatives (both, freestanding and embedded) and financial assets that were specifically<br />
designated into this classification upon initial recognition.<br />
Subsequent to initial recognition, financial assets classified as at fair value through profit or<br />
loss are measured at fair value. Any gains or losses arising from changes in the fair value of<br />
financial assets classified as at fair value through profit or loss are recognised in profit or loss.<br />
Net gains or losses on financial assets classified as at fair value through profit or loss exclude<br />
foreign exchange gains and losses, interest and dividend income. Such income is recognised<br />
separately in profit or loss as components of other income or other operating losses.<br />
However, derivatives that is linked to and must be settled by delivery of unquoted equity<br />
instruments that do not have a quoted market price in an active market are recognised at<br />
cost.<br />
(ii)<br />
Held-to-maturity investments<br />
Financial assets classified as held-to-maturity comprise non-derivative financial assets with<br />
fixed or determinable payments and fixed maturity that the Group has the positive intention<br />
and ability to hold to maturity.<br />
Subsequent to initial recognition, financial assets classified as held-to-maturity are measured at<br />
amortised cost using the effective interest method. Gains or losses on financial assets classified<br />
as held-to-maturity are recognised in profit or loss when the financial assets are derecognised<br />
or impaired, and through the amortisation process.<br />
(iii)<br />
Loans and receivables<br />
Financial assets classified as loans and receivables comprise non-derivative financial assets<br />
with fixed or determinable payments that are not quoted in an active market.<br />
Subsequent to initial recognition, financial assets classified as loans and receivables are<br />
measured at amortised cost using the effective interest method. Gains or losses on financial<br />
assets classified as loans and receivables are recognised in profit or loss when the financial<br />
assets are derecognised or impaired, and through the amortisation process.
048<br />
WAWASAN <strong>TKH</strong> HOLDINGS BERHAD (540218-A)<br />
<strong>ANNUAL</strong> <strong>REPORT</strong> <strong>2012</strong><br />
NOTES TO THE FINANCIAL STATEMENTS<br />
31 DECEMBER <strong>2012</strong> (cont’d)<br />
4. SIGNIFICANT ACCOUNTING POLICIES (cont’d)<br />
4.10 Financial instruments (cont’d)<br />
(a) Financial assets (cont’d)<br />
(iv) Available-for-sale financial assets<br />
Financial assets classified as available-for-sale comprise non-derivative financial assets<br />
that are designated as available-for-sale or are not classified as loans and receivables,<br />
held-to-maturity investments or financial assets at fair value through profit or loss.<br />
Subsequent to initial recognition, financial assets classified as available-for-sale are<br />
measured at fair value. Any gains or losses arising from changes in the fair value of financial<br />
assets classified as available-for-sale are recognised directly in other comprehensive<br />
income, except for impairment losses and foreign exchange gains and losses, until the<br />
financial asset is derecognised, at which time the cumulative gains or losses previously<br />
recognised in other comprehensive income are recognised in profit or loss. However,<br />
interest calculated using the effective interest method is recognised in profit or loss whilst<br />
dividends on available-for-sale equity instruments are recognised in profit or loss when the<br />
Group’s right to receive payment is established.<br />
Cash and cash equivalents include cash and bank balances, bank overdrafts, fixed deposit<br />
pledged to financial institutions, deposits and other short term, highly liquid investments with<br />
original maturities of three (3) months or less, which are readily convertible to cash and are<br />
subject to insignificant risk of changes in value.<br />
A financial asset is derecognised when the contractual right to receive cash flows from the<br />
financial asset has expired. On derecognition of a financial asset in its entirety, the difference<br />
between the carrying amount and the sum of consideration received (including any new asset<br />
obtained less any new liability assumed) and any cumulative gain or loss that had been recognised<br />
directly in other comprehensive income shall be recognised in profit or loss.<br />
A regular way of purchase or sale is a purchase or sale of a financial asset under a contract whose<br />
terms require delivery of the asset within the time frame established generally by regulation or<br />
marketplace convention.<br />
A regular way purchase or sale of financial assets shall be recognised and derecognised, as<br />
applicable, using trade date accounting.<br />
(b) Financial liabilities<br />
Financial instruments are classified as liabilities or equity in accordance with the substance of<br />
the contractual arrangement. A financial liability is classified into the following two (2) categories<br />
after initial recognition for the purpose of subsequent measurement:<br />
(i) Financial liabilities at fair value through profit or loss<br />
Financial liabilities at fair value through profit or loss comprise financial liabilities that are<br />
held for trading, derivatives (both, freestanding and embedded) and financial liabilities<br />
that were specifically designated into this classification upon initial recognition.<br />
Subsequent to initial recognition, financial liabilities classified as at fair value through profit<br />
or loss are measured at fair value. Any gains or losses arising from changes in the fair value<br />
of financial liabilities classified as at fair value through profit or loss are recognised in profit or<br />
loss. Net gains or losses on financial liabilities classified as at fair value through profit or loss<br />
exclude foreign exchange gains and losses, interest and dividend income. Such income is<br />
recognised separately in profit or loss as components of other income or other operating<br />
losses.
WAWASAN <strong>TKH</strong> HOLDINGS BERHAD (540218-A)<br />
<strong>ANNUAL</strong> <strong>REPORT</strong> <strong>2012</strong><br />
049<br />
NOTES TO THE FINANCIAL STATEMENTS<br />
31 DECEMBER <strong>2012</strong> (cont’d)<br />
4. SIGNIFICANT ACCOUNTING POLICIES (cont’d)<br />
4.10 Financial instruments (cont’d)<br />
(b) Financial liabilities (cont’d)<br />
(ii) Other financial liabilities<br />
Financial liabilities classified as other financial liabilities comprise non-derivative financial<br />
liabilities that are neither held for trading nor initially designated as at fair value through<br />
profit or loss.<br />
Subsequent to initial recognition, other financial liabilities are measured at amortised<br />
cost using the effective interest method. Gains or losses on other financial liabilities are<br />
recognised in profit or loss when the financial liabilities are derecognised and through the<br />
amortisation process.<br />
A financial liability is derecognised when, and only when, it is extinguished, i.e. when the<br />
obligation specified in the contract is discharged or cancelled or expires. An exchange between<br />
an existing borrower and lender of debt instruments with substantially different terms are<br />
accounted for as an extinguishment of the original financial liability and the recognition of a new<br />
financial liability. Similarly, a substantial modification of the terms of an existing financial liability<br />
is accounted for as an extinguishment of the original financial liability and the recognition of a<br />
new financial liability.<br />
Any difference between the carrying amount of a financial liability extinguished or transferred to<br />
another party and the consideration paid, including any non-cash assets transferred or liabilities<br />
assumed, is recognised in profit or loss.<br />
A financial guarantee contract is a contract that requires the issuer to make specified payments<br />
to reimburse the holder for a loss it incurs because a specified debtor fails to make payment<br />
when due in accordance with the original or modified terms of a debt instrument.<br />
The Group designates corporate guarantees given to banks for credit facilities granted to<br />
subsidiaries as insurance contracts as defined in MFRS 4 Insurance Contracts. The Group<br />
recognises these insurance contracts as recognised insurance liabilities when there is a<br />
present obligation, legal or constructive, as a result of a past event, when it is probable that an<br />
outflow of resources embodying economic benefits would be required to settle the obligation<br />
and a reliable estimate can be made of the amount of the obligation.<br />
At the end of every reporting period, the Group assesses whether its recognised insurance<br />
liabilities are adequate, using current estimates of future cash flows under its insurance<br />
contracts. If this assessment shows that the carrying amount of the insurance liabilities is<br />
inadequate, the entire deficiency shall be recognised in profit or loss.<br />
Recognised insurance liabilities are only removed from the statements of financial position<br />
when, and only when, it is extinguished via a discharge, cancellation or expiration.<br />
(b) Equity<br />
An equity instrument is any contract that evidences a residual interest in the assets of the Group<br />
and the Company after deducting all of its liabilities. Ordinary shares are classified as equity<br />
instruments.<br />
Ordinary shares are recorded at the nominal value and proceeds in excess of the nominal value<br />
of shares issued, if any, are accounted for as share premium. Both ordinary shares and share<br />
premium are classified as equity. Transaction costs of an equity transaction are accounted for<br />
as a deduction from equity, net of any related income tax benefit. Otherwise, they are charged<br />
to profit or loss.
050<br />
WAWASAN <strong>TKH</strong> HOLDINGS BERHAD (540218-A)<br />
<strong>ANNUAL</strong> <strong>REPORT</strong> <strong>2012</strong><br />
NOTES TO THE FINANCIAL STATEMENTS<br />
31 DECEMBER <strong>2012</strong> (cont’d)<br />
4. SIGNIFICANT ACCOUNTING POLICIES (cont’d)<br />
4.10 Financial instruments (cont’d)<br />
(c) Equity (cont’d)<br />
The Group measures a liability to distribute non-cash assets as a dividend to the owners of the<br />
Company at the fair value of the assets to be distributed. The carrying amount of the dividend is<br />
remeasured at each reporting date and at the settlement date, with any changes recognised directly<br />
in equity as adjustments to the amount of the distribution. On settlement of the transaction, the<br />
Group recognises the difference, if any, between the carrying amount of the assets distributed and<br />
the carrying amount of the liability in profit or loss.<br />
When the Group repurchases its own shares, the shares repurchased would be accounted for using<br />
the treasury stock method.<br />
Where the treasury stock method is applied, the shares repurchased and held as treasury shares shall<br />
be measured and carried at the cost of repurchase on initial recognition and subsequently. It shall not<br />
be revalued for subsequent changes in the fair value or market price of the shares.<br />
The carrying amount of the treasury shares shall be offset against equity in the statement of financial<br />
position. To the extent that the carrying amount of the treasury shares exceeds the share premium<br />
account, it shall be considered as a reduction of any other reserves as may be permitted by the Main<br />
Market Listing Requirements.<br />
No gain or loss is recognised in profit or loss on the purchase, sale, issue or cancellation of the own<br />
equity instruments of the Company. If such shares are issued by resale, any difference between the<br />
sales consideration and the carrying amount is shown as a movement in equity.<br />
4.11 Impairment of financial assets<br />
The Group assesses whether there is any objective evidence that a financial asset is impaired at the end<br />
of each reporting period.<br />
(a) Loans and receivables<br />
The Group collectively considers factors such as the probability of bankruptcy or significant financial<br />
difficulties of the receivables, and default or significant delay in payments by the receivables to<br />
determine whether there is objective evidence that an impairment loss on loans and receivables has<br />
occurred. Other objective evidence of impairment include historical collection rates determined on<br />
an individual basis and observable changes in national or local economic conditions that are directly<br />
correlated with the historical default rates of receivables.<br />
If any such objective evidence exists, the amount of impairment loss is measured as the difference<br />
between the financial asset’s carrying amount and the present value of estimated future cash flows<br />
discounted at the financial asset’s original effective interest rate. The impairment loss is recognised<br />
in profit or loss.<br />
The carrying amounts of loans and receivables are reduced through the use of an allowance account.<br />
If in a subsequent period, the amount of the impairment loss decreases and it objectively relates to<br />
an event occurring after the impairment was recognised, the previously recognised impairment loss<br />
is reversed to the extent that the carrying amount of the asset does not exceed its amortised cost at<br />
the reversal date. The amount of impairment reversed is recognised in profit or loss.
WAWASAN <strong>TKH</strong> HOLDINGS BERHAD (540218-A)<br />
<strong>ANNUAL</strong> <strong>REPORT</strong> <strong>2012</strong><br />
051<br />
NOTES TO THE FINANCIAL STATEMENTS<br />
31 DECEMBER <strong>2012</strong> (cont’d)<br />
4. SIGNIFICANT ACCOUNTING POLICIES (cont’d)<br />
4.12 Borrowing costs<br />
Borrowing costs that are directly attributable to the acquisition or production of a qualified asset<br />
is capitalised as part of the cost of the asset until when substantially all the activities necessary to<br />
prepare the asset for its intended use or sale are complete, after which such expense is charged to<br />
profit or loss. A qualifying asset is an asset that necessarily takes a substantial period of time to get<br />
ready for its intended use or sale. Capitalisation of borrowing cost is suspended during extended<br />
periods in which active development is interrupted.<br />
The amount of borrowing costs eligible for capitalisation is the actual borrowing costs incurred on<br />
the borrowing during the period less any investment income on the temporary investment of the<br />
borrowing.<br />
All other borrowing costs are recognised in profit or loss in the period in which they are incurred.<br />
4.13 Income taxes<br />
Income taxes include all domestic and foreign taxes on taxable profit. Income taxes also include<br />
other taxes, such as withholding taxes, which are payable by a foreign subsidiary on distributions<br />
to the Group and Company, and real property gains taxes payable on disposal of properties.<br />
Taxes in the income statements and statements of comprehensive income comprise current tax and<br />
deferred tax.<br />
(a) Current tax<br />
Current tax expenses are determined according to the tax laws of each jurisdiction in which the<br />
Group operates and include all taxes based upon the taxable profits (including withholding taxes<br />
payable by a foreign subsidiary on distribution of retained earnings to companies in the Group),<br />
and real property gains taxes payable on disposal of properties.<br />
(b) Deferred tax<br />
Deferred tax is recognised in full using the liability method on temporary differences arising<br />
between the carrying amount of an asset or liability in the statement of financial position and<br />
its tax base.<br />
Deferred tax is recognised for all temporary differences, unless the deferred tax arises from<br />
goodwill or the initial recognition of an asset or liability in a transaction which is not a business<br />
combination and at the time of transaction, affects neither accounting profit nor taxable profit.<br />
A deferred tax asset is recognised only to the extent that it is probable that future taxable profits<br />
will be available against which the deductible temporary differences, unused tax losses and<br />
unused tax credits can be utilised. The carrying amount of a deferred tax asset is reviewed at<br />
the end of each reporting period. If it is no longer probable that sufficient taxable profits will be<br />
available to allow the benefit of part or that entire deferred tax asset to be utilised, the carrying<br />
amount of the deferred tax asset will be reduced accordingly. When it becomes probable that<br />
sufficient taxable profit will be available, such reductions will be reversed to the extent of the<br />
taxable profits.<br />
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off<br />
current tax assets against current tax liabilities and when the deferred income taxes relate to<br />
the same taxation authority on either:<br />
(i) the same taxable entity; or<br />
(ii) different taxable entities which intend either to settle current tax liabilities and assets on a<br />
net basis, or to realise the assets and settle the liabilities simultaneously, in each future period<br />
in which significant amounts of deferred tax liabilities or assets are expected to be settled or<br />
recovered.<br />
Deferred tax would be recognised as income or expense and included in profit or loss for the<br />
period unless the tax relates to items that are credited or charged, in the same or a different<br />
period, directly to equity, in which case the deferred tax will be charged or credited directly to<br />
equity.<br />
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to<br />
the year when the asset is realised or the liability is settled, based on the announcement of tax<br />
rates and tax laws by the Government in the annual budgets which have the substantial effect<br />
of actual enactment by the end of the reporting period.
052<br />
WAWASAN <strong>TKH</strong> HOLDINGS BERHAD (540218-A)<br />
<strong>ANNUAL</strong> <strong>REPORT</strong> <strong>2012</strong><br />
NOTES TO THE FINANCIAL STATEMENTS<br />
31 DECEMBER <strong>2012</strong> (cont’d)<br />
4. SIGNIFICANT ACCOUNTING POLICIES (cont’d)<br />
4.14 Provisions<br />
Provisions are recognised when there is a present obligation, legal or constructive, as a result of a<br />
past event, when it is probable that an outflow of resources embodying economic benefits would be<br />
required to settle the obligation and a reliable estimate can be made of the amount of the obligation.<br />
Where the Group expects a provision to be reimbursed (for example, under an insurance contract), the<br />
reimbursement is recognised as a separate asset but only when the reimbursement is virtually certain.<br />
If the effect of the time value of money is material, the amount of a provision would be discounted to its<br />
present value at a pre-tax rate that reflects current market assessments of the time value of money and<br />
the risk specific to the liability.<br />
Provisions are reviewed at the end of each reporting period and adjusted to reflect the current best<br />
estimate. If it is no longer probable that an outflow of resources embodying economic benefits would<br />
be required to settle the obligation, the provision would be reversed.<br />
Provisions are not recognised for future operating losses. If the Group has a contract that is onerous, the<br />
present obligation under the contract shall be recognised and measured as a provision.<br />
4.15 Contingent liabilities and contingent assets<br />
A contingent liability is a possible obligation that arises from past events whose existence would be<br />
confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the<br />
control of the Group or a present obligation that is not recognised because it is not probable that an<br />
outflow of resources will be required to settle the obligation. A contingent liability also arises in extremely<br />
rare cases where there is a liability that cannot be recognised because it cannot be measured reliably.<br />
The Group does not recognise a contingent liability but discloses its existence in the financial statements.<br />
A contingent asset is a possible asset that arises from past events whose existence would be confirmed<br />
by the occurrence or non-occurrence of one or more uncertain future event beyond the control of the<br />
Group. The Group does not recognise contingent asset but discloses its existence where inflows of<br />
economic benefits are probable, but not virtually certain.<br />
In the acquisition of subsidiaries by the Group under business combinations, contingent liabilities<br />
assumed are measured initially at their fair value at the acquisition date.<br />
4.16 Employee benefits<br />
4.16.1<br />
Short term employee benefits<br />
Wages, salaries, social security contributions, paid annual leave, paid sick leave, bonuses and<br />
non-monetary benefits are measured on an undiscounted basis and are expensed when employees<br />
rendered their services to the Group.<br />
Short term accumulating compensated absences such as paid annual leave are recognised as an<br />
expense when employees render services that increase their entitlement to future compensated<br />
absences. Short term non-accumulating compensated absences such as sick leave are recognised<br />
when the absences occur and they lapse if the current period’s entitlement is not used in full and do<br />
not entitle employees to a cash payment for unused entitlement on leaving the Group.<br />
Bonuses are recognised as an expense when there is a present, legal or constructive obligation to make<br />
such payments, as a result of past events and when a reliable estimate can be made of the amount of the<br />
obligation.<br />
4.16 2<br />
Defined contribution plans<br />
The Company and its subsidiaries incorporated in Malaysia make contributions to a statutory<br />
provident fund and foreign subsidiary makes contribution to its country’s statutory pension scheme.<br />
The contributions are recognised as a liability after deducting any contribution already paid and as an<br />
expense in the period in which the employees render their services.<br />
A subsidiary of the Group also pays fixed contributions based on the terms and conditions stipulated<br />
in the Collective Agreement with Non-Metallic Mineral Products Manufacturing Employees’ Union<br />
(‘NMPME’).
WAWASAN <strong>TKH</strong> HOLDINGS BERHAD (540218-A)<br />
<strong>ANNUAL</strong> <strong>REPORT</strong> <strong>2012</strong><br />
053<br />
NOTES TO THE FINANCIAL STATEMENTS<br />
31 DECEMBER <strong>2012</strong> (cont’d)<br />
4. SIGNIFICANT ACCOUNTING POLICIES (cont’d)<br />
4.17 Foreign currencies<br />
4.17.1 Functional and presentation currency<br />
Items included in the financial statements of each of the Group’s entities are measured using the<br />
currency of the primary economic environment in which the entity operates (‘the functional currency’).<br />
The consolidated financial statements are presented in Ringgit Malaysia, which is the Company’s<br />
functional and presentation currency.<br />
4.17.2 Foreign currency translations and balances<br />
Transactions in foreign currencies are converted into functional currency at rates of exchange ruling at<br />
the transaction dates. Monetary assets and liabilities in foreign currencies at the end of the reporting<br />
period are translated into functional currency at rates of exchange ruling at that date unless hedged<br />
by forward foreign exchange contracts, in which case the rates specified in such forward contracts<br />
are used. All exchange differences arising from the settlement of foreign currency transactions and<br />
from the translation of foreign currency monetary assets and liabilities are included in profit or loss in<br />
the period in which they arise. Non-monetary items initially denominated in foreign currencies, which<br />
are carried at historical cost are translated using the historical rate as of the date of acquisition, and<br />
non-monetary items, which are carried at fair value are translated using the exchange rate that existed<br />
when the values were determined for presentation currency purposes.<br />
4.17.3 Foreign operations<br />
Financial statements of foreign operations are translated at end of the reporting period exchange rates<br />
with respect to their assets and liabilities, and at exchange rates at the dates of the transactions with<br />
respect to the statements of comprehensive income. All resulting translation differences are recognised<br />
as a separate component of equity.<br />
In the consolidated financial statements, exchange differences arising from the translation of net<br />
investment in foreign operations are taken into equity. When a foreign operation is partially disposed<br />
of or sold, exchange differences that were recorded in equity are recognised in profit or loss as part<br />
of the gain or loss on disposal.<br />
Exchange differences arising on a monetary item that forms part of the net investment of the Company<br />
in a foreign operation shall be recognised in profit or loss in the separate financial statements of the<br />
Company or the foreign operation, as appropriate. In the consolidated financial statements, such<br />
exchange differences shall be recognised initially as a separate component of equity and recognised<br />
in profit or loss upon disposal of the net investment.<br />
Goodwill and fair value adjustments to the assets and liabilities arising from the acquisition of a foreign<br />
operation are treated as assets and liabilities of the acquired entity and translated at the exchange rate<br />
ruling at the end of the reporting period.<br />
4.18 Revenue recognition<br />
Revenue is measured at the fair value of the consideration received or receivables, net of discounts and<br />
rebates.<br />
Revenue is recognised to the extent that it is probable that the economic benefits associated with the<br />
transaction will flow to the Group, and the amount of revenue and the cost incurred or to be incurred<br />
in respect of the transaction can be reliably measured and specific recognition criteria have been met<br />
for each of the Group’s activities as follows:
054<br />
WAWASAN <strong>TKH</strong> HOLDINGS BERHAD (540218-A)<br />
<strong>ANNUAL</strong> <strong>REPORT</strong> <strong>2012</strong><br />
NOTES TO THE FINANCIAL STATEMENTS<br />
31 DECEMBER <strong>2012</strong> (cont’d)<br />
4. SIGNIFICANT ACCOUNTING POLICIES (cont’d)<br />
4.18 Revenue recognition (cont’d)<br />
(a) Sale of goods<br />
Revenue from sale of goods is recognised when significant risks and rewards of ownership of<br />
the goods has been transferred to the customer and where the Group retains neither continuing<br />
managerial involvement over the goods, which coincides with delivery of goods and acceptance by<br />
customers.<br />
(b) Dividend income<br />
Dividend income is recognised when the right to receive payment is established.<br />
(c) Interest income<br />
Interest income is recognised as it accrues, using the effective interest method.<br />
(d) Management fees<br />
Management fees are recognised on an accrual basis.<br />
(e) Rental income<br />
Rental income is accounted for on a straight line basis over the lease term of an ongoing lease.<br />
4.19 Warrant reserves<br />
Where the Company received a lump sum payment (“proceeds”) from the issuance of new ordinary<br />
shares with warrants, the proceeds received shall be assigned to the ordinary shares and warrants<br />
based on their respective fair values.<br />
The value of the warrants ascertained shall be allocated to warrant reserves from other equity items.<br />
Warrant reserve is transferred to the capital reserve account upon the exercise of warrants and the<br />
warrant reserve in relation to the unexercised warrants shall remain in equity until the warrants lapsed.<br />
4.20 Operating segments<br />
Operating segments are defined as components of the Group that:<br />
(a) engage in business activities from which it could earn revenues and incur expenses (including<br />
revenues and expenses relating to transactions with other components of the Group);<br />
(b) whose operating results are regularly reviewed by the chief operating decision maker of the Group in<br />
making decisions about resources to be allocated to the segment and assessing its performance; and<br />
(c) for which discrete financial information is available.<br />
An operating segment may engage in business activities for which it has yet to earn revenues.<br />
The Group reports separately information about each operating segment that meets any of the following<br />
quantitative thresholds:<br />
(a)<br />
its reported revenue, including both sales to external customers and intersegment sales or transfers,<br />
is ten (10) per cent or more of the combined revenue, internal and external, of all operating<br />
segments.
WAWASAN <strong>TKH</strong> HOLDINGS BERHAD (540218-A)<br />
<strong>ANNUAL</strong> <strong>REPORT</strong> <strong>2012</strong><br />
055<br />
NOTES TO THE FINANCIAL STATEMENTS<br />
31 DECEMBER <strong>2012</strong> (cont’d)<br />
4. SIGNIFICANT ACCOUNTING POLICIES (cont’d)<br />
4.20 Operating segments (cont’d)<br />
(b)<br />
the absolute amount of its reported profit or loss is ten (10) per cent or more of the greater, in<br />
absolute amount of:<br />
(i) the combined reported profit of all operating segments that did not report a loss; and<br />
(ii) the combined reported loss of all operating segments that reported a loss.<br />
(c)<br />
its assets are ten (10) per cent or more of the combined assets of all operating segments.<br />
Operating segments that do not meet any of the quantitative thresholds may be considered reportable,<br />
and separately disclosed, if the management believes that information about the segment would be<br />
useful to users of the financial statements.<br />
Total external revenue reported by operating segments shall constitute at least seventy five (75) percent<br />
of the Group’s revenue. Operating segments identified as reportable segments in the current financial<br />
year in accordance with the quantitative thresholds would result in a restatement of prior period segment<br />
data for comparative purpose.<br />
4.21 Earnings per share<br />
(a)<br />
Basic<br />
Basic earnings per ordinary share for the financial year is calculated by dividing the profit for the<br />
financial year attributable to equity holders of the parent by the weighted average number of ordinary<br />
shares outstanding during the financial year.<br />
(b)<br />
Diluted<br />
Diluted earnings per ordinary share for the financial year is calculated by dividing the profit for<br />
the financial year attributable to equity holders of the parent by the weighted average number of<br />
ordinary shares outstanding during the financial year adjusted for the effects of dilutive potential<br />
ordinary shares.
056<br />
WAWASAN <strong>TKH</strong> HOLDINGS BERHAD (540218-A)<br />
<strong>ANNUAL</strong> <strong>REPORT</strong> <strong>2012</strong><br />
NOTES TO THE FINANCIAL STATEMENTS<br />
31 DECEMBER <strong>2012</strong> (cont’d)<br />
5. ADOPTION OF NEW MFRSs AND AMENDMENT TO MFRSs<br />
5.1 New MFRSs adopted during the current financial year<br />
The Group and Company adopted the following Standards of the MFRS Framework that were issued<br />
by the Malaysian Accounting Standards Board (‘MASB’) during the financial year.<br />
Title<br />
MFRS 1 First-time Adoption of Financial Reporting Standards<br />
MFRS 2 Share-based Payment<br />
MFRS 3 Business Combinations<br />
MFRS 4 Insurance Contracts<br />
MFRS 5 Non-current Assets Held for Sale and Discontinued Operations<br />
MFRS 6 Exploration for and Evaluation of Mineral Resources<br />
MFRS 7 Financial Instruments: Disclosures<br />
MFRS 8 Operating Segments<br />
MFRS 101 Presentation of Financial Statements<br />
MFRS 102 Inventories<br />
MFRS 107 Statement of Cash Flows<br />
MFRS 108 Accounting Policies, Changes in Accounting Estimates and Errors<br />
MFRS 110 Events After the Reporting Period<br />
MFRS 111 Construction Contracts<br />
MFRS 112 Income Taxes<br />
MFRS 116 Property, Plant and Equipment<br />
MFRS 117 Leases<br />
MFRS 118 Revenue<br />
MFRS 119 Employee Benefits<br />
MFRS 120 Accounting for Government Grants and Disclosure of Government<br />
Assistance<br />
MFRS 121 The Effects of Changes in Foreign Exchange Rates<br />
MFRS 123 Borrowing Costs<br />
MFRS 124 Related Party Disclosures<br />
MFRS 126 Accounting and Reporting by Retirement Benefit Plans<br />
MFRS 127 Consolidated and Separate Financial Statements<br />
MFRS 128 Investments in Associates<br />
MFRS 129 Financial Reporting in Hyperinflationary Economies<br />
MFRS 131 Interests in Joint Ventures<br />
MFRS 132 Financial Instruments: Presentation<br />
MFRS 133 Earnings Per Share<br />
MFRS 134 Interim Financial Reporting<br />
MFRS 136 Impairment of Assets<br />
MFRS 137 Provisions, Contingent Liabilities and Contingent Assets<br />
MFRS 138 Intangible Assets<br />
MFRS 139 Financial Instruments: Recognition and Measurement<br />
MFRS 140 Investment Property<br />
MFRS 141 Agriculture<br />
Improvements to MFRSs (2008)<br />
Improvements to MFRSs (2009)<br />
Improvements to MFRSs (2010)<br />
IC Interpretation 1 Changes in Existing Decommissioning, Restoration and Similar<br />
Liabilities<br />
IC Interpretation 2 Members’ Shares in Co-operative Entities and Similar Instruments<br />
IC Interpretation 4 Determining Whether an Arrangement Contains a Lease<br />
IC Interpretation 5 Rights to Interests Arising from Decommissioning, Restoration and<br />
Environmental Rehabilitation Funds<br />
Effective Date<br />
1 January <strong>2012</strong><br />
1 January <strong>2012</strong><br />
1 January <strong>2012</strong><br />
1 January <strong>2012</strong><br />
1 January <strong>2012</strong><br />
1 January <strong>2012</strong><br />
1 January <strong>2012</strong><br />
1 January <strong>2012</strong><br />
1 January <strong>2012</strong><br />
1 January <strong>2012</strong><br />
1 January <strong>2012</strong><br />
1 January <strong>2012</strong><br />
1 January <strong>2012</strong><br />
1 January <strong>2012</strong><br />
1 January <strong>2012</strong><br />
1 January <strong>2012</strong><br />
1 January <strong>2012</strong><br />
1 January <strong>2012</strong><br />
1 January <strong>2012</strong><br />
1 January <strong>2012</strong><br />
1 January <strong>2012</strong><br />
1 January <strong>2012</strong><br />
1 January <strong>2012</strong><br />
1 January <strong>2012</strong><br />
1 January <strong>2012</strong><br />
1 January <strong>2012</strong><br />
1 January <strong>2012</strong><br />
1 January <strong>2012</strong><br />
1 January <strong>2012</strong><br />
1 January <strong>2012</strong><br />
1 January <strong>2012</strong><br />
1 January <strong>2012</strong><br />
1 January <strong>2012</strong><br />
1 January <strong>2012</strong><br />
1 January <strong>2012</strong><br />
1 January <strong>2012</strong><br />
1 January <strong>2012</strong><br />
1 January <strong>2012</strong><br />
1 January <strong>2012</strong><br />
1 January <strong>2012</strong><br />
1 January <strong>2012</strong><br />
1 January <strong>2012</strong><br />
1 January <strong>2012</strong><br />
1 January <strong>2012</strong>
WAWASAN <strong>TKH</strong> HOLDINGS BERHAD (540218-A)<br />
<strong>ANNUAL</strong> <strong>REPORT</strong> <strong>2012</strong><br />
057<br />
NOTES TO THE FINANCIAL STATEMENTS<br />
31 DECEMBER <strong>2012</strong> (cont’d)<br />
5. ADOPTION OF NEW MFRSs AND AMENDMENT TO MFRSs (cont’d)<br />
5.1 New MFRSs adopted during the current financial year (cont’d)<br />
Title<br />
IC Interpretation 6 Liabilities Arising from Participating in a Specific Market-Waste<br />
Electrical and Electronic Equipment<br />
IC Interpretation 7 Applying the Restatement Approach under MFRS 129 Financial<br />
Reporting in Hyper inflationary Economies<br />
IC Interpretation 9 Reassessment of Embedded Derivatives<br />
IC Interpretation 10 Interim Financial Reporting and Impairment<br />
IC Interpretation 12 Service Concession Arrangements<br />
IC Interpretation 13 Customer Loyalty Programmes<br />
IC Interpretation 14 MFRS 119 – The Limit on a Defined Benefit Asset, Minimum<br />
Funding Requirements and their Interaction<br />
IC Interpretation 15 Agreements for the Construction of Real Estate<br />
IC Interpretation 16 Hedges of a Net Investment in a Foreign Operation<br />
IC Interpretation 17 Distributions of Non-cash Assets to Owners<br />
IC Interpretation 18 Transfers of Assets from Customers<br />
IC Interpretation 19 Extinguishing Financial Liabilities with Equity Instruments<br />
IC Interpretation 107 Introduction of the Euro<br />
IC Interpretation 110 Government Assistance – No Specific Relation to Operating<br />
Activities<br />
IC Interpretation 112 Consolidation – Special Purpose Entities<br />
IC Interpretation 113 Jointly Controlled Entities – Non-Monetary Contributions by<br />
Venturers<br />
IC Interpretation 115 Operating Leases – Incentives<br />
IC Interpretation 125 Income Taxes – Changes in the Tax Status of an Entity or its<br />
Shareholders<br />
IC Interpretation 127 Evaluating the Substance of Transactions Involving the Legal<br />
Form of a Lease<br />
IC Interpretation 129 Service Concession Arrangements: Disclosures<br />
IC Interpretation 131 Revenue – Barter Transactions Involving Advertising Services<br />
IC Interpretation 132 Intangible Assets – Web Site Costs<br />
Effective Date<br />
1 January <strong>2012</strong><br />
1 January <strong>2012</strong><br />
1 January <strong>2012</strong><br />
1 January <strong>2012</strong><br />
1 January <strong>2012</strong><br />
1 January <strong>2012</strong><br />
1 January <strong>2012</strong><br />
1 January <strong>2012</strong><br />
1 January <strong>2012</strong><br />
1 January <strong>2012</strong><br />
1 January <strong>2012</strong><br />
1 January <strong>2012</strong><br />
1 January <strong>2012</strong><br />
1 January <strong>2012</strong><br />
1 January <strong>2012</strong><br />
1 January <strong>2012</strong><br />
1 January <strong>2012</strong><br />
1 January <strong>2012</strong><br />
1 January <strong>2012</strong><br />
1 January <strong>2012</strong><br />
1 January <strong>2012</strong><br />
1 January <strong>2012</strong><br />
(a)<br />
(b)<br />
Amendments to MFRS 101 Clarification of the Requirements for Comparative Information are<br />
mandatory for annual periods beginning on or after 1 January 2013.<br />
The Group has early adopted Amendments to MFRS 101 Clarification of the Requirements for<br />
Comparative Information in conjunction with the application of MFRS 101. These Amendments<br />
clarify that the third statement of financial position is required only if a retrospective application,<br />
retrospective restatement or reclassification has a material effect on the information in the statement<br />
of financial position at the beginning of the preceding period. If the third statement of financial<br />
position is presented, these Amendments clarify that the related notes to the opening statement<br />
of financial position need not be disclosed. Accordingly, there are no related notes disclosed in<br />
relation to the opening statement of financial position as at 1 January 2011.<br />
Amendments to MFRS 1 First-time Adoption of Malaysian Financial Reporting Standards are<br />
mandatory for annual periods beginning on or after 1 January 2013.<br />
The Group has early adopted Amendments to MFRS 1 First-time Adoption of Malaysian Financial<br />
Reporting Standards in conjunction with the application of MFRS 1. These Amendments clarify that<br />
the first MFRS financial statements shall include at least three statements of financial position, two<br />
statements of profit or loss and other comprehensive income, two separate statements of profit<br />
or loss (if presented), two statements of cash flows and two statements of changes in equity and<br />
related notes, including comparative information for all statements presented.
058<br />
WAWASAN <strong>TKH</strong> HOLDINGS BERHAD (540218-A)<br />
<strong>ANNUAL</strong> <strong>REPORT</strong> <strong>2012</strong><br />
NOTES TO THE FINANCIAL STATEMENTS<br />
31 DECEMBER <strong>2012</strong> (cont’d)<br />
5. ADOPTION OF NEW MFRSs AND AMENDMENTS TO MFRSs (cont’d)<br />
5.2 New MFRSs that have been issued, but only effective for annual periods beginning on or after<br />
1 January 2013<br />
The following are accounting standards, amendments and interpretations of the MFRS Framework that<br />
have been issued by the Malaysian Accounting Standards Board (‘MASB’) but have not been adopted<br />
by the Group and the Company.<br />
Title<br />
Amendments to MFRS 101 Presentation of Items of Other Comprehensive Income<br />
MFRS 10 Consolidated Financial Statements<br />
MFRS 11 Joint Arrangements<br />
MFRS 12 Disclosure of Interests in Other Entities<br />
MFRS 13 Fair Value Measurement<br />
MFRS 119 Employee Benefits (revised)<br />
MFRS 127 Separate Financial Statements<br />
MFRS 128 Investments in Associates and Joint Ventures<br />
Amendments to MFRS 1 Government Loans<br />
Amendments to MFRS 7 Disclosures - Offsetting Financial Assets and Financial<br />
Liabilities<br />
Amendments to MFRSs Annual Improvements 2009 - 2011 Cycle<br />
Amendments to MFRS 10, MFRS 11 and MFRS 12 Consolidated Financial<br />
Statements, Joint Arrangements and Disclosure of Interests in Other Entities:<br />
Transition Guidance<br />
IC Interpretation 20 Stripping Costs in the Production Phase of a Surface Mine<br />
Amendments to MFRS 132 Offsetting Financial Assets and Financial Liabilities<br />
Mandatory Effective Date of MFRS 9 and Transition Disclosures<br />
MFRS 9 Financial Instruments<br />
Effective Date<br />
1 July <strong>2012</strong><br />
1 January 2013<br />
1 January 2013<br />
1 January 2013<br />
1 January 2013<br />
1 January 2013<br />
1 January 2013<br />
1 January 2013<br />
1 January 2013<br />
1 January 2013<br />
1 January 2013<br />
1 January 2013<br />
1 January 2013<br />
1 January 2014<br />
1 January 2015<br />
1 January 2015<br />
The Group is in the process of assessing the impact of implementing these accounting standards,<br />
amendments and interpretations, since the effects would only be observable for the future financial<br />
years.<br />
6. SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGEMENTS<br />
6.1 Changes in estimates<br />
Estimates are continually evaluated and are based on historical experience and other factors, including<br />
expectations of future events that are believed to be reasonable under the circumstances.<br />
The Directors are of the opinion that there are no changes in estimates at the end of the reporting period.<br />
6.2 Critical judgements made in applying accounting policies<br />
The following are judgements made by management in the process of applying the Group’s accounting<br />
policies that have the most significant effect on the amounts recognised in the financial statements.<br />
(a) Classification of leasehold land<br />
The Group has assessed and classified land use rights of the Group as finance leases based on the<br />
extent to which risks and rewards incidental to ownership of the land resides with the Group arising<br />
from the lease term. Consequently, the Group has classified the unamortised upfront payment for<br />
land use rights as finance leases in accordance with MFRS 117 Leases.
WAWASAN <strong>TKH</strong> HOLDINGS BERHAD (540218-A)<br />
<strong>ANNUAL</strong> <strong>REPORT</strong> <strong>2012</strong><br />
059<br />
NOTES TO THE FINANCIAL STATEMENTS<br />
31 DECEMBER <strong>2012</strong> (cont’d)<br />
6. SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGEMENTS (cont’d)<br />
6.2 Critical judgements made in applying accounting policies (cont’d)<br />
(b) Classification of non-current bank borrowings<br />
Term loan agreements entered into by the Group include repayment on demand clauses at the<br />
discretion of financial institutions. The Group believes that in the absence of a default being<br />
committed by the Group, these financial institutions are not entitled to exercise its right to demand<br />
for repayment. Accordingly, the carrying amount of the term loans have been classified between<br />
current and non-current liabilities based on their repayment period.<br />
(c) Contingent liabilities<br />
The determination of treatment of contingent liabilities is based on management’s view of the<br />
expected outcome of the contingencies for matters arising in the ordinary course of the business.<br />
(d) Contingent liabilities on corporate guarantees<br />
The Directors are of the view that the chances of the financial institutions to call upon the corporate<br />
guarantees are remote.<br />
6.3 Key sources of estimation uncertainty<br />
The following are key assumptions concerning the future and other key sources of estimation uncertaity at<br />
the end of the reporting period that have a significant risk of causing a material adjustment to the carrying<br />
amounts of assets and liabilities within the next financial year.<br />
(a) Impairment of goodwill on consolidation<br />
The Group determines whether goodwill on consolidation is impaired at least on an annual basis.<br />
This requires an estimation of the value in use of the subsidiaries to which goodwill is allocated.<br />
Estimating a value in use amount requires management to make an estimate of the expected future<br />
cash flows from the subsidiaries and also to choose a suitable discount rate in order to calculate<br />
the present value of those cash flows.<br />
Value in use of mining unit is based on the key assumptions as stated in Note 8 to the financial<br />
statements.<br />
(b) Impairment of property, plant and equipment<br />
The Group determines whether property, plant and equipment is impaired at the end of each<br />
reporting period. If an indication of impairment exists, the recoverable amount is estimated.<br />
Recoverable amount of an asset or cash generating unit (‘CGU’) is the higher of its fair value less<br />
cost to sell and its value in use.<br />
Estimating a value in use requires management to make an estimate of the expected future cash<br />
flows to be derived from continuing use of the asset and from its ultimate disposal, expectations<br />
about possible variations in the amount, timing of those cash flows, the time value of money, price<br />
for inherent uncertainty risk and other relevant factors.<br />
As at 31 December <strong>2012</strong>, management assessed that the recoverable amounts of property, plant<br />
and equipment of mining unit, based on value in use calculations, exceeded their carrying amounts<br />
of RM5,970,000 and thus, no impairment is required.<br />
Management also assessed that the recoverable amounts of land and buildings and plant and<br />
machineries of the disposable foodwares unit, based on valuations performed by independent<br />
professional valuers, exceeded their carrying amounts of RM77,843,000 and thus, no impairment<br />
is required.<br />
As for the Group’s other property, plant and equipment, the Directors are of the view that the<br />
recoverable amounts of these assets are equal or higher than their carrying amounts as all these<br />
assets are currently in use.
060<br />
WAWASAN <strong>TKH</strong> HOLDINGS BERHAD (540218-A)<br />
<strong>ANNUAL</strong> <strong>REPORT</strong> <strong>2012</strong><br />
NOTES TO THE FINANCIAL STATEMENTS<br />
31 DECEMBER <strong>2012</strong> (cont’d)<br />
6. SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGEMENTS (cont’d)<br />
6.3 Key sources of estimation uncertainty (cont’d)<br />
(c) Depreciation of property, plant and equipment<br />
The cost of property, plant and equipment is depreciated on a straight-line basis over the assets’<br />
useful lives. Management estimates the useful lives of these property, plant and equipment as<br />
disclosed in Note 4.4 to the financial statements. The useful lives are based on the Group’s historical<br />
experience with similar assets and taking into accounting anticipate technological changes. The<br />
depreciation charge for future period is adjusted if there are significant changes from previous<br />
estimates.<br />
(d) Impairment of receivables<br />
The Group makes impairment of receivables based on an assessment of the recoverability of<br />
receivables. Impairment is applied to receivables where events or changes in circumstances<br />
indicate that the carrying amounts may not be recoverable. Management specifically analyses<br />
historical bad debt, customer concentration, customer creditworthiness, current economic trends<br />
and changes in customer payment terms when making a judgement to evaluate the adequacy of<br />
impairment of receivables. Where expectations differ from the original estimates, the differences<br />
would impact the carrying amount of receivables.<br />
(e) Write down for obsolete or slow moving inventories<br />
The Group writes down its obsolete or slow moving inventories based on assessment of their<br />
estimated net selling price. Inventories are written down when events or changes in circumstances<br />
indicate that the carrying amounts may not be recoverable. Management specifically analyses sales<br />
trend and current economic conditions when making a judgement in evaluating the adequacy of<br />
the write down for obsolete or slow moving inventories. Where expectations differ from the original<br />
estimates, the differences would impact the carrying amount of inventories.<br />
(f) Income taxes<br />
Significant judgement is required in determining the capital allowances, deductibility of certain<br />
expenses and taxability of certain income during the estimation of the provision for income taxes.<br />
There are transactions during the ordinary course of business for which the ultimate tax determination<br />
is uncertain. The Group recognises tax liabilities based on estimates of whether additional taxes<br />
will be due. Where the final tax outcome is different from the amounts that were initially recorded,<br />
such differences will impact the income tax and deferred tax provisions in the period in which such<br />
determination is made.<br />
(g) Fair values of borrowings<br />
The fair values of borrowings are estimated by discounting future contractual cash flows at the current<br />
market interest rates available to the Group for similar financial instruments. Sensitivity analysis of the<br />
effects of interest rate risk has been disclosed in Note 27 to the financial statements.<br />
(h) Impairment of investments in subsidiaries<br />
Management reviews the material investments in subsidiaries for impairment when there is an<br />
indication of impairment.<br />
The recoverable amounts of the investments in subsidiaries are assessed by reference to the higher<br />
of its fair value less cost to sell and its value in use of the respective subsidiaries.<br />
Estimating a value in use requires management to make an estimate of the expected future cash<br />
flows to be derived from continuing use of the asset and from its ultimate disposal, expectations<br />
about possible variations in the amount, timing of those cash flows, the time value of money, price<br />
for inherent uncertainty risk and other relevant factors.<br />
As at 31 December <strong>2012</strong>, management assessed that the recoverable amounts of investments in<br />
subsidiaries, based on fair value less cost to sell, were lower than their carrying amounts and thus,<br />
an impairment loss of RM4,700,000 is recognised in profit or loss as disclosed in Note 9 to the<br />
financial statements.
WAWASAN <strong>TKH</strong> HOLDINGS BERHAD (540218-A)<br />
<strong>ANNUAL</strong> <strong>REPORT</strong> <strong>2012</strong><br />
061<br />
NOTES TO THE FINANCIAL STATEMENTS<br />
31 DECEMBER <strong>2012</strong> (cont’d)<br />
7. PROPERTY, PLANT AND EQUIPMENT<br />
Group<br />
Balance<br />
as at<br />
1.1.<strong>2012</strong><br />
RM’000<br />
Additions<br />
RM’000<br />
Disposals<br />
RM’000<br />
Depreciation<br />
charge for<br />
the financial<br />
year<br />
RM’000<br />
Adjustment*<br />
RM’000<br />
Balance<br />
as at<br />
31.12.<strong>2012</strong><br />
RM’000<br />
Carrying amount<br />
Short term leasehold land<br />
Buildings<br />
Furniture, fittings and office equipment<br />
Motor vehicles<br />
Plant and machinery, tools and factory equipment, roads<br />
and bridges, mould and electrical installation<br />
32,432<br />
34,448<br />
1,188<br />
170<br />
20,385<br />
-<br />
117<br />
86<br />
-<br />
4,149<br />
-<br />
(22)<br />
(124)<br />
-<br />
-<br />
(1,346)<br />
(1,485)<br />
(311)<br />
(58)<br />
(4,956)<br />
(149)<br />
-<br />
-<br />
-<br />
-<br />
31,086<br />
33,080<br />
963<br />
90<br />
19,305<br />
88,623 4,352 (146) (8,156)<br />
(149) 84,524<br />
|------------------------------------------ At 31.12.<strong>2012</strong> ---------------------------------------------------------|<br />
Cost<br />
RM’000<br />
Accumulated<br />
depreciation<br />
RM’000<br />
Accumulated<br />
impairment<br />
RM’000<br />
Carrying amount<br />
RM’000<br />
Short term leasehold land<br />
Buildings<br />
Furniture, fittings and office equipment<br />
Motor vehicles<br />
Plant and machinery, tools and factory equipment, roads<br />
and bridges, mould and electrical installation<br />
42,344<br />
36,993<br />
4,675<br />
1,351<br />
99,649<br />
(11,258)<br />
(2,938)<br />
(3,712)<br />
(1,261)<br />
(79,130)<br />
-<br />
(975)<br />
(1,214)<br />
-<br />
-<br />
31,086<br />
33,080<br />
963<br />
90<br />
19,305<br />
185,012<br />
(98,299)<br />
(2,189)<br />
84,524<br />
* Relates to the adjustment for the plant and machinery that were held on behalf of a third party.
062<br />
WAWASAN <strong>TKH</strong> HOLDINGS BERHAD (540218-A)<br />
<strong>ANNUAL</strong> <strong>REPORT</strong> <strong>2012</strong><br />
NOTES TO THE FINANCIAL STATEMENTS<br />
31 DECEMBER <strong>2012</strong> (cont’d)<br />
7. PROPERTY, PLANT AND EQUIPMENT (cont’d)<br />
Group<br />
Balance<br />
as at<br />
1.1.2011<br />
RM’000<br />
Additions<br />
RM’000<br />
Carrying amount<br />
Freehold land<br />
Short term leasehold land<br />
Buildings<br />
Furniture, fittings and office<br />
equipment<br />
Motor vehicles<br />
Plant and machinery, tools and<br />
factory equipment, roads and<br />
bridges, mould and electrical<br />
installation<br />
3,100<br />
33,600<br />
40,492<br />
1,322<br />
178<br />
25,673<br />
-<br />
171<br />
446<br />
383<br />
66<br />
1,485<br />
104,365<br />
2,551<br />
Short term leasehold land<br />
Buildings<br />
Furniture, fittings and office equipment<br />
Motor vehicles<br />
Plant and machinery, tools and factory equipment, roads<br />
and bridges, mould and electrical installation<br />
Disposals<br />
RM’000<br />
Written off<br />
RM’000<br />
Foreign<br />
currency<br />
translation<br />
differences<br />
RM’000<br />
Depreciation<br />
charge for<br />
the financial<br />
year<br />
RM’000<br />
Impairment<br />
loss<br />
RM’000<br />
Balance<br />
as at<br />
31.12.2011<br />
RM’000<br />
(3,100)<br />
-<br />
(4,233)<br />
-<br />
-<br />
-<br />
-<br />
-<br />
67<br />
-<br />
(1,339)<br />
(1,524)<br />
-<br />
-<br />
(800)<br />
-<br />
32,432<br />
34,448<br />
(179)<br />
-<br />
(2)<br />
-<br />
4<br />
-<br />
(340)<br />
(74)<br />
-<br />
-<br />
1,188<br />
170<br />
-<br />
-<br />
- (5,573) (1,200) 20,385<br />
(7,512)<br />
(2)<br />
71 (8,850) (2,000) 88,623<br />
|------------------------------------------ At 31.12.2011 ---------------------------------------------------------|<br />
Cost<br />
RM’000<br />
Accumulated<br />
depreciation<br />
RM’000<br />
Accumulated<br />
impairment<br />
RM’000<br />
Carrying amount<br />
RM’000<br />
42,344<br />
36,877<br />
4,593<br />
1,458<br />
(9,912)<br />
(1,454)<br />
(3,405)<br />
(1,288)<br />
-<br />
(975)<br />
-<br />
-<br />
32,432<br />
34,448<br />
1,188<br />
170<br />
97,004<br />
(75,405)<br />
(1,214)<br />
20,385<br />
182,276<br />
(91,464)<br />
(2,189)<br />
88,623
WAWASAN <strong>TKH</strong> HOLDINGS BERHAD (540218-A)<br />
<strong>ANNUAL</strong> <strong>REPORT</strong> <strong>2012</strong><br />
063<br />
NOTES TO THE FINANCIAL STATEMENTS<br />
31 DECEMBER <strong>2012</strong> (cont’d)<br />
7. PROPERTY, PLANT AND EQUIPMENT (cont’d)<br />
(a) Acquisition of property, plant and equipment<br />
During the financial year, the Group made the following cash payments to purchase property, plant and<br />
equipment:<br />
Purchase of property, plant and equipment<br />
Acquired under hire purchase arrangements<br />
Unsettled and remained as other payables<br />
Cash payments on purchase of property, plant and<br />
equipment<br />
(b) Assets under hire purchase<br />
Included in the carrying amount of property, plant and equipment are machineries and motor vehicles<br />
of RM2,984,000 (2011: RM7,105,000) acquired under hire purchase agreements.<br />
(c) Security<br />
At 31 December <strong>2012</strong>, property, plant and equipment with carrying amounts of RM61,739,000 (2011:<br />
RM64,366,000) are charged to financial institutions for credit facilities granted to the Group (Note 16).<br />
(d) Disposal of assets<br />
During the current financial year, property, plant and equipment with carrying amounts of RM146,000<br />
(2011: RM7,512,000) were disposed of for a total cash consideration of RM208,000 (2011: RM9,984,000)<br />
resulting in total gain on disposals of RM62,000 (2011: RM2,472,000).<br />
(e) Title to a leasehold land<br />
The title of a piece of kaolin land, which was acquired at a cost of RM3,550,000 is still in the process of<br />
being transferred to a subsidiary of the Group. The carrying amount of this land is RM Nil (2011: RM Nil).<br />
(f) Impairment loss of assets<br />
In the previous financial year, there was an impairment loss of RM2,000,000 recognised in profit or loss<br />
due to the assets were damaged by fire.
064<br />
WAWASAN <strong>TKH</strong> HOLDINGS BERHAD (540218-A)<br />
<strong>ANNUAL</strong> <strong>REPORT</strong> <strong>2012</strong><br />
NOTES TO THE FINANCIAL STATEMENTS<br />
31 DECEMBER <strong>2012</strong> (cont’d)<br />
8. INTANGIBLE ASSETS<br />
Group Goodwill Trademarks Total<br />
RM ’000 RM ’000 RM ’000<br />
Cost<br />
At 1 January 2011/ 31 December 2011 71,968 62 72,030<br />
At 1 January <strong>2012</strong>/ 31 December <strong>2012</strong> 71,968 62 72,030<br />
Accumulated amortisation and<br />
impairment loss<br />
At 1 January 2011/ 31 December 2011 60,968 - 60,968<br />
At 1 January <strong>2012</strong>/ 31 December <strong>2012</strong> 60,968 - 60,968<br />
Carrying amounts<br />
At 31 December 2011 11,000 62 11,062<br />
At 31 December <strong>2012</strong> 11,000 62 11,062<br />
Impairment testing for cash generating units containing goodwill<br />
For the purpose of impairment testing, goodwill is allocated to the Group’s operating divisions, which<br />
represent the lowest level within the Group at which the goodwill is monitored for internal management<br />
purposes. The carrying amount of goodwill allocated to each unit is as follows:<br />
Mining<br />
As at 31 December <strong>2012</strong>, management assessed that the recoverable amount of goodwill of the mining unit,<br />
based on value in use calculation, exceeded its carrying amount and thus, no impairment is required.
WAWASAN <strong>TKH</strong> HOLDINGS BERHAD (540218-A)<br />
<strong>ANNUAL</strong> <strong>REPORT</strong> <strong>2012</strong><br />
065<br />
NOTES TO THE FINANCIAL STATEMENTS<br />
31 DECEMBER <strong>2012</strong> (cont’d)<br />
8. INTANGIBLE ASSETS (cont’d)<br />
Value in use was determined by discounting the future cash flows generated from the continuing use of the<br />
unit and was based on the following key assumptions:<br />
(i) Cash flows of mining unit was projected based on financial budgets and plans approved by the Directors.<br />
These budgets and plans covered a five (5) year period based on the Directors’ estimation of the<br />
remaining available mineral reserves, extraction rate of those mineral reserves during the remaining<br />
lease period and the estimated useful life of the machineries for the mining unit.<br />
(ii) The anticipated annual revenue growth rates used in the cash flow budgets and plans of the mining unit<br />
are 54% in financial year 2013, 6% in financial year 2014, 7% for financial years 2015 and 2016 and 5%<br />
in financial year 2017. The management does not foresee any difficulties in obtaining approval for its<br />
new land application as planned.<br />
(iii) The anticipated gross profit margins used in the cash flow forecast/projections of the mining unit are 8%<br />
in financial year 2013, 7% in financial year 2014, 10% in financial year 2015, 13% in financial year 2016 and<br />
14% in financial year 2017; where it was assumed that various cost-cutting measures will be successfully<br />
implemented as planned.<br />
(iv) A pre-tax discount rate of 8.10% per annum has been applied in determining the recoverable amount of<br />
the mining unit. The discount rate was estimated based on an adjusted weighted average cost of capital.<br />
The values assigned to the key assumptions represent the management’s assessment of future trends in<br />
the mining industry and are based on both internal sources (historical data) and external sources where<br />
appropriate.<br />
Based on the sensitivity analysis performed by management, a 1% increase in the discount rate used<br />
and a 4% decrease in sales volume would result in a trivial difference in the impairment test outcome.
066<br />
WAWASAN <strong>TKH</strong> HOLDINGS BERHAD (540218-A)<br />
<strong>ANNUAL</strong> <strong>REPORT</strong> <strong>2012</strong><br />
NOTES TO THE FINANCIAL STATEMENTS<br />
31 DECEMBER <strong>2012</strong> (cont’d)<br />
9. INVESTMENTS IN SUBSIDIARIES<br />
Redeemable<br />
Company Ordinary preference<br />
shares shares Total<br />
RM ’000 RM ’000 RM ’000<br />
At cost<br />
Unquoted shares in Malaysia<br />
At 1 January 2011/ 31 December 2011 127,243 55,000 182,243<br />
At 1 January <strong>2012</strong>/ 31 December <strong>2012</strong> 127,243 55,000 182,243<br />
Accumulated impairment loss<br />
At 1 January 2011 108,655 - 108,655<br />
Impairment loss (Note 20) 1,500 - 1,500<br />
At 31 December 2011 110,155 - 110,155<br />
At 1 January <strong>2012</strong> 110,155 - 110,155<br />
Impairment loss (Note 20) 4,700 - 4,700<br />
At 31 December <strong>2012</strong> 114,855 - 114,855<br />
Carrying amounts<br />
At 31 December 2011 17,088 55,000 72,088<br />
At 31 December <strong>2012</strong> 12,388 55,000 67,388<br />
The details of the subsidiaries are as follows:<br />
Name of subsidiary<br />
Country of<br />
incorporation<br />
Interest in equity<br />
held by the<br />
Company<br />
<strong>2012</strong> 2011<br />
% %<br />
Principal activities<br />
Associated Kaolin<br />
Industries Sdn. Bhd.^<br />
Malaysia 100 100 Production and sale of refined<br />
kaolin<br />
Greatpac Sdn. Bhd. ^ Malaysia 100 100 Manufacturing and trading of<br />
disposable foodwares products<br />
(Subsidiaries of<br />
Greatpac Sdn. Bhd.)<br />
Greatpac (S) Pte. Ltd.* Singapore 100 100 Dormant<br />
Greatpac Trading<br />
Sdn. Bhd.^ Malaysia 100 100 Dormant<br />
* Audited by BDO Member Firm.<br />
^ Audited by BDO in Malaysia.<br />
During the current financial year, the Company recognised impairment loss of RM4,700,000 (2011:<br />
RM1,500,000) in respect of investments in subsidiaries due to the recoverable amounts are less than their<br />
carrying amounts.
WAWASAN <strong>TKH</strong> HOLDINGS BERHAD (540218-A)<br />
<strong>ANNUAL</strong> <strong>REPORT</strong> <strong>2012</strong><br />
067<br />
NOTES TO THE FINANCIAL STATEMENTS<br />
31 DECEMBER <strong>2012</strong> (cont’d)<br />
10. INVENTORIES<br />
At cost<br />
Raw materials<br />
Finished goods<br />
At net realisable value<br />
Raw materials<br />
Work-in-progress<br />
Finished goods<br />
<strong>2012</strong><br />
RM’000<br />
1,697<br />
144<br />
1,841<br />
-<br />
4,658<br />
2,540<br />
7,198<br />
9,039<br />
Group<br />
2011<br />
RM’000<br />
1,245<br />
846<br />
2,091<br />
804<br />
3,077<br />
3,591<br />
7,472<br />
9,563<br />
During the current financial year, the Group reversed RM167,000 (2011: RM Nil) in respect of inventories<br />
previously written down as the Group was able to sell these inventories above their carrying amounts. The<br />
amount is included in the cost of sales.<br />
In the previous financial year, the Group wrote down the inventories by RM408,000 to their net realisable<br />
values. The Group also wrote off inventories of RM1,400,000, which were mainly due to damages caused by<br />
fire. Both amounts written down and written off were included in cost of sales and other operating expenses.<br />
11. TRADE AND OTHER RECEIVABLES<br />
Non-current<br />
Deposits and prepayments<br />
Prepayments<br />
Group<br />
<strong>2012</strong><br />
RM’000<br />
1,419<br />
2011<br />
RM’000<br />
1,502<br />
<strong>2012</strong><br />
RM’000<br />
Company<br />
-<br />
2011<br />
RM’000<br />
-<br />
Current<br />
Trade receivables<br />
Third parties<br />
Less: Impairment loss<br />
8,084<br />
(1,535)<br />
9,853<br />
(1,595)<br />
-<br />
-<br />
-<br />
-<br />
6,549<br />
8,258<br />
-<br />
-<br />
Other receivables<br />
Amounts owing by subsidiaries<br />
Other receivables<br />
-<br />
1,534<br />
-<br />
4,521<br />
9,650<br />
1,066<br />
5,626<br />
1,066<br />
Less: Impairment loss<br />
1,534<br />
(1,066)<br />
4,521<br />
(1,066)<br />
10,716<br />
(1,066)<br />
6,692<br />
(1,066)<br />
468<br />
3,455<br />
9,650<br />
5,626<br />
Loans and receivables<br />
7,017<br />
11,713<br />
9,650<br />
5,626
068<br />
WAWASAN <strong>TKH</strong> HOLDINGS BERHAD (540218-A)<br />
<strong>ANNUAL</strong> <strong>REPORT</strong> <strong>2012</strong><br />
NOTES TO THE FINANCIAL STATEMENTS<br />
31 DECEMBER <strong>2012</strong> (cont’d)<br />
11. TRADE AND OTHER RECEIVABLES (cont’d)<br />
<strong>2012</strong><br />
RM’000<br />
Group<br />
2011<br />
RM’000<br />
<strong>2012</strong><br />
RM’000<br />
Company<br />
2011<br />
RM’000<br />
Deposits and prepayments<br />
Deposits<br />
Prepayments<br />
Less: Impairment loss<br />
270<br />
429<br />
699<br />
-<br />
448<br />
964<br />
1,412<br />
(184)<br />
-<br />
-<br />
-<br />
-<br />
-<br />
-<br />
-<br />
-<br />
699<br />
1,228<br />
-<br />
-<br />
7,716<br />
12,941<br />
9,650<br />
5,626<br />
9,135<br />
14,443<br />
9,650<br />
5,626<br />
Non-current<br />
(a) Prepayments<br />
Prepayments represent rentals paid by the Group for a tenancy agreement with a third party. Pursuant<br />
to the tenancy agreement, the Group is granted full and exclusive right to mine all kaolin deposits of the<br />
land.<br />
Current<br />
(a) Trade receivables are non-interest bearing and the normal trade credit terms granted by the Group<br />
range from one (1) month to three (3) months. They are recognised at their original invoice amounts,<br />
which represent their fair values on initial recognition.<br />
(b) Amounts owing by subsidiaries represent mainly payments made on behalf, management fees and<br />
advances, that are unsecured, interest-free other than an amount of RM4,200,000 (2011: RM650,000),<br />
which bears interest at rate of 8.10% (2011: ranging from 7.80% to 8.10%) per annum and payable upon<br />
demand in cash and cash equivalents. The interest charged on part of the above advances had been<br />
waived by the Company during the current financial year.<br />
(c) Information on the financial risk of trade and other receivables is disclosed in Note 27 to the financial<br />
statements.<br />
(d) The currency exposure profiles of receivables are as follows:<br />
<strong>2012</strong><br />
RM’000<br />
Group<br />
2011<br />
RM’000<br />
<strong>2012</strong><br />
RM’000<br />
Company<br />
2011<br />
RM’000<br />
Ringgit Malaysia<br />
Singapore Dollar<br />
US Dollar<br />
Euro<br />
Australian Dollar<br />
5,858<br />
177<br />
2,959<br />
-<br />
141<br />
10,454<br />
199<br />
2,576<br />
1,074<br />
140<br />
9,650<br />
-<br />
-<br />
-<br />
-<br />
5,626<br />
-<br />
-<br />
-<br />
-<br />
9,135<br />
14,443<br />
9,650<br />
5,626
WAWASAN <strong>TKH</strong> HOLDINGS BERHAD (540218-A)<br />
<strong>ANNUAL</strong> <strong>REPORT</strong> <strong>2012</strong><br />
069<br />
NOTES TO THE FINANCIAL STATEMENTS<br />
31 DECEMBER <strong>2012</strong> (cont’d)<br />
11. TRADE AND OTHER RECEIVABLES (cont’d)<br />
(e) The ageing analysis of trade receivables of the Group are as follows:<br />
Neither past due nor impaired<br />
Past due, not impaired<br />
1 to 30 days<br />
31 to 60 days<br />
61 to 90 days<br />
91 to 120 days<br />
121 to 150 days<br />
151 to 180 days<br />
More than 181 days<br />
Past due and impaired<br />
Receivables that are neither past due nor impaired<br />
<strong>2012</strong><br />
RM’000<br />
3,986<br />
2,021<br />
364<br />
38<br />
10<br />
18<br />
16<br />
96<br />
2,563<br />
1,535<br />
8,084<br />
Group<br />
2011<br />
RM’000<br />
4,082<br />
2,314<br />
752<br />
812<br />
215<br />
3<br />
7<br />
73<br />
4,176<br />
1,595<br />
9,853<br />
Trade receivables that are neither past due nor impaired are creditworthy receivables with good payment<br />
records with the Group.<br />
None of the trade receivables of the Group that are neither past due nor impaired have been renegotiated<br />
during the financial year.<br />
Receivables that are past due but not impaired<br />
Trade receivables that are past due but not impaired mainly arose from active corporate clients with<br />
healthy business relationship, in which the management is of the view that the amounts are recoverable<br />
based on past payments history.<br />
The trade receivables of the Group that are past due but not impaired are unsecured in nature.<br />
Receivables that are past due and impaired<br />
Trade receivables of the Group that are past due and impaired at the end of the reporting period are as<br />
follows:<br />
Group<br />
Individually impaired<br />
<strong>2012</strong><br />
2011<br />
RM’000 RM’000<br />
Trade receivables, gross<br />
Less: Impairment loss<br />
1,535<br />
(1,535)<br />
-<br />
1,595<br />
(1,595)<br />
-
070<br />
WAWASAN <strong>TKH</strong> HOLDINGS BERHAD (540218-A)<br />
<strong>ANNUAL</strong> <strong>REPORT</strong> <strong>2012</strong><br />
NOTES TO THE FINANCIAL STATEMENTS<br />
31 DECEMBER <strong>2012</strong> (cont’d)<br />
11. TRADE AND OTHER RECEIVABLES (cont’d)<br />
(f) The reconciliation of movements in the impairment loss on trade receivables are as follows:<br />
At 1 January<br />
Charge for the financial year (Note 20)<br />
Reversal of impairment loss (Note 20)<br />
Exchange differences<br />
At 31 December<br />
<strong>2012</strong><br />
RM’000<br />
1,595<br />
-<br />
(87)<br />
27<br />
1,535<br />
Group<br />
2011<br />
RM’000<br />
1,504<br />
88<br />
(18)<br />
21<br />
1,595<br />
Trade receivables that are individually determined to be impaired at the end of the reporting period relate<br />
to those receivables that exhibit significant financial difficulties and have defaulted on payments. These<br />
receivables are not secured by any collateral or credit enhancements.<br />
(g) The reconciliation of movements in the impairment loss on deposits and prepayments are as follows:<br />
At 1 January<br />
Written off<br />
At 31 December<br />
<strong>2012</strong><br />
RM’000<br />
184<br />
(184)<br />
-<br />
Group<br />
2011<br />
RM’000<br />
184<br />
-<br />
184<br />
12. DERIVATIVE FINANCIAL INSTRUMENTS<br />
Group<br />
Contract/<br />
Notional<br />
amount<br />
RM’000<br />
<strong>2012</strong><br />
Assets<br />
RM’000<br />
Liabilities<br />
RM’000<br />
Contract/<br />
Notional<br />
amount<br />
RM’000<br />
2011<br />
Assets<br />
RM’000<br />
Liabilities<br />
RM’000<br />
Forward currency<br />
contracts<br />
1,851<br />
-<br />
23<br />
3,365<br />
14<br />
46<br />
Forward currency contracts have been entered into for hedging forecast sales denominated in foreign<br />
currencies that are expected to occur at various dates within six (6) months from the end of the reporting<br />
period. The forward currency contracts have maturity dates that coincide with the expected occurrence of<br />
these transactions. The fair values of these components have been determined based on the differences<br />
between the quarterly future rates and the strike rates, discounted at the convenience yield of the instruments<br />
involved.<br />
During the financial year, the Group recognised total gains of RM9,000 (2011: total losses of RM74,000)<br />
arising from fair value changes of derivative instruments. The fair value changes are attributable to changes<br />
in foreign exchange spot and forward foreign exchange rates. The methods and assumptions applied in<br />
determining the fair values of derivatives are disclosed in Note 26 to the financial statements.
WAWASAN <strong>TKH</strong> HOLDINGS BERHAD (540218-A)<br />
<strong>ANNUAL</strong> <strong>REPORT</strong> <strong>2012</strong><br />
071<br />
NOTES TO THE FINANCIAL STATEMENTS<br />
31 DECEMBER <strong>2012</strong> (cont’d)<br />
13. CASH AND CASH EQUIVALENTS<br />
<strong>2012</strong><br />
RM’000<br />
Group<br />
2011<br />
RM’000<br />
<strong>2012</strong><br />
RM’000<br />
Company<br />
2011<br />
RM’000<br />
Cash and bank balances<br />
Deposits placed with licensed<br />
banks<br />
206<br />
544<br />
1,622<br />
529<br />
11<br />
-<br />
10<br />
-<br />
750<br />
2,151<br />
11<br />
10<br />
(a) Included in the deposits placed with licensed banks is RM544,000 (2011: RM529,000) pledged for bank<br />
facilities granted to subsidiaries.<br />
(b) Information on the financial risk of cash and cash equivalents is disclosed in Note 27 to the financial<br />
statements.<br />
(c) The currency exposure profiles of cash and cash equivalents are as follows:<br />
<strong>2012</strong><br />
RM’000<br />
Group<br />
2011<br />
RM’000<br />
<strong>2012</strong><br />
RM’000<br />
Company<br />
2011<br />
RM’000<br />
Ringgit Malaysia<br />
Singapore Dollar<br />
US Dollar<br />
707<br />
13<br />
30<br />
641<br />
1,226<br />
284<br />
11<br />
-<br />
-<br />
10<br />
-<br />
-<br />
750<br />
2,151<br />
11<br />
10<br />
(d) For the purpose of the statements of cash flows, cash and cash equivalents comprise the following as at<br />
the end of the reporting period:<br />
<strong>2012</strong><br />
RM’000<br />
Group<br />
2011<br />
RM’000<br />
<strong>2012</strong><br />
RM’000<br />
Company<br />
2011<br />
RM’000<br />
Cash and bank balances<br />
Deposits placed with<br />
licensed banks<br />
Bank overdrafts<br />
included in borrowings<br />
(Note 16)<br />
206<br />
544<br />
(3,598)<br />
1,622<br />
529<br />
(3,503)<br />
11<br />
-<br />
-<br />
10<br />
-<br />
-<br />
Less: Deposits pledged<br />
with licensed<br />
banks<br />
(2,848)<br />
(544)<br />
(1,352)<br />
(529)<br />
11<br />
-<br />
10<br />
-<br />
(3,392)<br />
(1,881)<br />
11<br />
10
072<br />
WAWASAN <strong>TKH</strong> HOLDINGS BERHAD (540218-A)<br />
<strong>ANNUAL</strong> <strong>REPORT</strong> <strong>2012</strong><br />
NOTES TO THE FINANCIAL STATEMENTS<br />
31 DECEMBER <strong>2012</strong> (cont’d)<br />
14. SHARE CAPITAL, RESERVES AND ACCUMULATED LOSSES<br />
14.1 Share capital<br />
Ordinary shares of<br />
RM0.10 each:<br />
Number<br />
of shares<br />
’000<br />
Group and Company<br />
<strong>2012</strong> 2011<br />
Number<br />
of shares<br />
RM’000 ’000<br />
RM’000<br />
Authorised<br />
5,000,000<br />
500,000<br />
5,000,000<br />
500,000<br />
Issued and fully paid:<br />
Balance as at 1 January<br />
Par value reduction<br />
Issuance during the<br />
financial year<br />
Balance as at 31<br />
December<br />
448,438<br />
-<br />
16,000<br />
464,438<br />
44,844<br />
-<br />
1,600<br />
46,444<br />
288,438<br />
-<br />
160,000<br />
448,438<br />
57,688<br />
(28,844)<br />
16,000<br />
44,844<br />
During the current financial year, the Company increased its issued and paid-up share capital by issuance<br />
of 16 million new ordinary shares of RM0.10 each for cash via the exercise of 16 million detachable warrants<br />
2008/2013 (‘Warrants’) at exercise price of RM0.21 per Warrant on the basis of one (1) new ordinary share<br />
for every one (1) Warrant exercised pursuant to the Deed Poll dated 24 July 2008.<br />
In the previous financial year, the Company undertook the following:<br />
(i) reduced the issued and paid-up share capital of the Company via cancellation of RM0.10 from the<br />
par value of every existing ordinary share of RM0.20 each in the Company pursuant to Section 64 of the<br />
Companies Act, 1965 in Malaysia; and<br />
(ii) increased its issued and paid-up share capital by issuance of 160 million new ordinary shares of RM0.10<br />
each via a private placement to its major shareholder, namely W<strong>TKH</strong>SB or its assignee(s)/renouncee(s)<br />
by way of the conversion of an existing debt amounting to RM16 million owing by the Company to<br />
W<strong>TKH</strong>SB.<br />
The owners of the parent are entitled to receive dividends as and when declared by the Company and are<br />
entitled to one (1) vote per ordinary share at meetings of the Company. All ordinary shares rank pari passu<br />
with regard to the Company’s residual assets.<br />
14.2 Reserves and accumulated losses<br />
<strong>2012</strong><br />
RM’000<br />
Group<br />
2011<br />
RM’000<br />
<strong>2012</strong><br />
RM’000<br />
Company<br />
2011<br />
RM’000<br />
Non-distributable:<br />
Capital reserve<br />
Warrant reserve<br />
Exchange translation<br />
reserve<br />
3,472<br />
5,980<br />
(41)<br />
-<br />
7,692<br />
(46)<br />
3,472<br />
5,980<br />
-<br />
-<br />
7,692<br />
-<br />
Accumulated losses<br />
9,411<br />
(40,499)<br />
7,646<br />
(30,254)<br />
9,452<br />
(18,187)<br />
7,692<br />
(14,853)<br />
(31,088)<br />
(22,608)<br />
(8,735)<br />
(7,161)
WAWASAN <strong>TKH</strong> HOLDINGS BERHAD (540218-A)<br />
<strong>ANNUAL</strong> <strong>REPORT</strong> <strong>2012</strong><br />
073<br />
NOTES TO THE FINANCIAL STATEMENTS<br />
31 DECEMBER <strong>2012</strong> (cont’d)<br />
14. SHARE CAPITAL, RESERVES AND ACCUMULATED LOSSES (cont’d)<br />
14.2 Reserves and accumulated losses (cont’d)<br />
(a) Capital reserve<br />
The capital reserve arose from the exercise of warrants during the financial year ended 31 December<br />
<strong>2012</strong>. The reserve could be utilised, upon approval by the relevant authorities, to offset accumulated<br />
losses of the Group and the Company.<br />
The capital reserve arose from the Par Value Reduction in the previous financial year as disclosed in<br />
Note 14.1(i) to the financial statements had enabled the Company to eliminate RM28,844,000 of its<br />
accumulated losses, which was within the threshold approved by the Court Order dated 28 February<br />
2011 of RM28,844,000.<br />
(b) Warrant reserve<br />
The Warrants of 71,856,764 issued pursuant to the Rights Issue exercise of the Company were<br />
constituted by a Deed Poll dated 24 July 2008 (“Deed Poll”). The Warrants were listed on Main Market<br />
of Bursa Malaysia Securities <strong>Berhad</strong> on 29 August 2008. The main features of the Warrants are as<br />
follows:<br />
(i) Each Warrant will entitle its registered holder during the exercise period to subscribe for one (1) new<br />
ordinary share at the exercise price, subject to adjustment in accordance with the provision of the<br />
Deed Poll.<br />
(ii) The exercise price of each Warrant has been fixed at RM0.21, subject to adjustments under certain<br />
circumstances in accordance with the provision of the Deed Poll.<br />
th<br />
(iii) The expiry date of Warrants shall be the day falling on the fifth (5 ) anniversary of the date of issue<br />
of the Warrants, whereupon any warrant, which has not been exercised will lapse and cease<br />
thereafter to be valid for any purpose.<br />
(iv) The ordinary shares of RM0.10 each to be issued pursuant to the exercise of the Warrants will rank<br />
pari passu in all respect with the existing issued ordinary share of the Company.<br />
During the current financial year, 16,000,000 warrants had been exercised and the balance of warrants<br />
that remain unexercised are 55,856,764 units (2011: 71,856,764 units).<br />
(c) Exchange translation reserve<br />
The exchange translation reserve is used to record foreign currency exchange differences arising from<br />
the translation of the financial statements of a foreign operation whose functional currency is different<br />
from that of the Group’s presentation currency. It is also used to record the exchange differences arising<br />
from monetary items which form part of the Group’s net investment in a foreign operation, where the<br />
monetary item is denominated in either the functional currency of the reporting entity or the foreign<br />
operation.
074<br />
WAWASAN <strong>TKH</strong> HOLDINGS BERHAD (540218-A)<br />
<strong>ANNUAL</strong> <strong>REPORT</strong> <strong>2012</strong><br />
NOTES TO THE FINANCIAL STATEMENTS<br />
31 DECEMBER <strong>2012</strong> (cont’d)<br />
15. TRADE AND OTHER PAYABLES<br />
Non-current<br />
Other payables<br />
Amount owing to a related party<br />
<strong>2012</strong><br />
RM’000<br />
38,996<br />
Group<br />
2011<br />
RM’000<br />
39,735<br />
<strong>2012</strong><br />
RM’000<br />
38,996<br />
Company<br />
2011<br />
RM’000<br />
39,735<br />
Current<br />
Trade payables<br />
Third parties<br />
5,940<br />
8,953<br />
-<br />
-<br />
Other payables<br />
Amount owing to a subsidiary<br />
Amounts owing to related parties<br />
Other payables<br />
Accruals<br />
-<br />
247<br />
2,925<br />
4,805<br />
-<br />
27<br />
2,891<br />
5,905<br />
-<br />
21<br />
73<br />
250<br />
986<br />
21<br />
17<br />
186<br />
13,917<br />
17,776<br />
344<br />
1,210<br />
52,913<br />
57,511<br />
39,340<br />
40,945<br />
Non-current<br />
Amount owing to a related party, W<strong>TKH</strong>SB, a substantial corporate shareholder of the Company relates to<br />
advances received, which are unsecured and bear interest at rate of 8.10% (2011: ranging from 7.80% to<br />
8.10%) per annum. The amount is not repayable in the next twelve (12) months.<br />
On 31 December <strong>2012</strong>, W<strong>TKH</strong>SB has formalised the repayment terms in respect of the amount owing by the<br />
Company amounting to RM38,996,000 (2011: RM39,735,000). The said outstanding amount bears interest at<br />
8.10% (2011: 8.10%) per annum.<br />
Term and repayment schedule<br />
Group and<br />
Company<br />
<strong>2012</strong><br />
Year of<br />
maturity<br />
Carrying<br />
amount<br />
RM’000<br />
Under<br />
1 year<br />
RM’000<br />
1 - 2<br />
years<br />
RM’000<br />
2 - 5<br />
years<br />
RM’000<br />
Over<br />
5 years<br />
RM’000<br />
Amount owing to a<br />
related party<br />
2021<br />
38,996<br />
-<br />
3,613<br />
12,764<br />
22,619<br />
2011<br />
Amount owing to a<br />
related party<br />
2020<br />
39,735<br />
-<br />
3,681<br />
13,006<br />
23,048<br />
W<strong>TKH</strong>SB has agreed to the Company’s request to subordinate the advances due to W<strong>TKH</strong>SB amounting to<br />
RM38,996,000 (2011: RM39,735,000) for the next twelve (12) months from the date of this report. W<strong>TKH</strong>SB<br />
had also waived RM2,000,000 of the above advances and RM2,429,000 of the interest charged during the<br />
current financial year.
WAWASAN <strong>TKH</strong> HOLDINGS BERHAD (540218-A)<br />
<strong>ANNUAL</strong> <strong>REPORT</strong> <strong>2012</strong><br />
075<br />
NOTES TO THE FINANCIAL STATEMENTS<br />
31 DECEMBER <strong>2012</strong> (cont’d)<br />
15. TRADE AND OTHER PAYABLES (cont’d)<br />
Current<br />
(a) Trade payables are non-interest bearing and the normal trade credit terms granted to the Group range<br />
from one (1) month to three (3) months.<br />
(b) Amounts owing to a subsidiary and related parties are mainly in respect of payments made on behalf and<br />
advances, which are unsecured, interest-free and payable upon demand in cash and cash equivalents.<br />
(c) Included in accruals of the Group is an amount of RM512,000 (2011: RM704,000) in relation to the<br />
contributions payable under the terms and conditions of the Collective Agreement with NMPME.<br />
(d) Information on the financial risk of trade and other payables is disclosed in Note 27 to the financial<br />
statements.<br />
(e) The currency exposure profiles of payables are as follows:<br />
<strong>2012</strong><br />
RM’000<br />
Group<br />
2011<br />
RM’000<br />
<strong>2012</strong><br />
RM’000<br />
Company<br />
2011<br />
RM’000<br />
Ringgit Malaysia<br />
Singapore Dollar<br />
US Dollar<br />
52,359<br />
10<br />
544<br />
54,370<br />
318<br />
2,823<br />
39,340<br />
-<br />
-<br />
40,945<br />
-<br />
-<br />
52,913<br />
57,511<br />
39,340<br />
40,945<br />
16. BORROWINGS<br />
Non-current liabilities<br />
<strong>2012</strong><br />
RM’000<br />
Group<br />
2011<br />
RM’000<br />
Secured bank loans<br />
Hire purchase liabilities<br />
Current liabilities<br />
Secured bank loans<br />
Secured bankers’ acceptances<br />
Secured bank overdrafts<br />
Unsecured bankers’ acceptances<br />
Hire purchase liabilities<br />
Total borrowings<br />
Secured bank loans<br />
Secured bankers’ acceptances<br />
Secured bank overdrafts<br />
Unsecured bankers’ acceptances<br />
Hire purchase liabilities<br />
24,045<br />
1,599<br />
25,644<br />
2,133<br />
4,410<br />
3,598<br />
3,155<br />
514<br />
13,810<br />
26,178<br />
4,410<br />
3,598<br />
3,155<br />
2,113<br />
39,454<br />
22,611<br />
223<br />
22,834<br />
2,656<br />
4,327<br />
3,503<br />
4,995<br />
1,590<br />
17,071<br />
25,267<br />
4,327<br />
3,503<br />
4,995<br />
1,813<br />
39,905
076<br />
WAWASAN <strong>TKH</strong> HOLDINGS BERHAD (540218-A)<br />
<strong>ANNUAL</strong> <strong>REPORT</strong> <strong>2012</strong><br />
NOTES TO THE FINANCIAL STATEMENTS<br />
31 DECEMBER <strong>2012</strong> (cont’d)<br />
15. BORROWINGS (cont’d)<br />
(a) The bank loans, bankers’ acceptances and bank overdrafts facilities are secured against the following:<br />
(i) first legal charge over the leasehold land and buildings with carrying amounts of RM61,739,000<br />
(2011: RM64,366,000) (Note 7);<br />
(ii) fixed deposits of RM377,000 (2011: RM366,000);<br />
(iii) debenture over all present and future fixed and floating assets of certain subsidiaries; and<br />
(iv) corporate guarantee by the Company.<br />
(b) Terms and repayment schedule<br />
Group<br />
<strong>2012</strong><br />
Year of<br />
maturity<br />
Carrying<br />
amount<br />
RM’000<br />
Under<br />
1 year<br />
RM’000<br />
1 - 2<br />
years<br />
RM’000<br />
2 - 5<br />
years<br />
RM’000<br />
Over<br />
5 years<br />
RM’000<br />
Secured bank loans<br />
Secured bankers’<br />
acceptances<br />
Secured bank<br />
overdrafts<br />
Unsecured<br />
bankers’<br />
acceptances<br />
Hire purchase<br />
liabilities<br />
2022<br />
2013<br />
2013<br />
2013<br />
2017<br />
26,178<br />
4,410<br />
3,598<br />
3,155<br />
2,113<br />
2,133<br />
4,410<br />
3,598<br />
3,155<br />
514<br />
2,137<br />
-<br />
-<br />
-<br />
421<br />
7,447<br />
-<br />
-<br />
-<br />
1,178<br />
14,461<br />
-<br />
-<br />
-<br />
-<br />
39,454<br />
13,810<br />
2,558<br />
8,625<br />
14,461<br />
Group<br />
2011<br />
Year of<br />
maturity<br />
Carrying<br />
amount<br />
RM’000<br />
Under<br />
1 year<br />
RM’000<br />
1 - 2<br />
years<br />
RM’000<br />
2 - 5<br />
years<br />
RM’000<br />
Over<br />
5 years<br />
RM’000<br />
Secured bank loans<br />
Secured bankers’<br />
acceptances<br />
Secured bank<br />
overdrafts<br />
Unsecured<br />
bankers’<br />
acceptances<br />
Hire purchase<br />
liabilities<br />
2022<br />
<strong>2012</strong><br />
<strong>2012</strong><br />
<strong>2012</strong><br />
2016<br />
25,267<br />
4,327<br />
3,503<br />
4,995<br />
1,813<br />
2,656<br />
4,327<br />
3,503<br />
4,995<br />
1,590<br />
1,777<br />
-<br />
-<br />
-<br />
156<br />
5,678<br />
-<br />
-<br />
-<br />
67<br />
15,156<br />
-<br />
-<br />
-<br />
-<br />
39,905<br />
17,071<br />
1,933<br />
5,745<br />
15,156<br />
(c) Hire purchase liabilities are payable as follows:<br />
Group<br />
Less than<br />
one year<br />
Between one<br />
and five years<br />
[----------------------<strong>2012</strong>--------------------] [----------------------2011---------------------]<br />
Minimum<br />
Minimum<br />
lease<br />
lease<br />
payments Interest Principal payments Interest Principal<br />
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000<br />
651<br />
1,816<br />
137<br />
217<br />
514<br />
1,599<br />
1,645<br />
238<br />
55<br />
15<br />
1,590<br />
223<br />
2,467<br />
354<br />
2,113<br />
1,883<br />
70<br />
1,813<br />
(d) Information on financial risk of borrowings is disclosed in Note 27 to the financial statements.<br />
(e) All borrowings are denominated in Ringgit Malaysia.
WAWASAN <strong>TKH</strong> HOLDINGS BERHAD (540218-A)<br />
<strong>ANNUAL</strong> <strong>REPORT</strong> <strong>2012</strong><br />
077<br />
NOTES TO THE FINANCIAL STATEMENTS<br />
31 DECEMBER <strong>2012</strong> (cont’d)<br />
17. DEFERRED TAX LIABILITIES<br />
(a) Deferred tax liabilities are attributable to the following:<br />
<strong>2012</strong><br />
RM’000<br />
Group<br />
2011<br />
RM’000<br />
Property, plant and equipment<br />
6,770<br />
7,063<br />
(b) The movements of deferred tax liabilities during the financial year are as follows:<br />
<strong>2012</strong><br />
RM’000<br />
Group<br />
2011<br />
RM’000<br />
At 1 January<br />
Recognised in profit or loss (Note 21)<br />
At 31 December<br />
7,063<br />
(293)<br />
6,770<br />
7,355<br />
(292)<br />
7,063<br />
(c) The amounts of temporary differences for which no deferred tax assets have been recognised in the<br />
statements of financial position are as follows:<br />
Group<br />
<strong>2012</strong> 2011<br />
RM’000 RM’000<br />
Unabsorbed capital allowances<br />
Unused tax losses<br />
Provisions<br />
At 25% (2011: 25%)<br />
21,204<br />
51,522<br />
678<br />
73,404<br />
18,351<br />
15,388<br />
47,650<br />
889<br />
63,927<br />
15,982<br />
Deferred tax assets have not been recognised in respect of these items as it is not probable that future<br />
taxable profit would be available against which the deductible temporary differences can be utilised.<br />
The deductible temporary differences do not expire under the current tax legislation.<br />
18. REVENUE<br />
<strong>2012</strong><br />
RM’000<br />
Group<br />
2011<br />
RM’000<br />
<strong>2012</strong><br />
RM’000<br />
Company<br />
2011<br />
RM’000<br />
Sales<br />
Management fees<br />
54,407<br />
-<br />
70,340<br />
-<br />
-<br />
374<br />
-<br />
614<br />
54,407<br />
70,340<br />
374<br />
614
078<br />
WAWASAN <strong>TKH</strong> HOLDINGS BERHAD (540218-A)<br />
<strong>ANNUAL</strong> <strong>REPORT</strong> <strong>2012</strong><br />
NOTES TO THE FINANCIAL STATEMENTS<br />
31 DECEMBER <strong>2012</strong> (cont’d)<br />
19. FINANCE COSTS<br />
Interest expense on:<br />
-advances<br />
-bankers’ acceptances<br />
-bank loans<br />
-bank overdrafts<br />
-hire purchase<br />
-others<br />
<strong>2012</strong><br />
RM’000<br />
158<br />
384<br />
1,873<br />
219<br />
67<br />
167<br />
Group<br />
2011<br />
RM’000<br />
2,513<br />
409<br />
2,005<br />
205<br />
218<br />
166<br />
<strong>2012</strong><br />
RM’000<br />
220<br />
-<br />
-<br />
-<br />
-<br />
-<br />
Company<br />
2011<br />
RM’000<br />
2,676<br />
-<br />
-<br />
-<br />
-<br />
-<br />
2,868<br />
5,516<br />
220<br />
2,676<br />
20. LOSS BEFORE TAX<br />
Loss before tax is<br />
arrived at after charging:<br />
Note<br />
<strong>2012</strong><br />
RM’000<br />
Group<br />
2011<br />
RM’000<br />
<strong>2012</strong><br />
RM’000<br />
Company<br />
2011<br />
RM’000<br />
Auditors’ remuneration<br />
- statutory audit<br />
- other services<br />
Depreciation of property,<br />
plant and equipment<br />
Directors’ remuneration<br />
- fees<br />
- other emoluments<br />
Fair value adjustments on<br />
derivative instruments<br />
Impairment losses on:<br />
- investments in<br />
subsidiaries<br />
- other receivables<br />
- property, plant and<br />
equipment<br />
- trade receivables<br />
Interest expense<br />
Inventories written down<br />
Inventories written off<br />
Property, plant and<br />
equipment written off<br />
Rental expenses on<br />
- mining lease<br />
- office equipment<br />
- property leases<br />
- forklift<br />
Royalty<br />
7<br />
12<br />
9<br />
7<br />
11<br />
19<br />
10<br />
10<br />
7<br />
122<br />
22<br />
8,156<br />
105<br />
27<br />
-<br />
-<br />
-<br />
-<br />
-<br />
2,868<br />
-<br />
-<br />
-<br />
129<br />
-<br />
-<br />
40<br />
732<br />
113<br />
11<br />
8,850<br />
105<br />
1,058<br />
74<br />
-<br />
6<br />
2,000<br />
88<br />
5,516<br />
408<br />
1,400<br />
2<br />
129<br />
21<br />
41<br />
-<br />
418<br />
50<br />
16<br />
-<br />
90<br />
27<br />
-<br />
4,700<br />
-<br />
-<br />
-<br />
220<br />
-<br />
-<br />
-<br />
-<br />
-<br />
-<br />
-<br />
-<br />
42<br />
8<br />
-<br />
90<br />
924<br />
-<br />
1,500<br />
-<br />
-<br />
-<br />
2,676<br />
-<br />
-<br />
-<br />
-<br />
-<br />
-<br />
-<br />
-<br />
and after crediting:<br />
Fair value adjustments on<br />
derivative instruments<br />
Gain on disposal of<br />
property, plant and<br />
equipment<br />
Insurance compensation<br />
Interest income<br />
Net foreign exchange gain<br />
Rental income<br />
Waiver of amount owing to a<br />
related party<br />
Reversal of inventories written<br />
down<br />
Reversal of impairment loss<br />
on trade receivables<br />
12<br />
7<br />
15<br />
10<br />
11<br />
9<br />
62<br />
-<br />
17<br />
723<br />
449<br />
2,000<br />
167<br />
87<br />
-<br />
2,472<br />
3,919<br />
17<br />
704<br />
10<br />
-<br />
-<br />
18<br />
-<br />
-<br />
-<br />
159<br />
-<br />
-<br />
2,000<br />
-<br />
-<br />
-<br />
-<br />
-<br />
312<br />
-<br />
-<br />
-<br />
-<br />
-
WAWASAN <strong>TKH</strong> HOLDINGS BERHAD (540218-A)<br />
<strong>ANNUAL</strong> <strong>REPORT</strong> <strong>2012</strong><br />
079<br />
NOTES TO THE FINANCIAL STATEMENTS<br />
31 DECEMBER <strong>2012</strong> (cont’d)<br />
21. TAXATION<br />
<strong>2012</strong><br />
RM’000<br />
Group<br />
2011<br />
RM’000<br />
<strong>2012</strong><br />
RM’000<br />
Company<br />
2011<br />
RM’000<br />
Current taxation based on<br />
loss for the financial year<br />
Over provision in prior years<br />
-<br />
-<br />
-<br />
(53)<br />
-<br />
-<br />
(53)<br />
Deferred tax (Note 17):<br />
Relating to origination<br />
and reversal of temporary differences<br />
-<br />
(293)<br />
(53)<br />
(292)<br />
-<br />
-<br />
(53)<br />
-<br />
(293)<br />
(345)<br />
-<br />
(53)<br />
The Malaysian income tax is calculated at the statutory tax rate of 25% (2011: 25%) of the estimated taxable<br />
profit for the fiscal year.<br />
Tax expense for other taxation authorities are calculated at the rates prevailing in those respective jurisdictions.<br />
The numerical reconciliations between the tax income and the product of accounting loss multiplied by the<br />
applicable tax rate of the Group and of the Company are as follows:<br />
<strong>2012</strong><br />
RM’000<br />
Group<br />
2011<br />
RM’000<br />
<strong>2012</strong><br />
RM’000<br />
Company<br />
2011<br />
RM’000<br />
Loss before tax<br />
(10,538)<br />
(15,129)<br />
(3,334)<br />
(5,346)<br />
Tax at Malaysia tax rate of<br />
25% (2011: 25%)<br />
(2,634)<br />
(3,783)<br />
(834)<br />
(1,336)<br />
Non-taxable income<br />
Non-allowable expenses<br />
Deferred tax assets<br />
not recognised<br />
Differences of tax rate in<br />
foreign jurisdiction<br />
(549)<br />
535<br />
2,369<br />
(14)<br />
(1,641)<br />
2,299<br />
2,887<br />
(54)<br />
(500)<br />
1,334<br />
-<br />
-<br />
-<br />
1,336<br />
-<br />
-<br />
Over provision of tax<br />
expense in prior years<br />
(293)<br />
-<br />
(292)<br />
(53)<br />
-<br />
-<br />
-<br />
(53)<br />
(293)<br />
(345)<br />
-<br />
(53)
080<br />
WAWASAN <strong>TKH</strong> HOLDINGS BERHAD (540218-A)<br />
<strong>ANNUAL</strong> <strong>REPORT</strong> <strong>2012</strong><br />
NOTES TO THE FINANCIAL STATEMENTS<br />
31 DECEMBER <strong>2012</strong> (cont’d)<br />
22. LOSS PER SHARE<br />
(a) Basic<br />
Basic loss per ordinary share for the financial year is calculated by dividing the loss for the financial<br />
year attributable to equity holders of the parent by the weighted average number of ordinary shares<br />
outstanding during the financial year.<br />
Loss for the year attributable to equity holders of<br />
the parent<br />
<strong>2012</strong><br />
RM’000<br />
(10,245)<br />
Group<br />
2011<br />
RM’000<br />
(14,748)<br />
Weighted average number of ordinary shares in issue<br />
(‘000 unit)<br />
Basic loss per ordinary share (sen)<br />
(b) Diluted<br />
<strong>2012</strong><br />
451,870<br />
(2.27)<br />
Group<br />
2011<br />
415,123<br />
(3.56)<br />
The diluted loss per ordinary share is the same as the basic loss per ordinary share because the effect<br />
of the assumed conversion of warrants outstanding will be anti dilutive and the Company has no other<br />
dilutive potential ordinary share in issue as at end of the reporting period.<br />
23. EMPLOYEE BENEFITS<br />
<strong>2012</strong><br />
RM’000<br />
Group<br />
2011<br />
RM’000<br />
<strong>2012</strong><br />
RM’000<br />
Company<br />
2011<br />
RM’000<br />
Salaries, wages, overtime and allowance<br />
Contributions to Employee Provident Fund<br />
Contributions to NMPME Union Fund<br />
Other employee benefits<br />
8,513<br />
629<br />
(192)<br />
347<br />
11,395<br />
817<br />
60<br />
417<br />
452<br />
54<br />
-<br />
29<br />
1,353<br />
146<br />
-<br />
26<br />
9,297<br />
12,689<br />
535<br />
1,525<br />
Included in the employee benefits of the Group and of the Company are Executive Directors’ remunerations<br />
amounting to RM27,000 (2011: RM1,058,000) and RM27,000 (2011: RM924,000) respectively.
WAWASAN <strong>TKH</strong> HOLDINGS BERHAD (540218-A)<br />
<strong>ANNUAL</strong> <strong>REPORT</strong> <strong>2012</strong><br />
081<br />
NOTES TO THE FINANCIAL STATEMENTS<br />
31 DECEMBER <strong>2012</strong> (cont’d)<br />
24. RELATED PARTY DISCLOSURES<br />
(a) Identities of related parties<br />
Parties are considered to be related to the Group if the Group has the ability, directly or indirectly,<br />
to control the party or exercise significant influence over the party in making financial and operating<br />
decisions, or vice versa, or where the Group and the party are subject to common control or common<br />
significant influence. Related parties may be individuals or other parties.<br />
The Company has controlling related party relationship with its direct and indirect subsidiaries.<br />
The related parties and their relationships with the Group as at 31 December <strong>2012</strong> are as follows:<br />
Name of related parties<br />
<strong>Wawasan</strong> <strong>TKH</strong> Sdn. Bhd.<br />
Relationship<br />
Corporate shareholder and a company in<br />
which certain Directors of the Company<br />
have substantial financial interests.<br />
Asia Experience Sdn. Bhd. ) Companies in which certain Directors of the<br />
Clear Expertise Sdn. Bhd. ) Company have substantial financial interests.<br />
PST Travel Services Sdn. Bhd. )<br />
<strong>TKH</strong> Manufacturing Sdn. Bhd. )<br />
Xilouette Manufacturer Sdn. Bhd. )<br />
Xixili Intima Sdn. Bhd. )<br />
(b) In addition to the transactions and balances detailed elsewhere in the financial statements, the Group<br />
and the Company had the following transactions with related parties during the financial year:<br />
Subsidiaries<br />
Advances to<br />
Interest receivable<br />
Interest payable<br />
Management fees<br />
receivable<br />
<strong>2012</strong><br />
RM’000<br />
-<br />
-<br />
-<br />
-<br />
Group<br />
2011<br />
RM’000<br />
-<br />
-<br />
-<br />
-<br />
<strong>2012</strong><br />
RM’000<br />
4,540<br />
158<br />
62<br />
374<br />
Company<br />
2011<br />
RM’000<br />
1,304<br />
312<br />
163<br />
614<br />
Related parties<br />
Advances from<br />
Interest payable<br />
Waiver of advances owing to<br />
Insurance brokerage commission<br />
Flight tickets paid or payable<br />
Sale of raw materials<br />
Rental income<br />
Purchase of motor vehicle<br />
Sale of office equipment<br />
1,104<br />
158<br />
2,000<br />
78<br />
55<br />
-<br />
449<br />
-<br />
-<br />
3,670<br />
2,513<br />
-<br />
64<br />
49<br />
217<br />
10<br />
66<br />
2<br />
1,104<br />
158<br />
2,000<br />
-<br />
-<br />
-<br />
-<br />
-<br />
-<br />
3,670<br />
2,513<br />
-<br />
-<br />
-<br />
-<br />
-<br />
-<br />
The Directors are of the opinion that the terms and conditions and prices of the above transactions are<br />
not materially different from those obtainable from transactions with unrelated parties.
082<br />
WAWASAN <strong>TKH</strong> HOLDINGS BERHAD (540218-A)<br />
<strong>ANNUAL</strong> <strong>REPORT</strong> <strong>2012</strong><br />
NOTES TO THE FINANCIAL STATEMENTS<br />
31 DECEMBER <strong>2012</strong> (cont’d)<br />
24. RELATED PARTY DISCLOSURES (cont’d)<br />
(c) Compensation of key management personnel<br />
Key management personnel are those persons having the authority and responsibility for planning,<br />
directing and controlling the activities of the entity, directly and indirectly, including any Director (whether<br />
executive or otherwise) of the Group and the Company.<br />
The remunerations of Directors and other key management personnel during the financial year are as<br />
follows:<br />
Group<br />
Company<br />
<strong>2012</strong> 2011<br />
<strong>2012</strong> 2011<br />
RM’000 RM’000 RM’000 RM’000<br />
Directors’ remuneration<br />
- fees<br />
- other emoluments<br />
105<br />
27<br />
105<br />
1,058<br />
90<br />
27<br />
90<br />
923<br />
Other key management personnel<br />
- short term employee benefits<br />
132<br />
1,690<br />
1,163<br />
2,002<br />
117<br />
466<br />
1,013<br />
532<br />
1,822<br />
3,165<br />
583<br />
1,545<br />
25. OPERATING SEGMENTS<br />
The Group has arrived at three (3) reportable segments that are organised and managed separately<br />
according to the nature of products and services, specific expertise and technologies requirements, which<br />
requires different business and marketing strategies. The reportable segments are summarised as follows:<br />
(i)<br />
Investment holding<br />
(ii) Manufacturing disposable foodwares<br />
(iii) Mining<br />
The Group’s chief operating decision maker monitors the operating results of its business units separately<br />
for the purpose of making decisions on resource allocation and performance assessment.<br />
The accounting policies of operating segments are the same as those described in the summary of significant<br />
accounting policies. The Group evaluates performance on the basis of profit or loss from operations before<br />
tax excluding non-recurring losses such as restructuring costs and goodwill impairment.<br />
Inter-segment revenue is priced on an arm’s length basis and is eliminated in the consolidated financial<br />
statements. These policies have been applied consistently throughout the current and previous financial<br />
years.<br />
Segment assets exclude tax assets.<br />
Segment liabilities exclude tax liabilities and deferred tax liabilities. Even though loans and borrowings arise<br />
from financing activities rather than operating activities, they are allocated to the segments based on funding<br />
requirements. Details are provided in the reconciliations from segment assets and liabilities to the position of<br />
the Group.
WAWASAN <strong>TKH</strong> HOLDINGS BERHAD (540218-A)<br />
<strong>ANNUAL</strong> <strong>REPORT</strong> <strong>2012</strong><br />
083<br />
NOTES TO THE FINANCIAL STATEMENTS<br />
31 DECEMBER <strong>2012</strong> (cont’d)<br />
25. OPERATING SEGMENTS (cont’d)<br />
<strong>2012</strong><br />
Investment<br />
holding<br />
RM’000<br />
Manufacturing<br />
disposable<br />
foodwares<br />
RM’000<br />
Mining<br />
RM’000<br />
Total<br />
RM’000<br />
Revenue<br />
Total revenue<br />
Inter-segment revenue<br />
Revenue from external<br />
customers<br />
374<br />
(374)<br />
-<br />
41,729<br />
-<br />
41,729<br />
12,678<br />
-<br />
12,678<br />
54,781<br />
(374)<br />
54,407<br />
Interest income<br />
Finance costs<br />
2<br />
(220)<br />
10<br />
(2,520)<br />
5<br />
(128)<br />
17<br />
(2,868)<br />
Net finance expense<br />
(218)<br />
(2,510)<br />
(123)<br />
(2,851)<br />
Segment loss before tax<br />
(3,492)<br />
(9,857)<br />
(1,889)<br />
(15,238)<br />
Taxation<br />
-<br />
268<br />
25<br />
293<br />
Other material non-cash items:<br />
- Depreciation<br />
- Waiver of amount owing to<br />
a related party<br />
- Gain on disposal of property,<br />
plant and equipment<br />
- Reversal of inventories<br />
written down<br />
2,000<br />
-<br />
-<br />
-<br />
(7,676)<br />
-<br />
62<br />
-<br />
(480)<br />
-<br />
-<br />
167<br />
(8,156)<br />
2,000<br />
62<br />
167<br />
Segment assets<br />
41<br />
89,816<br />
24,653<br />
114,510<br />
Segment liabilities<br />
39,340<br />
46,235<br />
6,815<br />
92,390
084<br />
WAWASAN <strong>TKH</strong> HOLDINGS BERHAD (540218-A)<br />
<strong>ANNUAL</strong> <strong>REPORT</strong> <strong>2012</strong><br />
NOTES TO THE FINANCIAL STATEMENTS<br />
31 DECEMBER <strong>2012</strong> (cont’d)<br />
25. OPERATING SEGMENTS (cont’d)<br />
2011<br />
Investment<br />
holding<br />
RM’000<br />
Manufacturing<br />
disposable<br />
foodwares<br />
RM’000<br />
Mining<br />
RM’000<br />
Total<br />
RM’000<br />
Revenue<br />
Total revenue<br />
Inter-segment revenue<br />
Revenue from external<br />
customers<br />
614<br />
(614)<br />
-<br />
57,522<br />
-<br />
57,522<br />
12,818<br />
-<br />
12,818<br />
70,954<br />
(614)<br />
70,340<br />
Interest income<br />
Finance costs<br />
-<br />
(2,676)<br />
12<br />
(2,736)<br />
5<br />
(104)<br />
17<br />
(5,516)<br />
Net finance expense<br />
(2,676)<br />
(2,724)<br />
(99)<br />
(5,499)<br />
Segment loss before tax<br />
(5,657)<br />
(8,322)<br />
(2,650)<br />
(16,629)<br />
Taxation<br />
53<br />
269<br />
23<br />
345<br />
Other material non-cash items:<br />
- Depreciation<br />
- Gain on disposal of property,<br />
plant and equipment<br />
- Impairment loss on property,<br />
plant and equipment<br />
- Impairment loss on trade and<br />
other receivables<br />
- Inventories written down<br />
- Inventories written off<br />
-<br />
-<br />
-<br />
-<br />
-<br />
-<br />
(8,286)<br />
2,472<br />
(2,000)<br />
(79)<br />
(114)<br />
(1,400)<br />
(564)<br />
-<br />
-<br />
(15)<br />
(294)<br />
-<br />
(8,850)<br />
2,472<br />
(2,000)<br />
(94)<br />
(408)<br />
(1,400)<br />
Segment assets<br />
40<br />
100,805<br />
25,011<br />
125,856<br />
Segment liabilities<br />
39,958<br />
50,036<br />
7,468<br />
97,462<br />
Reconciliations of reportable segment revenues, profit or loss, assets and liabilities to the Group’s<br />
corresponding amounts are as follows:<br />
<strong>2012</strong> 2011<br />
RM’000 RM’000<br />
Revenue<br />
Total revenue for reportable segments<br />
Elimination of inter-segment revenue<br />
54,781<br />
(374)<br />
70,954<br />
(614)<br />
Group’s revenue per consolidated income statements<br />
Loss for the financial year<br />
Total loss for reportable segments<br />
Impairment loss on investments in subsidiaries<br />
Loss before tax<br />
Taxation<br />
Loss for the financial year per consolidated income<br />
statements<br />
54,407<br />
(15,238)<br />
4,700<br />
(10,538)<br />
293<br />
(10,245)<br />
70,340<br />
(16,629)<br />
1,500<br />
(15,129)<br />
345<br />
(14,784)
WAWASAN <strong>TKH</strong> HOLDINGS BERHAD (540218-A)<br />
<strong>ANNUAL</strong> <strong>REPORT</strong> <strong>2012</strong><br />
085<br />
NOTES TO THE FINANCIAL STATEMENTS<br />
31 DECEMBER <strong>2012</strong> (cont’d)<br />
25. OPERATING SEGMENTS (cont’d)<br />
Reconciliations of reportable segment revenues, profit or loss, assets and liabilities to the Group’s<br />
corresponding amounts are as follows: (cont’d)<br />
Assets<br />
Total assets for reportable segments<br />
Current tax assets<br />
Group’s assets per consolidated statement of<br />
financial position<br />
Liabilities<br />
Total liabilities for reportable segments<br />
Current tax liabilities<br />
Deferred tax liabilities<br />
Group’s liabilities per consolidated statement of<br />
financial position<br />
<strong>2012</strong><br />
RM’000<br />
114,510<br />
18<br />
114,528<br />
92,390<br />
12<br />
6,770<br />
99,172<br />
2011<br />
M’000<br />
125,856<br />
918<br />
126,774<br />
97,462<br />
13<br />
7,063<br />
104,538<br />
Geographical information<br />
The Group’s manufacturing facilities and sales offices are mainly based in Malaysia and Singapore.<br />
In presenting information on the basis of geographical areas, segment revenue is based on the geographical<br />
location from which the sale transactions originated.<br />
Segment assets are based on the geographical location of the Group’s assets. The non-current assets do<br />
not include financial instruments and deferred tax assets.<br />
Revenue from external customers<br />
Malaysia<br />
Singapore<br />
Non-current assets<br />
Malaysia<br />
<strong>2012</strong><br />
RM’000<br />
54,407<br />
-<br />
54,407<br />
<strong>2012</strong><br />
RM’000<br />
97,005<br />
2011<br />
RM’000<br />
69,202<br />
1,138<br />
70,340<br />
2011<br />
RM’000<br />
101,187<br />
Major customers<br />
The Group does not have major customers with revenue equal to or more than 10 percent of the revenue of<br />
the Group.
086<br />
WAWASAN <strong>TKH</strong> HOLDINGS BERHAD (540218-A)<br />
<strong>ANNUAL</strong> <strong>REPORT</strong> <strong>2012</strong><br />
NOTES TO THE FINANCIAL STATEMENTS<br />
31 DECEMBER <strong>2012</strong> (cont’d)<br />
26. FINANCIAL INSTRUMENTS<br />
(a) Capital management<br />
The primary objective of the Group’s capital management is to ensure that entities of the Group would be<br />
able to continue as going concerns while maximising the return to shareholders through the optimisation<br />
of the debt and equity balance. The overall strategy of the Group remains unchanged from financial year<br />
ended 31 December 2011.<br />
The Group manages its capital structure and makes adjustments to it, in light of changes in economic<br />
conditions. The dividend payment or capital to shareholders may be adjusted or new shares may be<br />
issued in order to maintain or adjust the capital structure. No changes were made in the objectives,<br />
policies or processes during the financial years ended 31 December <strong>2012</strong> and 31 December 2011.<br />
The Group is not subject to any externally imposed capital requirements.<br />
Under the requirement of Bursa Malaysia Practice Note 17, the Group is required to maintain a<br />
consolidated shareholders’ equity equal to not less than 25 percent of the issued and paid up capital<br />
(excluding treasury shares, if any) and such shareholders’ equity is not less than RM40 million.<br />
The Group has complied with this requirement for the financial year ended 31 December <strong>2012</strong>.<br />
The Group monitors capital using a gearing ratio, which is net debts divided by total capital plus net<br />
debts. Net debts of the Group include loans and borrowings, trade and other payables, less cash and<br />
bank balances. Capital represents equity attributable to the owners of the parent. In relation to this,<br />
the Group requires financial support from its corporate shareholder, W<strong>TKH</strong>SB to finance the Group’s<br />
operations and meet its obligations as and when they fall due.<br />
(b) Categories of financial instruments<br />
Group<br />
<strong>2012</strong><br />
Loans and<br />
receivables<br />
RM’000<br />
Total<br />
RM’000<br />
Financial assets<br />
Trade and other receivables, net of<br />
deposits and prepayments<br />
Cash and cash equivalents<br />
7,017<br />
750<br />
7,767<br />
7,017<br />
750<br />
7,767<br />
Financial liabilities<br />
Borrowings<br />
Trade and other payables<br />
Derivative liabilities<br />
Other financial<br />
liabilities<br />
RM’000<br />
39,454<br />
52,913<br />
-<br />
Fair value through<br />
profit or loss<br />
RM’000<br />
-<br />
-<br />
23<br />
Total<br />
RM’000<br />
39,454<br />
52,913<br />
23<br />
92,367<br />
23<br />
92,390<br />
Company<br />
<strong>2012</strong><br />
Loans and<br />
receivables<br />
RM’000<br />
Financial assets<br />
Trade and other receivables, net of<br />
deposits and prepayments<br />
Cash and cash equivalents<br />
9,650<br />
11<br />
9,661<br />
Financial liabilities<br />
Trade and other payables<br />
Other financial<br />
liabilities<br />
RM’000<br />
39,340
WAWASAN <strong>TKH</strong> HOLDINGS BERHAD (540218-A)<br />
<strong>ANNUAL</strong> <strong>REPORT</strong> <strong>2012</strong><br />
087<br />
NOTES TO THE FINANCIAL STATEMENTS<br />
31 DECEMBER <strong>2012</strong> (cont’d)<br />
26. FINANCIAL INSTRUMENTS (cont’d)<br />
(b) Categories of financial instruments (cont’d)<br />
Group<br />
2011<br />
Loans and<br />
receivables<br />
RM’000<br />
Fair value<br />
through<br />
profit or loss<br />
RM’000<br />
Total<br />
RM’000<br />
Financial assets<br />
Trade and other receivables, net of<br />
deposits and prepayments<br />
Derivative assets<br />
Cash and cash equivalents<br />
11,713<br />
-<br />
2,151<br />
-<br />
14<br />
-<br />
11,713<br />
14<br />
2,151<br />
13,864<br />
14<br />
13,878<br />
Financial liabilities<br />
Borrowings<br />
Trade and other payables<br />
Derivative liabilities<br />
Other<br />
financial<br />
liabilities<br />
RM’000<br />
39,905<br />
57,511<br />
-<br />
Fair value<br />
through<br />
profit or loss<br />
RM’000<br />
-<br />
-<br />
46<br />
Total<br />
RM’000<br />
39,905<br />
57,511<br />
46<br />
97,416<br />
46<br />
97,462<br />
Company<br />
2011<br />
Loans and<br />
receivables<br />
RM’000<br />
Financial assets<br />
Trade and other receivables, net of<br />
deposits and prepayments<br />
Cash and cash equivalents<br />
5,626<br />
10<br />
5,636<br />
Financial liabilities<br />
Trade and other payables<br />
Other financial<br />
liabilities<br />
RM’000<br />
40,945<br />
(c) Fair values of financial instruments<br />
The fair values of financial instruments that are not carried at fair values and whose carrying amounts do<br />
not approximate their fair values are as follows:<br />
<strong>2012</strong><br />
Notes<br />
Carrying<br />
amounts<br />
RM’000<br />
Group<br />
Fair<br />
values<br />
RM’000<br />
Recognised<br />
Financial liabilities<br />
Hire purchase liabilities<br />
16<br />
2,113<br />
2,115<br />
2011<br />
Recognised<br />
Financial liabilities<br />
Hire purchase liabilities<br />
16<br />
1,813<br />
1,849
088<br />
WAWASAN <strong>TKH</strong> HOLDINGS BERHAD (540218-A)<br />
<strong>ANNUAL</strong> <strong>REPORT</strong> <strong>2012</strong><br />
NOTES TO THE FINANCIAL STATEMENTS<br />
31 DECEMBER <strong>2012</strong> (cont’d)<br />
26. FINANCIAL INSTRUMENTS (cont’d)<br />
(d) Methods and assumptions used to estimate fair values<br />
The fair values of financial assets and financial liabilities are determined as follows:<br />
(i) Financial instruments that are not carried at fair values and whose carrying amounts are a reasonable<br />
approximation of fair values<br />
The carrying amounts of financial assets and financial liabilities, such as trade and other receivables,<br />
trade and other payables and borrowings, are reasonable approximation of fair values, either due to<br />
their short-term nature or that they are floating rate instruments that are re-priced to market interest<br />
rates on or near the end of the reporting period.<br />
(ii) Obligations under finance lease<br />
The fair values of these financial instruments are estimated by discounting expected future cash flows<br />
at market incremental lending rate for similar types of lending, borrowing or leasing arrangements at<br />
the end of the reporting period.<br />
(iii) Derivatives<br />
The fair value of a forward foreign exchange contract is the amount that would be payable or<br />
receivable upon termination of the outstanding position arising and is determined by reference<br />
to the difference between the contracted rate and the forward exchange rate as at the end of the<br />
reporting period applied to a contract of similar amount and maturity profile.<br />
(e) Fair value hierarchy<br />
The following table provides an analysis of financial instruments that are measured subsequent to<br />
initial recognition at fair value, grouped into Levels 1 to 3 based on the degree to which the fair value<br />
is observable.<br />
Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active markets<br />
for identical assets or liabilities.<br />
Level 2 fair value measurements are those derived from inputs other than quoted prices included within<br />
Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived<br />
from prices).<br />
Level 3 fair value measurements are those derived from inputs for the asset or liability that are not based<br />
on observable market data (unobservable inputs).<br />
As at 31 December <strong>2012</strong>, the Group held the following financial instruments carried at fair value on the<br />
statement of financial position:<br />
Liabilities measured at fair values<br />
Financial liabilities at fair value<br />
through profit or loss<br />
- Forward currency contracts<br />
Total<br />
RM’000<br />
23<br />
Level 1<br />
RM’000<br />
As at 31 December 2011, the Group held the following financial instruments carried at fair value on the<br />
statement of financial position:<br />
-<br />
Level 2<br />
RM’000<br />
23<br />
Level 3<br />
RM’000<br />
-<br />
Assets measured at fair values<br />
Financial assets at fair value<br />
through profit or loss<br />
- Forward currency contracts<br />
Total<br />
RM’000<br />
14<br />
Level 1<br />
RM’000<br />
-<br />
Level 2<br />
RM’000<br />
14<br />
Level 3<br />
RM’000<br />
-<br />
Liabilities measured at fair values<br />
Financial liabilities at fair value<br />
through profit or loss<br />
- Forward currency contracts<br />
Total<br />
RM’000<br />
46<br />
Level 1<br />
RM’000<br />
-<br />
Level 2<br />
RM’000<br />
46<br />
Level 3<br />
RM’000<br />
-<br />
There were no transfers between Level 1 and Level 2 fair value measurements during the financial years<br />
ended 31 December <strong>2012</strong> and 31 December 2011.
WAWASAN <strong>TKH</strong> HOLDINGS BERHAD (540218-A)<br />
<strong>ANNUAL</strong> <strong>REPORT</strong> <strong>2012</strong><br />
089<br />
NOTES TO THE FINANCIAL STATEMENTS<br />
31 DECEMBER <strong>2012</strong> (cont’d)<br />
27. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES<br />
The Group’s financial risk management objective is to optimise value creation for shareholders whilst<br />
minimising the potential adverse impact arising from fluctuations in foreign currency exchange and interest<br />
rates and the unpredictability of the financial markets.<br />
The Group is exposed mainly to credit risk, liquidity and cash flow risk, interest rate risk and foreign currency<br />
risk. Information on the management of the related exposures is detailed below:<br />
(i) Credit risk<br />
Cash deposits and trade receivables may give rise to credit risk, which requires the loss to be recognised<br />
if a counter party fails to perform as contracted. It is the Group’s policy to monitor the financial standing<br />
of these counter parties on an ongoing basis to ensure that the Group is exposed to minimal credit risk.<br />
The Group’s primary exposure to credit risk arises through its trade receivables. The Group’s trading<br />
terms with its customers are mainly on credit, except for new customers, where deposits in advance are<br />
normally required. The credit period is generally for a period of one (1) month, extending up to three (3)<br />
months for major customers. Informal credit evaluations are performed on all customers requiring credit<br />
over a certain amount. The Group seeks to maintain strict control over its outstanding receivables and<br />
overdue balances are reviewed regularly by senior management.<br />
Exposure to credit risk<br />
At the end of the reporting period, the Group’s and the Company’s maximum exposure to credit risk<br />
is represented by the carrying amount of each class of financial assets recognised in the statements<br />
of financial position, including derivatives with positive fair values.<br />
Information regarding credit enhancements for trade and other receivables is disclosed in Note 11 to<br />
the financial statements.<br />
Credit risk concentration profile<br />
The Group determines concentration of credit risk by monitoring the sales segment and industry sector<br />
profiles of its trade receivables on an ongoing basis. The credit risk concentration profiles of the Group’s<br />
trade receivables at the end of the reporting period are as follows:<br />
By sales segment<br />
Domestic<br />
Overseas<br />
<strong>2012</strong><br />
RM’000 % of total<br />
3,238<br />
3,311<br />
49<br />
51<br />
Group<br />
2011<br />
RM’000 % of total<br />
4,412<br />
3,846<br />
53<br />
47<br />
6,549<br />
100<br />
8,258<br />
100<br />
By industry sectors<br />
Trading<br />
Manufacturing<br />
4,765<br />
1,784<br />
73<br />
27<br />
5,309<br />
2,949<br />
64<br />
36<br />
6,549<br />
100<br />
8,258<br />
100<br />
Financial assets that are neither past due nor impaired<br />
Information regarding credit enhancements for trade and other receivables is disclosed in Note 11 to the<br />
financial statements. Deposits with banks and other financial institutions and derivatives that are neither<br />
past due nor impaired are placed with or entered into with reputable financial institutions with high credit<br />
ratings and no history of default.<br />
Financial assets that are either past due or impaired<br />
Information regarding financial assets that are either past due or impaired is disclosed in Note 11 to the<br />
financial statements.
090<br />
WAWASAN <strong>TKH</strong> HOLDINGS BERHAD (540218-A)<br />
<strong>ANNUAL</strong> <strong>REPORT</strong> <strong>2012</strong><br />
NOTES TO THE FINANCIAL STATEMENTS<br />
31 DECEMBER <strong>2012</strong> (cont’d)<br />
27. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (cont’d)<br />
(ii) Liquidity and cash flow risk<br />
Prudent liquidity and cash flow risk management implies maintaining sufficient cash and marketable<br />
securities, the availability of funding through an adequate amount of committed credit facilities. The<br />
Group actively manages their cash flows and the availability of funding so as to ensure all operating,<br />
investing and financing needs are met. To mitigate liquidity risk, the Group requires financial support<br />
from its corporate shareholder, W<strong>TKH</strong>SB to finance the Group’s operations and meet its obligations<br />
as and when they fall due.<br />
The Group monitors liquidity risk of its loans and borrowings (including overdrafts) that should mature<br />
in the next one year period to maintain sufficient liquid financial assets and stand-by credit facilities with<br />
different banks.<br />
The table below summarises the maturity profile of the Group’s and the Company’s liabilities at the end<br />
of the reporting period based on contractual undiscounted repayment obligations.<br />
<strong>2012</strong><br />
Group<br />
On demand<br />
or within<br />
one year<br />
RM’000<br />
One to five<br />
years<br />
RM’000<br />
Over five<br />
years<br />
RM’000<br />
Total<br />
RM’000<br />
Financial liabilities:<br />
Trade and other payables<br />
Borrowings<br />
Derivatives<br />
13,917<br />
15,820<br />
23<br />
26,557<br />
17,241<br />
-<br />
26,557<br />
17,020<br />
-<br />
67,031<br />
50,081<br />
23<br />
Total undiscounted financial liabilities<br />
29,760<br />
43,798<br />
43,577<br />
117,135<br />
Company<br />
Financial liabilities:<br />
Trade and other payables<br />
344<br />
26,557<br />
26,557<br />
53,458<br />
Total undiscounted financial liabilities<br />
344<br />
26,557<br />
26,557<br />
53,458<br />
Group<br />
On demand<br />
or within<br />
one year<br />
RM’000<br />
2011<br />
One to five<br />
years<br />
RM’000<br />
Over five<br />
years<br />
RM’000<br />
Total<br />
RM’000<br />
Financial liabilities:<br />
Trade and other payables<br />
Borrowings<br />
Derivatives<br />
17,776<br />
19,211<br />
46<br />
27,060<br />
13,393<br />
-<br />
27,059<br />
18,698<br />
-<br />
71,895<br />
51,302<br />
46<br />
Total undiscounted financial liabilities<br />
37,033<br />
40,453<br />
45,757<br />
123,243<br />
Company<br />
Financial liabilities<br />
Trade and other payables<br />
1,211<br />
27,060<br />
27,059<br />
55,330<br />
Total undiscounted financial liabilities<br />
1,211<br />
27,060<br />
27,059<br />
55,330
WAWASAN <strong>TKH</strong> HOLDINGS BERHAD (540218-A)<br />
<strong>ANNUAL</strong> <strong>REPORT</strong> <strong>2012</strong><br />
091<br />
NOTES TO THE FINANCIAL STATEMENTS<br />
31 DECEMBER <strong>2012</strong> (cont’d)<br />
27. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (cont’d)<br />
(iii) Interest rate risk<br />
Interest rate risk is the risk that the fair value or future cash flows of the Group’s and the Company’s<br />
financial instruments would fluctuate because of changes in market interest rates.<br />
The Group’s primary interest rate risk relates to interest-earning deposits and interest-bearing borrowings<br />
from financial institutions. The Group’s fixed-rate deposits and borrowings are not exposed to risk of<br />
changes in their fair values due to changes in interest rates. The Group’s floating rate borrowings are<br />
exposed to risk of changes in cash flows due to changes in interest rates. Short term receivables and<br />
payables are not exposed to interest rate risk. There is no formal hedging policy with respect to interest<br />
rate exposure.<br />
Sensitivity analysis for interest rate risk<br />
As at 31 December <strong>2012</strong>, if interest rates at the date had been 100 basis points lower with all other<br />
variables held constant, the Group’s and the Company’s loss after tax for the year would have been<br />
lower by approximately RM397,000 (2011: RM749,000) and RM21,000 (2011: RM325,000) respectively,<br />
arising mainly as a result of lower interest expenses on borrowings and amount owing to a related party.<br />
If interest rates had been 100 basis points higher with all other variables held constant, the Group’s and<br />
the Company’s loss after tax for the year would have been higher by approximately RM400,000 (2011:<br />
RM756,000) and RM21,000 (2011: RM325,000) respectively, arising mainly as a result of higher interest<br />
expenses on borrowings and amount owing to a related party. The assumed movement in basis point<br />
for interest rate sensitivity analysis is based on currently observable market environment.
092<br />
WAWASAN <strong>TKH</strong> HOLDINGS BERHAD (540218-A)<br />
<strong>ANNUAL</strong> <strong>REPORT</strong> <strong>2012</strong><br />
NOTES TO THE FINANCIAL STATEMENTS<br />
31 DECEMBER <strong>2012</strong> (cont’d)<br />
27. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (cont’d)<br />
(iii) Interest rate risk (cont’d)<br />
The following tables set out the carrying amounts, the weighted average effective interest rates as at the end of the reporting period and the remaining<br />
maturities of the Group’s and the Company’s financial instruments that are exposed to interest rate risk:
WAWASAN <strong>TKH</strong> HOLDINGS BERHAD (540218-A)<br />
<strong>ANNUAL</strong> <strong>REPORT</strong> <strong>2012</strong><br />
093<br />
NOTES TO THE FINANCIAL STATEMENTS<br />
31 DECEMBER <strong>2012</strong> (cont’d)<br />
27. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (cont’d)<br />
(iii) Interest rate risk (cont’d)
094<br />
WAWASAN <strong>TKH</strong> HOLDINGS BERHAD (540218-A)<br />
<strong>ANNUAL</strong> <strong>REPORT</strong> <strong>2012</strong><br />
NOTES TO THE FINANCIAL STATEMENTS<br />
31 DECEMBER <strong>2012</strong> (cont’d)<br />
27. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (cont’d)<br />
(iv) Foreign currency risk<br />
Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will<br />
fluctuate because of changes in foreign exchange rates.<br />
The Group is exposed to foreign exchange risk on sales and purchases that are denominated in<br />
currencies other than Ringgit Malaysia. The currencies giving rise to this risk are primarily US Dollar<br />
(‘USD’), Euro, Australian Dollar (‘AUD’) and Singapore Dollar (‘SGD’).<br />
Derivative financing instruments are used to reduce exposure to fluctuations in foreign exchange rates.<br />
The Group reviews, monitors and controls the hedging of transactions. USD and SGD bank accounts<br />
are being set up to facilitate natural hedging against any fluctuation in USD and SGD.<br />
The Group is also exposed to foreign currency risk in respect of the foreign subsidiary. The Group does<br />
not hedge this exposure with foreign currency borrowings.<br />
During the financial year, the Group entered into foreign currency forward contracts to manage exposures<br />
to currency risk for receivables, which are denominated in a currency other than the functional currencies<br />
of the Group.<br />
The notional amounts and maturity dates of the forward foreign exchange contracts outstanding as at<br />
31 December <strong>2012</strong> are as follows:<br />
Contract<br />
Sales contracts used<br />
to hedge trade<br />
receivables<br />
The notional amounts and maturity dates of the forward foreign exchange contracts outstanding as at<br />
31 December 2011 were as follows:<br />
Contract<br />
Sales contracts used<br />
to hedge trade<br />
receivables<br />
Sensitivity analysis for foreign currency risk<br />
No sensitivity analysis for foreign currency risk is prepared at the end of the reporting period as the Group<br />
does not have significant exposure to foreign currency risk.<br />
28. COMMITMENTS<br />
(a) Capital commitments<br />
Capital expenditure in respect of purchase of property,<br />
plant and equipment:<br />
Contracted but not provided for
WAWASAN <strong>TKH</strong> HOLDINGS BERHAD (540218-A)<br />
<strong>ANNUAL</strong> <strong>REPORT</strong> <strong>2012</strong><br />
095<br />
NOTES TO THE FINANCIAL STATEMENTS<br />
31 DECEMBER <strong>2012</strong> (cont’d)<br />
28. COMMITMENTS (cont’d)<br />
(b) Operating lease commitments<br />
(i) The Group as lessor<br />
The Group has entered into non-cancellable lease arrangements on certain properties for a term<br />
of three (3) years. The leases include a clause to enable upward revision of the rental charge on an<br />
annual basis depending on prevailing market conditions.<br />
Not later than one (1) year<br />
Later than one (1) year and not later than five (5) years<br />
29. CONTINGENCIES<br />
The Directors are of the opinion that provisions are not required in respect of these matters, as it is not<br />
probable that a future sacrifice of economic benefits will be required or the amount is not capable of reliable<br />
measurement.<br />
(a) Guarantees<br />
The Company has provided corporate guarantees for<br />
credit facilities of certain subsidiaries<br />
The Directors are of the view that the chances of the banks to call upon the corporate guarantees are<br />
remote. Accordingly, the fair values of the above corporate guarantees given to the subsidiaries for<br />
banking facilities are negligible.<br />
(b) Filling and leveling obligations (unsecured)<br />
As highlighted in the previous financial years, AKI has contingent liabilities, which are not readily<br />
ascertainable in respect of filling and leveling obligations stipulated in the Mining Enactment F.M.S.<br />
Chapter 147 (‘the Enactment’).<br />
The Board of Directors is of the view that there are no contingent liabilities in respect of filling and leveling<br />
obligations on these mining leases as AKI has fulfilled its obligations as stipulated in the Enactment.<br />
Moreover, the leases on these leasehold mining lands have expired and are currently awaiting the<br />
extension from the Mineral and Geosciences Department. As for the mining on the third party land, there<br />
are no obligation stipulated in the respective agreement in respect of filling and leveling.<br />
30. SIGNIFICANT EVENTS DURING THE FINANCIAL YEAR<br />
(a) On 24 April <strong>2012</strong>, a major shareholder of the Company, namely W<strong>TKH</strong>SB, exercised 5 million detachable<br />
warrants 2008/2013 (‘Warrants’) at exercise price of RM0.21 per Warrant on the basis of one (1) new<br />
ordinary share for every one (1) Warrant exercised pursuant to the Deed Poll dated 24 July 2008. The new<br />
ordinary shares of RM0.10 each rank pari passu in all respect with the existing shares of the Company.<br />
(b) On 14 December <strong>2012</strong>, a major shareholder of the Company, namely W<strong>TKH</strong>SB, exercised 11 million<br />
detachable warrants 2008/2013 (‘Warrants’) at exercise price of RM0.21 per Warrant on the basis of<br />
one (1) new ordinary share for every one (1) Warrant exercised pursuant to the Deed Poll dated 24 July<br />
2008. The new ordinary shares of RM0.10 each rank pari passu in all respect with the existing shares<br />
of the Company
096<br />
WAWASAN <strong>TKH</strong> HOLDINGS BERHAD (540218-A)<br />
<strong>ANNUAL</strong> <strong>REPORT</strong> <strong>2012</strong><br />
NOTES TO THE FINANCIAL STATEMENTS<br />
31 DECEMBER <strong>2012</strong> (cont’d)<br />
31. EXPLANATION OF TRANSITION TO MFRSs<br />
The Group and the Company are non-transitioning entities as defined by the MASB, and has adopted the<br />
MFRS Framework during the financial year ended 31 December <strong>2012</strong>. Accordingly, these are the first financial<br />
statements of the Group and of the Company prepared in accordance with MFRSs.<br />
The accounting policies set out in Note 4 to the financial statements have been applied in preparing the<br />
financial statements of the Group and of the Company for the financial year ended 31 December <strong>2012</strong>, as<br />
well as comparative information presented in these financial statements for the financial year ended 31<br />
December 2011 and in the preparation of the opening MFRS statements of financial position at 1 January<br />
2011 (the date of transition of the Group to MFRSs).<br />
The Group has adjusted amounts previously reported in financial statements that were prepared in<br />
accordance with the previous FRS Framework. In preparing the opening statements of financial position<br />
at 1 January 2011, an explanation on the impact arising from the transition from FRSs to MFRSs on the<br />
Group’s financial position and financial performance is set out as follows:<br />
(a) Reconciliation of financial position as at 1 January 2011:<br />
Group<br />
ASSETS<br />
Note<br />
Previously<br />
reported<br />
under FRSs<br />
RM’000<br />
Effect on<br />
adoption<br />
of MFRSs<br />
RM’000<br />
Restated<br />
under<br />
MFRSs<br />
RM’000<br />
Non-current assets<br />
Property, plant and equipment<br />
Intangible assets<br />
Trade and other receivables<br />
31(d)(i)<br />
104,224<br />
11,062<br />
584<br />
141<br />
--<br />
104,365<br />
11,062<br />
584<br />
Current assets<br />
Inventories<br />
Trade and other receivables<br />
Derivative assets<br />
Current tax assets<br />
Cash and cash equivalents<br />
115.870<br />
8,414<br />
10,520<br />
44<br />
1,170<br />
1,862<br />
141<br />
-<br />
-<br />
-<br />
-<br />
-<br />
116,011<br />
8,414<br />
10,520<br />
44<br />
1,170<br />
1,862<br />
22,010<br />
-<br />
22,010<br />
TOTAL ASSETS<br />
137,880<br />
141<br />
138,021<br />
EQUITY AND LIABILITIES<br />
Equity attributable to owners<br />
of the parent<br />
Share capital<br />
Reserves<br />
Accumulated losses<br />
31(d)(iii)<br />
57,688<br />
32,331<br />
(69,155)<br />
-<br />
(24,736)<br />
24,841<br />
57,688<br />
7,595<br />
(44,314)<br />
TOTAL EQUITY<br />
20,864<br />
105<br />
20,969<br />
LIABILITIES<br />
Non-current liabilities<br />
Trade and other payables<br />
Borrowings<br />
Deferred tax liabilities<br />
31(d)(ii)<br />
33,552<br />
27,903<br />
7,319<br />
-<br />
-<br />
36<br />
33,552<br />
27,903<br />
7,355<br />
Current liabilities<br />
Trade and other payables<br />
Derivative liabilities<br />
Borrowings<br />
Current tax iabilities<br />
68,774<br />
29,793<br />
1<br />
18,434<br />
14<br />
36<br />
-<br />
-<br />
-<br />
-<br />
68,810<br />
29,793<br />
1<br />
18,434<br />
14<br />
48,242<br />
-<br />
48,242<br />
TOTAL LIABILITIES<br />
117,016<br />
36<br />
117,052<br />
TOTAL EQUITY AND<br />
LIABILITIES<br />
137,880<br />
141<br />
138,021<br />
There is no impact to the Company’s opening statement of financial position as at 1 January 2011 arising<br />
from the transition from FRSs to MFRSs.
WAWASAN <strong>TKH</strong> HOLDINGS BERHAD (540218-A)<br />
<strong>ANNUAL</strong> <strong>REPORT</strong> <strong>2012</strong><br />
097<br />
NOTES TO THE FINANCIAL STATEMENTS<br />
31 DECEMBER <strong>2012</strong> (cont’d)<br />
31. EXPLANATION OF TRANSITION TO MFRSs (cont’d)<br />
(b) Reconciliation of financial position as at 31 December 2011:<br />
Group<br />
ASSETS<br />
Note<br />
Previously<br />
reported<br />
under FRSs<br />
RM’000<br />
Effect on<br />
adoption<br />
of MFRSs<br />
RM’000<br />
Restated<br />
under<br />
MFRSs<br />
RM’000<br />
Non-current assets<br />
Property, plant and equipment<br />
Intangible assets<br />
Trade and other receivables<br />
31(d)(i)<br />
88,435<br />
11,062<br />
1,502<br />
188<br />
--<br />
88,623<br />
11,062<br />
1,502<br />
Current assets<br />
Inventories<br />
Trade and other receivables<br />
Derivative assets<br />
Current tax assets<br />
Cash and cash equivalents<br />
100,999<br />
9,563<br />
12,941<br />
14<br />
918<br />
2,151<br />
188<br />
-<br />
-<br />
-<br />
-<br />
-<br />
101,187<br />
9,563<br />
12,941<br />
14<br />
918<br />
2,151<br />
25,587<br />
-<br />
25,587<br />
TOTAL ASSETS<br />
126,586<br />
188<br />
126,774<br />
EQUITY AND LIABILITIES<br />
Equity attributable to owners<br />
of the parent<br />
Share capital<br />
Reserves<br />
Accumulated losses<br />
31(d)(iii)<br />
44,844<br />
28,378<br />
(51,139)<br />
-<br />
(20,732)<br />
20,885<br />
44,844<br />
7,646<br />
(30,254)<br />
TOTAL EQUITY<br />
22,083<br />
153<br />
22,236<br />
LIABILITIES<br />
Non-current liabilities<br />
Trade and other payables<br />
Borrowings<br />
Deferred tax liabilities<br />
31(d)(ii)<br />
39,735<br />
22,834<br />
7,028<br />
-<br />
-<br />
35<br />
39,735<br />
22,834<br />
7,063<br />
Current liabilities<br />
Trade and other payables<br />
Derivative liabilities<br />
Borrowings<br />
Current tax iabilities<br />
69,597<br />
17,776<br />
46<br />
17,071<br />
13<br />
35<br />
-<br />
-<br />
-<br />
-<br />
69,632<br />
17,776<br />
46<br />
17,071<br />
13<br />
34,906<br />
-<br />
34,906<br />
TOTAL LIABILITIES<br />
104,503<br />
35<br />
104,538<br />
TOTAL EQUITY AND<br />
LIABILITIES<br />
126,586<br />
188<br />
126,774<br />
There is no impact to the Company’s statement of financial position as at 31 December 2011 arising<br />
from the transition from FRSs to MFRSs.
098<br />
WAWASAN <strong>TKH</strong> HOLDINGS BERHAD (540218-A)<br />
<strong>ANNUAL</strong> <strong>REPORT</strong> <strong>2012</strong>
WAWASAN <strong>TKH</strong> HOLDINGS BERHAD (540218-A)<br />
<strong>ANNUAL</strong> <strong>REPORT</strong> <strong>2012</strong><br />
099
100<br />
WAWASAN <strong>TKH</strong> HOLDINGS BERHAD (540218-A)<br />
<strong>ANNUAL</strong> <strong>REPORT</strong> <strong>2012</strong><br />
NOTES TO THE FINANCIAL STATEMENTS<br />
31 DECEMBER <strong>2012</strong> (cont’d)
WAWASAN <strong>TKH</strong> HOLDINGS BERHAD (540218-A)<br />
<strong>ANNUAL</strong> <strong>REPORT</strong> <strong>2012</strong><br />
101<br />
PROPERTIES OF THE GROUP<br />
AS AT 31 DECEMBER <strong>2012</strong><br />
Registered<br />
Owner<br />
Location/<br />
Title<br />
Description<br />
of Property<br />
Existing Use<br />
Land<br />
Area<br />
Tenure<br />
Age of<br />
Building<br />
Net Book<br />
Value<br />
(RM)<br />
Greatpac<br />
Sdn. Bhd.<br />
Lot 6, Jalan<br />
Teknologi,<br />
Taman Sains<br />
Selangor 1,<br />
Kota<br />
Damansara,<br />
47810<br />
Petaling Jaya,<br />
Selangor<br />
Land and<br />
Building<br />
Office,<br />
Warehouse<br />
and Factory<br />
6.34<br />
acres<br />
Leasehold<br />
expiring in<br />
2036<br />
6 Years 32,354,664<br />
Greatpac<br />
Sdn. Bhd.<br />
Lot 10,<br />
Jalan<br />
Teknologi,<br />
Taman<br />
Sains<br />
Selangor 1,<br />
Kota<br />
Damansara,<br />
47810<br />
Petaling<br />
Jaya,<br />
Selangor<br />
Land and<br />
Building<br />
Office,<br />
Warehouse<br />
and Factory<br />
6.52<br />
acres<br />
Leasehold<br />
expiring in<br />
2036<br />
6 Years 29,384,732<br />
Associated<br />
Kaolin<br />
Industries<br />
Sdn. Bhd.<br />
37-38<br />
Milestone,<br />
Tapah/<br />
Bidor Road,<br />
35007<br />
Tapah,<br />
Perak<br />
Land and<br />
Building<br />
Factory and<br />
Administrative<br />
Office<br />
10.072<br />
acres<br />
Leasehold<br />
expired in<br />
2008<br />
Note (a)<br />
30 Years 2,426,668<br />
Kerajaan<br />
Negeri<br />
Perak<br />
Lot 5907<br />
Mukim of<br />
Batang<br />
Padang,<br />
Perak<br />
Building<br />
and Kaolin<br />
Land<br />
Mining and<br />
Factory<br />
63.21<br />
acres<br />
Leasehold<br />
mining<br />
land<br />
expired in<br />
1993<br />
Note (b)<br />
30 Years 1<br />
Notes:<br />
(a) Associated Kaolin Industries Sdn. Bhd. has applied for a 30 years extension of the leases and currently<br />
awaiting approval.<br />
(b) Associated Kaolin Industries Sdn. Bhd. has applied for a 15 years extension of the leases and is currently<br />
awaiting approval.
102<br />
WAWASAN <strong>TKH</strong> HOLDINGS BERHAD (540218-A)<br />
<strong>ANNUAL</strong> <strong>REPORT</strong> <strong>2012</strong>
WAWASAN <strong>TKH</strong> HOLDINGS BERHAD (540218-A)<br />
<strong>ANNUAL</strong> <strong>REPORT</strong> <strong>2012</strong><br />
103
104<br />
WAWASAN <strong>TKH</strong> HOLDINGS BERHAD (540218-A)<br />
<strong>ANNUAL</strong> <strong>REPORT</strong> <strong>2012</strong>
WAWASAN <strong>TKH</strong> HOLDINGS BERHAD (540218-A)<br />
<strong>ANNUAL</strong> <strong>REPORT</strong> <strong>2012</strong><br />
105<br />
STATISTICS ON SHARES<br />
AS AT 23 ARPIL 2013 (cont’d)<br />
LIST OF TOP 30 HOLDERS AS AT 23 APRIL 2013 (cont’d)<br />
(WITHOUT AGGREGATING SECURITIES FROM DIFFERENT SECURITIES ACCOUNTS BELONGING TO THE<br />
SAME REGISTERED HOLDER) (cont’d)<br />
NO.<br />
NAME<br />
17 TAN BOON PUN 3,523,810 0.758<br />
18 TAN HOE PIN 3,523,810 0.758<br />
19 JUNE LEW LI LIN 3,382,100 0.728<br />
20 MALAYSIAN INDUSTRIAL DEVELOPMENT FINANCE BERHAD 2,962,300 0.637<br />
21 HDM NOMINEES (TEMPATAN) SDN BHD<br />
PLEDGED SECURITIES ACCOUNT FOR OOI KHENG IM (M01) 2,154,400 0.463<br />
22 YIP KUM FOOK 1,779,800 0.383<br />
23 LOW KIM SOI & LOW TIEN SANG 1,637,700 0.352<br />
24 GAN LI LI 1,500,000 0.322<br />
25 YAP SENG YEW 1,500,000 0.322<br />
26 RICHARD TEH LIP HEONG 1,260,000 0.271<br />
27 LIP SDN BHD 1,110,000 0.238<br />
28 LOW KOK KONG 1,000,700 0.215<br />
29 MAYBANK SECURITIES NOMINEES (TEMPATAN) SDN BHD<br />
PLEDGED SECURITIES ACCOUNT FOR TAN CHEE<br />
@ TAN CHOO (REM 157)<br />
30 WONG CHIN YUE 860,000 0.185<br />
Total 428,246,800
106<br />
WAWASAN <strong>TKH</strong> HOLDINGS BERHAD (540218-A)<br />
<strong>ANNUAL</strong> <strong>REPORT</strong> <strong>2012</strong>
WAWASAN <strong>TKH</strong> HOLDINGS BERHAD (540218-A)<br />
<strong>ANNUAL</strong> <strong>REPORT</strong> <strong>2012</strong><br />
107
108<br />
WAWASAN <strong>TKH</strong> HOLDINGS BERHAD (540218-A)<br />
<strong>ANNUAL</strong> <strong>REPORT</strong> <strong>2012</strong><br />
NOTICE OF TWELFTH (12TH) <strong>ANNUAL</strong> GENERAL MEETING<br />
NOTICE IS HEREBY GIVEN that the 12th Annual General Meeting of the Company will be held at Ground Floor,<br />
Wisma <strong>TKH</strong>, Lot 6, Jalan Teknologi, Taman Sains Selangor 1, Kota Damansara, 47810 Petaling Jaya, Selangor<br />
Darul Ehsan on Wednesday, 12 June 2013 at 10.00 a.m. to transact the following business:<br />
AGENDA<br />
Ordinary Business<br />
1 To receive the Audited Financial Statements for the financial year ended 31 December<br />
<strong>2012</strong> together with the Reports of the Directors and Auditors thereon.<br />
2. To re-elect Dato’ Tan Boon Pun who retires pursuant to Article 79 of the Company’s<br />
Articles of Association.<br />
3. To re-appoint Dato’ Tan Kim Hor as Director of the Company pursuant to Section 129<br />
of the Companies Act, 1965.<br />
4. To re-appoint Geh Cheng Hooi as Director of the Company pursuant to Section 129<br />
of the Companies Act, 1965.<br />
5. To re-appoint Messrs BDO as Auditors of the Company and to authorise the Directors<br />
to fix their remuneration.<br />
(Please refer to<br />
Explanatory Note 1)<br />
(Resolution 1)<br />
(Resolution 2)<br />
(Resolution 3)<br />
(Resolution 4)<br />
Special Business<br />
To consider and if thought fit, to pass the following resolution, with or without<br />
modifications, as Ordinary Resolution of the Company:<br />
6.<br />
7.<br />
ORDINARY RESOLUTION<br />
AUTHORITY TO ISSUE SHARES<br />
“THAT pursuant to Section 132D of the Companies Act, 1965, the Directors of the<br />
Company be and are hereby empowered to issue shares in the Company at any time and<br />
upon such terms and conditions and for such purposes as the Directors may in their<br />
absolute discretion deem fit provided that the aggregate number of shares issued<br />
pursuant to this resolution does not exceed 10% of the issued share capital of the<br />
Company for the time being and that the Directors be and are also empowered to obtain<br />
approval for the listing of and quotation for the additional shares so issued on Bursa<br />
Malaysia Securities <strong>Berhad</strong> and that such authority shall continue to be in force until the<br />
conclusion of the next Annual General Meeting of the Company unless revoked or varied<br />
by the Company at a general meeting.”<br />
To consider any other business which due notice shall be given in accordance with the<br />
Companies Act, 1965.<br />
(Resolution 5)<br />
By Order of the Board<br />
NG YEN HOONG (LS 008016)<br />
WONG PEIR CHYUN (MAICSA 7018710)<br />
Company Secretaries<br />
Kuala Lumpur<br />
21 May 2013
WAWASAN <strong>TKH</strong> HOLDINGS BERHAD (540218-A)<br />
<strong>ANNUAL</strong> <strong>REPORT</strong> <strong>2012</strong><br />
109<br />
NOTICE OF TWELFTH (12TH) <strong>ANNUAL</strong> GENERAL MEETING<br />
(cont’d)<br />
NOTES:-<br />
1. Appointment of Proxy<br />
(a) A member entitled to attend and vote at the Meeting is entitled to appoint proxy(ies) (or in the case of a<br />
corporation, a duly authorised representative) to attend and vote in his stead. A proxy may but need<br />
not be a member of the Company and the provisions of Section 149(1)(b) of the Act shall not apply to<br />
the Company.<br />
(b) The instrument appointing a proxy shall be in writing under the hand of the appointer or of his attorney<br />
duly authorised in writing or, if the appointor is a corporation, either under the corporation’s Seal or under<br />
the hand of an officer or attorney duly authorised.<br />
(c) A member shall be entitled to appoint not more than two (2) proxies to attend and vote at the same<br />
meetings. Where a member appoints two proxies, the member shall specify the proportions of his<br />
shareholdings to be represented by each proxy.<br />
(d) Where a member of the Company is an authorised nominee as defined under the Securities Industry<br />
(Central Depositories) Act, 1991 (“SICDA”), it may appoint at least one proxy in respect of each securities<br />
account it holds with ordinary shares of the Company standing to the credit of the said securities account.<br />
(e) Where a member of the company is an exempt authorised nominee as defined under the SICDA which<br />
holds ordinary shares in the company for multiple beneficial owners in one securities account (“omnibus<br />
account”), there is no limit to the number of proxies which the exempt authorised nominee may appoint<br />
in respect of each omnibus account it holds.<br />
(f) Where the authorised nominee or an exempt authorised nominee appoints more than one proxy, the<br />
proportion of the shareholdings to be represented by each proxy must be specified in the instrument<br />
appointing the proxies.<br />
(g) The instrument appointing a proxy and the power of attorney or other authority, if any, under which it is<br />
signed or a notarially certified copy of that power or authority shall be deposited at the registered office of<br />
the Company at Level 18, The Gardens North Tower, Mid Valley City, Lingkaran Syed Putra, 59200 Kuala<br />
Lumpur, not less than forty-eight (48) hours before the time for holding the meeting or any adjournment<br />
thereof.<br />
(h) Only members whose names appear on the Record of Depositors as at 5 June 2013 shall be entitled to<br />
attend and vote at this meeting or appoint proxy(ies) to attend and vote on their behalf.<br />
2. Audited Financial Statements for the financial year ended 31 December <strong>2012</strong><br />
The Audited Financial Statements in Agenda 1 is meant for discussion only as the approval of the<br />
shareholders is not required pursuant to the provision of Section 169(1) of the Companies Act, 1965.<br />
Hence, this Agenda is not put forward for voting by shareholders.<br />
3. Explanatory Notes on Special Business<br />
Resolution 5 – Authority to Issue Shares<br />
The Proposed Resolution 5 is proposed for the purpose of granting a renewed general mandate (“General<br />
Mandate”) and empowering the Directors to issue shares in the Company up to an amount not exceeding<br />
in total ten per centum (10%) of the Issued Share Capital of the Company for such purposes as the Director<br />
consider would be in the interest of the Company.<br />
This authority, unless revoked or varied by the Company at a general meeting, will expire at the next Annual<br />
General Meeting.<br />
The renewed General Mandate is to provide flexibility to the Company to issue new securities without the<br />
need to convene separate general meeting to obtain its shareholders’ approval so as to avoid incurring<br />
additional cost and time. The purpose of this renewed General Mandate is for possible fund raising<br />
exercise including but not limited to further placement of shares for purpose of funding current and/or<br />
future investment projects, working capital, repayment of bank borrowings, acquisition and/or for issuance<br />
of shares as settlement of purchase consideration.<br />
As at the date of this Notice, the Company did not issue any shares pursuant to the mandate granted to the<br />
Directors at the Eleventh Annual General Meeting, because there were no investment(s), acquisition(s) or<br />
working capital that required fund raising activity.
110<br />
WAWASAN <strong>TKH</strong> HOLDINGS BERHAD (540218-A)<br />
<strong>ANNUAL</strong> <strong>REPORT</strong> <strong>2012</strong><br />
* This page have been left blank intentionally.
No. of shares held<br />
CDS Account No.<br />
WAWASAN <strong>TKH</strong> HOLDINGS BERHAD<br />
(540218-A)<br />
(Incorporated in Malaysia)<br />
I/We<br />
NRIC No.<br />
of<br />
being a member/members of the Company hereby appoint<br />
NRIC No.<br />
of<br />
or failing him/her, the Chairman of the Meeting as *my/our proxy to vote for *me/us and on *my/our behalf at the 12th<br />
Annual General Meeting of the Company, to be held at Ground Floor, Wisma <strong>TKH</strong>, Lot 6, Jalan Teknologi, Taman Sains<br />
Selangor 1, Kota Damansara, 47810 Petaling Jaya, Selangor Darul Ehsan on Wednesday, 12 June 2013 at 10.00 a.m. and,<br />
at every adjournment thereof *for/against the resolution(s) to be proposed thereat<br />
Item<br />
AGENDA<br />
Resolution<br />
For<br />
Against<br />
1.<br />
2.<br />
Ordinary Business<br />
Receive the Audited Financial Statements for the financial year ended 31 December<br />
<strong>2012</strong> together with the Reports of the Directors and Auditors thereon.<br />
Re-election of Dato’ Tan Boon Pun as Director of the Company pursuant to Article 79<br />
of the Company’s Articles of Association<br />
Re-appointment of Dato’ Tan Kim Hor as Director of the Company pursuant to Section<br />
129 of the Companies Act, 1965.<br />
Re-appointment of Geh Cheng Hooi as Director of the Company pursuant to Section<br />
129 of the Companies Act, 1965.<br />
1<br />
3.<br />
2<br />
4.<br />
5.<br />
Re-appointment of Messrs BDO as Auditor.<br />
3<br />
4<br />
6.<br />
Special Business<br />
Authority to the Directors to issue shares pursuant to Section 132D of the Companies<br />
Act, 1965.<br />
5<br />
Please indicate with an “X” in the space provided whether you wish your votes to be cast for or against the resolutions.<br />
In the absence of specific directions, your proxy will vote or abstain as he/she thinks fits.<br />
As witness my hand, this_______________day of________________<br />
*Strike out whichever is not desired. (Unless otherwise instructed, the proxy may vote as he thinks fit)<br />
Signature or Common Seal of Member(s)<br />
Notes:<br />
(i) A member entitled to attend and vote at the Meeting is entitled to appoint proxy(ies) (or in the case of a corporation, a duly<br />
authorised representative) to attend and vote in his stead. A proxy may, but need not be a member of the Company and the<br />
provision of Section 149(1)(b) of the Act shall not apply to the Company.<br />
(ii)<br />
(iii)<br />
(iv)<br />
(v)<br />
(vi)<br />
(vii)<br />
The instrument appointing a proxy shall be in writing under the hand of the appointer or of his attorney duly authorised in writing or,<br />
if the appointor is a corporation, either under the corporation’s Seal or under the hand of an officer or attorney duly authorised.<br />
A member shall be entitled to appoint not more than two (2) proxies to attend and vote at the same meetings. Where a member<br />
appoints two proxies, the member shall specify the proportions of his shareholdings to be represented by each proxy.<br />
Where a member of the Company is an authorised nominee as defined under the Securities Industry (Central Depositories) Act,<br />
1991 (“SICDA”), it may appoint at least one proxy in respect of each securities account it holds with ordinary shares of the Company<br />
standing to the credit of the said securities account.<br />
Where a member of the company is an exempt authorised nominee as defined under the SICDA which holds ordinary shares in the<br />
company for multiple beneficial owners in one securities account (“omnibus account”), there is no limit to the number of proxies<br />
which the exempt authorised nominee may appoint in respect of each omnibus account it holds.<br />
Where the authorised nominee or an exempt authorised nominee appoints more than one proxy, the proportion of the<br />
shareholdings to be represented by each proxy must be specified in the instrument appointing the proxies.<br />
The instrument appointing a proxy and the power of attorney or other authority, if any, under which it is signed or a notarially certified<br />
copy of that power or authority shall be deposited at the registered office of the Company at Level 18, The Gardens North Tower,<br />
Mid Valley City, Lingkaran Syed Putra, 59200 Kuala Lumpur, not less than forty-eight (48) hours before the time for holding the<br />
meeting or any adjournment thereof.<br />
(viii)<br />
Only members whose names appear on the Record of Depositors as at 5 June 2013 shall be entitled to attend and vote at this<br />
meeting or appoint proxy(ies) to attend and vote on their behalf.
FOLD THIS FLAP FOR SEALING<br />
FOLD HERE<br />
Affix<br />
stamp<br />
The Company Secretaries<br />
<strong>Wawasan</strong> <strong>TKH</strong> <strong>Holdings</strong> <strong>Berhad</strong> (540218-A)<br />
Level 18, The Gardens North Tower,<br />
Mid Valley, Lingkaran Syed Putra,<br />
59200 Kuala Lumpur<br />
FOLD HERE