Annual Report 2011 (Part I) - Wawasan TKH Holdings Berhad

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WAWASAN TKH HOLDINGS BERHAD (540218-A) • ANNUAL REPORT 2011 037 NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2011 1. CORPORATE INFORMATION The Company is a public limited liability company, incorporated and domiciled in Malaysia, and is listed on the Main Market of Bursa Malaysia Securities Berhad. The registered office of the Company is located at Level 18, The Gardens North Tower, Mid Valley City, Lingkaran Syed Putra, 59200 Kuala Lumpur. The principal place of business of the Company is located at Wisma TKH, Lot 6, Jalan Teknologi, Taman Sains Selangor 1, Kota Damansara, 47810 Petaling Jaya, Selangor Darul Ehsan. The financial statements are presented in Ringgit Malaysia (‘RM’), which is also the Company’s functional currency. The financial statements were authorised for issue in accordance with a resolution by the Board of Directors on 26 April 2012. 2. PRINCIPAL ACTIVITIES The Company is principally engaged in investment holding whilst the principal activities of the subsidiaries are as stated in Note 9 to the financial statements. There have been no significant changes in the nature of these activities during the financial year. 3. BASIS OF PREPARATION The financial statements of the Group and of the Company set out on pages 28 to 107 have been prepared in accordance with applicable approved Financial Reporting Standards (‘FRSs’) and the provisions of the Companies Act, 1965 in Malaysia. However, Note 33 to the financial statements set out on page 108 has been prepared in accordance with Guidance on Special Matter No.1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian Institute of Accountants (‘MIA Guidance’) and the directive of Bursa Malaysia Securities Berhad. 4. SIGNIFICANT ACCOUNTING POLICIES 4.1 Basis of accounting The financial statements of the Group and of the Company have been prepared under the historical cost convention except as otherwise stated in the financial statements and on the basis of accounting principles applicable to a going concern. The Group and the Company have incurred net loss of RM14,832,601 and RM5,292,671 respectively during the financial year ended 31 December 2011, and as of that date, the current liabilities of the Group exceeded the current assets by RM9,318,882. These conditions indicate the existence of a material uncertainty, which may cast significant doubts about the Group’s and the Company’s ability to achieve profitable operations in the foreseeable future, to meet their obligations as and when they fall due and to continue operations as going concerns.
038 WAWASAN TKH HOLDINGS BERHAD (540218-A) • ANNUAL REPORT 2011 NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2011 (cont’d) 4. SIGNIFICANT ACCOUNTING POLICIES (cont’d) 4.1 Basis of accounting (cont’d) The continuation of the Group and of the Company as going concerns is dependent upon the Group’s and the Company’s ability to operate profitably in the foreseeable future and to receive continuous financial support from its corporate shareholder, Wawasan TKH Sdn. Bhd. (“WTKHSB”). The Group will continue to pursue initiatives to increase revenue and margins progressively towards recovery. In relation to this, the Directors are of the view that the disposable foodwares unit will continue to rationalise its product mix and operational costs, while extending its product range and market reach towards improving gross margin. The mining unit is expected to enhance sales mix, while containing its operational cost through cost rationalisation. This will improve the results of the Group in the foreseeable future. In addition to the above, WTKHSB has agreed to provide the necessary continuous financial support to the Group and to the Company and it has also agreed to the Company’s request to subordinate the advances due to WTKHSB amounting to RM39,734,958 (2010: RM49,552,139) for the next twelve (12) months from the date of this report. Based on the latest financial position of WTKHSB, the Directors confirmed that WTKHSB is able to provide the necessary financial support to the Group and the Company to continue operations as going concerns in the next twelve (12) months from the date of this report. Subsequent to the end of the reporting period, WTKHSB exercised 5 million detachable warrants 2008/2013 (“Warrants”) at exercise price of RM0.21 per Warrant on the basis of one (1) new ordinary share for every one (1) Warrant exercised pursuant to the Deed Poll dated 24 July 2008. In view of the foregoing, the Directors consider that it is appropriate to prepare the financial statements of the Group and of the Company on a going concern basis, and accordingly, the financial statements do not include any adjustments relating to the recoverability and classification of recorded assets amounts, or to amounts or classification of liabilities that may be necessary if the going concern basis of preparing the financial statements of the Group and of the Company is not appropriate. The preparation of financial statements requires the Directors to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses and disclosure of contingent assets and contingent liabilities. In addition, the Directors are also required to exercise their judgement in the process of applying the accounting policies. The areas involving such judgements, estimates and assumptions are disclosed in Note 6 to the financial statements. Although these estimates and assumptions are based on the Directors’ best knowledge of events and actions, actual results could differ from those estimates.
Page 1 and 2: WAWASAN TKH HOLDINGS BERHAD (540218
Page 3 and 4: 002 CORPORATE INFORMATION BOARD OF
Page 5 and 6: 004 CHAIRMAN’S STATEMENT (cont’
Page 7 and 8: 006 FIVE-YEAR FINANCIAL HIGHLIGHTS
Page 9 and 10: 008 DIRECTORS’ PROFILE (cont’d)
Page 11 and 12: 010 CORPORATE STRUCTURE WAWASAN TKH
Page 13 and 14: 012 STATEMENT ON CORPORATE GOVERNAN
Page 15 and 16: 014 STATEMENT ON CORPORATE GOVERNAN
Page 17 and 18: 016 STATEMENT ON INTERNAL CONTROL (
Page 19 and 20: 018 AUDIT COMMITTEE REPORT (cont’
Page 21 and 22: 020 WAWASAN TKH HOLDINGS BERHAD (54
Page 37: 036 WAWASAN TKH HOLDINGS BERHAD (54

Annual Report 2011 (Part I) - Wawasan TKH Holdings Berhad

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