100% - Bursa Malaysia Announcements

A New Era 

Annual Report 2010

We Accomplish Our Mission by 

• Accumulating in-depth knowledge 

of our customers, the interaction 

with their business partners and 

their industry to better service their 

needs 

• Recruiting, training, empowering 

and rewarding talented and 

motivated people 

• Selecting and developing a 

network of effective and reliable 

affiliates 

Cover Rationale 

A New Era 

Our strong vision to engage with our staffs and customers, 

alongside our steady IT driven processes will move us forward 

into becoming a pioneer in delivering quality, effective and 

powerful logistics solutions. 

The ray of light depicts Konsortium headed into the new era 

of business and a vision to move ahead and be the superior in 

the industry. 

Mission & Guiding Principles 

We Provide Our Customers With A Competitive Advantage 

Through The Delivery Of Superior Logistics Services. 

• Applying proven enabling 

technologies, techniques and tools 

for developing and executing 

innovative logistics solutions 

• Improving the value of our service 

by continuously reassessing 

current solutions and jointly 

developing new capabilities with 

our customers 

• Ensuring that the environment in 

which we operate is safe, healthy 

and secure 

Our Guiding Principles 

• INTEGRITY 

• QUALITY 

• DISCIPLINE 

• COMMITMENT 

• TEAMWORK 

• INITIATIVE

CORPORATE 

1 Contents 

Performance Review 

2 Group Five-Year Financial 

Highlights 

3 Our Organization 

4 Corporate Information 

5 Corporate Structure 

6 Global Presence 

7 Board of Directors 

8 Directors’ Profile 

13 Executive Management 

14 Our Management 

Contents 

REPORT 

15 Chairman’s Statement 

18 CEO’s Statement 

20 Review of Operations 

COMPLIANCE & VOLUNTARY 

25 Statement on Corporate 

Governance 

33 Statement on Internal Control 

34 Statement on Corporate Social 

Responsibility 

35 Audit Committee Report 

FINANCIALS 

42 Directors’ Report 

50 Statement by Directors 

50 Statutory Declaration 

51 Independent Auditors’ Report 

53 Statements of Financial Position 

55 Statements of Comprehensive 

Income 

56 Statements of Changes in Equity 

59 Statements of Cash Flow 

61 Notes to the Financial 

Statements 

159 Group Properties 

Performance Review 

% 2010 

Contribution to Total 

Group’s total Revenue 

41 120,168 LSO Auto 

30 88,991 IAO Transport 

12 35,635 LSO Project 

6 18,404 IAO Storage 

5 13,938 LSO Oil & Gas 

5 15,009 IAO Value Added Services 

1 2,265 LSO Distribution 

100 294,410 

OTHERS 

161 Additional Compliance 

Information 

164 Analysis of Shareholdings 

168 Notice of Annual General 

Meeting 

Form of Proxy 

annual repor t 2010 

KONSORTIUM LOGISTIK BERHAD (89243-A) 1


KONSORTIUM LOGISTIK BERHAD (89243-A) 2 

Group Five-Year 

Financial Highlights 

STATISTICAL INFORMATION 

Revenue (RM’000) 

253,092 

252,843 

260,368 

239,135 

294,410 

06 07 08 09 10 

Profit/(loss) from 

ordinary activities 

before tax (RM’000) 

22,190 

32,311 

28,661 

31,855 

06 07 08 09 10 

(18,216) 

Profit/(loss) from ordinary 

activities after tax and 

minority interest (RM’000) 

06 07 08 09 10 

Staff strength 

06 07 08 09 10 

2006 2007 2008 2009 2010 

Revenue (RM’000) 253,092 252,843 260,368 239,135 294,410 

Profit/(loss) from ordinary activities before tax (RM’000) 22,190 32,311 28,661 31,855 (18,216) 

Profit/(loss) from ordinary activities after tax and minority interest (RM’000) 15,495 24,379 21,319 23,274 (26,512) 

Net profit/(loss) attributable to shareholders 14,634 24,132 22,188 24,979 (26,364) 

Shareholders’ Funds 323,313 316,392 307,512 318,164 253,303 

Net earnings/(loss) per share (sen) 6.08 10.02 9.42 10.90 (11.14) 

Net tangible assets per share (sen) 129 127 131 131 1.02 

Dividend Rate (%) 3.00 20.00 8.08 11.04 19.50 

15,495 

24,379 

21,319 

23,274 

(26,512) 

1,336 

1,330 

1,219 

1,155 

1,152

Our 

Organisation 

LOGISTICS 

SERVICE 

ORGANISATION 

( LSO ) 

INTERNAL & 

EXTERNAL 

AFFILIATE 

ORGANISATIONS 

( IAO & EAO ) 

SHARED 

SERVICES 

ORGANISATION 

( SSO ) 

LSO comprises the four major market segments 

we serve. Each team within the segments 

market their customised logistics solutions to 

their specific set of customers. Once accepted, 

the team implements the logistics solution by 

using the logistics components of our internal 

and external affiliates. Our Four Major Market 

Segments: 

IAO & EAO comprise logistics components that 

we own and manage as well as those of our 

partners’. They are divided into three categories, 

namely Transport, Storage and Value Added 

Services. 

SSO provides common support to both the LSO 

and IAO & EAO. These services include: 

• Automotive Logistics 

• Oil & Gas Logistics 

• Distribution Logistics 

• Project Logistics 

Transport 

• Haulage 

• Bulk Liquid Transportation 

• Heavy Lift/Special Haulage 

Storage 

• Warehousing 

• Distripark 

• Finance 

• Human Resource & Administration 

• Business Process & IT 

• Internal Audit & Risk Management 

• Corporate Communications 

• Secretarial Services 

Value Added Services 

• Port & Customs Clearance 

• Air and Ocean Freighting 

• Shipping Agency 

• Free Commercial Zone 

• Insurance 



4 


KONSORTIUM LOGISTIK LOGISTIK LOGISTIK BERHAD (89243-A) 

Corporate 

Information 

AUDIT COMMITTEE 

Dato’ Seri Talaat bin Husain (Chairman) 

Haji Ismett Azyze bin Hamad Abbdul Azyze 

Dato‘ Rosli bin Sharif 

Syed Yasir Arafat bin Syed Abd Kadir 

REMUNERATION COMMITTEE 

Dato‘ Rosli bin Sharif (Chairman) 


Dato’ Seri Talaat bin Husain 


NOMINATION COMMITTEE 

Haji Ismett Azyze bin Hamad Abbdul Azyze (Chairman) 




ESOS OPTIONS COMMITTEE 

Dato’ Seri Talaat bin Husain (Chairman) 

Che Azizuddin bin Che Ismail 

Zulkifli bin Sarkam 

Thoo W’y-Kit 

Siti Zauwiyah binti Othman 


Independent Non-Executive Director & Chairman 


Executive Director & Chief Executive Officer 


Executive Director 

Mohd Aminudin bin Mustapha 

Non-Independent Non-Executive Director 



COMPANY SECRETARIES 

Leong Oi Wah (MAICSA 7023802) 

Tai Li Ching (MAICSA 7053542) 

Lim Siau Cheng (MAICSA 7060871) 

AUDITORS 

BDO (AF 0206) 

12th Floor, Menara Uni.Asia 

1008, Jalan Sultan Ismail 

50250 Kuala Lumpur 

Malaysia 

Tel : (+603) 2616 2888 

Fax : (+603) 2616 3190/91 

SHARE REGISTRAR 

Symphony Share Registrars Sdn Bhd 

Level 6, Symphony House 

Pusat Dagangan Dana 1 

Jalan PJU 1A/46 

47301 Petaling Jaya 

Selangor Darul Ehsan 


Tel : (+603) 7841 8000 

Fax : (+603) 7841 8008 

Nik Johaan bin Nik Hashim 



Independent Non-Executive Director 



REGISTERED OFFICE 

Lot 3410, Mukim Petaling 

Batu 12½, Jalan Puchong 

47100 Puchong 



Tel : (+603) 8060 5000 

Fax : (+603) 8060 5030 

Email : enquiry@konsortium.net 

PRINCIPAL BANKERS 

AmBank (M) Berhad 

CIMB Bank Berhad 

BOARD OF DIRECTORS 

STOCK EXCHANGE LISTING 

Main Market of 

Bursa Malaysia Securities Berhad, Malaysia 

Stock Name : KONSORT 

Stock Code : 6157 

WEBSITE 

www.konsortium.net

Corporate 

Structure 

100% 

North Terminal 

Sdn. Bhd. 


Diperdana Selatan 

Sdn. Bhd. 


Diperdana Terminal 

Services Sdn. Bhd. 

70% 

P.T Kay Pi Transmalindo 


Parcel Tankers 

Malaysia Sdn. Bhd. 


Asia Pacific Freight 

System Sdn. Bhd. 


KP Distribution 



Aman Freight (Malaysia) 

Sdn. Bhd. 


Maya Perkasa (M) 

Sdn. Bhd 


Aman Freight 



KP Asia Auto 

Logistics Sdn. Bhd. 


Westport Distripark (M) 

Sdn. Bhd. 


Pengangkutan 

Aspacs Sdn. Bhd. 


Cougar Logistics 

(Malaysia) Sdn. Bhd. 


PNSL Berhad 


Transworld Enterprise Ltd 


PNSL Risk 

Management 

Sdn. Bhd. 


Diperdana Utara 

Sdn. Bhd. 

50% 

Kaypi Integrated 

Sdn. Bhd. 


Diperdana Kontena 

Sdn. Bhd. 


Kaypi Logistics 

Depot Sdn. Bhd. 

40% 

KPB Sadao ICD 

Co. Ltd 


Malaysian Shipping 

Agencies Sdn. Bhd. 


Kaypi Southern 

Terminal Sdn. Bhd. 

35% 

Chong Fui Shipping & 

Forwarding Sdn. Bhd. 

100% 100% 

Konsortium Logistik Konsortium Logistik 

(Sabah) Sdn. Bhd. (Sarawak) Sdn. Bhd. 


KONSORTIUM LOGISTIK BERHAD (89243-A)


KONSORTIUM LOGISTIK BERHAD (89243-A) 

Global 

Presence 

1 

2 

3 

4 5 

1. LOS ANGELES, USA Express Une Corporation Inc Usa 

2. HOUSTON, USA Express Une Corporation Inc Usa 

3. NEW ORLEANS, USA Transoceanic 

4. QUEBEC, CANADA Express UNE (USA) 

5. LONDON, UK Widewater Ltd 

6. ROTTERDAM, NETHERLANDS Schenker International 

7. ITALY Deugro Iltalia 

8. HAMBURG, GERMANY Schenker International 

9. BREMEN, GERMANY Schenker International 

10 . STOCKHOLM, SWEDEN Scandinavian Gateway AS 

11. JOHANNESBURG, SOUTH AFRICA Deugro S.A 

12. SADAO, THAILAND KPB Sadao ICD Co Ltd 

7 

6 

8 

10 

9 

11 

13. BANGKOK, THAILAND Cargo Express Service 

14. SINGAPORE Titan Logistics Pte Ltd 

15. JAKARTA, INDONESIA P.T. Kay Pi Transmalindo 

16. HONG KONG, CHINA Speedy Aircargo 

17. SHANGHAI, CHINA Speedy Aircargo 

18. SEOUL, KOREA Sun & Moon Logistics 

19. TAIWAN Speedy Aircargo 

20. MANILA, PHILIPPINES KPI Warehouse Holdings Inc 

21. TOKYO, JAPAN Fairwinds Co. Ltd 

22. SYDNEY, AUSTRALIA Bright Logistics Pty Ltd 

23. NORTH SHORE CITY, 

NEW ZEALAND Bright Logistics Pty Ltd 

12 

15 

13 

14 

16 

17 

18 

19 

20 

21 

22 

23

Board of 

Directors 

1 Zulkifli bin Sarkam 

2 Dato’ Rosli bin Sharif 

3 Syed Yasir Arafat bin Syed Abd Kadir 

4 Haji Ismett Azyze bin Hamad Abbdul Azyze 

5 Che Azizuddin bin Che Ismail 

6 Dato’ Seri Talaat bin Husain 

7 Mohd Aminudin bin Mustapha 

8 Nik Johaan bin Nik Hashim Left to Right : 

1 2 3 4 5 6 7 8 


KONSORTIUM LOGISTIK BERHAD (89243-A)

8 


KONSORTIUM LOGISTIK LOGISTIK LOGISTIK BERHAD (89243-A) 

Directors’ 

Profile 

Haji Ismett Azyze bin Hamad Abbdul 

Azyze, a Malaysian aged 65, was appointed 

as an Independent Non-Executive Director 

of Konsortium Logistik Berhad on 25 

September 2007. Subsequently, he was 

appointed as Chairman of the Company 

on 30 November 2007. 

He holds a Masters degree in Education 

Technology from Brighton University, England. 

He served as the Regional Liaison Officer Brighton 

for Malaysian students in United Kingdom and Eire 

(for Southern England and Wales) from 1985 to 

1989. Thereafter, he returned to Malaysia to take 

up the position of Special Aide to the Director 

General of the Ministry of Education until 1992. 

Che Azizuddin bin Che Ismail, a Malaysian 

aged 53, was appointed as an Executive 

Director of Konsortium Logistik Berhad 

on 30 November 2007. Subsequently, he 

was appointed as Chief Executive Officer 

of the Company on 22 October 2010. 

HAJI ISMETT AZYZE BIN HAMAD ABBDUL AZYZE 

• Independent Non-Executive Director & Chairman 

• Chairman of Nomination Committee 

• Member of Audit Committee 

• Member of Remuneration Committee 

He was then posted again to the United Kingdom 

to serve as the Regional Liaison Officer Glasgow 

for Malaysian students in United Kingdom and Eire 

(for Scotland and Northern England) until 1995. 

In 1996, he was appointed the Principal Private 

Secretary to the Deputy Minister of the Ministry 

of Education up until 2000 when he was made 

the Education Advisor for the Institute Technology 

Tun Abdul Razak. During this period until his 

CHE AZIZUDDIN BIN CHE ISMAIL 

• Executive Director & Chief Executive Officer 

• Member of ESOS Options Committee 

He holds a Bachelor of Science (Ecology) Degree 

from the University of Malaya and holds a 

Diploma in Marketing Studies from the Institute of 

Marketing Birkshire, United Kingdom. 

He started his career in the logistics industry in 

1987 as a management trainee with Shapadu 

Transystem before joining Tenaga Sabaka Sdn Bhd 

as General Manager in 1988. He formed KP Asia 

retirement from public service in 2002, he was 

also the Special Adviser to the Chairman and Chief 

Executive Officer of KUB Malaysia. 

He has no family relationship with any Director 

and/or major shareholder of Konsortium and has 

no conflict of interest with the Company. He has 

no convictions for any offences within the past 10 

years other than traffic offences, if any. 

Auto Logistics Sdn Bhd in 1991 (now a whollyowned 

subsidiary of Konsortium) where he 

was the Managing Director until 1998. He was 

the Senior Vice President of the Auto division 

of Konsortium before he was appointed as an 

Executive Director of the Company. 

Currently, as the Chief Executive Officer of the 

Company, he is responsible for overseeing the 

overall business development and corporate 

planning stratergy of Konsortium Group. 

He also sits on the Board of Directors of several 

subsidiary companies in the Konsortium Group. 




no convictions for any offences within the past 

10 years other than traffic offences, if any.

Nik Johaan bin Nik Hashim, a Malaysian 

aged 41, was appointed as a Non- 



December 2010. 

He graduated from the University of Leicester, 

United Kingdom with a Bachelor of Arts degree 

Mohd Aminudin bin Mustapha, a 

Malaysian aged 41, was appointed as an 

Independent Non-Executive Director of 

Konsortium Logistik Berhad on 26 June 

2007. Subsequently, he was re-designated 

as Non-Independent Non-Executive 

Director on 8 August 2007. 

He holds a Bachelor of Economics (Finance) from 

the International Islamic University Malaysia. 

He started his career as the Executive Director 

of Precision Portal Sdn Bhd (“PPSB”). During his 

service with PPSB, it has grown to become one 

of the renown System Integrator company in 

Malaysia, securing several Government Mega IT 

projects. Currently, he is the Advisor to PPSB. 

NIK JOHAAN BIN NIK HASHIM 

• Non-Independent Non-Executive Director 

in Economics. He later obtained a Masters degree 

in International Banking & Financial Services from 

the University of Reading, United Kingdom. 

He has over 18 years experience in investment 

and consumer banking covering debt/equity 

fund raising exercises, corporate advisory and 

retail/business banking product sales. He began 

MOHD AMINUDIN BIN MUSTAPHA 


He was recently appointed as the Special Advisor 

to the Information Bureau for the Exco Pemuda 

UMNO Malaysia. He is also instrumental in 

introducing the electric-car technology to the 

country by assisting PROTON to partner with 

Detroit Electric, USA. 

Directors’ Profile (continued) 

his career in 1992 as an executive in the Capital 

Markets department of CIMB Investment Bank 

Berhad and rose from the ranks to his last position 

in the group as Director and Head, Multinational 

Corporation and Government Relations. 

Currently, he is a Senior Director, Investment/ 

Stakeholder Management of Ekuiti Nasional 

Berhad and is also a board member of Tabung 

Warisan Negeri Selangor, a Selangor state 

investment fund. 





10 years other than traffic offences, if any. 





years other than traffic offences, if any. 



10 



Dato’ Seri Talaat bin Husain, a Malaysian 

aged 60, was appointed as an Independent 

Non-Executive Director of Konsortium 

Logistik Berhad on 16 August 2007. 

He had his early education at Anglo-Chinese 

School, Sitiawan and later at The Malay College 

Kuala Kangsar. He holds a Bachelor of Social 

Sciences (Hons) degree in Political Science from 

University of Science, Malaysia and a Masters 

degree in Professional Studies (International 

Planning) from Cornell University, United States 

of America. He has also attended the Senior 

Executive Program at London Business School, 

Zulkifli bin Sarkam, a Malaysian aged 53, 

was appointed as an Executive Director 

of Konsortium Logistik Berhad on 12 June 

2007. 

He holds an Advanced Diploma in Business 

Administration (Transport) from MARA Institute of 

Technology. 

He joined PNSL Berhad as an executive in 1982 and 

was promoted to the position of General Manager 

of PNSL Berhad before joining Malaysian Shipping 

Agencies Sdn Bhd, a wholly-owned subsidiary of 

Konsortium in 1998. 

DATO’ SERI TALAAT BIN HUSAIN 

• Independent Non-Executive Director 

• Chairman of Audit Committee 

• Chairman of ESOS Options Committee 


• Member of Nomination Committee 

United Kingdom and the Advanced Management 

Program at Harvard Business School, United States 

of America. 

He started his civil service career as Assistant State 

Secretary in Penang and since then held several 

key positions in the Prime Minister’s Department, 

Socio-Economics Research Unit, National Institute 

for Public Administration, National Palace and the 

Ministry of Education. He served as the Mayor of 

Ipoh, Perak from 1998 to 2002. He then served 

as Secretary-General of the Ministry of Youth 

and Sports and the Ministry of Domestic Trade 

and Consumer Affairs before his retirement from 

public service in January 2007. 

ZULKIFLI BIN SARKAM 

• Executive Director 

• Member of ESOS Options Committee 

Currently, as an Executive Director of Konsortium, 

he is responsible in overseeing the Project 

Logistics division, Oil and Gas division and 

Distribution Logistics division. He also sits on the 

Board of Directors of several subsidiary companies 

in Konsortium Group. 


Thereafter, he served as the Chairman of the 

Companies Commission of Malaysia and as Board 

member of the Sepang International Circuit, 

Malaysian Intellectual Property Corporation 

and Malaysian Communication and Multimedia 

Corporation. 

Currently, he sits on the Board of Shell Refining 

Company (Federation of Malaya) Berhad and 

Silver Bird Group Berhad. He also sits on the 

Board/Council of the Outward Bound Trust of 

Malaysia. 





10 years other than traffic offences, if any. 





years other than traffic offences, if any.

Dato’ Rosli bin Sharif, a Malaysian aged 

56, was appointed as an Independent 

Non-Executive Director of Konsortium 

Logistik Berhad on 23 February 2011. 

He is a certified public accountant and a member 

of the Malaysian Institute of Accountants. He 

has attended the Senior Executive Development 

Programme at Banff School of Advanced 

Management, (BSAM) Canada. 

He served with the Government of Malaysia in 

various capacities at the Treasury Department of 

the Accountant General’s Office, Accountant at 

the Department of Civil Aviation and as the State 

Treasurer of Negeri Sembilan from 1980 to 1982. 

Since 1982, he was a Director in severel private 

limited companies involved in construction and 

property development. 

DATO’ ROSLI BIN SHARIF 

• Independent Non-Executive Director 

• Chairman of Remuneration Committee 



He joined Cement Industries of Malaysia Berhad 

(“CIMA”) in 1988 as the Group Finance Manager 

and was subsequently promoted to General 

Manager, then Chief Operating Officer and 

Managing Director in 2002. Between 1998 to 

2005, he led CIMA to grow its business and in 

particular involved to acquire and restructure 

Negeri Sembilan Cement Industries Sdn Bhd, 

which resulted in CIMA expanding its production 

capacity and market share especially in Singapore. 

He was the Chairman of the Cement and Concrete 

Association of Malaysia from 1998 to 2000. 

At UEM Group Berhad, in 2006, he was promoted 

as the Senior Director to head International 

Business West Asia. In 2009, he was then 

appointed as Senior Director, Corporate Services 

of UEM Group Berhad. During that period, he held 

directorships in several companies namely Faber 

Group Berhad, PT Lintas Marga Sedaya (Indonesia), 

UEM International (West Asia) Sdn Bhd, UEM 

International (East Asia) Sdn Bhd, UEM Group 


Management Sdn Bhd, First Impact Sdn Bhd, Intralogic 

Sdn Bhd, Mavtrac Sdn Bhd, Vistajati Holdings Sdn Bhd 

and UEM Tech Sdn Bhd. He was also the Chairman and 

Board Member of Infra Red Advance Technology Sdn 

Bhd. 

He has no family relationship with any Director and/or 

major shareholder of Konsortium and has no conflict of 

interest with the Company. He has no convictions for 

any offences within the past 10 years other than traffic 

offences, if any. 



12 



Syed Yasir Arafat bin Syed Abd Kadir, a 

Malaysian aged 39, was appointed as a 



November 2010. 

He graduated from the University of Essex, United 

Kingdom with a Bachelor of Arts (Hons) degree in 

Accounting and Financial Management. 

SYED YASIR ARAFAT BIN SYED ABD KADIR 





He was previously the Country Manager (ING 

Wholesale Banking) at ING Corporate Advisory 

(Malaysia) Sdn Bhd, specialising in areas of 

mergers and acquisitions (M&A), equity and 

equity-linked fund raising, debt fund raising and 

financial advisory for some of Malaysia’s leading 

companies in banking, plantations, automotive, 

telecommunications and property, among others. 


Prior to that, he was attached to United Overseas 

Bank (Malaysia) Berhad, Pengurusan Danaharta 

Nasional Berhad, Commerce International 

Merchant Bankers Berhad and Aseambankers 

Malaysia Berhad. 

Currently, he sits on the Board of Tanjung 

Offshore Berhad. He is also the Managing Partner, 

Investment of Ekuiti Nasional Berhad. 





10 years other than traffic offences, if any.

Executive 

Management 

Center: 


(Executive Director & Chief Executive Officer) 

Left: 


(Executive Director & SVP, Project Logistics) 

Right: 

Eddie Thoo 

(Chief Financial Officer) 



14 



Our 

Management 

INTERNAL & EXTERNAL AFFILIATE ORGANISATIONS 

( IAO & EAO ) BUSINESS SEGMENT 

left to Right : 

Pauline Tee • SVP, Value Added Services 

Wan Norliza Wan Othman • AVP, Free Commercial Zone 

Shahrilnizam Shahrum • VP, Haulage 

Mohd Azeli Shaharudin • AVP, Air Freight 

SHARED SERVICES ORGANISATION ( SSO ) BUSINESS SEGMENT 


Siti Zauwiyah Othman • Human Resource & Administration 

Shanice Lim • Company Secretary 

Othman Kastor • AVP, Quality Environment Health Safety 

LOGISTICS SERVICE ORGANISATION (LSO) BUSINESS 

SEGMENT 


Azmir Redza Ahmad • VP, Automotive Logistics 

Norlida Mustapha • VP, Distirbution Logistics 

Mohamad Nasir • VP, Oil & Gas Logistics 

Ahmad Munawir • VP, Project Logistics 

SHARED SERVICES ORGANISATION ( SSO ) BUSINESS SEGMENT 


M. Baskar • VP, Business Process & IT 

Tan Hoe Boon • VP, Internal Audit & Risk Management 

Esther Kee • VP, Finance 

Michelle Tan • AVP, Corporate Communications & Investor Relation

Chairman’s 

Statement 

DEAR SHAREHOLDERS, 

On behalf of the Board of Directors, I am 

pleased to present to you the Annual 

Report and financial results of Konsortium 

Logistik Berhad for the financial year ended 

31 December 2010. 


Chairman 



1 



WE RISE TO A NEW DAWN 

Malaysia’s economic recovery, which started in mid- 

2009, has been steadily on the rise as we dawn into 

2011. 

The country’s logistics industry is expected to grow by 

11.5% in 2011. Frost and Sullivan added that it expects 

the growth to continue at a compounded rate of 

12.6% over the next five years. Battling a tough 2010 

year by enduring the rugged economy, our Company 

has overcome the odds to stay on track of growth 

by delivering healthy cash flow to our shareholders, 

whilst meeting the demands of our customers 

without compromising on the quality standard of our 

business processes. 

Our focus is and still will be on enhancing Konsortium’s 

operational efficiencies to drive cost savings and 

improve margins, as well as seeking to grow revenue 

and earnings through aggressive marketing and 

acquisition of new clients. We have also set our sights 

on enhancing our businesses and assets to facilitate 

optimal utilisation of resources to unlock value and 

enhance future growth of the group. Konsortium 

Logistik Berhad is well geared and equipped with the 

confidence that it will continue to make progress in 

2011. 

FINANCIAL PERFORMANCE 

Revenue 

During the year, Group revenue increased 23.1% to 

RM294.4 million in 2010 compared to RM239.1 million 

recorded in 2009. 

Profit 

The Group recorded a Net loss attributable to 

shareholders of RM26.4 million in 2010 compared 

to Net Profit of RM25.0 million in 2009, due to the 

items being written down or one-off provisions made 

during the year. Excluding the exceptional items 

being written down and provisions made, the profit 

before tax would have been RM41.1 million in 2010 

as compared to RM31.9 million in 2009, an increase 

of 29%. Despite incurring the net loss, the cash flow 

remain strong and saw a growth from RM28.9 million 

to RM64.3 million. 

Dividend 

The Directors do not recommend the payment of 

any final dividend payment in respect of the 

financial year ended 31 December 2010. 

Message from the Chairman (continued) 

SURGING AHEAD THROUGH QUALITY 

The product of extensive logistics industry experience 

and knowledge has enabled our Company to deliver 

solutions to our customers that are practical, highly 

logical, totally effective and simple to install and 

operate on a day-to-day basis. 

Committed to continue evolving and carving a niche 

for ourselves as a leader in strategic logistics solutions, 

we remained focused on our goal to become an 

organisation that strives to better itself every day. 

Our sole purpose is to ensure that we always deliver 

in terms of quality, efficiency and continuously 

enhanced operational excellence throughout. 

CORPORATE GOVERNANCE 

The Board has a long-standing commitment to 

corporate governance and protection of shareholder 

value, which has been integral to the Company’s 

achievements and strong financial profile to date. 

The Company’s corporate governance structure is 

a fundamental part of the Board’s responsibility to 

protect and enhance long-term shareholder value 

and the financial performance of the Company and 

Group, whilst taking into account the interests of all 

stakeholders.

LOOKING AHEAD 

The year ahead looks very promising indeed with a 

stronger growth expected to forge its way through the 

year. Malaysia’s economy is likely to grow by 7% in 2011 

based on the improving world economic conditions. 

The RM50 billion logistics sector, representing about 

7% of the country’s gross domestic product (GDP), is 

one of their main drivers of the nation’s growth. With 

the outlook of a promising year ahead in place, we 

look forward towards maximizing our growth sectors 

to drive earnings, as well as increasing our dividends. 

Driven by the dynamism and strong fundamentals 

anchored by the company and its management team, 

we are bullish of sustaining strong returns to maximise 

shareholders return. 

OUR UNDIVIDED GRATITUDE 

Thank you for your continued commitment as 

Konsortium shareowners, financiers, partners and 

agents who have helped us achieve our long-term 

financial goals of earnings growth and improved 

margins, cash flows and returns on capital. I would 

also like to express our gratitude and appreciation 

to our valued employees, management and fellow 

board members, for their immense dedication in 

ensuring the Company stays focused on its path 

in the long-term view that has brought us to this 

stage and will continue to form the foundation of 

our journey. This will ensure that we build a stronger 

brand for our customers and a stronger corporate 

citizen for our economy. 

Haji Ismett Azyze 

Chairman 



18 


KONSORTIUM LOGISTIK LOGISTIK BERHAD (89243-A) 

CEO’s 

Statement 

CHE AZIZUDDIN BIN CHE ISMAIL 

Chief Executive Officer 

“Ability is nothing without opportunity. We at Konsortium have 

always been endowed as an organisation rich in opportunity. 

We’ve been on a mission ever since 2000 to give our customers 

superior, cost efficient and effective logistics solutions and 

move forward into a new era of surging ahead in business” 

BUSINESS OVERVIEW 

2010 was a significant year for Konsortium in 

two important ways: We responded successfully 

to the global economic crisis, and we laid the 

foundation for future growth as we prepare 

ourselves to gear up and embrace our transition 

into the new era, a new beginning to all things 

great for the Group. 

One fundamental aim is to achieve our long-term 

business objectives in a manner that leverages on 

the abilities and commitment of our people, our 

sound processes in driving solid performances 

and the right direction of success. 

HUMAN CAPITAL 

The development of human capital is one of the 

central strategies in the formulation of workforce 

strength, while surfacing opportunities and 

strategies to proactively manage people. 

The year that passed saw a total of 800 

employees with the number of 6,011 hours 

participated in various training courses catered 

to their professional development requirements. 

Amongst our initiatives was giving prominence 

to our drivers’ training with tailored courses to 

increase their productivity in handling prime 

machinery under their care. 

The need for higher productivity has become 

universallyacceptedanddependenceonefficient 

and effective training is not less apparent. Our 

specially-tailored training courses for our staff 

enabled them to perform their duties and make 

meaningful contributions towards the success of 

the organisation’s goals. 

CORPORATE DEVELOPMENT 

Ekuiti Nasional Berhad (Ekuinas), the governmentlinked 

private equity fund management 

company has on 18 October 2010 acquired a 

major controlling stake in Konsortium Logistik 

Berhad. Currently, Ekuinas’s shareholding stands 

at 65.9%. With the government endowment of 

RM5 billion under the 9th Malaysia Plan and 10th

Malaysia Plan, Ekuinas aims to create Malaysia’s next 

generation of leading companies whilst promoting 

equitables, effective and sustainable Bumiputera 

economic participation. 

PARTNERSHIP WITH OUR CUSTOMERS 

Nowhere is it more evident than in the rapid progress 

made on improving customer satisfaction, where 

each of our businesses made significant progress 

during the year. 

Trust is the foundation that holds the business 

relationship together and is repeatedly demonstrated 

in our actions and solutions to our customers by 

leveraging on our long standing professional ethics 

and responsibility to constantly engage not only with 

our customers but with our customers’ customer, to 

ensure a solid basis for business is built around an 

even stronger ties of valued commitment to loyalty. 

MOVING AHEAD WITH PEOPLE, 

PERFORMANCE AND PROCESSES 

Employees are important assets of the Group as 

they also determine the success of the Group. We 

recognize that their skill and performance levels 

must continuously be enhanced. In this respect, 

Konsortium gives training and development 

programmes to employees at all levels. The Company 

is also committed in keeping our workforce motivated 

while creating a fulfilling environment that rewards 

performance through the Group Performance and 

Incentive Plan (GPIP). The goals within the GPIP 

provide the opportunity for head of departments 

and division leaders to better manage and guide their 

team’s performance as well as provide a clearer job 

focus. Overall, it must be recorded that their unstinting 

effort has contributed a great deal to the continuing 

growth of the Group. 

The move to focus on having a structured IT 

environment also shows that the Group is ready to 

compete with international players, as this would 

require them to meet certain industry standards 

and expectations. We recognise the importance of 

investment in a good IT infrastructure to drive value, 

ensure cost reductions and increase productivity in 

our daily as well as long term operations. 

As a result of the improved architecture and 

processes provided by Konsortium, our customers 

have recognized the real costs of their existing supply 

chain management and have now learnt how to tap 

on the benefits and savings that can be achieved. 

What is important is leveraging on our business in 

ensuring steady growth as we take a step forward into 

the future with aligned targets and goals. 

CORPORATE SOCIAL RESPONSIBILITY 

Our Company recognizes that its businesses have 

direct and indirect impact on the communities in 

which we operate. We bear a special responsibility 

to use our knowledge and experience for the 

betterment of society and to further develop and 

initiate improvements for and with society. Some of 

our initiatives in contributing towards being a 

positive global citizen included initiatives that were 

carried out through efforts in the workplace, the 

community, the marketplace and the environment. 

Konsortium is committed to working towards a 

sustainable society for the next generation. As we 

know, the world is facing such serious challenges as 

climate change. It is our generation’s responsibility 

to address these issues - to create a better society 

and maintain the global environment for the next 

generation. 

As such, we are making significant progress on 

emissions reductions, with the use of alternatively 

powered vehicles on the road and applying some 

of the same approaches as the airlines to improving 

efficiency in air. We are also helping our customers 

to improve their carbon footprint by enhancing their 

logistics process as an important element in their own 

emission reduction programmes. 

As a global company, we at Konsortium recognise our 

responsibility to play an important role in achieving 

these critical objectives, both on our own and in 

partnership with others, which are highlighted in 

the Corporate Social Responsibility Statement in this 

Annual Report. 

APPRECIATION 

I would like to express my profound appreciation to 

the shareholders, customers, business associates, 

bankers, government authorities, regulatory bodies 

and mass media for their support, patience and trust 

of our management during the year. 

To the management and staff, I wish to extend my 

sincere gratitude for their loyalty, dedication and 

commitment to the Group. Last but not least, I would 

like to thank my fellow directors for their unconditional 

support and valuable advice to the Group throughout 

the year. 

Che Azizuddin Bin Che Ismail 

Chief Executive Officer 



20 



Review 

of Operations 

Surging Forward 

Through Total 

Logistics Solutions 

In line with our vision to be the 

preferred total logistics solutions 

provider, The Konsortium Group has 

grown to become a leading regional 

player in the logistics arena with 

our rapidly growing organisational 

entities; the Logistics Service 

Organisation (LSO), the Internal 

and External Affiliate Organisations 

(IAO/EAO) and the Shared Services 

Organisation (SSO). 

Our partnership-like approach to 

working with our clients makes our 

Company a total logistics solutions 

provider that everyone should 

consider engaging. 

2010 Total Revenue 120,168 

Percentage increase from 2009 64% 

Percentage contribution to Group’s total revenue 41% 

AUTOMOTIVE LOGISTICS 

2010 motor vehicle sales performance has surpassed the industry’s expectation as the nation’s Total 

Industry Volume (TIV) achieved a double-digit growth for the year. The TIV in 2010 has increased by 

12.7% to 605,156 units from 536,905 units recorded in the previous year. The strong growth marked 

the signs of economic recovery for the country after going though the global recession in 2009. 

During the year under review, the strong industry performance has favorably contributed towards 

the revenue growth of the Automotive Logistics Division. In 2010, the Division’s revenue registered 

an increase of nearly 64% to RM120.2 million against RM73.4 million in 2009. Besides the solid sales 

performance by the Division’s key clients, Proton and Perodua, the revenue growth was supported by 

the realization of new businesses particularly the Proton Edar CBU Distribution hubs in Klang, Selangor 

and Tanjung Malim, Perak. 

For 2011, the automotive industry is expected to stabilize after posting a strong growth. The Malaysia 

Automotive Association (MAA) has established a forecast TIV growth of 2.1% for 2011 taking into 

consideration the moderate economic outlook for the coming year. In the effort to sustain its financial 

performance, the Division shall actively pursue new business opportunities within the industry besides 

optimizing the potentials of the existing businesses through continuous improvements on efficiency 

and productivity.

PROJECT LOGISTICS 

For the year ending in 2010, The Project Logistics Division 

recorded slightly better financial results, amounting to a 

Revenue of RM35.64 million as opposed to RM35.60 million 

in 2009. There is a growing opportunity in expectations 

of more forthcoming projects in the requirements of 

logistics service as the correlation between the objectives 

of the Government Transformation Programme and the 

Economic Transformation Programme are becoming 

more and more evident. 

Among some of our project initiatives for 2010 include: 

1 Ship Chartering Sector 

- Serviced the existing Contract of Affreighment (COA)- 

Involved spots shipments transporting bulk coal 

from port of loading in Indonesia, South Africa and 

Australia. 

- For the year under review, the Division has handled 

the transportation of 4.76 million metric tones (MT) of 

bulk coal to power plants located in Kapar – Selangor, 

Lumut – Perak, Tanjung Bin – Johor and Jimah – 

Negeri Sembilan. This marked an increase of about 

47% in tonnage handled as compared to the year 

2009 which recorded 3.23 million metric tones (MT). 


Percentage increase from 2009 0.1% 


2 Private & Government Sector 

Review of Operations (continued) 

The Division also handled the Logistics Requirements for the Oil & Gas, power and telecommunication 

customers involving shipments of pipes, plant equipments and spare parts. 

We manage to secure the handling and delivery of 140 units of LRT Car from Mexico and other parts 

from various countries from shippers Bombardier Canada Mexico. 

For the Government Sector, among our various achievemants include handling the project for 

warehousing and the delivery of 800,000 books to Resource Centres (“Pusat Sumber”) to a total 5,682 

schools within Malaysia including Sabah and Sarawak within 6 month. We also handled and distributed 

77,645 copies of directories to Johor, Pahang and Kuala Lumpur for one of the Telco Company. 

The Division has also succeeded in maintaining its status as one of the leading Government’s appointed 

MTO (Multi-Modal Transport Operator). 



22 



Internal & 

External Affiliate 

Organisation 

(IAO & EAO) 

KONSORTIUM’S MARKET SHARE AND VOLUME 

Region Market 

Share 

Central 5.22% 91,711 

North 10.00% 47,411 

South 9.18% 54,113 

Source : 

Containers 

Handled (Units) 

Northern 

Penang Port Sdn Bhd 

North Butterworth Container Terminal (New Port) 

Butterworh Container Terminal (Old Port) 

Central 

Klang Container Terminal Berhad 

Klang Multi-Terminal Berhad 

Port Management Berhad 

Southern 

Johor Port Container Terminal 




HAULAGE 

In the year 2010, Konsortium’s Haulage Division registered a revenue of RM89 million as compared 

to RM76 million in 2009. This was an increase of 17%. High escalating costs of operations coupled 

with stiff competition in 2010 stretched profit margin to its limits. In a sustained bid to maximise cost 

savings and operational excellence, we have initiated several mitigating cost efficiency measures to 

steadily increase productivity via better assets utilisation. 

We have further taken deliveres of another 38 units of new prime movers and 6 side loaders during the 

year, bringing a total of new fleet below 3 years old to 227 units. Our drivers were sent for defensive 

driving refresher courses whilst the new drivers were given training on prime mover familiarization 

and defensive driving methods in our continuous effort to maintain high level of safety, productivity 

and efficiency. These would help in increasing productivity and improve cost efficiency. 

Our prime movers are fully equipped with the latest GPS tracking devices. The GPS tracking system 

provides timely and accurate information where customers track their consignment at their 

convenience. This IT driven application has enabled the Company to deliver a more efficient, cost 

effective, innovative and making it a more valuable business solution for our customers.



Percentage contribution to Group’s total revenue. 6% 

IAO STORAGE 

IAO Storage 

Konsortium’s logistics resources and expertise provides a turnkey solution to the challenge of product 

distribution that has brought value, consistency and high quality support to customers of every type and 

size which we have performed successfully. 

We shall strive to enhance our relationships with our custermers to help them better manage the full 

range of their global logistic needs. We will continuously train and re-train staff in ensuring that we meet 

all our customers requirements on: 

• Instant order fulfillment and configuration; 

• Better inventory management and lower holding costs; 

• Increased flexibility in managing demand fluctuations; 

• Excess/obsolescence management and reporting; and 

• Reduced lead time through efficient transport/distribution services 




24 





Percentage decrease from 2009 13% 


IAO VALUE ADDED SERVICES 

Port & Customs Clearance, Freighting (Air & Sea) and Insurance 

As a major service provider of freight forwarding, port & custom clearance for both import & 

export consignments as well as transshipment, our focus for the year ahead remains on securing 

higher value added businesses to further drive our margins. Adding on to that, our other strength 

lies in the fact that we act as a ship’s agent and attend to vessel clearance and husbandry and we are 

leveraging on that as another strong pulling factor of this division. 

The reduction of revenue from RM17.2 million to RM15 million was attributable to a shift in focus 

to move away from the low margin business segment. We continue to work towards enabling our 

current and prospective customers to better manage their costs, improve their order fulfillment lead 

times and reduce their investment in logistics assets.

Statement on 

Corporate Governance 

The Board of Directors (“the Board”) of Konsortium Logistik Berhad (“Konsortium” 

or “the Company”) recognises that the exercise of good corporate governance 

in conducting the affairs of the Company and its subsidiaries (“the Group”) with 

integrity, transparency and professionalism are the key components for the 

Group’s continuing progress and success as these would not only safeguard and 

enhance shareholders’value but also provide some assurance that the interests of 

the other stakeholders are protected. 

The Board of Konsortium is committed to comply with the principles and 

recommendation embodied in the Malaysian Code on Corporate Governance 

(Revised 2007) (“the Code”) in order to meet the highest standard of corporate 

governance. It strives to adopt the substance and not merely the form of the 

Code. 

In addition to the Code, the Group’s own corporate governance practices 

have always been guided by its “Mission” framework whereby responsible and 

balanced commercial success is to be achieved by addressing the interest of all 

stakeholders encompassing our customers, shareholders, employees, business 

associates, nation and the operating environment. There was in place a set of 

guiding principles that guide the employees at all levels in the conduct and 

management of the business and affairs of the Group. 

The Board of Konsortium is pleased to present the following reports on the 

application of the principles as set out in the Code and the extent to which the 

Group has complied with the best practices of the Code during the financial year 

ended 31 December 2010: 

A. DIRECTORS 

1. The Board 

The Board is the ultimate body which takes full responsibility for the overall 

performance of the Company and the Group. It resolves key business 

matters and corporate policy except those reserved for shareholders as 

provided in the Articles of Association (“the Articles”) of the Company, 

the Companies Act 1965 (“the Act”) and other regulatory requirements. 

The Board establishes the vision and strategic objectives of the Group, 

directing policies, strategic action plans and stewardship of the Group’s 

resources towards realising the Group’s mission. 

The Board’s important functions are as follows: 

(a) setting the objectives, goals and strategic plan for the Group with a 

view to maximise the shareholders’ value; 

(b) adopting and monitoring progress of the Group’s strategies, budgets, 

plans and policies; 

(c) overseeing the conduct of the Group’s business to evaluate whether 

the business is being properly managed; 

(d) identifying principal risks and ensure the implementation of 

appropriate systems to manage these risks; 

(e) considering management recommendations on key issues including 

acquisitions and divestments, restructuring, funding and significant 

capital expenditure; 

(f ) succession planning including appointing, training and reviewing 

senior management composition and compensation; 

(g) developing and implementing an investor relations programme or 

shareholder communications policy for the Group; and 

(h) reviewing the adequacy and the integrity of the Group’s internal 

control system and management information systems. 





Statement on Corporate Governance (continued) 

2. Board Composition and Balance 

The Board of Konsortium currently consists of eight (8) members of which 

two (2) of the Board members are Executive Directors, three (3) are Non- 

Independent Non-Executive Directors and three (3) are Independent Non- 

Executive Directors. During the financial year ended 31 December 2010, there 

were some changes to the composition of the Board following the changes 

in the controlling shareholder of the Company. The Board composition 

complies with the Main Market Listing Requirements of Bursa Malaysia 

Securities Berhad (“Bursa Securities”) (“the Listing Requirements”) that requires 

at least two (2) or one-third (1/3) of the Board, whichever is the higher are 

independent Directors. The Board has maintained its mix of Directors from 

diverse professional background with a wide range of experience and 

expertise in the field of business, information technology, economics, finance 

and accounting. 

The Executive Directors are responsible for the day-to-day business of the 

Group, implementation of the Group’s policies and the Board’s decisions, 

develop and implement the business and corporate strategies. They are 

assisted by two (2) Senior Vice Presidents and the respective heads of the 

operating divisions. 

The Independent Non-Executive Directors are independent of management 

and free from any business relationship which could materially interfere with 

their independent judgement. Their presence ensures that issues of strategies, 

performance and resources proposed by the management are objectively 

evaluated and thus provide a capable check and balance for the Executive 

Directors. 

The role of the Chairman is held by Haji Ismett Azyze bin Hamad Abbdul Azyze, 

an Independent Non-Executive Director of the Company, to ensure a balance 

of power and authority and a strong independent element on the Board. Haji 

Ismett Azyze is also the Senior Independent Non-Executive Director of the 

Company to whom concerns may be conveyed. 

3. Board Meetings 

The Board meets at least four (4) times annually, with additional meetings 

convened when necessary. The agenda of each Board meeting and papers 

relating to the agenda are disseminated to all Directors for review before the 

Board meeting. During the financial year ended 31 December 2010, a total of 

five (5) Board meetings were held and the respective Director’s attendance is 

shown in the following table: 

No. of 

meetings Percentage 

Name of Directors attended (%) 

Haji Ismett Azyze bin Hamad Abbdul Azyze 4 out of 5 80 

Che Azizuddin bin Che Ismail 5 out of 5 100 

Zulkifli bin Sarkam 5 out of 5 100 

Mohd Aminudin bin Mustapha 5 out of 5 100 

Dato’ Seri Talaat bin Husain 5 out of 5 100 

Loo Hooi Keat 

(Resigned on 8 December 2010) 4 out of 5 80 

Dr. Hj. Izhar bin Che Mee 

(Resigned on 23 February 2011) 4 out of 5 80 

Lai Ngit Sin 

(Resigned on 23 February 2011) 4 out of 5 80 

Syed Yasir Arafat bin Syed Abd Kadir 1 out of 1 100 

(Appointed on 19 November 2010) 

Nik Johaan bin Nik Hashim Not applicable Not applicable 

(Appointed on 23 December 2010) 

Dato’ Rosli bin Sharif Not applicable Not applicable 

(Appointed on 23 February 2011) 

4. Supply of Information 

Each Director is provided with an agenda and a complete set of Board 

papers containing the quantitative and qualitative information prior to each 

Board meeting with the aim of enabling the Directors to make an informed 

decisions. The senior management officers are invited to attend the Board 

meetings to report to the Board on the matters relating to their areas of 

responsibility when necessary.

The Board has direct access to the senior management on information 

relating to the Company’s business and affairs in the discharge of their duties. 

The Directors also have access to the advices and services of the Company 

Secretaries and all information in relation to the Group whether as a full Board 

or in their individual capacity to assist them in furtherance of their duties. 

From time to time, the Directors are regularly updated by the Company 

Secretaries on any latest development in the statutory requirements 

relating to their duties and responsibilities. The Company Secretaries attend 

all the Board meetings and ensure all the proceedings, deliberations and 

resolutions passed are properly recorded and maintained. 

The Directors may also seek the independent advices from independent 

professional advisers at the Company’s expense, if necessary. 

5. Appointments to the Board 

The appointment of new Board members are considered and evaluated 

by the Nomination Committee prior to recommendation to the Board for 

approval. The actual decision as to who should be nominated shall be the 

responsibility of the Board after considering the recommendations from the 

Nomination Committee. The Company Secretaries will ensure that all the 

appointments are properly made in accordance with the relevant regulatory 

requirements. 

6. Directors’ Training 

The Board acknowledges that continuous education is vital for its Board 

members to gain insight into the state of the economy, technological 

advances, latest regulatory developments and management strategies. The 

Nomination Committee assesses from time to time the training needs of the 

Directors and ensures the fulfillment of such training deemed appropriate. 

The Board members are also encouraged to attend training programmes 

and seminars to keep abreast with developments in the market place as well 

as to enhance their professionalism and knowledge. 

All the existing Directors of the Company have attended and completed the 

Mandatory Accreditation Programme as prescribed by Bursa Securities. 


During the financial year under review, the particulars of training programmes 

attended by the Directors are as follows: 

Name of Director Training programme attended 

Haji Ismett Azyze bin Half day - Global Trend & Market Strategy 

Hamad Abbdul Azyze (Global Finance & Challenging Issues) 

Che Azizuddin bin Half day - Global Trend & Market Strategy 

Che Ismail (Global Finance & Challenging Issues) 

Zulkifli bin Sarkam Half day - Global Trend & Market Strategy 

(Global Finance & Challenging Issues) 

Half day - Overview of the implications and 

scope of Goods and Services Tax (GST) in 


Mohd Aminudin bin Half day - Global Trend & Market Strategy 

Mustapha (Global Finance & Challenging Issues) 

Dato’ Seri Talaat bin Husain Two days - Directors’ Continuing Education 

Programme 

Loo Hooi Keat Half day - Global Trend & Market Strategy 

(Resigned on 8 December 2010) (Global Finance & Challenging Issues) 

Dr Hj Izhar bin Che Mee Half day - Overview of the implications and 

(Resigned on 23 February 2011) scope of Goods and Services Tax (GST) in 


Lai Ngit Sin Half day - Global Trend & Market Strategy 

(Resigned on 23 February 2011) (Global Finance & Challenging Issues) 

Half day - Overview of the implications and 

scope of Goods and Services Tax (GST) in 




28 




7. Re-election of Directors 

The Articles of the Company provides that at every Annual General Meeting 

of the Company, one-third (1/3) of the Directors for the time being and 

those appointed during the financial year shall retire from office and shall 

be eligible for re-election. The Articles further provides that all Directors shall 

retire from office at least once every three (3) years but shall be eligible for 

re-election. 

The Nomination Committee will review and assess annually the retiring 

Directors who seek for re-election at the Annual General Meeting of the 

Company and thereafter submit its recommendation to the Board on the 

proposed re-election of Directors for consideration before tabling the same 

for shareholders’ approval. 

At the forthcoming Twenty-Fifth Annual General Meeting, Zulkifli bin Sarkam 

and Che Azizuddin bin Che Ismail are due for retirement pursuant to Article 

82(1) of the Articles of the Company, whilst Syed Yasir Arafat bin Syed Abd 

Kadir, Nik Johaan bin Nik Hashim and Dato’ Rosli bin Sharif are due for 

retirement pursuant to Article 82(5) of the Company’s Articles. All of them 

have offered themselves for re-election. 

8. Board Committees 

To enable the Board to discharge their duties efficiently and effectively, the 

Board has delegated specific tasks to four (4) Board Committees, which are 

Audit Committee, Nomination Committee, Remuneration Committee and 

Executives’ Share Option Scheme (“ESOS”) Options Committee. Each Board 

Committee has its own terms of reference that clearly defined their duties 

and authorities that have been approved by the Board. 

The respective Board Committees will report their deliberations and 

recommendations to the Board and all the deliberations and decisions taken 

will then be approved by the Board. 

(a) Audit Committee 

The Audit Committee report and its terms of reference are presented 

on pages 35 to 40 of this Annual Report. The terms of reference of the 

Audit Committee are in compliance with the Listing Requirements and 

the best practices as set out in the Code. 

(b) Nomination Committee 

The Nomination Committee was established on 26 April 2002 and 

comprises mainly of Independent Non-Executive Directors. The 

members of the Nomination Committee are as follows: 

Name of Nomination Committee members 

Haji Ismett Azyze bin Chairman 

Hamad Abbdul Azyze Independent Non-Executive Director 

Dato’ Seri Talaat bin Member 

Husain Independent Non-Executive Director 

Mohd Aminudin bin Member 

Mustapha Non-Independent Non-Executive Director 

(Resigned on 23 December 2010) 

Syed Yasir Arafat bin Member 

Syed Abd Kadir Non-Independent Non-Executive Director 


Dato’ Rosli bin Sharif Member 

(Appointed on 23 February 2011) Independent Non-Executive Director

The Nomination Committee met once during the financial year ended 

31 December 2010 to review the composition of the Board and the 

required mix of skills. The Nomination Committee also assesses the 

performance and effectiveness of the Board as a whole and the Board 

Committees, evaluate the performance of individual Directors and 

discuss the training needs of the Directors. 

TheNominationCommitteeisresponsibleformakingrecommendations 

to the Board on the appointment of new Board members and Board 

Committees members. The Nomination Committee considers, reviews 

and assesses the qualification, skill and experience, core competencies 

and attributes of the candidate before recommending him/her to 

the Board for consideration and approval. All the assessments and 

evaluations carried out are properly documented and minuted by the 

Company Secretaries. 

(c) Remuneration Committee 

The Remuneration Committee was established on 26 April 2002 and 

comprises exclusively of Independent Non-Executive Directors. The 

members of the Remuneration Committee are as follows: 

Name of Remuneration Committee members 

Lai Ngit Sin Chairman 

(Resigned on 23 February 2011) Independent Non-Executive Director 

Dato’ Rosli bin Sharif Chairman 

(Appointed on 23 February 2011) Independent Non-Executive Director 

Haji Ismett Azyze bin Member 

Hamad Abbdul Azyze Independent Non-Executive Director 

Dato’ Seri Talaat bin Member 

Husain Independent Non-Executive Director 

Syed Yasir Arafat bin Member 

Syed Abd Kadir Non-Independent Non-Executive 

(Appointed on 23 December 2010) Director 


The Remuneration Committee met once during the financial year 

ended 31 December 2010 to review the bonus and increments of the 

Executive Directors. 

The Remuneration Committee is responsible in reviewing the 

remuneration of the Executive Directors as well as to make the 

recommendation to the Board on all elements of remuneration for the 

Executive Directors. The levels of remuneration for Executive Directors 

are determined based on the corporate and individual’s performance 

whilst the level of remuneration for Non-Executive Directors would 

reflects the experience and level of responsibilities undertaken by the 

particular Non-Executive Director. 

The Remuneration Committee reviews and ensures that the 

remuneration packages of the Executive Directors are sufficient so as 

to attract and retain the high caliber persons to run and manage the 

Company successfully. 

(d) ESOS Options Committee 

The ESOS Options Committee was set-up to ensure the ESOS is fairly 

and properly administered in accordance with its approved By-Laws 

and other applicable rules and regulations. 

The ESOS Options Committee was established on 27 February 2008 

and comprises of the following members: 

Name of ESOS Options Committee members 

Dato’ Seri Talaat bin Husain Chairman 


Che Azizuddin bin Che Ismail Member 

Executive Director & Chief Executive 

Officer 

Zulkifli bin Sarkam Member 

Executive Director 



30 




(d) ESOS Options Committee (continued) 

Name of ESOS Options Committee members 

Thoo W’y-Kit Member 

Chief Financial Officer 

Siti Zauwiyah binti Othman Member 

Human Resource & Administration 

The duties and responsibilities of the ESOS Options Committee amongst 

others, are as follows: 

a) to determine the eligibility of the person for participation in the 

ESOS; 

b) to decide on the number of shares to be offered to the eligible 

persons, the subscription price for the shares and such other terms 

in relation to the offer; 

c) to monitor the progress of the ESOS; 

d) to enter into any transactions, agreements, deeds, documents 

or arrangements, and make rules, regulations or impose terms 

and conditions or delegate part of its power relating to the ESOS 

subject to the provisions of the ESOS By-Laws; and 

e) to take all other actions within the purview of the ESOS Options 

Committee pursuant to the ESOS By-Laws, for the necessary and 

effective implementation and administration of the ESOS. 

B. DIRECTORS’ REMUNERATION 

The Company has adopted the objective as recommended by the Code 

in determining the remuneration of the Directors so as to ensure that the 

Company attract, retain and motivate the Directors needed to manage the 

Group successfully. 

The Remuneration Committee reviews the remuneration packages of the 

Executive Directors annually to ensure that they are awarded appropriately 

for their contributions to the Group’s growth and profitability. The 

Remuneration Committee recommends to the Board the remuneration 

packages of the Executive Directors and the Board approves the 

remuneration packages with the particular Executive Director abstaining 

from deliberation and voting on the relevant resolution. 

The Non-Executive Directors’ fees are determined by the Board as a whole 

and are subject to the shareholders’ approval at the general meeting. 

The details on the aggregate remuneration of the Directors for the financial 

year ended 31 December 2010 are as follows: 

*Other Benefits- 

Fees Salaries emoluments in-kind Total 

(RM) (RM) (RM) (RM) (RM) 

Executive 

Directors 30,000 1,252,000 787,650 64,117 2,133,767 

Non-Executive 

Directors 316,000 - 36,000 11,800 363,800 

* Other emoluments include bonuses, leave passage, allowances and 

statutory contributions.

The number of Directors whose total remuneration falls within the respective 

bands is as follows: 

Number of Directors 

Executive Non-Executive 

Range of remuneration Directors Directors 

RM50,001 to RM100,000 - 4 

RM100,001 to RM150,000 - 1 

RM550,001 to RM600,000 1 - 

RM600,001 to RM650,000 1 - 

RM900,001 to RM950,000 1 - 

C. SHAREHOLDERS 

1. Communication with Shareholders and Investors 

The Board recognises the importance of transparency and accountability 

in disclosing the Group’s business activities to shareholders and investors. To 

this effect, the Board has maintained an effective communication policy that 

enables both the management and the Board to communicate effectively 

with the shareholders and investors. 

In addition to that, the Company also makes timely announcements and 

disclosures to Bursa Securities, including financial results on a quarterly basis 

to provide the shareholders and the investing public an updated overview 

of the Group’s performance and operations. 

Other modes of communication with shareholders and investors include the 

Annual Report, Circular, press releases and Konsortium’s website at www. 

konsortium.net. 


2. The Annual General Meeting 

The Annual General Meeting is the principal forum for the Board to meet 

with the shareholders. At the Annual General Meeting, a presentation on 

the Company’s operational and financial performance will be shown to all 

attendees. The shareholders are encouraged to raise questions pertaining 

to the business activities of the Group and the Board will respond to 

shareholders’ questions during the meeting. 

D. ACCOUNTABILITY AND AUDIT 

1. Financial Reporting 

The Board strives to ensure that the Company’s financial reporting to 

its stakeholders, in particular the shareholders, investors and regulatory 

authorities by means of the annual financial statements and quarterly 

announcements, represents a clear, balanced and comprehensive 

assessment of the Group’s financial performance and prospects at the 

end of the financial year. 

The Audit Committee assists the Board in ensuring the accuracy, 

adequacy and quality of the financial reporting prior to recommendation 

to the Board for approval and submission to Bursa Securities within the 

prescribed period. 

2. Directors’ Responsibility Statement in preparing the Annual 

Audited Financial Statements 

The Board of Konsortium is fully accountable to ensure that the financial 

statements are drawn up in accordance with the Act and the applicable 

approved financial reporting standards in Malaysia so as to give a true 

and fair view of the state of affairs of the Group and the Company at the 

end of the financial year and of the results and cash flows of the Group 

and the Company for the financial year. 



32 




In the preparation of the financial statements, the Directors have: 

(a) applied relevant and appropriate accounting policies consistently and 

in accordance with applicable approved financial reporting standards; 

(b) made judgments and estimates that are prudent and reasonable; and 

(c) prepared the financial statements on a going concern basis. 

The Directors are responsible for ensuring that proper accounting records 

are kept in accordance with the Act. The Directors also have overall 

responsibility in taking such steps as are reasonably open to them to 

safeguard the assets of the Group and to prevent and detect fraud and 

other irregularities. 

3. Internal Control and Risk Management 

The Board has an overall responsibility to maintain a sound system of 

internal control and ensure proper risk management practices are in place 

to safeguard shareholders’ investment and the Group’s assets. 

There is an ongoing process to identify, evaluate and manage significant 

risks faced by the Group. 

4. Relationship with Auditors 

The Board has established a formal and transparent working relationship 

with the Group’s auditors, both internal and external that enables the Board 

to seek their professional advice and ensure compliance with accounting 

standards and regulatory requirements. The Audit Committee met with the 

external auditors at least twice in a year to discuss the audit plan, audit 

findings and audited accounts without executive board members present.

Statement on 

Internal Control 

The Board of Directors (The Board) is committed to maintain a sound system of 

internal control to safeguard the sharholders’ investments and the Group’s assets 

and is pleased to provide the following Statement on Internal Control pursuant 

to paragraph 15.26(b) of Main Market Listing Requirements of (“Bursa Malaysia 

Securities Berhad”) (“Bursa Securities”). 

Board Responsibility 

The Board acknowledges their responsibility for the Group’s system of internal 

control and for reviewing its adequacy and integrity. Due to the limitations that are 

inherent in any system of internal control, it should be noted that such systems are 

designed to manage, rather than eliminate the risk of failure to achieve corporate 

objectives. Accordingly, it can only provide reasonable but not absolute assurance 

against misstatement or loss. 

The Group has in place an on-going process for identifying, evaluating, monitoring 

and managing the significant risks faced by the Group. This process is regularly 

reviewed by the Board, in accordance with the Statement on Internal Control and 

Guidance for Directors of Public Listed Companies. 

Risk Management Framework 

The Board has extended the responsibilities of the Audit Committee to include 

the work of monitoring the effectiveness of the internal control on its behalf, 

including identifying risk areas and communicating these risk areas to the Board. 

Detailed risk events were identified and discussed and with the approval of the 

Board appropriate measures were taken to control and mitigate these risks. 

Internal Audit Function 

The internal audit was directed towards selected risk areas of the operations and 

was carried out in accordance with the internal audit plan approved by the Audit 

Committee. An internal audit update is submitted to the Audit Committee on a 

quarterly basis. The Audit committee reviews and ensures that the risk monitoring 

and compliance procedures are adequate and presents their findings to the Board 

on a quarterly basis. 

Financial Reporting 

Each business division undertakes yearly comprehensive budgeting and 

forecasting process. The heads of business divisions conduct periodic reviews of 

the financial performance of the individual business divisions against financial 

budget, and key performance indicators. Major variances are highlighted to the 

Executive Committee (“EXCO”), which comprises certain Directors, Chief Executive 

Officer, Chief Financial Officer and representatives from the penultimate holding 

company with corrective actions taken to resolve these issues. 

Other Risks and Control Processes 

Apart from the internal audit and risk management, other risks and controls 

processes are described as follow: 

(a) Clear organisation structures with formally defined lines of responsibility and 

delegation of authority that act as a control mechanism in terms of lines of 

reporting and accountability. 

(b) Documented internal policies and procedures. All Divisions are subject to 

periodic cycle review by internal auditors based on the approved audit plan. 

(c) Regular visits to operating units by senior management. Monthly EXCO 

meeting. 

(d) The Board and Audit Committee meets at least quarterly and are provided 

with an agenda on matters of discussion in order to maintain full and effective 

supervision. 

(e) Audit Committee reviews the internal and external audit plans, reports and 

their evaluation of the system of internal control on a quarterly and yearly 

basis respectively. 



34 



Statement on Corporate 

Social Responsibility 

RESPONSIBILITY TO THE WORKPLACE 

What makes one employee look forward to taking on more responsibilities and 

accountability is highly dependent on Management’s commitment in creating an 

environment that fosters such outcome. Konsortium Logistik Berhad (“Konsortium” 

or “the Company”) is constantly working on developing human capital by 

implementing measures to ensure organizational effectiveness in realizing our 

coporate, financial and marketing objectives. Continuous training programmes 

such as our drivers training programmes and skills development programmes are 

organized in tandem with our objective in ensuring higher level of productivity 

is met. 

As a socially caring and responsible employer, the Company also looks after the 

well being of the staff by arranging health talks and screenings with a few of the 

non-govermental organisations (NGOs) such as the National Kidney Foundation 

and also the Malaysian Mental Health Association. 

COMMITMENT TO THE COMMUNITY 

Konsortium has always kept the communities at heart and has always looked after 

their best interests. Some of the Company’s initiatives for the year include: 

Blood Donation Drive 

The Company was pleased to instil some social responsibility values among staff 

in response to the call from the National Blood Bank. A Blood Donation Drive 

was carried out across all regions of our operations and saw an overwhelming 

support from our staff especially the drivers who have willingly donated towards 

the cause of promoting a caring society as well as to help save lives. 

Talk on Mental Illness by Malaysian Mental Health Association 

The Company played host to the Malaysian Mental Health Association by 

organizing workshops on mental illness for the staff. Besides raising awareness 

and imparting a more responsive attitude towards good mental health, the 

primary objective of this initiative was aim to address the continuing needs to 

“make mental health a global priority, and stressed the all too-often neglected 

fact that mental health is an integral part of our overall health”. 

Health Screening by National Kidney Foundation 

The National Kidney Foundation plays a major role in educating the public on the 

prevention and management of kidney diseases. The Company was privileged 

to have them over for a health screening for the employees. It was indeed an 

eye opener as staff excitedly took the opportunity to have their body mass index 

(BMI) checked. 

“Majlis Ibadah Qurban” 

As part of the Company’s religious duty to the communities that we served, the 

Chief Executive Officer, Encik Che Azizuddin bin Che Ismail had performed the 

“Ibadah Qurban”, which was held during the Hari Raya Haji celebrations at selected 

mosques in Port Klang, Penang and Johor in September 2010. 

PROTECTING THE ENVIRONMENT 

Earth Hour @ Konsortium 

Non-essential lights and air-conditioning in our businesses and homes were 

turned off for two hours as the Company took a stand against climate change on 

27 March 2010. The Company’s staff also participated in Earth Hour where they 

eagerly signed up online in show of support. 

MARKETPLACE RELATIONS 

We at Konsortium are totally steadfast to constantly enhance our working relations 

and create a conducive business environment with the communities in our 

marketplace mainly shareholders, customers, suppliers, analysts, fund managers, 

union and the media. Our principles are and will remain to use our experience to 

guide our business and industry from the planning stage to the victory days.

Audit 

Committee Report 

The Board of Directors (“the Board”) of Konsortium Logistik Berhad (“Konsortium” 

or “the Company”) is pleased to present the following report of the Audit 

Committee for the financial year ended 31 December 2010: 

MEMBERSHIP AND MEETING 

During the financial year, the Audit Committee increased the numbers of 

members to four (4) with the appointment of Tuan Syed Yasir Arafat bin Syed 

Abd Kadir, a Non-Independent Non-Executive Director, on 1 December 2010. 

Subsequent to the financial year end, Dato’Rosli bin Sharif, an Independent Non- 

Executive Director, was appointed a member in place of Mr Lai Ngit Sin who has 

resigned as a Director and Audit Committee member on 23 February 2011. 

The Audit Committee meetings were appropriately structured through the use 

of agenda. During the financial year ended 31 December 2010, a total of five (5) 

Audit Committee meetings were held and the respective committee member’s 

attendance is shown in the following table: 

Name of Audit Committee members No. of meetings Percentage 

attended (%) 

Dato’ Seri Talaat bin Husain (Chairman) 4 out of 4 100 


Haji Ismett Azyze bin Hamad Abbdul Azyze 3 out of 4 80 


Lai Ngit Sin 4 out of 4 100 


(Resigned on 23 February 2011) 

Syed Yasir Arafat bin Syed Abd Kadir Not Applicable Not Applicable 



Dato’ Rosli bin Sharif Not Applicable Not Applicable 


(Appointed on 23 February 2011) 

The Heads of Finance, Internal Audit and Risk Management and representatives 

of the external auditors and the external consultants are invited to attend the 

Audit Committee meetings when necessary. 

TERMS OF REFERENCE OF THE AUDIT COMMITTEE 

1. Constitution 

1.1 The Board of Konsortium, in accordance with Article 106(1) of the 

Articles of Association of the Company, has established a Committee of 

the Board, known as Audit Committee (“AC”), vide Directors’Resolution 

passed on 6 December 1995. 

1.2 The functions and authority of the AC extend to Konsortium and all 

its subsidiaries, joint ventures and associates where management 

responsibility is vested to Konsortium or subsidiaries of Konsortium 

(collectively referred to as the “Group”). 

2. Membership 

2.1 The members of the AC shall be appointed by the Board of Konsortium 

and shall consist at least three (3) members. All the AC members must 

be non-executive directors, with a majority of them being independent 

directors as defined in paragraph 1.01 of the Main Market Listing 

Requirements of Bursa Malaysia Securities Berhad (“Bursa Securities”). 

If membership for any reason falls below three (3) members, the Board 

shall, within three (3) months of that event, appoint such number of 

new members as may be required to fulfill the minimum requirement. 

2.2 No Alternate Directors shall be appointed to the AC. 

2.3 At least one (1) member of the AC must meet the criteria set out by 

paragraph 15.09(1)(c) of the Listing Requirements of Bursa Securities, 

ie: 

(a) must be a member of the Malaysian Institute of Accountants; or 





Audit Committee Report (continued) 

(b) if he is not a member of the Malaysian Institute of Accountants, he 

must have at least three (3) years’ working experience and: 

(i) must have passed the examinations specified in Part 1 of the 

1st Schedule of the Accountants Act 1967; or 

(ii) must be a member of one of the associations of accountants 

specified in Part II of the 1st Schedule of the Accountants Act 

1967; or 

(c) fulfills such other requirements as prescribed or approved by Bursa 

Securities. 

2.4 The members of the AC shall elect a Chairman from among their 

numbers who shall be an independent director. 

3. Authority 

In performance of its duty, the AC shall in accordance with the same 

procedures adopted by the Board and at the cost of the Group: 

(a) have authority to investigate any activity within its Terms of Reference; 

(b) have access to resources required to perform its duties; 

(c) have full and unrestricted access to any employee and information 

pertaining to the Group and all documents of the Group shall be made 

accessible to the AC; 

(d) have direct communication channels with external auditors and persons 

carrying out the internal audit function or activity for the Group; 

(e) have authority to direct the internal audit functions in its activities, 

including approval of appointments of senior executives and budgets 

in these functions; 

(f ) have authority to engage independent professional advisers or other 

advisers and to secure attendance of outsiders with relevant experience 

and expertise if it considers this necessary; and 

(g) be able to convene meetings with the external auditors, the internal 

auditors or both, excluding the attendance of other Directors and 

employees of the Company, whenever deemed necessary. 

4. Duties and Responsibilities 

The AC shall carry out the following responsibilities: 

4.1 Evaluate the standards of internal control and financial reporting 

4.1.1. Assess the quality and effectiveness of the systems of internal 

control and the efficiency of the Group’s operations, particularly 

those relating to areas of significant risks. Evaluate the process 

of the Group has in place for assessing and continuously 

improving internal controls. 

4.1.2. Assess the internal process for determining and managing key 

risks. 

4.1.3. Review the scope of internal and external auditors’ review of 

internal control over the Group. 

4.1.4. Review internal audit reports (including those of the Group) and 

management’s response and ensure that appropriate action is 

taken in respect of these and AC resolutions. Where action is not 

taken by management within adequate timeframe set by the 

AC, the AC will report to the Board for its action. 

4.1.5. Review external audit reports and management’s response 

and ensure that appropriate action is taken in respect of these 

reports and AC resolutions.

4.1.6. Review the effectiveness of the system for monitoring compliance 

with laws and regulations and the results of management’s 

investigation and follow-up (including disciplinary action) of any 

instances of non-compliance. 

4.1.7. Review the findings of any examinations by regulatory 

authorities. 

4.1.8. Obtain regular updates from management and internal audit 

regarding compliance matters, and remedial action taken 

in respect of findings, if any, of examinations by regulatory 

authorities. 

4.2 Review of financial statements 

4.2.1. Review and recommend acceptance or otherwise of major 

accounting policies, principles and practices. 

4.2.2. Review the quarterly results and annual financial statements of 

the Company and the Group before submission to the Board for 

approval. The review should focus primarily on:- 

(a) any changes in or implementation of major accounting 

policy changes; 

(b) major judgemental areas, significant and unusual events; 

(c) significant adjustments resulting from audit; 

(d) compliance with accounting standards; and 

(e) compliance with Listing Requirements of Bursa Securities 

and other legal requirements. 

4.2.3. Review with the management on any legal matter that could have 

a significant impact on the organization’s financial statements. 


4.3 Oversee all matters relating to external and internal audit 

4.3.1. Review with the management and the external auditors, the 

results of the audit, including any difficulties encountered. 

4.3.2. Review the adequacy of the scope, functions, competency and 

resources of the internal audit functions and that the AC has the 

necessary authority and resources to carry out its work. 

4.3.3. Approve the appointments and resignations of the Head and 

staff of internal audit department. 

4.3.4. Conduct and prepare appraisal report on the Head of internal 

audit, and review the appraisals or assessments of members of 

the internal audit functions. 

4.3.5. Direct any special investigations to be carried out by internal 

audit. 

4.3.6. Review external audit plans and scope of work before the audit 

commences. 

4.3.7. Discuss problems and reservations arising out from external 

audit, including assistance given by the employees and any 

matters the auditors may wish to discuss, in the absence of 

management or Executive Directors, where necessary. 

4.3.8. Nominate the external audit together with such other functions 

as may be agreed to by the AC and the Board and recommend 

for approval of the Board on the external audit fee, and consider 

any questions of resignation or dismissal, experience, resources 

and capability. 

4.3.9. Review and reassess, with the assistance of the management, 

the external auditors and legal counsel, the adequacy of the 

Terms of Reference of the AC where necessary. 



38 




4.4 Additional duties and responsibilities 

5. Meetings 

4.4.1. Review on any related party transaction and conflict of interest 

situation that may arise within the Company or the Group 

including any transaction, procedure or course of conduct that 

raises questions of management integrity. 

4.4.2. Where the AC is of the view that a matter reported by it to the 

Board has not been satisfactorily resolved, resulting in a breach of 

Listing Requirements of Bursa Securities, the AC must promptly 

report such matters to the Bursa Securities. 

4.4.3. Perform other duties as directed by the Board. 

4.4.4. Be able to obtain independent professional or other advice. 

5.1 Upon the request of any member of the AC, the Head of internal audit 

or the external auditors, the Chairman of the AC shall convene a special 

meeting of the AC to consider any matters brought up by them. An 

agenda shall be sent to all members of the Committee and any persons 

that may be required to attend. 

5.2 Notice of meeting of the AC shall be issued to all the members and any 

persons who may be required to attend in writing via electronic mail, 

facsimile, hand delivery or by courier service. 

5.3 The Chairman of the AC shall be the Chairman of the meeting. In 

the absence of the Chairman, the members present shall elect a 

Chairman for the meeting from amongst the members present who is 

independent director. 

5.4 Where the decision of the AC requires voting, it shall be determined by 

a majority of votes and the determination by a majority of the members 

shall for all purposes be deemed a determination of the AC. In case of 

an equality of votes, the Chairman of the meeting shall have a casting 

vote. 

5.5 In order to form a quorum for a meeting of the AC, the majority of 

members present must be independent directors. 

5.6 The meetings of the AC shall be governed by the provisions contained 

in the Memorandum and Articles of Association of Konsortium for 

regulating the meetings and proceedings of Directors unless otherwise 

provided in this Terms of Reference. 

5.7 Non-Executive Directors of the Board who are not members of the AC 

may also attend the meetings of the AC upon invitation by the AC, but 

they shall not have any voting rights. 

5.8 The meetings of the AC shall normally be attended by the Head of 

internal audit and the management of Konsortium shall be represented 

by the President or Vice President of Finance, or their nominated 

persons, at the invitation of the AC and shall excuse themselves from 

the meeting when so directed by the AC. 

5.9 The AC may request other Directors, members of the management, 

counsels, internal auditors (including subsidiaries) and external auditors, 

where applicable to participate in the AC meetings, as necessary and 

when so invited, to assist the AC in carrying out its responsibilities. 

5.10 The AC shall meet the external auditors at least twice a year (in the 

absence of the management, where necessary). 

5.11 An AC member shall excuse himself/herself from the meeting during 

discussions or deliberations on any matter which gives rise to an actual 

or perceived conflict of interest situation for the member. Where this 

results in insufficient directors to make up a quorum, the Committee has 

the right to appoint another director(s) which meets the membership 

criteria. 

5.12 The secretary of the AC shall be the Company Secretary or his/her 

appointed nominee from the Company Secretarial Department.

5.13 The AC, through its Chairman, shall report to the Board after each 

meeting. 

5.14 Minutes of each meeting shall be kept and distributed to each member 

of the AC and also members of the Board. 

5.15 The minutes of proceedings of the AC shall be kept by the secretary at 

the registered office of the Company, and if required, shall be available 

for inspection by any member of the AC or any member of the Board. 

6. Audit Committee Report 

Pursuant to paragraph 15.15(3) of the Main Market Listing Requirements of 

Bursa Securities, Konsortium must ensure that the AC Report must be clearly 

set out in the annual report which include the followings:- 

(a) the composition of the AC, including the name, designation (indicating 

the Chairman) and directorship of the members (indicating whether 

the Directors are independent or otherwise); 

(b) the Terms of Reference of the AC; 

(c) the number of the AC meetings held during the financial year and 

details of attendance of each AC member; 

(d) a summary of the activities of the AC in the discharge of its functions 

and duties for that financial year; and 

(e) the existence of an internal audit function or activity and where is such 

a function or activity, a summary of the activities of the function or 

activity. Where such a function or activity does not exist, an explanation 

of the mechanisms that exist to enable the AC to discharge its functions 

effectively. 


SUMMARY OF ACTIVITIES OF THE AUDIT COMMITTEE DURING THE YEAR 

During the financial year, the AC carried out its duties as set out in the Terms of 

Reference, particularly on: 

(a) review of the half yearly business risk assessment and risk management 

reports to identify and manage key business risks as well as to monitor the 

status of the risk mitigating measures; 

(b) review of the annual proposed internal audit plan and internal audit 

reports; 

(c) review of the audit plan for the Group and discussion of the audit issues as 

highlighted by the external auditors; 

(d) review of the adequacy of the scope, functions and resources of the internal 

audit functions; 

(e) review of the performance of members of the internal audit function; 

(f ) review of the AC report and Statement on Internal Control for insertion into 

the annual report; 

(g) review of the performance and fees of the external auditors and consider the 

re-appointment of auditors; 

(h) review of the quarterly financial results and annual audited accounts; and 

(i) review of recurrent related party transactions of a revenue or trading nature 

on quarterly basis. 



40 




INTERNAL AUDIT FUNCTION 

The internal audit function of the Group is performed in-house by the Internal 

Audit Department, in which the Internal Audit Charter had been formally adopted 

by the AC. The Internal Audit Department is independent of the activities or 

operations of other operating units.The principal role is to undertake independent, 

regular and systematic review of the system of internal controls so as to provide 

reasonable assurance that such systems continue to operate satisfactorily and 

effectively. It is the responsibility of the Internal Audit Department to provide the 

AC with independent and objective reports on the state of internal control of 

the various operating units within the Group and the extent of compliance of 

the units with the Group’s established policies and procedures as well as relevant 

statutory requirements. 

During the financial year, the Internal Audit Department carried out various risk 

based operational and financial audits covering automotive logistics, haulage, 

freight forwarding and also some ad-hoc audits. 

For the financial year ended 31 December 2010, the Company incurred a total 

sum of RM234,000 for its internal audit function.

42 



Directors’ Report 

The Directors have pleasure in submitting their report and the audited financial statements of the Group and of the Company for the financial year ended 31 December 

2010. 

PRINCIPAL ACTIVITIES 

The Group and the Company are principally engaged in the provision of total logistics services and inventory solutions, which include the provision of container haulage 

services, bulk liquid distribution services, inland container depot services, freight forwarding, shipping agency and chartering services, warehousing and distribution 

services and insurance agency. There have been no significant changes in the nature of these activities during the financial year. 

RESULTS 

Group Company 

RM’000 RM’000 

(Loss)/Profit for the financial year (26,512) 258,338 

Attributable to: 

Owners of the parent (26,364) 258,338 

Minority interest (148) - 

DIVIDEND 

(26,512) 258,338 

Dividend on ordinary shares paid or declared by the Company since the end of the previous financial year were as follows: 

Company 

RM’000 

In respect of the financial year ended 31 December 2009: 

Final gross dividend of 8.00 sen per ordinary share, less tax at 25% (6.00 sen 

net per ordinary share), paid on 9 September 2010 13,815 

In respect of the financial year ended 31 December 2010: 

Interim gross dividend of one (1) treasury share for every forty (40) existing 

ordinary shares of RM1 each, distributed on 30 September 2010 6,473 

2nd interim gross dividend of 17 sen per ordinary share, less tax at 25% 

(12.75 sen net per ordinary share ), paid on 24 January 2011 30,076

DIVIDEND (continued) 

The amount of final dividend paid of RM13,814,994 in respect of the year ended 31 December 2009 was lower than the dividend proposed of RM13,983,498 in last year’s 

Directors’ report. The difference of RM168,504 was in respect of repurchase of own shares by the Company subsequent to the end of the previous financial year, but prior 

to the closing date of the entitlement to dividend on 12 August 2010 as follows: 

Company 

RM’000 

Proposed final gross dividend of 8.00 sen per ordinary share, less tax at 25% 

(6.00 sen net per ordinary share) 13,983 

Add: Shares distributed 10 

13,993 

Less: Shares repurchased (178) 

Actual final dividend paid on 9 September 2010 13,815 

The Directors do not recommend the payment of any final dividend payment in respect of the financial year ended 31 December 2010. 

RESERVES AND PROVISIONS 

There were no material transfers to or from reserves or provisions during the financial year. 

ISSUE OF SHARES AND DEBENTURES 

There were no issues of new shares or debentures during the financial year. 

TREASURY SHARES 

Directors’ Report (continued) 

The shareholders of the Company, by a special resolution passed at the Extraordinary General Meeting held on 21 March 2008, authorised the Company’s plan to 

purchase its own shares. The authority granted by the shareholders was subsequently renewed during subsequent Annual General Meetings of the Company, including 

the last meeting held on 23 June 2010. The Directors of the Company are committed to enhancing the value of the Company to its shareholders and believe that the 

repurchase plan can be applied in the best interest of the Company and its shareholders. 

During the financial year, the Company repurchased a total of 2,927,600 ordinary shares of RM1.00 each from the open market for a total consideration of RM3,878,851 

at an average price of RM1.32 per ordinary share. The repurchase transactions were financed by internally generated funds and external borrowings. The Company has 

resold a total of 10,000 ordinary shares of RM1.00 each to the open market for a total consideration of RM13,343 at an average price of RM1.33 per ordinary share. The 

repurchased shares are held as treasury shares in accordance with the requirement of Section 67A of the Companies Act, 1965. 


annual repor t 2010

44 




TREASURY SHARES (continued) 

The Company has the right to retain, cancel, resell these shares and/or distribute these shares as dividends. As treasury shares, the rights attached to them as to voting, 

dividends and participation in any other distributions or otherwise are suspended. Of the total 240,718,829 (2009: 240,718,829) issued and fully paid ordinary shares of 

RM1.00 each as at 31 December 2010, 4,828,471 (2009: 7,660,529) ordinary shares of RM1.00 each costing to RM5,435,816 (2009: RM8,042,000) are held as treasury shares 

by the Company. 

The number of outstanding ordinary shares of RM1.00 each in issue after deducting the treasury shares is 235,890,358 (2009: 233,058,300) as at 31 December 2010. 

OPTIONS GRANTED OVER UNISSUED SHARES 

No options were granted to any person to take up unissued shares of the Company during the financial year. 

DIRECTORS 

The Directors who held office since the date of the last report are: 


Mohd Aminudin bin Mustapha 




Syed Yasir Arafat bin Syed Abd Kadir (appointed on 19 November 2010) 

Nik Johaan bin Nik Hashim (appointed on 23 December 2010) 

Dato’ Rosli bin Sharif (appointed on 23 February 2011) 

Loo Hooi Keat (resigned on 8 December 2010) 

Dr. Hj. Izhar bin Che Mee (resigned on 23 February 2011) 

Lai Ngit Sin (resigned on 23 February 2011)

DIRECTORS’ INTERESTS 

The Directors holding office at the end of the financial year and their beneficial interests in the ordinary shares of the Company and of its related corporations during 

the financial year ended 31 December 2010 as recorded in the Register of Directors’ Shareholdings kept by the Company under Section 134 of the Companies Act, 1965 

were as follows: 

Shares in the Company 

Direct interests: 


Number of ordinary shares of RM1.00 each 

Balance Balance 

as at Bought/ as at 

1.1.2010 Share Dividend Sold 31.12.2010 

Che Azizuddin bin Che Ismail 95,943 130,523 - 226,466 

Lai Ngit Sin 107,151 2,678 - 109,829 

Zulkifli bin Sarkam 343,956 8,598 - 352,554 

Shares in the Company 

Indirect interests: 

Che Azizuddin bin Che Ismail 65,168,282 1,602,351 (66,770,633) - 

Dr. Hj. Izhar bin Che Mee 67,457,073 1,659,570 (61,938,101) 7,178,542 

Mohd Aminudin bin Mustapha 67,457,073 1,659,570 (61,938,101) 7,178,542 

Zulkifli bin Sarkam 60,453,616 1,484,485 (61,938,101) - 

Lai Ngit Sin 10,715 267 - 10,982 

None of the other Directors holding office at the end of the financial year held any beneficial interests in the ordinary shares of the Company and of its related 

corporations during the financial year. 


annual repor t 2010

46 




DIRECTORS’ BENEFITS 

Since the end of the previous financial year, none of the Directors have received or become entitled to receive any benefit by reason of a contract made by the Company 

or a related corporation with the Director or with a firm of which the Director is a member, or with a company in which the Director has a substantial financial interest 

other than the following: 

(i) directors’ fees and other emoluments as disclosed in Note 27 (b) to the financial statements; and 

(ii) deemed benefits arising from related party transactions as disclosed in Note 33 to the financial statements; 

There were no arrangements during and at the end of the financial year, to which the Company is a party, which had the object of enabling the Directors to acquire 

benefits by means of the acquisition of shares in or debentures of the Company or any other body corporate. 

OTHER STATUTORY INFORMATION REGARDING THE GROUP AND THE COMPANY 

(I) AS AT THE END OF THE FINANCIAL YEAR 

(a) Before the statements of comprehensive income and statements of financial positions of the Group and of the Company were made out, the Directors took 

reasonable steps: 

(i) to ascertain that proper action had been taken in relation to the writing off of bad debts and the making of provision for doubtful debts and have 

satisfied themselves that all known bad debts had been written off and that adequate provision had been made for doubtful debts; and 

(ii) to ensure that any current assets other than debts, which were unlikely to realise their book values in the ordinary course of business had been written 

down to their estimated realisable values. 

(b) In the opinion of the Directors, the results of the operations of the Group and of the Company during the financial year have not been substantially affected 

by any item, transaction or event of a material and unusual nature except for: 

(i) the effects arising from the impairment of receivables resulting in a decrease in the Group’s and the Company’s results for the financial year by 

RM36,869,000 and RM35,947,000 respectively as disclosed in Note 27 to the financial statements; 

(ii) the effects arising from the impairment on investment property in the Company resulting in a decrease in the Group’s and the Company’s results for the 

financial year by RM5,000,000 as disclosed in Note 27 to the financial statements; 

(iii) the effects arising from the waiver of debt due to subsidiaries resulting in an increase in the Company’s results for the financial year by RM9,480,000 as 

disclosed in Note 27 to the financial statements. 

(iv) the effects arising from the impairment of amounts due from subsidiaries resulting in a decrease in the Company’s results for the financial year by 

RM 1,842,000 as disclosed in Note 27 to the financial statements.

OTHER STATUTORY INFORMATION REGARDING THE GROUP AND THE COMPANY (continued) 

(I) AS AT THE END OF THE FINANCIAL YEAR (continued) 

(b) In the opinion of the Directors, the results of the operations of the Group and of the Company during the financial year have not been substantially affected 

by any item, transaction or event of a material and unusual nature except for: (continued) 

(v) the effects arising from the disposal of property by a subsidiary resulting in a decrease in the Group’s results for the financial year by RM6,495,000 as 

disclosed in Note 27 to the financial statements. 

(vi) the effects arising from property, plant and equipment written off resulting in a decrease in the Group’s and the Company’s results for the financial year 

by RM9,453,000 and RM2,911,000 respectively as disclosed in Note 27 to the financial statements. 

(vii) the effects arising from the impairment of property, plant and equipment resulting in a decrease in the Group’s and the Company’s results for the 

financial year by RM3,096,000 and RM3,017,000 respectively as disclosed in Note 27 to the financial statements. 

(viii) the effects arising from the write-off of an amount owing by a subsidiary resulting in a decrease in the Company’s results for financial year by RM9,410,000 

as disclosed in Note 27 to the financial statements. 

(ix) the effects arising from the impairment of investments in subsidiaries resulting in a decrease in the Company’s results for the financial year by 

RM145,339,000 as disclosed in Note 27 to the financial statements. 

(x) the effects arising from the acquisition of additional interest in a subsidiary resulting in an increase in the Group’s results for the financial year by 

RM2,749,000 as disclosed in Note 27 to the financial statements. 

(xi) the effects arising from the disposal of an associate resulting in a decrease in the Group’s results for the financial year by RM337,000 and an increase in 

the Company’s results for the financial year by RM5,051,000 as disclosed in Note 27 to the financial statements. 

(xii) the effects arising from the impairment of investment in associates resulting in a decrease in the Company’s results for the financial year by RM2,200,000 

as disclosed in Note 27 to the financial statements. 

(II) FROM THE END OF THE FINANCIAL YEAR TO THE DATE OF THIS REPORT 

(c) The Directors are not aware of any circumstances: 


(i) which would render the amounts written off for bad debts or the amount of the provision for doubtful debts in the financial statements of the Group 

and of the Company inadequate to any material extent; and 

(ii) which would render the values attributed to current assets in the financial statements of the Group and of the Company misleading; and 

(iii) which have arisen which would render adherence to the existing method of valuation of assets or liabilities of the Group and of the Company misleading 

or inappropriate. 


annual repor t 2010

48 




OTHER STATUTORY INFORMATION REGARDING THE GROUP AND THE COMPANY (continued) 

(II) FROM THE END OF THE FINANCIAL YEAR TO THE DATE OF THIS REPORT (continued) 

(d) In the opinion of the Directors: 

(i) there has not arisen any item, transaction or event of a material and unusual nature likely to affect substantially the results of the operations of the Group 

and of the Company for the financial year in which this report is made, and 

(ii) no contingent or other liability has become enforceable, or is likely to become enforceable, within the period of twelve (12) months after the end of the 

financial year which will or may affect the ability of the Group or of the Company to meet their obligations as and when they fall due. 

(III) AS AT THE DATE OF THIS REPORT 

(e) There are no charges on the assets of the Group and of the Company which have arisen since the end of the financial year to secure the liabilities of any other 

person. 

(f ) There are no contingent liabilities of the Group and of the Company which have arisen since the end of the financial year. 

(g) The Directors are not aware of any circumstances not otherwise dealt with in the report or financial statements which would render any amount stated 

in the financial statements of the Group and of the Company misleading. 

SIGNIFICANT EVENTS DURING THE FINANCIAL YEAR 

(a) On 30 April 2010, the Company entered into a Settlement cum Parting Agreement with Mitsui O.S.K. Lines Ltd. to acquire 6,695,000 ordinary shares of RM1.00 each 

representing the remaining forty-nine percent (49%) equity interest in Cougar Logistics (Malaysia) Sdn. Bhd. (“Cougar”) for a total cash consideration of RM1.00. The 

acquisition was completed on 30 April 2010 and as a result, Cougar is now a 100% wholly-owned subsidiary of the Group. 

(b) During the financial year, the Company had completed the disposal of its entire 30% equity interest comprising 90,001 ordinary shares of RM1.00 each, in Mitsui 

O.S.K. Lines (Malaysia) Sdn. Bhd. for a total sales consideration of RM5,141,000. As a result, Mitsui O.S.K. Lines (Malaysia) Sdn. Bhd. ceased to be the Company’s 

associate. 

(c) During the financial year, the Company struck-off seven (7) wholly owned subsidiaries, Inter-Fleet Engineering Service (M) Sdn. Bhd., Tinjauan Melati Sdn. Bhd., Asia 

Vehicle Transport Sdn. Bhd., Direct Fortune Sdn. Bhd., Diperdana Indah Sdn. Bhd., Diperdana Logistics Sdn. Bhd. and PNSL Agencies Limited. These companies are 

dormant and inactive. The disposals have no major impact on the results of the operations of the Group and of the Company. 

(d) During the financial year, P.T. Kay Pi Transmalindo (“P.T. Transmalindo”), a 70% owned subsidiary of the Group completed the disposal of its properties to a third party 

for a cash consideration of RM8,635,000, resulting in a gain of RM4,370,000 at the subsidiary level. 

During the financial year, the Company has also entered into negotiation with a third party to dispose off its 70% equity in P.T. Transmalindo for a cash consideration 

of RM1. 

The above proposed disposal of the subsidiary will result in a loss of RM6,495,000 to the Group. The loss to the Group has been taken to loss on disposal of property, 

plant and equipment as the loss is in respect of the debit balance of foreign exchange reserve arising from translation of the properties upon consolidation.

SIGNIFICANT EVENT SUBSEQUENT TO END OF THE REPORTING PERIOD 

On 26 January 2011, 4,828,471 ordinary shares of RM1.00 each held as treasury shares by the Company were cancelled. Subsequent to the cancellation of the treasury 

shares, the Company’s issued and paid-up share capital of RM240,718,829 has been reduced to RM235,890,358 comprising 235,890,358 ordinary shares of RM1.00 

each. 

HOLDING COMPANY 

On 18 October 2010, Bendahara 1 Sdn Bhd (“Bendahara”) had acquired 56.5% equity interest of the issued and paid-up share capital of the Company. Bendahara is a 

100% wholly-owned subsidiary of E-Cap (Internal) One Sdn Bhd (“E-Cap”); which is a 100% wholly-owned subsidiary of Ekuinas Capital Sdn Bhd (“ECSB”). ECSB is also a 

100% wholly-owned subsidiary of Yayasan Ekuiti Nasional (“YEN”). Bendahara, E-Cap, ECSB and YEN are all incorporated in Malaysia. 

Consequently, Bendahara, E-Cap, ECSB and YEN became the immediate, intermediate, penultimate and ultimate holding companies of the Company respectively. 

AUDITORS 

The auditors, BDO, have expressed their willingness to continue in office. 

Signed on behalf of the Board in accordance with a resolution of the Directors. 

Che Azizuddin bin Che Ismail Zulkifli bin Sarkam 

Director Director 

Kuala Lumpur 

6 April 2011 



annual repor t 2010

50 



Statement by Directors 

In the opinion of the Directors, the financial statements set out on pages 53 to 158 have been drawn up in accordance with applicable approved Financial Reporting 

Standards and the provisions of the Companies Act, 1965 in Malaysia so as to give a true and fair view of the financial positions of the Group and of the Company as at 

31 December 2010 and of their financial performance and cash flows of the Group and of the Company for the financial year then ended. 

On behalf of the Board, 

Che Azizuddin bin Che Ismail Zulkifli bin Sarkam 

Director Director 

Kuala Lumpur 

6 April 2011 

Statutory Declaration 

I, Thoo W’y Kit, being the officer primarily responsible for the financial management of Konsortium Logistik Berhad, do solemnly and sincerely declare that the financial 

statements set out on pages 53 to 158 are, to the best of my knowledge and belief, correct and I make this solemn declaration conscientiously believing the same to be 

true and by virtue of the provisions of the Statutory Declarations Act, 1960. 

Subscribed and solemnly 

declared by the above named at 

Kuala Lumpur this 

6 April 2011 

Before me: 

S. Ideraju (No. W-451) 

Commissioner for Oaths 

Kuala Lumpur

Independent Auditors’ Report 

To The Members Of Konsortium Logistik Berhad 

Report on the Financial Statements 

We have audited the financial statements of Konsortium Logistik Berhad, which comprise the statements of financial positions as at 31 December 2010 of the Group and 

of the Company, and the statements of comprehensive income, statements of changes in equity and statements of cash flows of the Group and of the Company for the 

financial year then ended, and a summary of significant accounting policies and other explanatory information, as set out on pages 53 to 158. 

Directors’ Responsibility for the Financial Statements 

The Directors of the Company are responsible for the preparation of financial statements that give a true and fair view in accordance with Financial Reporting Standards 

and the Companies Act, 1965 in Malaysia, and for such internal control as the Directors determine are necessary to enable the preparation of financial statements that 

are free from material misstatement, whether due to fraud or error. 

Auditors’ Responsibility 

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with approved standards on auditing 

in Malaysia. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the 

financial statements are free from material misstatement. 

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on 

our judgment, including the assessment of risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, 

we consider internal control relevant to the entity’s preparation of the financial statements that give a true and fair view in order to design audit procedures that are 

appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating 

the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the Directors, as well as evaluating the overall presentation 

of the financial statements. 

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. 

Opinion 

In our opinion, the financial statements have been properly drawn up in accordance with applicable approved Financial Reporting Standards and the provisions of 

the Companies Act, 1965 in Malaysia so as to give a true and fair view of the financial positions of the Group and of the Company as of 31 December 2010 and of their 

financial performance and cash flows for the financial year then ended. 


annual repor t 2010

52 



Independent Auditors’ Report 

To The Members Of Konsortium Logistik Berhad (continued) 

Report on Other Legal and Regulatory Requirements 

In accordance with the requirements of the Companies Act, 1965 in Malaysia, we also report the following: 

(a) In our opinion, the accounting and other records and the registers required by the Act to be kept by the Company and its subsidiaries of which we have acted as 

auditors have been properly kept in accordance with the provisions of the Act. 

(b) We have considered the financial statements of the subsidiary of which we have not acted as auditors, which is indicated in Note 11 to the financial statements. 

(c) We are satisfied that the financial statements of the subsidiaries that have been consolidated with the Company’s financial statements are in form and content 

appropriate and proper for the purposes of the preparation of the financial statements of the Group and we have received satisfactory information and explanations 

required by us for those purposes. 

(d) The audit reports on the financial statements of the subsidiaries did not contain any qualification or any adverse comment made under Section 174(3) of the Act. 

Other Reporting Responsibilites 

The supplementary information set out in Note 22(e) to the financial statements is disclosed to meet the requirement of Bursa Malaysia Securities Berhad and is not part 

of the financial statements. The Directors are responsible for the preparation of the supplementary information 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. In our opinion, the supplementary information is prepared, 

in all material respects, in accordance with the MIA Guidance and the directive of Bursa Malaysia Securities Berhad. 

Other Matters 

This report is made solely to the members of the Company, as a body, in accordance with Section 174 of the Companies Act, 1965 in Malaysia and for no other purpose. 

We do not assume responsibility to any other person for the content of this report. 

BDO Chan Wai Leng 

AF: 0206 2893/08/11 (J) 

Chartered Accountants Chartered Accountant 

Kuala Lumpur 

6 April 2011

Statements of Financial Position 

As At 31 December 2010 

Group Company 

2010 2009 2010 2009 

ASSETS Note RM’000 RM’000 RM’000 RM’000 

Non-current assets 

Property, plant and equipment 7 209,044 216,736 144,351 141,954 

Investment property 8 15,000 20,000 15,000 20,000 

Prepaid lease payments for land 9 27,037 27,875 18,775 18,972 

Goodwill on consolidation 10 11,883 11,883 - - 

Investments in subsidiaries 11 - - 421,624 559,050 

Investments in associates 12 18,057 24,977 11,684 13,974 

Other investments 13 13,400 17,101 13,094 16,781 

Amounts owing by associates 14 - 17,580 - 17,580 

Deferred tax assets 15 2,130 2,050 486 - 

296,551 338,202 625,014 788,311 

Current assets 

Consumable stores, at cost 67 37 67 37 

Trade and other receivables 16 90,292 147,863 21,293 58,276 

Amounts owing by subsidiaries 17 - - 7,505 9,572 

Advances to subsidiaries 18 - - 22,703 54,929 

Current tax assets 3,625 4,244 467 2,376 

Cash and cash equivalents 19 73,451 38,908 23,116 10,122 

167,435 191,052 75,151 135,312 

Assets classified as held for sale 20 475 - 151 - 

TOTAL ASSETS 464,461 529,254 700,316 923,623 

The attached notes form an integral part of the financial statements. 


annual repor t 2010

54 



Statements of Financial Position 

AS AT 31 DECEMBER 2010 (continued) 

Group Company 

2010 2009 2010 2009 

EQUITY AND LIABILITIES Note RM’000 RM’000 RM’000 RM’000 

Equity attributable to owners of the parent 

Share capital 21 240,719 240,719 240,719 240,719 

Reserves 22 12,584 77,445 279,887 68,965 

253,303 318,164 520,606 309,684 

Minority interest - (3,553) - - 

TOTAL EQUITY 253,303 314,611 520,606 309,684 

LIABILITIES 

Non-current liabilities 

Borrowings 23 36,003 41,233 36,003 39,243 

Provision for retirement benefits 24 1,856 1,915 1,541 1,571 

Deferred tax liabilities 15 3,148 4,637 - 2,080 

Advances from subsidiaries 18 - - 51,055 508,502 

41,007 47,785 88,599 551,396 

Current liabilities 

Trade and other payables 25 96,169 105,039 26,442 21,019 

Amounts owing to subsidiaries 17 - - 2,810 701 

Amounts owing to associates 14 56 - 56 - 

Borrowings 23 43,727 58,835 31,727 40,823 

Current tax payable 123 2,984 - - 

Dividend payable 30,076 - 30,076 - 

170,151 166,858 91,111 62,543 

TOTAL LIABILITIES 211,158 214,643 179,710 613,939 

TOTAL EQUITY AND LIABILITIES 464,461 529,254 700,316 923,623 

The attached notes form an integral part of the financial statements.

Statements of Comprehensive Income 

For The Financial Year Ended 31 December 2010 

Group Company 

2010 2009 2010 2009 

Note RM’000 RM’000 RM’000 RM’000 

Revenue 26 294,410 239,135 109,164 93,894 

Direct operating costs (206,991) (159,232) (94,210) (81,183) 

Gross profit 87,419 79,903 14,954 12,711 

Other income 10,065 3,592 468,527 15,458 

Selling and marketing expenses (2,001) (1,843) (1,146) (716) 

Administrative expenses (36,979) (36,558) (22,422) (19,382) 

Other expenses (69,149) (6,757) (192,878) (2,567) 

Finance cost (6,479) (6,702) (8,289) (5,054) 

Share of results of associates (1,092) 220 - - 

(Loss)/Profit before tax 27 (18,216) 31,855 258,746 450 

Taxation 28 (8,296) (8,581) (408) 1,687 

(Loss)/Profit for the financial year (26,512) 23,274 258,338 2,137 

Other comprehensive income: 

Foreign currency translation 8,782 2,039 - - 

Write down to fair value on financial assets, available for sale (1,280) - (1,280) - 

Other comprehensive income, net of tax 7,502 2,039 (1,280) - 

Total comprehensive income (19,010) 25,313 257,058 2,137 

(Loss)/profit attributable to: 

- Owners of the parent (26,364) 24,979 258,338 2,137 

- Minority interest (148) (1,705) - - 

(26,512) 23,274 258,338 2,137 

Total comprehensive income attributable to: 

- Owners of the parent (18,862) 27,018 257,058 2,137 

- Minority interest (148) (1,705) - - 

(19,010) 25,313 257,058 2,137 

(Loss)/Earnings per ordinary share attributable to equity holders of the Company (sen): 

Basic and diluted 29 (11.14) 10.90 - - 

Proposed dividend per ordinary share in respect of the financial year-gross (sen) 30 

- interim 17.00 - 17.00 - 

- final - 8.00 - 8.00 

Distributed share dividend in respect of the financial year 2.50 3.04 2.50 3.04 



annual repor t 2010

56 



Statements of Changes In Equity 


Group 

Total 

Exchange attributable 

Share Share translation Treasury Retained to owners of Minority Total 

capital premium reserve shares earnings the parent interest equity 

Note RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 

Balance as at 31 December 2008 240,719 74,485 (12,278) (14,620) 19,206 307,512 (1,848) 305,664 

Total comprehensive income - - 2,039 - 24,979 27,018 (1,705) 25,313 

Transactions with owners 

Purchase of Company’s own shares 22(b) - - - (9,511) - (9,511) - (9,511) 

Dividend 30 - (16,089) - 16,089 (6,855) (6,855) - (6,855) 

Total transactions with owners - - (16,089) - 6,578 (6,855) (16,366) - (16,366) 

Balance as at 31 December 2009 240,719 58,396 (10,239) (8,042) 37,330 318,164 (3,553) 314,611

Group 

Retained Total 

Available Exchange earnings/ attributable 

Share Share for sale translation Treasury (Accumulated to owners of Minority Total 

capital premium reserves reserve shares losses) the parent interest equity 

Note RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 

Balance as at 31 December 2009 240,719 58,396 - (10,239) (8,042) 37,330 318,164 (3,553) 314,611 

Effects of the adoption of FRS139 40 - - 1,890 - - (131) 1,759 - 1,759 

Restated balance as at 1 January 2010 240,719 58,396 1,890 (10,239) (8,042) 37,199 319,923 (3,553) 316,370 

Total comprehensive income - - (1,280) 8,782 - (26,364) (18,862) (148) (19,010) 


Additional investment in a subsidiary - - - - - - - 3,701 3,701 

Purchase of Company’s own shares 22(b) - - - - (3,867) - (3,867) - (3,867) 

Dividend 30 - (6,473) - - 6,473 (43,891) (43,891) - (43,891) 

Total transactions with owners - (6,473) - - 2,606 (43,891) (47,758) 3,701 (44,057) 

Balance as at 31 December 2010 240,719 51,923 610 (1,457) (5,436) (33,056) 253,303 - 253,303 



For The Financial Year Ended 31 December 2010 (continued) 


annual repor t 2010

58 





Company 

Available 

Share Share for sale Treasury Retained Total 

capital premium reserve shares earnings equity 

Note RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 

Balance as at 31 December 2008 240,719 74,485 - (14,620) 23,329 323,913 

Total comprehensive income - - - - 2,137 2,137 


Purchase of Company’s own shares 22(b) - - - (9,511) - (9,511) 

Dividend 30 - (16,089) - 16,089 (6,855) (6,855) 

Total transactions with owners - (16,089) - 6,578 (6,855) (16,366) 



Effects of the adoption of FRS139 40 - - 1,890 - (268) 1,622 

Restated balance as at 1 January 2010 240,719 58,396 1,890 (8,042) 18,343 311,306 

Total comprehensive income - - (1,280) - 258,338 257,058 


Purchase of Company’s own shares 22(b) - - - (3,867) - (3,867) 

Dividend 30 - (6,473) - 6,473 (43,891) (43,891) 

Total transactions with owners - (6,473) - 2,606 (43,891) (47,758) 

Balance as at 31 December 2010 240,719 51,923 610 (5,436) 232,790 520,606 


CASH FLOWS FROM OPERATING ACTIVITIES 

Statements of Cash Flow 


Group Company 

2010 2009 2010 2009 

Note RM’000 RM’000 RM’000 RM’000 

Cash receipts from customers 332,818 220,328 135,416 98,705 

Cash paid to suppliers and employees (248,304) (165,320) (103,615) (96,173) 

Cash generated from operations 84,514 55,008 31,801 2,532 

Interest expense paid (6,479) (6,702) (8,289) (5,054) 

Tax paid (12,107) (5,918) (1,065) (131) 

(18,586) (12,620) (9,354) (5,185) 

Net cash from/(used in) operating activities 65,928 42,388 22,447 (2,653) 

CASH FLOWS FROM INVESTING ACTIVITIES 

Investment in subsidiary - - (7,913) (1,000) 

Interest income received 383 212 168 62 

Dividend received from associates 350 479 350 479 

Dividend received from other investments 405 259 405 259 

Dividend received from subsidiaries - - 4,600 - 

Purchase of property, plant and equipment 7(b) (4,750) (4,354) (1,930) (2,834) 

Disposal of a subsidiary 38 - (44) - - 

Purchase of quoted shares (8,498) (8,657) (8,498) (8,657) 

Proceeds from disposal of property, plant and equipment 8,917 3,662 8,874 1,280 

Proceeds from disposal of other investments 13,391 596 13,391 596 

Proceeds from disposal of an associate 5,141 - 5,141 - 

Proceed from investment by minority shareholders 6,450 - - - 

Repayments (to)/by associates (152) 137 (152) 137 

Net cash used in/(from) investing activities 21,637 (7,710) 14,436 (9,678) 



annual repor t 2010

60 



Statements of Cash Flow 


CASH FLOWS FROM FINANCING ACTIVITIES 

Group Company 

2010 2009 2010 2009 

Note RM’000 RM’000 RM’000 RM’000 

Dividend paid 30 (13,815) (6,855) (13,815) (6,855) 

Proceeds from term loan and other borrowings 5,000 18,172 - 16,972 

Repayments of hire-purchase liabilities (9,671) (6,922) (9,671) (6,922) 

Repayments of term loans and other borrowings (29,618) (15,124) (17,668) (12,664) 

Payments for share buyback 22(b) (3,867) (9,511) (3,867) (9,511) 

Repayments by subsidiaries - - 21,132 36,650 

Placements of deposits pledged with licensed bank (109) (345) - (1,255) 

Net cash (used in)/from financing activities (52,080) (20,585) (23,889) 16,415 

Net increase in cash and cash equivalents 35,485 14,093 12,994 4,084 

Effects of exchange rate changes - 108 - - 

Cash and cash equivalents at beginning of financial year 29,045 14,844 8,858 4,774 

Cash and cash equivalents at end of financial year 19 64,530 29,045 21,852 8,858 


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 and the principal place of business of the Company is located at Lot 3410, Mukim Petaling, Batu 12½, Jalan Puchong, 47100 Puchong, Selangor 

Darul Ehsan. 

The financial statements are presented in Ringgit Malaysia (“RM”), which is also the Company’s functional currency. All financial information presented in RM has 

been rounded to the nearest thousand, unless otherwise stated. 

The financial statements were authorised for issue in accordance with a resolution by the Board of Directors on 6 April 2011. 

2. PRINCIPAL ACTIVITIES 

The Group and the Company are principally engaged in the provision of total logistics services and inventory solutions, which include the provision of container 

haulage services, bulk liquid distribution services, inland container depot services, freight forwarding, shipping agency and chartering services, warehousing and 

distribution services and insurance agency. There have been no significant changes in the nature of these activities during the financial year. 

3. BASIS OF PREPARATION 

The financial statements of the Group and of the Company have been prepared in accordance with applicable approved Financial Reporting Standards (“FRSs”) 

and the provisions of the Companies Act, 1965 in Malaysia except that Note 22(e) to the financial statements 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 

Notes To The Financial Statements 

31 December 2010 

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 also on the basis of accounting principles applicable to a going concern. 

The Group incurred a net loss of RM 26,512,000 for the financial year ended 31 December 2010 and, as of that date, the Group’s and the Company’s current 

liabilities exceeded their current assets by RM2,241,000 and RM15,809,000 respectively. 

The Group and the Company have sufficient credit facilities in place to meet their operational requirements. In addition, the Group and the Company carry 

out monthly cash flows review for the next twelve (12) months to ensure that the business operations have sufficient funds available to operate as going 

concerns. Historical results of the treasury management show that the Group and the Company have the ability to meet their obligations as and when they 

fall due and the Group and the Company have not defaulted on any obligations due or payable to financial institutions or creditors. 


annual repor t 2010

62 




31 December 2010 (continued) 

4. SIGNIFICANT ACCOUNTING POLICIES (continued) 

4.1 Basis of accounting (continued) 

The Directors are of the opinion that the Group and the Company will be able to operate profitably in the foreseeable future, obtain continuing financial 

support from the lenders and shareholders and therefore continue as going concerns and accordingly, realise their assets and discharge their liabilities in the 

normal course of business. 

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 asset 

amounts, or to amounts and classification of liabilities that may be necessary should the going concern basis for the preparation of the financial statements 

of the Group and of the Company be 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 judgment 

in the process of applying accounting policies. The areas involving such judgments, 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. 

4.2 Basis of consolidation 

The consolidated financial statements incorporate the financial statements of the Company and all its subsidiaries made up to the end of the financial year 

using the purchase method of accounting. 

Under the purchase method of accounting, the cost of a business combination is measured at the aggregate of fair values at the date of exchange, of assets 

given, liabilities incurred or assumed, and equity instruments issued plus any costs directly attributable to the business combination. 

At the acquisition date, the cost of a business combination is allocated to the identifiable assets acquired, liabilities assumed and contingent liabilities in 

the business combination which are measured initially at their fair values at the acquisition date. The excess of the cost of the business combination over 

the Group’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities is recognised as goodwill (See Note 4.7 to the financial 

statements on goodwill). If the cost of the business combination is less than the interest in the net fair value of the identifiable assets, liabilities and contingent 

liabilities, the Group will: 

(a) reassess the identification and measurement of the acquiree’s identifiable assets, liabilities and contingent liabilities and the measurement of the cost 

of the combination; and 

(b) recognise immediately in the consolidated statement of comprehensive income any excess remaining after that reassessment. 

When a business combination includes more than one exchange transaction, any adjustment to the fair values of the subsidiary’s identifiable assets, liabilities 

and contingent liabilities relating to previously held interests of the Group is accounted for as a revaluation.


4.2 Basis of consolidation (continued) 



Subsidiaries are consolidated from the acquisition date, which is the date on which the Group effectively obtains control, until the date on which the Group 

ceases to control the subsidiaries. Control exists when the Group has the power to govern the financial and operating policies of an entity so as to obtain 

benefits from its activities. In assessing control, the existence and effect of potential voting rights that are currently convertible or exercisable are taken into 

consideration. 

Intragroup balances, transactions and unrealised gains and losses on intragroup transactions are eliminated in full. Intragroup losses may indicate an 

impairment that requires recognition in the consolidated financial statements. If a subsidiary uses accounting policies other than those adopted in the 

consolidated financial statements for like transactions and events in similar circumstances, appropriate adjustments are made to its financial statements in 

preparing the consolidated financial statements. 

The gain or loss on disposal of a subsidiary, which is the difference between the net disposal proceeds and the Group’s share of its net assets as of the date 

of disposal including the carrying amount of goodwill and the cumulative amount of any exchange differences that relate to the subsidiary, is recognised in 

the consolidated statement of comprehensive income. 

Minority interest is that portion of the profit or loss and net assets of a subsidiary attributable to equity interests that are not owned, directly or indirectly 

through subsidiaries, by the Group. It is measured at the minority’s share of the fair value of the subsidiaries’ identifiable assets and liabilities at the acquisition 

date and the minority’s share of changes in the subsidiaries’ equity since that date. 

Where losses applicable to the minority in a subsidiary exceed the minority’s interest in the equity of that subsidiary, the excess and any further losses 

applicable to the minority are allocated against the Group’s interest except to the extent that the minority has a binding obligation and is able to make 

additional investment to cover the losses. If the subsidiary subsequently reports profits, such profits are allocated to the Group’s interest until the minority’s 

share of losses previously absorbed by the Group has been recovered. 

Minority interest is presented in the consolidated statement of financial position within equity and is presented in the consolidated statement of changes in 

equity separately from equity attributable to owners of the Company. 

Minority interest in the results of the Group is presented in the consolidated statement of comprehensive income as an allocation of the total profit or loss 

for the financial year between minority interest and owners of the Company. 

Transactions with minority interests are treated as transactions with parties external to the Group. Disposals to minority interests result in gains and losses that 

are recorded in the statements of comprehensive income. 


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4.3 Property, plant and equipment and depreciation 

All items of property, plant and equipment are initially measured at cost. Cost includes expenditure that is directly attributable to the acquisition of the asset. 

Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when the cost is incurred and it is 

probable that future economic benefits associated with the cost will flow to the Group and the cost of the asset can be measured reliably. The carrying 

amount of parts that are replaced is derecognised. The costs of the day-to-day servicing of property, plant and equipment are recognised in profit or loss as 

incurred. Cost also comprises the initial estimate of dismantling and removing the asset and restoring the site on which it is located for which the Group is 

obligated to incur when the asset is acquired, if applicable. 

Each part of an item of property, plant and equipment with a cost that is significant in relation to the total cost of the asset and which has a different useful 

life, is depreciated separately. 

After initial recognition, property, plant and equipment except for freehold land are stated at cost less accumulated depreciation and any accumulated 

impairment losses. 

Depreciation is calculated to write off the cost of the assets to their residual values on a straight line basis over their estimated useful lives. Leased assets are 

depreciated over the shorter of the lease term and their useful lives unless it is reasonably certain that the Group will obtain ownership by end of the lease 

term. The principal depreciation rates are as follows: 

Buildings, structure and renovation 2% - 15% 

Vehicles and mechanical equipment 5% - 13% 

Furniture, fittings and office equipment 10% - 33 1 /3% 

Freehold land is not depreciated as it has an infinite life. 

At the end of each reporting period, the carrying amount of an item of property, plant and equipment is assessed for impairment when events or changes in 

circumstances indicate that its carrying amount may not be recoverable. A write-down is made if the carrying amount exceeds the recoverable amount (see 

Note 4.8 to the financial statements on impairment of non-financial assets). 

The residual values, useful lives and depreciation method are reviewed at each financial year end to ensure that the amount, method and period of depreciation 

are consistent with previous estimates and the expected pattern of consumption of the future economic benefits embodied in the items of property, plant 

and equipment. If expectations differ from previous estimates, the changes are accounted for as a change in an accounting estimate. The Group anticipates 

that the residual values of its property, plant and equipment will not be significant. 

The carrying amount of an item of property, plant and equipment is derecognised on disposal or when no future economic benefits are expected from its 

use or disposal. The difference between the net disposal proceeds, if any, and the carrying amount is included in profit or loss.


4.4 Leases and hire-purchase 

(a) Finance leases and hire-purchase 

Assets acquired under finance leases and hire-purchase which transfer substantially all the risks and rewards of ownership to the Group are recognised 

initially at amounts equal to the fair value of the leased assets or, if lower, the present value of the minimum lease payments, each determined at the 

inception of the lease. The discount rate used in calculating the present value of the minimum lease payments is the interest rate implicit in the leases, 

if this is practicable to determine; if not, the Group’s incremental borrowing rate is used. Any initial direct costs incurred by the Group are added to the 

amount recognised as an asset. The assets are capitalised as property, plant and equipment and the corresponding obligations are treated as liabilities. 

The property, plant and equipment capitalised are depreciated on the same basis as owned assets. 

The minimum lease payments are apportioned between finance charges and a reduction of the outstanding liability. The finance charges are recognised 

in profit or loss over the period of the lease term so as to produce a constant periodic rate of interest on the remaining lease and hire-purchase 

liabilities. 

(b) Operating leases 

A lease is classified as an operating lease if it does not transfer substantially all the risks and rewards incidental to ownership. 

Lease payments under operating leases are recognised as an expense on a straight line basis over the lease term. 



(c) Lease of land and buildings 

For leases of land and buildings, the land and buildings elements are considered separately for the purpose of lease classification and these leases are 

classified as operating or finance leases in the same way as leases of other assets. 

The minimum lease payments including any lump-sum upfront payments made to acquire the interest in the land and buildings are allocated between 

the land and the buildings elements in proportion to the relative fair values of the leasehold interests in the land element and the buildings element 

of the lease at the inception of the lease. 

Leasehold land that normally has an indefinite economic life and where the lease does not transfer substantially all the risks and rewards incidental to 

ownership is treated as an operating lease. The lump-sum upfront lease payments made on entering into or acquiring leasehold land are accounted as 

prepaid lease payments and are amortised over the lease term ranging from 30 to 99 years on a straight line basis. 

The buildings element is classified as a finance or operating lease in accordance with Note 4.4(a) and Note 4.4(b) to the financial statements. If the lease 

payment cannot be allocated reliably between leasehold land and building, the entire lease is classified as a finance lease, unless it is clear that both 

elements are operating leases, in which case the entire lease is classified as an operating lease. 

For a lease of land and building in which the amount that would initially be recognised for the land element is immaterial, the land and building are 

treated as a single unit for the purpose of lease classification and is accordingly classified as a finance or operating lease. In such a case, the economic 

life of the building is regarded as the economic life of the entire leased asset. 


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4.4 Leases and hire-purchase (continued) 

(c) Lease of land and buildings (continued) 

Following the adoption of Amendment to FRS 117 Leases contained in the Improvements to FRSs (2009), the Group had reassessed the classification 

of land elements of unexpired leases on the basis of information existing at the inception of those leases. There is no impact upon adoption of this 

amendment to the Group and the Company. 

4.5 Investment properties 

Investment properties are properties which are held to earn rental yields or for capital appreciation or for both, and are not occupied by the Group. 

Investment properties comprise freehold properties and are stated at cost less any accumulated depreciation and impairment losses. Investment properties 

that consist of freehold land are not depreciated as it has an infinite life. Other investment properties are depreciated on the straight line basis to write off the 

cost of the assets to their residual values over their estimated useful lives. 

Investment properties are derecognised when either they have been disposed off or when they are permanently withdrawn from use and no future 

economic benefit is expected from them. The gains or losses arising from the retirement or disposal of an investment property is determined as the 

difference between the net disposal proceeds, if any, and the carrying amount of the asset and is recognised in profit or loss in the period of the retirement 

or disposal. 

4.6 Investments 

(a) Subsidiaries 

A subsidiary is an entity in which the Group and the Company has power to control the financial and operating policies so as to obtain benefits from 

its activities. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the 

Group has such power over another entity. 

An investment in subsidiary, which is eliminated on consolidation, is stated in the Company’s separate financial statements at cost less impairment 

losses, if any. On disposal of such an investment, the difference between the net disposal proceeds and its carrying amount is included in profit or loss. 

(b) Associates 

An associate is an entity over which the Group and the Company have significant influence and that is neither a subsidiary nor an interest in a joint 

venture. Significant influence is the power to participate in the financial and operating policy decisions of the investee but not control or joint control 

over those policies. 

In the Company’s separate financial statements, an investment in associate is stated at cost less impairment losses, if any. 

An investment in associate is accounted for in the consolidated financial statements using the equity method of accounting. The investment in associate 

in the consolidated statement of financial position is initially recognised at cost and adjusted thereafter for the post acquisition change in the Group’s 

share of net assets of the investment.


4.6 Investments (continued) 

(b) Associates (continued) 

The interest in the associate is the carrying amount of the investment in the associate under the equity method together with any long term interest 

that, in substance, forms part of the Group’s net investment in the associate. 

4.7 Goodwill 

The Group’s share of the profit or loss of the associate during the financial year is included in the consolidated statement of comprehensive income, after 

adjustments to align the accounting policies with those of the Group, from the date that significant influence commences until the date that significant 

influence ceases. Distributions received from the associate reduce the carrying amount of the investment. Adjustments to the carrying amount may 

also be necessary for changes in the Group’s proportionate interest in the associate arising from changes in the associate’s equity that have not been 

recognised in the associate’s profit or loss. Such changes include those arising from the revaluation of property, plant and equipment and from foreign 

exchange translation differences. The Group’s share of those changes is recognised directly in equity of the Group. 

Unrealised gains and losses on transactions between the Group and the associate are eliminated to the extent of the Group’s interest in the associate; 

unrealised losses are also eliminated unless the transaction provides evidence on the impairment of the asset transferred. 

When the Group’s share of losses in the associate equals to or exceeds its interest in the associate, the carrying amounting of that interest is reduced to 

nil and the Group does not recognise further losses unless it has incurred legal or constructive obligations or made payments on its behalf. 

The most recent available financial statements of the associate are used by the Group in applying the equity method. When the end of the reporting 

periods of the financial statements are not conterminous, the share of results is arrived at using the latest financial statements for which the difference 

in end of the reporting periods is no more than three (3) months. Adjustments are made for the effects of any significant transactions or events that 

occur between the intervening periods. 

Upon disposal of an investment in associate, the difference between the net disposal proceeds and its carrying amount is included in the statements 

of comprehensive income. 

Goodwill acquired in a business combination is recognised as an asset at the acquisition date and is initially measured at cost being the excess of the cost of 

the business combination over the Group’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities. After initial recognition, 

goodwill is measured at cost less accumulated impairment losses, if any. Goodwill is not amortised but instead tested for impairment annually or more 

frequently if events or changes in circumstances indicate that the carrying amount may be impaired. Gains and losses on the disposal of an entity include the 

carrying amount of goodwill relating to the entity sold. 

Goodwill arising on acquisition of an associate is the excess of the cost of investment over the Group’s share of the net fair value of net assets of the 

associates’ identifiable assets, liabilities and contingent liabilities at the date of acquisition. 

Goodwill relating to the associate is included in the carrying amount of the investment and is not amortised. 




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4.8 Impairment of non-financial assets 

The carrying amounts of assets, except for financial assets (excluding investments in subsidiaries and associates), inventories, deferred tax assets and noncurrent 

assets held for sale, are reviewed at the end of each reporting period to determine whether there is any indication of impairment. If any such 

indication exists, the asset’s recoverable amount is estimated. 

Goodwill is tested annually for impairment or more frequently if events or changes in circumstances indicate that the goodwill might be impaired. 

The recoverable amount of an asset is estimated for an individual asset. Where it is not possible to estimate the recoverable amount of the individual asset, 

the impairment test is carried out on the cash generating unit (“CGU”) to which the asset belongs. Goodwill acquired in a business combination is from the 

acquisition date, allocated to each of the Group’s CGU or groups of CGU that are expected to benefit from the synergies of the combination giving rise to the 

goodwill irrespective of whether other assets or liabilities of the acquiree are assigned to those units or groups of units. 

Following the adoption of FRS 8 Operating Segments as disclosed in Note 4.20 to the financial statements, the consequential amendment to FRS 136 Impairment 

of Assets is also mandatory for financial periods beginning on or after 1 July 2009. This amendment requires goodwill acquired in a business combination 

to be tested for impairment as part of the impairment testing of CGU to which it relates. The CGU to which goodwill is allocated shall represent the lowest 

level within the Group at which the goodwill is monitored for internal management purposes and not larger than an operating segment determined in 

accordance with FRS 8. 

The recoverable amount of an asset or CGU is the higher of its fair value less cost to sell and its value in use. 

In estimating value in use, the estimated future cash inflows and outflows to be derived from continuing use of the asset and from its ultimate disposal are 

discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to 

the asset. An impairment loss is recognised in the income statements when the carrying amount of the asset or the CGU, including the allocated goodwill, 

exceeds the recoverable amount of the asset or the CGU. The total impairment loss is allocated, first, to reduce the carrying amount of any goodwill allocated 

to the CGU and then to the other assets of the CGU on a pro-rata basis of the carrying amount of each asset in the CGU. The impairment loss is recognised 

in profit or loss immediately. 

An impairment loss on goodwill is not reversed in subsequent periods. An impairment loss on other assets is reversed if, and only if, there has been a change 

in the estimates used to determine the assets’ recoverable amount since the last impairment loss was recognised. 

An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, 

net of depreciation or amortisation, if no impairment loss had been recognised. Such reversals are recognised as income immediately in profit or loss. 

4.9 Consumable stores 

Consumables stores comprise fuel, lubricant and stores. Cost is determined using the weighted average cost basis. The cost of consumables and stores 

comprises all costs of purchase plus the cost of bringing the inventories to their present location and condition. 

Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and the estimated costs necessary 

to make the sale.


4.10 Financial instruments 



A financial instrument is any contract that gives rise to a financial asset of one enterprise and a financial liability or equity instrument of another enterprise. 

A financial asset is any asset that is cash, an equity instrument of another enterprise, a contractual right to receive cash or another financial asset from another 

enterprise, or a contractual right to exchange financial assets or financial liabilities with another enterprise under conditions that are potentially favourable 

to the Group. 

A financial liability is any liability that is a contractual obligation to deliver cash or another financial asset to another enterprise, or a contractual obligation to 

exchange financial assets or financial liabilities with another enterprise under conditions that are potentially unfavourable to the Group. 

Financial instruments are recognised in the statement of financial position when the Group has become a party to the contractual provisions of the 

instrument. At initial recognition, a financial instrument is recognised at fair value plus, in the case of a financial instrument not at fair value through profit or 

loss, transaction costs that are directly attributable to the acquisition or issuance of the financial instrument. 

An embedded derivative is separated from the host contract and accounted for as a derivative if, and only if the economic characteristics and risks of the 

embedded derivative is not closely related to the economic characteristics and risks of the host contract, a separate instrument with the same terms as the 

embedded derivative meets the definition of a derivative, and the hybrid instrument is not measured at fair value through profit or loss. 

(a) Financial assets 

A financial asset is classified into the following four categories after initial recognition for the purpose of subsequent measurement: 

(i) Financial assets at fair value through profit or loss 

Financial assets at fair value through profit or loss comprise financial assets that are held for trading (i.e. financial assets acquired principally for the 

purpose of resale in the near term), derivatives (both, freestanding and embedded) and financial assets that were specifically designated into this 

classification upon initial recognition. 

Subsequent to initial recognition, financial assets classified as at fair value through profit or loss are measured at fair value. Any gains or losses 

arising from changes in the fair value of financial assets classified as at fair value through profit or loss are recognised in profit or loss. Net gains or 

losses on financial assets classified as at fair value through profit or loss exclude foreign exchange gains and losses, interest and dividend income. 

Such income is recognised separately in profit or loss as components of other income or other operating losses. 

However, derivatives that are linked to and must be settled by delivery of unquoted equity instruments that do not have a quoted market price 

in an active market are recognised at cost. 

(ii) Held-to-maturity investments 

Financial assets classified as held-to-maturity comprise non-derivative financial assets with fixed or determinable payments and fixed maturity 

that the Group and the Company have the positive intention and ability to hold to maturity. 

Subsequent to initial recognition, financial assets classified as held-to-maturity are measured at amortised cost using the effective interest method. 

Gains or losses on financial assets classified as held-to-maturity are recognised in profit or loss when the financial assets are derecognised or 

impaired, and through the amortisation process. 


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4.10 Financial instruments (continued) 

(a) Financial assets (continued) 

(iii) Loans and receivables 

Financial assets classified as loans and receivables comprise non-derivative financial assets with fixed or determinable payments that are not 

quoted in an active market. 

Subsequent to initial recognition, financial assets classified as loans and receivables are measured at amortised cost using the effective interest 

method. Gains or losses on financial assets classified as loans and receivables are recognised in profit or loss when the financial assets are 

derecognised or impaired, and through the amortisation process. 

(iv) Available-for-sale financial assets 

Financial assets classified as available-for-sale comprise non-derivative financial assets that are designated as available for sale or are not classified 

as loans and receivables, held-to-maturity investments or financial assets at fair value through profit or loss. 

Subsequent to initial recognition, financial assets classified as available-for-sale are measured at fair value. Any gains or losses arising from changes 

in the fair value of financial assets classified as available-for-sale are recognised directly in other comprehensive income, except for impairment 

losses and foreign exchange gains and losses, until the financial asset is derecognised, at which time the cumulative gains or losses previously 

recognised in other comprehensive income are recognised in profit or loss. However, interest calculated using the effective interest method is 

recognised in profit or loss whilst dividends on available-for-sale equity instruments are recognised in profit or loss when the Group’s right to 

receive payment is established. 

Cash and cash equivalents include cash and bank balances, bank overdrafts, deposits and other short term, highly liquid investments with original 

maturities of three (3) months or less, which are readily convertible to cash and are subject to insignificant risk of changes in value. 

A financial asset is derecognised when the contractual right to receive cash flows from the financial asset has expired. On derecognition of a financial 

asset in its entirety, the difference between the carrying amount and the sum of consideration received (including any new asset obtained less any 

new liability assumed) and any cumulative gain or loss that had been recognised directly in other comprehensive income shall be recognised in profit 

or loss. 

A regular way purchase or sale is a purchase or sale of a financial asset under a contract whose terms require delivery of the asset within the time frame 

established generally by regulation or marketplace convention. 

(b) Financial liabilities 

Financial instruments are classified as liabilities or equity in accordance with the substance of the contractual arrangement. A financial liability is classified 

into the following two categories after initial recognition for the purpose of subsequent measurement: 

(i) Financial liabilities at fair value through profit or loss 

Financial liabilities at fair value through profit or loss comprise financial liabilities that are held for trading, derivatives (both, freestanding and 

embedded) and financial liabilities that were specifically designated into this classification upon initial recognition.



(b) Financial liabilities (continued) 

(i) Financial liabilities at fair value through profit or loss (continued) 



Subsequent to initial recognition, financial liabilities classified as at fair value through profit or loss are measured at fair value. Any gains or losses 

arising from changes in the fair value of financial liabilities classified as at fair value through profit or loss are recognised in profit or loss. Net gains 

or losses on financial liabilities classified as at fair value through profit or loss exclude foreign exchange gains and losses, interest and dividend 

income. Such income is recognised separately in profit or loss as components of other income or other operating losses. 

(ii) Other financial liabilities 

Financial liabilities classified as other financial liabilities comprise non-derivative financial liabilities that are neither held for trading nor initially 

designated as at fair value through profit or loss. 

Subsequent to initial recognition, other financial liabilities are measured at amortised cost using the effective interest method. Gains or losses on 

other financial liabilities are recognised in profit or loss when the financial liabilities are derecognised and through the amortisation process. 

A financial liability is derecognised when, and only when, it is extinguished, i.e. when the obligation specified in the contract is discharged or cancelled 

or expires. An exchange between an existing borrower and lender of debt instruments with substantially different terms are accounted for as an 

extinguishment of the original financial liability and the recognition of a new financial liability. Similarly, a substantial modification of the terms of an 

existing financial liability is accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability. 

The difference between the carrying amount of a financial liability extinguished or transferred to another party and the consideration paid, including 

any non-cash assets transferred or liabilities assumed, is recognised in profit or loss. 

A financial guarantee contract is a contract that requires the issuer to make specified payments to reimburse the holder for a loss it incurs because a 

specified debtor fails to make payment when due in accordance with the original or modified terms of a debt instrument. 

The Group designates corporate guarantees given to banks for credit facilities granted to subsidiaries as insurance contracts as defined in FRS 4 Insurance 

Contracts. The Group recognises these insurance contracts as recognised insurance liabilities when there is a present obligation, legal or constructive, 

as a result of a past event, when it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and 

a reliable estimate can be made of the amount of the obligation. 

At the end of every reporting period, the Group shall assess whether its recognised insurance liabilities are adequate, using current estimates of future 

cash flows under its insurance contracts. If this assessment shows that the carrying amount of the insurance liabilities is inadequate, the deficiency shall 

be recognised in profit or loss. 

Recognised insurance liabilities are only removed from the statement of financial position when, and only when, it is extinguished via a discharge, 

cancellation or expiration. 


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(c) Equity 

An equity instrument is any contract that evidences a residual interest in the assets of the Group and the Company after deducting all of its liabilities. 

Ordinary shares are classified as equity instruments. 

Ordinary shares are recorded at the nominal value and proceeds in excess of the nominal value of shares issued, if any, are accounted for as share 

premium. Both ordinary shares and share premium are classified as equity. Transaction costs of an equity transaction are accounted for as a deduction 

from equity, net of any related income tax benefit. Otherwise, they are charged to profit or loss. 

Dividends to shareholders are recognised in equity in the period in which they are declared. 

If the Company reacquires its own equity instruments, the consideration paid, including any attributable transaction costs is deducted from equity as 

treasury shares until they are cancelled. No gain or loss is recognised in profit or loss on the purchase, sale, issue or cancellation of the Company’s own 

equity instruments. 

Where treasury shares are distributed as share dividends, the cost of the treasury shares shall be applied in the reduction of the share premium account 

or the distribution reserves, or both. Where such shares are issued by resale, the difference between the sales consideration and the carrying amount 

is shown as a movement in equity. 

Following the adoption of FRS 139 during the financial year, the Group reassessed the classification and measurement of financial assets and financial 

liabilities as at 1 January 2010. Consequently, the Group reclassified and remeasured financial assets and financial liabilities as disclosed in Note 40 to the 

financial statements. 

4.11 Impairment of financial assets 

The Group assesses whether there is any objective evidence that a financial asset is impaired at the end of each reporting period. 

(a) Loans and receivables 

The Group collectively considers factors such as the probability of bankruptcy or significant financial difficulties of the receivable or investee, and default 

or significant delay in payments to determine whether there is objective evidence that an impairment loss on loans and receivables has occurred. Other 

objective evidence of impairment include historical collection rates determined on an individual basis and observable changes in national or local 

economic conditions that are directly correlated with the historical default rates of receivables. 

If any such objective evidence exists, the amount of impairment loss is measured as the difference between the financial asset’s carrying amount and 

the present value of estimated future cash flows discounted at the financial asset’s original effective interest rate. The impairment loss is recognised in 

profit or loss. 

The carrying amount of loans and receivables are reduced through the use of an allowance account.


4.11 Impairment of financial assets (continued) 

(a) Loans and receivables (continued) 

If in a subsequent period, the amount of the impairment loss decreases and it objectively relates to an event occurring after the impairment was 

recognised, the previously recognised impairment loss is reversed to the extent that the carrying amount of the asset does not exceed its amortised 

cost at the reversal date. The amount of impairment reversed is recognised in profit or loss. 

(b) Available-for-sale financial assets 

The Group collectively considers factors such as significant or prolonged decline in fair value below cost, significant financial difficulties of the issuer or 

obligor, and the disappearance of an active trading market as objective evidence that available-for-sale financial assets are impaired. 

If any such objective evidence exists, an amount comprising the difference between the financial asset’s cost (net of any principal payment and 

amortisation) and current fair value, less any impairment loss previously recognised in profit or loss, is transferred from equity to profit or loss. 

Impairment losses on available-for-sale equity investments are not reversed to profit or loss in subsequent periods. Instead, any increase in the fair value 

subsequent to the impairment loss is recognised in other comprehensive income. 

4.12 Non-current assets held for sale 

Non-current assets are classified as held for sale if their carrying amounts will be recovered principally through a sale transaction rather than through 

continuing use. For this to be the case, the assets must be available for immediate sale in their present condition subject only to terms that are usual and 

customary for sales of such assets and their sale must be highly probable. 

The sale is expected to qualify for recognition as a completed sale within one (1) year from the date of classification. However, an extension of the period 

required to complete the sale does not preclude the assets from being classified as held for sale if the delay is caused by events or circumstances beyond the 

control of the Group and there is sufficient evidence that the Group remains committed to its plan to sell the assets. 

Immediately before the initial classification as held for sale, the carrying amounts of the non-current assets are measured in accordance with applicable FRSs. 

On initial classification as held for sale, non-current assets or disposal groups (other than investment properties, deferred tax assets, employee benefits assets, 

and financial assets carried at fair value) are measured at the lower of carrying amount before the initial classification as held for sale and fair value less costs 

to sell. The differences, if any, are recognised in profit or loss as impairment loss. 

Non-current assets held for sale are classified as current assets (and current liabilities directly attributable to non-current assets held for sale) in the statement of 

financial position and are stated at the lower of carrying amount immediately before initial classification and fair value less costs to sell and are not depreciated. 

Any cumulative income or expense recognised directly in equity relating to the non-current asset classified as held for sale is presented separately. 

If the Group has classified an asset as held for sale but subsequently the criteria for classification is no longer met, the Group ceases to classify the asset as held 

for sale. The Group measures a non-current asset that ceases to be classified as held for sale at the lower of: 

(i) its carrying amount before the asset was classified as held for sale, adjusted for any depreciation, amortisation or revaluations that would have been 

recognised had the asset not been classified as held for sale; 

(ii) its recoverable amount at the date of the subsequent decision not to sell. 




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4.13 Income taxes 

Income taxes include all domestic and foreign taxes on taxable profit. Income taxes also include other taxes, such as withholding taxes, which are payable by 

foreign subsidiaries or associates on distributions to the Group and the Company, and real property gains taxes payable on disposal of properties. 

Taxes in the statements of comprehensive income comprise current tax and deferred tax. 

(a) Current tax 

Current tax is the amount of income taxes payable or receivable in respect of the taxable profit or loss for a period. 

Current tax for the current and prior periods is measured at the amount expected to be recovered from or payable to the taxation authorities. The tax 

rates and tax laws used to compute the amount are those that have been enacted or substantively enacted by the end of the reporting period. 

(b) Deferred tax 

Deferred tax is recognised in full using the liability method on temporary differences arising between the carrying amount of an asset or liability in the 

statement of financial position and its tax base. 

Deferred tax is recognised for all temporary differences, unless the deferred tax arises from goodwill or the initial recognition of an asset or liability in a 

transaction which is not a business combination and at the time of the transaction, affects neither accounting profit nor taxable profit. 

A deferred tax asset is recognised only to the extent that it is probable that taxable profit will be available against which the deductible temporary 

differences, unused tax losses and unused tax credits can be utilised. The carrying amount of a deferred tax asset is reviewed at the end of each reporting 

period. If it is no longer probable that sufficient taxable profit will be available to allow the benefit of part or all of that deferred tax asset to be realised, 

the carrying amount of the deferred tax asset will be reduced accordingly. When it becomes probable that sufficient taxable profit will be available, such 

reductions will be reversed to the extent of the taxable profit. 

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when 

the deferred income taxes relate to the same taxation authority on either: 

i) the same taxable entity; or 

ii) different taxable entities which intend either to settle current tax liabilities and assets on a net basis, or to realise the assets and settle the liabilities 

simultaneously, in each future period in which significant amounts of deferred tax liabilities or assets are expected to be settled or recovered. 

Deferred tax will be recognised as income or expense and included in profit or loss for the period unless the tax relates to items that are credited or 

charged, in the same or a different period, directly to equity, in which case the deferred tax will be charged or credited directly to equity. 

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realised or the liability is settled, 

based on tax rates and tax laws that have been enacted or substantively enacted by the reporting period.


4.14 Provisions 

Provisions are recognised when there is a present obligation, legal or constructive, as a result of a past event, and when it is probable that an outflow of 

resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. 

Where the effect of the time value of money is material, the amount of a provision will be discounted to its present value at a pre-tax rate that reflects current 

market assessments of the time value of money and the risks specific to the liability. 

Provisions are reviewed at the end of each reporting period and adjusted to reflect the current best estimate. If it is no longer probable that an outflow of 

resources embodying economic benefits will be required to settle the obligation, the provision will be reversed. 

Provisions are not recognised for future operating losses. If the Group has a contract that is onerous, the present obligation under the contract shall be 

recognised and measured as a provision. 

4.15 Employee benefits 



4.15.1 Short term employee benefits 

Wages, salaries, social security contributions, paid annual leave, paid sick leave, bonuses and non-monetary benefits are recognised as an expense in 

the financial year when employees have rendered their services to the Group. 

Short term accumulating compensated absences such as paid annual leave are recognised as an expense when employees render services that 

increase their entitlement to future compensated absences. Short term non-accumulating compensated absences such as sick leave are recognised 

when the absences occur. 

Bonuses are recognised as an expense when there is a present, legal or constructive obligation to make such payments, as a result of past events and 

when a reliable estimate can be made of the amount of the obligation. 

4.15.2 Defined contribution plans 

The Company and its subsidiaries incorporated in Malaysia make contributions to a statutory provident fund and foreign subsidiaries make 

contributions to their respective countries’ statutory pension schemes. The contributions are recognised as a liability after deducting any contributions 

already paid and as an expense in the period in which the employees render their services. 

4.15.3 Defined benefit plans 

The Group operates an unfunded defined benefit plan for eligible employees of the Group. The amount recognised as a liability in respect of the 

defined benefit plan is the present value of the defined benefit obligations at the end of the reporting period adjusted for unrecognised actuarial 

gains and losses and unrecognised past service cost minus the fair value at the end of the reporting period of plan assets out of which the obligations 

are to be settled directly. 

If the amount calculated results in an asset, the Group measures the resulting asset at the lower of the amount calculated and the net total of any 

cumulative unrecognised actuarial losses and past service cost and the present value of any economic benefits available in the form of refunds from 

the plan or reductions in future contributions to the plan. 


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4.15 Employee benefits (continued) 

4.15.3 Defined benefit plans (continued) 

The Group determines the present value of the defined benefit obligations and the fair value of the plan assets with sufficient regularity such that 

the amounts recognised in the financial statements do not differ materially from the amounts that would be determined at the end of the reporting 

period. 

The present value of the defined benefit obligations and the related current service cost and past service cost is determined using the projected 

unit credit method. The rate used to discount the obligations is based on market yields at the end of the reporting period of government securities 

which have currency and terms consistent with the currency and estimated terms of the obligations. 

Actuarial gains and losses may result from changes in the present value of the plan assets. They are recognised as income or expense over the 

expected average remaining working lives of the employees participating in that plan when the net cumulative unrecognised actuarial gains and 

losses exceed the higher of: 

(a) 10% of the present value of the defined benefit obligations at that date (before deducting plan assets); and 

(b) 10% of the fair value of any plan assets at that date. 

In measuring its defined benefit liability, the Group recognises past service cost as an expense on a straight line basis over the average period until 

the benefits become vested. To the extent that the benefits are already vested immediately following the introduction of, or changes to, the defined 

benefit plan, the Group recognises past service cost immediately in the income statements. 

4.15.4 Termination benefits 

Termination benefits are payments due to employees as a result of the termination of employment before the normal retirement date or an 

employee’s decision to accept voluntary redundancy in exchange for those benefits. They are recognised as a liability and an expense when the 

Group has a detailed formal plan for termination with no realistic possibility of withdrawal. In the case of voluntary redundancy, the benefits are 

accounted for based on the number of employees expected to accept the offer. 

4.16 Foreign currencies 

Where termination benefits fall due more than twelve (12) months after the reporting period, they are discounted to present value based on market 

yields at the end of the reporting period of government securities, which have currency and terms consistent with the currency and estimated terms 

of the obligations. 

4.16.1 Functional and presentation currency 

Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary economic environment 

in which the entity operates (“the functional currency”). The consolidated financial statements are presented in Ringgit Malaysia, which is the 

Company’s functional and presentation currency.


4.16 Foreign currencies (continued) 

4.16.2 Foreign currency translations and balances 

Transactions in foreign currencies are converted into the functional currency of each company in the Group at rates of exchange ruling at the 

transaction dates. Monetary assets and liabilities in foreign currencies at the end of the reporting period are translated into their functional 

currencies at rates of exchange ruling at that date unless hedged by forward foreign exchange contracts, in which case the rates specified in 

such forward contracts are used. All exchange differences arising from the settlement of foreign currency transactions and from the translation 

of foreign currency monetary assets and liabilities are included in profit or loss in the period. Non-monetary items initially denominated in foreign 

currencies, which are carried at historical cost are translated using the historical rate as of the date of acquisition, and non-monetary items 

which are carried at fair value are translated using the exchange rate that existed when the values were determined for presentation currency 

purposes. 

4.16.3 Foreign operations 

Financial statements of foreign operations are translated at financial year end exchange rates with respect to the assets and liabilities, and at 

exchange rates at the dates of the transactions with respect to the income statement. All resulting translation differences are recognised as a 

separate component of equity. 

4.17 Revenue recognition 

In the consolidated financial statements, exchange differences arising from the translation of net investment in foreign operations are taken to 

equity. When a foreign operation is partially disposed of or sold, exchange differences that were recorded in equity are recognised in profit or loss 

as part of the gain or loss on disposal. 

Exchange differences arising on a monetary item that forms part of the net investment of the Company in a foreign operation shall be recognised in 

profit or loss in the separate financial statements of the Company or the foreign operation, as appropriate. In the consolidated financial statements, 

such exchange differences shall be recognised initially as a separate component of equity and recognised in profit or loss upon disposal of the net 

investment. 

Goodwill and fair value adjustments to the assets and liabilities arising from the acquisition of a foreign operation are treated as assets and liabilities 

of the acquired entity and translated at the exchange rate ruling at the end of the reporting period. 

Revenue is measured at the fair value of the consideration received or receivable net of discounts and rebates. 

Revenue is recognised to the extent that it is probable that the economic benefits associated with the transaction will flow to the Group, and the amount 

of revenue and the cost incurred or to be incurred in respect of the transaction can be reliably measured and specific recognition criteria have been met for 

each of the Group’s activities as follows: 

(a) Haulage income 

Income from haulage and related activities is recognised upon performance of services, net of discounts. 




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4.17 Revenue recognition (continued) 

(b) Agency fees 

Income is recognised on completion of shipping operations. 

(c) Cargo commission and forwarding related income 

Income from transportation of goods is recognised upon delivery of goods at the receiving point. 

(d) Interest income 

Interest income is recognised as it accrues, using the effective interest method. 

(e) Dividend income 

Dividend income is recognised when the right to receive payment is established. 

(f ) Rental income 

Rental income is recognised on a straight line basis over the term of an ongoing lease. 

4.18 Earnings per share 

The Group presents basic earnings per share (“EPS”) data for its ordinary share. Basic EPS is calculated by dividing the profit or loss attributable to ordinary 

shareholders of the Company by weighted average number of ordinary share outstanding during the period. 

4.19 Contingent liabilities and contingent assets 

A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or 

more uncertain future events beyond the control of the Group or a present obligation that is not recognised because it is not probable that an outflow of 

resources will be required to settle the obligation. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognised 

because it cannot be measured reliably. The Group does not recognise this contingent liability but discloses its existence in the financial statements. 

A contingent asset is a possible asset that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more 

uncertain future events beyond the control of the Group. The Group does not recognise a contingent asset but discloses its existence where the inflows of 

economic benefits are probable, but not virtually certain. 

In the acquisition of subsidiaries by the Group under business combinations, contingent liabilities assumed are measured initially at their fair value at the 

acquisition date, irrespective of the extent of any minority interest. 

4.20 Operating segments 

During the previous financial year, segment reporting was presented based on business segments of the Group. Business segments provide information 

about products or services that are subject to risks and returns that are different from those of other business segments.


4.20 Operating segments (continued) 

Following the adoption of FRS 8 Operating Segments during the current financial year, operating segments are defined as components of the Group that: 

(a) engages in business activities from which it may earn revenues and incur expenses (including revenues and expenses relating to transactions with other 

components of the Group); 

(b) whose operating results are regularly reviewed by the Group’s chief operating decision maker (i.e. the Group’s Executive Committee comprises certain 

Directors, Chief Executive Officer, Chief Financial Officer, and representatives from penultimate holding company) in making decisions about resources 

to be allocated to the segment and assessing its performance; and 

(c) for which discrete financial information is available. 

An operating segment may engage in business activities for which it has yet to earn revenues. 

The Group reports separately information about each operating segment that meets any of the following quantitative thresholds: 

(i) Its reported revenue, including both sales to external customers and intersegment sales or transfers, is ten (10) percent or more of the combined 

revenue, internal and external, of all operating segments. 

(ii) The absolute amount of its reported profit or loss is ten (10) percent or more of the greater, in absolute amount of: 

(i) the combined reported profit of all operating segments that did not report a loss; and 

(ii) the combined reported loss of all operating segments that reported a loss. 

(iii) Its assets are ten (10) per cent or more of the combined assets of all operating segments. 

Operating segments that do not meet any of the quantitative thresholds may be considered reportable, and separately disclosed, if the management 

believes that information about the segment would be useful to users of the financial statements. 

Total external revenue reported by operating segments shall constitute at least seventy five (75) percent of the Group’s revenue. Operating segments 

identified as reportable segments in the current financial year in accordance with the quantitative thresholds would result in a restatement of prior period 

segment data for comparative purposes. 

4.21 Borrowing Costs 

All borrowing costs are recognised in profit or loss in the period in which they are incurred. 




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5. ADOPTION OF NEW FRSs AND AMENDMENTS TO FRSs 

5.1 New FRSs adopted during the current financial year 

(a) FRS 8 and the consequential amendments resulting from FRS 8 are mandatory for annual financial periods beginning on or after 1 July 2009. 

FRS 8 sets out the requirements for the disclosure of information on the Group’s operating segments, products and services, the geographical areas in 

which it operates and its customers. 

The requirements of this Standard are based on the information about the components of the Group that management uses to make decisions about 

operating matters. This Standard requires the identification of operating segments on the basis of internal reports that are regularly reviewed by the 

Group’s chief operating decision maker in order to allocate resources to the segment and assess its performance, as elaborated in Note 4.20 to the 

financial statements. 

In accordance with the transitional provisions of FRS 8, segment information for prior years that is reported as comparative information for the initial year 

of application has been restated to conform to requirements of FRS 8, as disclosed in Note 34 to the financial statements. 

The adoption of this standard will only impact the form and content of disclosures and presentation of the Group’s financial statements. 

(b) FRS 4 Insurance Contracts and the consequential amendments resulting from FRS 4 are mandatory for annual financial periods beginning on or after 1 

January 2010. FRS 4 replaces the existing FRS 202 2004 General Insurance Business and FRS 203 2004 Life Insurance Business. 

This Standard applies to all insurance contracts, including reinsurance contracts that an entity issues and to reinsurance contracts that it holds. This 

Standard prohibits provisions for potential claims under contracts that are not in existence at the end of the reporting period, and requires a test for 

the adequacy of recognised insurance liabilities and an impairment test for reinsurance assets. This Standard also requires an insurer to keep insurance 

liabilities in its statement of financial position until they are discharged or cancelled, or expire, and to present insurance liabilities without offsetting 

them against related reinsurance assets. 

Following the adoption of this Standard, the Group designates corporate guarantees given to banks for credit facilities granted to subsidiaries as 

insurance contracts. 

(c) FRS 7 Financial Instruments: Disclosures and the consequential amendments resulting from FRS 7 are mandatory for annual financial periods beginning 

on or after 1 January 2010. FRS 7 replaces the disclosure requirements of the existing FRS 132 Financial Instruments: Disclosure and Presentation. 

This Standard applies to all risks arising from a wide array of financial instruments and requires the disclosure of the significance of financial instruments 

for the Group’s financial position and performance. 

(d) FRS 123 Borrowing Costs and the consequential amendments resulting from FRS 123 are mandatory for annual periods beginning on or after 1 January 

2010. 

This Standard removes the option of immediately recognising as an expense borrowing costs that are directly attributable to the acquisition, construction 

or production of a qualifying asset. However, capitalisation of borrowing costs is not required for assets measured at fair value, and inventories that are 

manufactured or produced in large quantities on a repetitive basis, even if they take a substantial period of time to get ready for use or sale. 

There is no impact upon adoption of this Standard during the financial year.

5. ADOPTION OF NEW FRSs AND AMENDMENTS TO FRSs (continued) 

5.1 New FRSs adopted during the current financial year (continued) 

(e) FRS 139 Financial Instruments: Recognition and Measurement and the consequential amendments resulting from FRS 139 are mandatory for annual 

financial periods beginning on or after 1 January 2010. 

This Standard establishes the principles for the recognition and measurement of financial assets and financial liabilities including circumstances under 

which hedge accounting is permitted. 

The impact upon adoption of this Standard is disclosed in Note 40 to the financial statements. 

(f ) Amendments to FRS 2 Share-based Payment: Vesting Conditions and Cancellations are mandatory for annual financial periods beginning on or after 1 

January 2010. 

These amendments clarify that vesting conditions comprise service conditions and performance conditions only. Cancellations by parties other than 

the Group are accounted for in the same manner as cancellations by the Group itself and features of a share-based payment that are non-vesting 

conditions are included in the grant date fair value of the share-based payment. 

There is no impact upon adoption of these amendments during the financial year. 

(g) Amendments to FRS 1 First-time Adoption of Financial Reporting Standards and FRS 127 Consolidated and Separate Financial Statements: Cost of an 

Investment in a Subsidiary, Jointly Controlled Entity or Associate is mandatory for annual periods beginning on or after 1 January 2010. 

These amendments allow first-time adopters to use a deemed cost of either fair value or the carrying amount under previous accounting practice to 

measure the initial cost of investments in subsidiaries, jointly controlled entities and associates in the separate financial statements. The cost method of 

accounting for an investment has also been removed pursuant to these amendments. 


(h) IC Interpretation 9 Reassessment of Embedded Derivatives is mandatory for annual financial periods beginning on or after 1 January 2010. 

This Interpretation prohibits the subsequent reassessment of embedded derivatives unless there is a change in the terms of the host contract that 

significantly modifies the cash flows that would otherwise be required by the host contract. 

There is no impact upon adoption of this Interpretation during the financial year. 

(i) IC Interpretation 10 Interim Financial Reporting and Impairment is mandatory for annual financial periods beginning on or after 1 January 2010. 

This Interpretation prohibits the reversal of an impairment loss recognised in a previous interim period in respect of goodwill or an investment in either 

an equity instrument or a financial asset carried at cost. 





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(j) IC Interpretation 11 FRS 2 – Group and Treasury Share Transactions is mandatory for annual periods beginning on or after 1 January 2010. 

This Interpretation requires share-based payment transactions in which the Company receives services from employees as consideration for its own 

equity instruments to be accounted for as equity-settled, regardless of the manner of satisfying the obligations to the employees. 

If the Company grants rights to its equity instruments to the employees of its subsidiaries, this Interpretation requires the Company to recognise the 

equity reserve for the obligation to deliver the equity instruments when needed whilst the subsidiaries shall recognise the remuneration expense for 

the services received from employees. 

If the subsidiaries grant rights to equity instruments of the Company to its employees, this Interpretation requires the Company to account for the 

transaction as cash-settled, regardless of the manner the subsidiaries obtain the equity instruments to satisfy its obligations. 


The Group would like to draw attention to the withdrawal of this Interpretation for annual periods beginning on or after 1 January 2011 as disclosed 

in Note 5.2(l) to the financial statements. 

(k) IC Interpretation 13 Customer Loyalty Programmes is mandatory for annual periods beginning on or after 1 January 2010. 

This Interpretation requires the separation of award credits as a separately identifiable component of sales transactions involving the award of free or 

discounted goods or services in the future. The fair value of the consideration received or receivable from the initial sale shall be allocated between the 

award credits and the other components of the sale. 

If the Group supplies the awards itself, the consideration allocated to the award credits shall only be recognised as revenue when the award credits are 

redeemed. If a third party supplies the awards, the Group shall assess whether it is acting as a principal or agent in the transaction. 

If the Group is acting as the principal in the transaction, it shall measure its revenue as the gross consideration allocated to the award credits. If the Group 

is acting as an agent, it shall measure its revenue as the net amount retained on its own account, and recognise the net amount as revenue when the 

third party becomes obliged to supply the awards and entitled to receive the consideration for doing so. 


(l) IC Interpretation 14 FRS 119 – The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction is mandatory for annual periods 

beginning on or after 1 January 2010. 

This Interpretation applies to all post-employment defined benefits and other long-term employee defined benefits. This Interpretation clarifies that an 

economic benefit is available if the Group can realise it at some point during the life of the plan or when the plan liabilities are settled, and that it does 

not depend on how the Group intends to use the surplus.



(l) IC Interpretation 14 FRS 119 – The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction is mandatory for annual periods 

beginning on or after 1 January 2010. (continued) 

A right to refund is available to the Group in stipulated circumstances and the economic benefit available shall be measured as the amount of the 

surplus at the end of the reporting period less any associated costs. If there are no minimum funding requirements, the economic benefit available 

shall be determined as a reduction in future contributions as the lower of the surplus in the plan and the present value of the future service cost to 

the Group. If there is a minimum funding requirement for contributions relating to the future accrual of benefits, the economic benefit available shall 

be determined as a reduction in future contributions at the present value of the estimated future service cost less the estimated minimum funding 

required in each financial year. 


(m) FRS 101 Presentation of Financial Statements is mandatory for annual periods beginning on or after 1 January 2010. 



FRS 101 sets out the overall requirements for the presentation of financial statements, guidelines for their structure and minimum requirements for their 

content. 

This Standard introduces the titles ‘statement of financial position’ and ‘statement of cash flows’ to replace the current titles ‘balance sheet’ and ‘cash 

flow statement’ respectively. A new statement known as the ‘statement of comprehensive income’ is also introduced in this Standard whereby all nonowner 

changes in equity are required to be presented in either one statement of comprehensive income or in two statements (i.e. a separate income 

statement and a statement of comprehensive income). Components of comprehensive income are not permitted to be presented in the statement of 

changes in equity. 

This Standard also introduces a new requirement to present a statement of financial position as at the beginning of the earliest comparative period if 

there are applications of retrospective restatements that are defined in FRS 108, or when there are reclassifications of items in the financial statements. 

Additionally, FRS 101 requires the disclosure of reclassification adjustments and income tax relating to each component of other comprehensive income, 

and the presentation of dividends recognised as distributions to owners together with the related amounts per share in the statement of changes in 

equity or in the notes to the financial statements. 

This Standard introduces a new requirement to disclose information on the objectives, policies and processes for managing capital based on information 

provided internally to key management personnel as defined in FRS 124 Related Party Disclosures. Additional disclosures are also required for puttable 

financial instruments classified as equity instruments. 

Following the adoption of this Standard, the Group has reflected the new format of presentation and additional disclosures warranted in the primary 

financial statements and relevant notes to the financial statements. 


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(n) Amendments to FRS 139, FRS 7 and IC Interpretation 9 are mandatory for annual periods beginning on or after 1 January 2010. 

These amendments permit reclassifications of non-derivative financial assets (other than those designated at fair value through profit or loss upon initial 

recognition) out of the fair value through profit or loss category in rare circumstances. Reclassifications from the available-for-sale category to the loans 

and receivables category are also permitted provided there is intention and ability to hold that financial asset for the foreseeable future. All of these 

reclassifications shall be subjected to subsequent reassessments of embedded derivatives. 

These amendments also clarifies the designation of one-sided risk in eligible hedged items and streamlines the terms used throughout the Standards 

in accordance with the changes resulting from FRS 101. 


(o) Amendments to FRS 132 Financial Instruments: Presentation is mandatory for annual periods beginning on or after 1 January 2010. 

These amendments require certain puttable financial instruments, and financial instruments that impose an obligation to deliver to counterparties a 

pro rata share of the net assets of the entity only on liquidation to be classified as equity. 

Puttable financial instruments are defined as financial instruments that give the holder the right to put the instrument back to the issuer for cash, or 

another financial asset, or are automatically put back to the issuer upon occurrence of an uncertain future event or the death or retirement of the 

instrument holder. 


(p) Improvements to FRSs (2009) are mandatory for annual periods beginning on or after 1 January 2010. 

Amendment to FRS 5 Non-current Assets Held for Sale and Discontinued Operations clarifies that the disclosure requirements of this Standard specifically 

apply to non-current assets (or disposal groups) classified as held for sale or discontinued operations. There is no impact upon adoption of this 

amendment during the financial year. 

Amendment to FRS 8 clarifies the consistency of disclosure requirement for information about profit or loss, assets and liabilities. There is no impact 

upon adoption of this amendment during the financial year. 

Amendment to FRS 107 Statement of Cash Flows clarifies the classification of cash flows arising from operating activities and investing activities. Cash 

payments to manufacture or acquire assets held for rental to others and subsequently held for sale, and the related cash receipts, shall be classified as 

cash flows from operating activities. Expenditures that result in a recognised asset in the statement of financial position are eligible for classification as 

cash flows from investing activities. There is no impact upon adoption of this amendment during the financial year. 

Amendment to FRS 108 clarifies that only Implementation Guidance issued by the MASB that are integral parts of FRSs is mandatory. There is no impact 

upon adoption of this amendment during the financial year.



(p) Improvements to FRSs (2009) are mandatory for annual periods beginning on or after 1 January 2010. (continued) 



Amendment to FRS 110 Events after the Reporting Period clarifies the rationale for not recognising dividends declared after the reporting period but 

before the financial statements are authorised for issue. There is no impact upon adoption of this amendment during the financial year. 

Amendment to FRS 116 Property, Plant and Equipment removes the definition pertaining the applicability of this Standard to property that is being 

constructed or developed for future use as investment property but do not yet satisfy the definition of ‘investment property’ in FRS 140 Investment 

Property. This amendment also replaces the term ‘net selling price’ with ‘fair value less costs to sell’, and clarifies that proceeds arising from routine sale of 

items of property, plant and equipment shall be recognised as revenue in accordance with FRS 118 Revenue rather than FRS 5. There is no impact upon 

adoption of this amendment during the financial year. 

Amendment to FRS 117 Leases removes the classification of leases of land and of buildings, and instead, requires assessment of classification based on 

the risks and rewards of the lease itself. The reassessment of land elements of unexpired leases shall be made retrospectively in accordance with FRS 

108. 

The Group had reassessed the classification of land elements of unexpired leases based on their related risks and rewards. There is no impact upon 

adoption of this amendment to the Group and the Company. 

As at the end of the reporting period, the Group has carrying amount of prepaid lease payments for land of RM27,037,000 (see Note 9 to the financial 

statements). 

Amendment to FRS 118 clarifies reference made on the term ‘transaction costs’ to the definition in FRS 139. There is no impact upon adoption of this 

amendment during the financial year. 

Amendment to FRS 119 Employee Benefits clarifies the definitions in this Standard by consistently applying settlement dates within twelve (12) months in 

the distinction between short-term employee benefits and other long-term employee benefits. This amendment also provides additional explanations 

on negative past service cost and curtailments. There is no impact upon adoption of this amendment during the financial year. 

Amendment to FRS 120 Accounting for Government Grants and Disclosure of Government Assistance streamlines the terms used in this Standard in 

accordance with the new terms used in FRS 101. There is no impact upon adoption of this amendment during the financial year. 

Amendment to FRS 123 clarifies that interest expense calculated using the effective interest rate method described in FRS 139 qualifies for recognition 

as borrowing costs. There is no impact upon adoption of this amendment during the financial year. 

Amendment to FRS 127 Consolidated and Separate Financial Statements clarifies that investments measured at cost shall be accounted for in accordance 

with FRS 5 when they are held for sale in accordance with FRS 5. There is no impact upon adoption of this amendment during the financial year. 

Amendment to FRS 128 Investments in Associates clarifies that investments in associates held by venture capital organisations, or mutual funds, unit 

trusts and similar entities shall make disclosures on the nature and extent of any significant restrictions on the ability of associates to transfer funds to the 

investor in the form of cash dividends, or repayment of loans or advances. This amendment also clarifies that impairment loss recognised in accordance 

with FRS 136 Impairment of Assets shall not be allocated to any asset, including goodwill, that forms the carrying amount of the investment. Accordingly, 

any reversal of that impairment loss shall be recognised in accordance with FRS 136. There is no impact upon adoption of this amendment during the 

financial year. 


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Amendment to FRS 129 Financial Reporting in Hyperinflationary Economies streamlines the terms used in this Standard in accordance with the new 

terms used in FRS 101. This amendment also clarifies that assets and liabilities that are measured at fair value are exempted from the requirement to 

apply historical cost basis of accounting. There is no impact upon adoption of this amendment during the financial year. 

Amendment to FRS 131 Interests in Joint Ventures clarifies that ventures’ interests in jointly controlled entities held by venture capital organisations, or 

mutual funds, unit trusts and similar entities shall make disclosures on related capital commitments. This amendment also clarifies that a listing and 

description of interests in significant joint ventures and the proportion of ownership interest held in jointly controlled entities shall be made. There is no 

impact upon adoption of this amendment during the financial year. 

Amendment to FRS 136 clarifies the determination of allocation of goodwill to each cash-generating unit whereby each unit shall not be larger than 

an operating segment as defined in FRS 8 before aggregation. This amendment also requires additional disclosures if the fair value less costs to sell is 

determined using discounted cash flow projections. There is no impact upon adoption of this amendment during the financial year. 

Amendment to FRS 138 Intangible Assets clarifies the examples provided in this Standard in measuring the fair value of an intangible asset acquired in 

a business combination. This amendment also removes the statement on the rarity of situations whereby the application of the amortisation method 

for intangible assets results in a lower amount of accumulated amortisation than under the straight line method. There is no impact upon adoption of 

this amendment during the financial year. 

Amendment to FRS 140 clarifies that properties that are being constructed or developed for future use as investment property are within the definition 

of ‘investment property’. This amendment further clarifies that if the fair value of such properties cannot be reliably determinable but it is expected that 

the fair value would be readily determinable when construction is complete, the properties shall be measured at cost until either its fair value becomes 

reliably determinable or construction is completed, whichever is earlier. There is no impact upon adoption of this amendment during the financial year. 

(q) Amendments to FRS 132 is mandatory for annual periods beginning on or after 1 January 2010 and 1 March 2010 in respect of the transitional provisions 

in accounting for compound financial instruments and classification of rights issues respectively. 

These amendments remove the transitional provisions in respect of accounting for compound financial instruments issued before 1 January 2003 

pursuant to FRS 132 2004 Financial Instruments: Disclosure and Presentation. Such compound financial instruments shall be classified into its liability and 

equity components when FRS 139 first applies. 


(r) Amendments to FRS 139 is mandatory for annual periods beginning on or after 1 January 2010. 

These amendments remove the scope exemption on contracts for contingent consideration in a business combination. Accordingly, such contracts 

shall be recognised and measured in accordance with the requirements of FRS 139. 

There is no impact upon adoption of these amendments during the financial year.


5.2 New FRSs that have been issued, but not yet effective and not yet adopted 

(a) Amendments to FRS 132 is mandatory for annual periods beginning on or after 1 March 2010 in respect of classification of rights issues. 

The amendments also clarifies that rights, options or warrants to acquire a fixed number of the Group’s own equity instruments for a fixed amount of 

any currency shall be classified as equity instruments rather than financial liabilities if the Group offers the rights, options or warrants pro rata to all of its 

own existing owners of the same class of its own non-derivative equity instruments. 

The Group does not expect any impact on the financial statements arising from the adoption of these amendments. 

(b) FRS 1 First-time Adoption of Financial Reporting Standards is mandatory for annual periods beginning on or after 1 July 2010. 

This Standard supersedes the existing FRS 1 and shall be applied when the Group adopts FRSs for the first time via the explicit and unreserved statement 

of compliance with FRSs. An opening FRS statement of financial position shall be prepared and presented at the date of transition to FRS, whereby: 

(i) All assets and liabilities shall be recognised in accordance with FRSs; 

(ii) Items of assets and liabilities shall not be recognised if FRSs do not permit such recognition; 

(iii) Items recognised in accordance with previous GAAP shall be reclassified in accordance with FRSs; and 

(iv) All recognised assets and liabilities shall be measured in accordance with FRSs. 

All resulting adjustments shall therefore be recognised directly in retained earnings at the date of transition to FRSs. 

The Group does not expect any impact on the financial statements arising from the adoption of this Standard. 

(c) FRS 3 Business Combinations is mandatory for annual periods beginning on or after 1 July 2010. 

This Standard supersedes the existing FRS 3 and now includes business combinations involving mutual entities and those achieved by way of contract 

alone. Any non-controlling interest in an acquiree shall be measured at fair value or as the non-controlling interest’s proportionate share of the acquiree’s 

net identifiable assets. 

The time limit on the adjustment to goodwill due to the arrival of new information on the crystallisation of deferred tax benefits shall be restricted 

to the measurement period resulting from the arrival of the new information. Contingent liabilities acquired arising from present obligations shall be 

recognised, regardless of the probability of outflow of economic resources. 

Acquisition-related costs shall be accounted for as expenses in the periods in which the costs are incurred and the services are received. Consideration 

transferred in a business combination, including contingent consideration, shall be measured and recognised at fair value at acquisition date. 

In business combinations achieved in stages, the acquirer shall remeasure its previously held equity interest at its acquisition date fair value and 

recognise the resulting gain or loss in profit or loss. 

The Group does not expect any impact on the financial statements arising from the adoption of this Standard. 




annual repor t 2010

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5.2 New FRSs that have been issued, but not yet effective and not yet adopted (continued) 

(d) FRS 127 Consolidated and Separate Financial Statements is mandatory for annual periods beginning on or after 1 July 2010. 

This Standard supersedes the existing FRS 127 and replaces the current term ‘minority interest’ with a new term ‘non-controlling interest’ which is defined 

as the equity in a subsidiary that is not attributable, directly or indirectly, to a parent. Accordingly, total comprehensive income shall be attributed to the 

owners of the parent and to the non-controlling interests, even if this results in the non-controlling interests having a deficit balance. 

Changes in the Group’s ownership interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions. If the Group 

loses control of a subsidiary, any gains or losses are recognised in profit or loss and any investment retained in the former subsidiary shall be measured 

at its fair value at the date when control is lost. 

As at the end of the reporting period, the Group reports minority interests of RM Nil. The Group does not expect any impact on the financial statements 

arising from the adoption of this Standard. 

(e) Amendments to FRSs are mandatory for annual periods beginning on or after 1 July 2010. 

Amendments to FRS 2 Share-based Payments clarifies that transactions in which the Group acquired goods as part of the net assets acquired in a 

business combination or contribution of a business on the formation of a joint venture are excluded from the scope of this Standard. The Group does 

not expect any impact on the financial statements arising from the adoption of this amendment. 

Amendments to FRS 5 clarifies that non-current asset classified as held for distribution to owners acting in their capacity as owners are within the 

scope of this Standard. The amendment also clarifies that in determining whether a sale is highly probable, the probability of shareholders’ approval, 

if required in the jurisdiction, shall be considered. In a sale plan involving loss of control of a subsidiary, all assets and liabilities of that subsidiary shall 

be classified as held for sale, regardless of whether the Group retains a non-controlling interest in its former subsidiary after the sale. Discontinued 

operations information shall also be presented. Non-current asset classified as held for distribution to owners shall be measured at the lower of its 

carrying amount and fair value less costs to distribute. The Group does not expect any impact on the financial statements arising from the adoption of 

this amendment. 

Amendments to FRS 138 clarifies that the intention of separating an intangible asset is irrelevant in determining the identifiability of the intangible 

asset. In a separate acquisition and acquisition as part of a business combination, the price paid by the Group reflects the expectations of the Group 

of an inflow of economic benefits, even if there is uncertainty about the timing or the amount of the inflow. Accordingly, the probability criterion is 

always considered to be satisfied for separately acquired intangible assets. The useful life of a reacquired right recognised as an intangible asset in a 

business combination shall be the remaining contractual period of the contract in which the right was granted, and do not include renewal periods. 

In the case of a reacquired right in a business combination, if the right is subsequently reissued to a third party, the related carrying amount shall be 

used in determining the gain or loss on reissue. The Group does not expect any impact on the financial statements arising from the adoption of this 

amendment. 

Amendments to IC Interpretation 9 clarifies that embedded derivatives in contracts acquired in a business combination, combination of entities or 

business under common controls, or the formation of a joint venture are excluded from this Interpretation. The Group does not expect any impact on 

the financial statements arising from the adoption of this amendment.



(f ) IC Interpretation 12 Service Concession Arrangements is mandatory for annual periods beginning on or after 1 July 2010. 

This Interpretation applies to operators for public-to-private service concession arrangements, whereby infrastructure within the scope of this 

Interpretation shall not be recognised as property, plant and equipment of the operator. The operator shall recognise and measure revenue in 

accordance with FRS 111 Construction Contracts and FRS 118 for the services performed. The operator shall also account for revenue and costs relating 

to construction or upgrade services in accordance with FRS 111. 

Consideration received or receivable by the operator for the provision of construction or upgrade services shall be recognised at its fair value. If the 

consideration consists of an unconditional contractual right to receive cash or another financial asset from the grantor, it shall be classified as a financial 

asset. Conversely, if the consideration consists of a right to charge users of the public service, it shall be classified as an intangible asset. 

The Group does not expect any impact on the financial statements arising from the adoption of this Interpretation. 



(g) IC Interpretation 16 Hedges of a Net Investment in a Foreign Operation is mandatory for annual periods beginning on or after 1 July 2010. 

This Interpretation applies to hedges undertaken on foreign currency risk arising from net investments in foreign operations and the Group wishes to 

qualify for hedge accounting in accordance with FRS 139. 

Hedge accounting is applicable only to the foreign exchange differences arising between the functional currency of the foreign operation and the 

functional currency of any parent (immediate, intermediate or ultimate parent) of that foreign operation. An exposure to foreign currency risk arising 

from a net investment in a foreign operation may qualify for hedge accounting only once in the consolidated financial statements. 

Hedging instruments designated in the hedge of a net investment in a foreign operation may be held by any companies within the Group, as long as 

the designation, documentation and effectiveness requirements of FRS 139 are met. The Group does not expect any impact on the financial statements 

arising from the adoption of this Interpretation. 

(h) IC Interpretation 17 Distributions of Non-cash Assets to Owners is mandatory for annual periods beginning on or after 1 July 2010. 

This Interpretation applies to non-reciprocal distributions of non-cash assets by the Group to its owners in their capacity as owners, as well as distributions 

that give owners a choice of receiving either non-cash assets or a cash alternative. This Interpretation also applies to distributions in which all owners of 

the same class of equity instruments are treated equally. 

The liability to pay a dividend shall be recognised when the dividend is appropriately authorised and is no longer at the discretion of the Group. The 

liability shall be measured at the fair value of the assets to be distributed. If the Group gives its owners a choice of receiving either a non-cash asset or a 

cash alternative, the dividend payable shall be estimated by considering the fair value of both alternatives and the associated probability of the owners’ 

selection. 

At the end of each reporting period, the carrying amount of the dividend payable shall be remeasured and any changes shall be recognised in equity. 

At the settlement date, any difference between the carrying amounts of the assets distributed and the carrying amount of the dividend payable shall 

be recognised in profit or loss. The Group does not expect any impact on the financial statements arising from the adoption of this Interpretation. 


annual repor t 2010

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(i) Amendment to FRS 1 Limited Exemption from Comparative FRS 7 Disclosures for First-time Adopters is mandatory for annual periods beginning on or after 

1 January 2011. 

This amendment permits a first-time adopter of FRSs to apply the exemption of not restating comparatives for the disclosures required in Amendments 

to FRS 7 (see Note 13 to the financial statements). 

The Group does not expect any impact on the financial statements arising from the adoption of this amendment. 

(j) Amendments to FRS 1 Additional Exemptions for First-time Adopters are mandatory for annual periods beginning on or after 1 January 2011. 

These amendments permits a first-time adopter of FRSs to apply the exemption of not restating the carrying amounts of oil and gas assets determined 

under previous GAAP. 


(k) Amendments to FRS 7 Improving Disclosures about Financial Instruments are mandatory for annual periods beginning on or after 1 January 2011. 

These amendments require enhanced disclosures of fair value of financial instruments based on the fair value hierarchy, including the disclosure of 

significant transfers between Level 1 and Level 2 of the fair value hierarchy as well as reconciliations for fair value measurements in Level 3 of the fair 

value hierarchy. 

By virtue of the exemption provided under paragraph 44G of FRS 7, the impact of applying these amendments on the financial statements upon first 

adoption of FRS 7 as required by paragraph 30(b) of FRS 108 are not disclosed. 

(l) Amendments to FRS 2 Group Cash-settled Share-based Payment Transactions are mandatory for annual periods beginning on or after 1 January 2011. 

These amendments clarify the scope and the accounting for group cash-settled share-based payment transactions in the separate financial statements 

of the entity receiving the goods or services when that entity has no obligation to settle the share-based payment transaction. 

Consequently, IC Interpretation 8 Scope of FRS 2 and IC Interpretation 11 have been superseded and withdrawn. 

The Group does not expect any impact on the financial statements arising from the adoption of these amendments. The effects of adopting IC 

Interpretation 11 have been disclosed in Note 5.1(j) to the financial statements. 

(m) IC Interpretation 4 Determining whether an Arrangement contains a Lease is mandatory for annual periods beginning on or after 1 January 2011. 

This Interpretation requires the determination of whether an arrangement is, or contains, a lease based on an assessment of whether the fulfilment of 

the arrangement is dependent on the use of a specific asset and whether the arrangement conveys a right to use the asset. This assessment shall be 

made at the inception of the arrangement and subsequently reassessed if certain condition(s) in the Interpretation is met. 

The Group does not expect any impact on the financial statements arising from the adoption of this amendment because there are no arrangements 

dependent on the use of specific assets in the Group.



(n) IC Interpretation 18 Transfers of Assets from Customers is mandatory for annual periods beginning on or after 1 January 2011. 

This Interpretation applies to agreements in which an entity receives from a customer an item of property, plant and equipment that must be used to 

either connect the customer to a network or to provide the customer with ongoing access to a supply of goods or services. The entity receiving the 

transferred item is required to assess whether the transferred item meets the definition of an asset set out in the Framework. The credit entry would be 

accounted for as revenue in accordance with FRS 118. 

The Group does not expect any impact on the financial statements arising from the adoption of this Interpretation because there are no such 

arrangements in the Group. 

(o) IC Interpretation 15 Agreements for the Construction of Real Estate is mandatory for annual periods beginning on or after 1 January 2012. 

This Interpretation applies to the accounting for revenue and associated expenses by entities undertaking construction or real estate directly or via 

subcontractors. Within a single agreement, the Group may contract to deliver goods or services in addition to the construction of real estate. Such an 

agreement shall therefore, be split into separately identifiable components. 

An agreement for the construction of real estate shall be accounted for in accordance with FRS 111 if the buyer is able to specify the major structural 

elements of the design of the real estate before construction begins and/or specify major structural changes once construction is in progress. Accordingly, 

revenue shall be recognised by reference to the stage of completion of the contract. 

An agreement for the construction of real estate in which buyers only have limited ability to influence the design of the real estate or to specify only 

minor variations to the basic designs is an agreement for the sale of goods in accordance with FRS 118. Accordingly, revenue shall be recognised by 

reference to the criteria in paragraph 14 of FRS 118 (e.g. transfer of significant risks and rewards, no continuing managerial involvement nor effective 

control, reliable measurement, etc.). 


(p) Improvements to FRSs (2010) are mandatory for annual periods beginning on or after 1 January 2011. 



Amendments to FRS 1 clarifies that FRS 108 does not apply to changes in accounting policies made upon adoption of FRSs until after the first FRS 

financial statements have been presented. If changes in accounting policies or exemptions in this FRS are used, an explanation of such changes 

together with updated reconciliations shall be made in each interim financial report. Entities whose operations are subject to rate regulation are 

permitted the use of previously revalued amounts as deemed cost. The Group does not expect any impact on the financial statements arising from the 

adoption of this amendment. 

Amendments to FRS 3 clarifies that for each business combination, the acquirer shall measure at the acquisition date non-controlling interests that 

consists of the present ownership interests and entitle holders to a proportionate share of the entity’s net assets in the event of liquidation. Un-replaced 

and voluntarily replaced share-based payment transactions shall be measured using the market-based measurement method in accordance with 

FRS 2 at the acquisition date. The Group does not expect any impact on the consolidated financial statements arising from the adoption of these 

amendments. 


annual repor t 2010

92 








Amendments to FRS 7 clarifies that quantitative disclosures of risk concentrations are required if the disclosures made in other parts of the financial 

statements are not readily apparent. The disclosure on maximum exposure to credit risk is not required for financial instruments whose carrying amount 

best represents the maximum exposure to credit risk. The Group expects to improve the disclosures on maximum exposure to credit risk upon adoption 

of these amendments. 

Amendments to FRS 101 clarify that a statement of changes in equity shall be presented as part of a complete set of financial statements. The Group 

does not expect any impact on the financial statements arising from the adoption of these amendments. 

Amendments to FRS 121 The Effects of Changes in Foreign Exchange Rates clarify that the accounting treatment for cumulative foreign exchange 

differences in other comprehensive income for the disposal or partial disposal of a foreign operation shall be applied prospectively. The Group does not 

expect any impact on the financial statements arising from the adoption of these amendments. 

Amendments to FRS 128 clarify that the accounting treatment for the cessation of significant influence over an associate shall be applied prospectively. 

The Group does not expect any impact on the consolidated financial statements arising from the adoption of these amendments. 

Amendments to FRS 131 clarify that the accounting treatment for the cessation of joint control over an entity shall be applied prospectively. The Group 

does not expect any impact on the consolidated financial statements arising from the adoption of these amendments. 

Amendments to FRS 132 clarify that contingent consideration from a business combination that occurred before the effective date of the revised FRS 

3 of 1 July 2010 shall be accounted for prospectively. The Group does not expect any impact on the financial statements arising from the adoption of 

these amendments. 

Amendments to FRS 134 clarify that updated information on significant events and transactions since the end of the last annual reporting period shall 

be included in the Group’s interim financial report. Although the Group does not expect any impact on the financial statements rising from the adoption 

of these amendments, it is expected that additional disclosures would be made in the quarterly interim financial statements of the Group. 

Amendments to FRS 139 clarify that contingent consideration from a business combination that occurred before the effective date of the revised FRS 

3 of 1 July 2010 shall be accounted for prospectively. The Group does not expect any impact on the financial statements arising from the adoption of 

these amendments. 

Amendments to IC Interpretation 13 clarify that the fair value of award credits takes into account, amongst others, the amount of the discounts or 

incentives that would otherwise be offered to customers who have not earned award credits from an initial sale. The Group does not expect any impact 

on the financial statements arising from the adoption of these amendments.



(q) Amendments to IC Interpretation 14 FRS 119 – The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction are mandatory for 

annual periods beginning on or after 1 July 2011. 

These amendments clarify that if there is a minimum funding requirement for contributions relating to future service, the economic benefit available 

as a reduction in future contributions shall include any amount that reduces future minimum funding requirement contributions for future service 

because of the prepayment made. 


(r) IC Interpretation 19 Extinguishing Financial Liabilities with Equity Instruments is mandatory for annual periods beginning on or after 1 July 2011. 

This Interpretation applies to situations when equity instruments are issued to a creditor to extinguish all or part of a recognised financial liability. Such 

equity instruments shall be measured at fair value, and the difference between the carrying amount of the financial liability extinguished and the 

consideration paid shall be recognised in profit or loss. 


(s) FRS 124 Related Party Disclosures and the consequential amendments to FRS 124 are mandatory for annual periods beginning on or after 1 January 

2012. 

This revised Standard simplifies the definition of a related party and eliminates certain inconsistencies within the superseded version. In addition to this, 

transactions and balances with government-related entities are broadly exempted from the disclosure requirements of the Standard. 

The Group expects to reduce related party disclosures in respect of transactions and balances with government-related entities upon adoption of this 

Standard. 

6. SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGMENTS 

Estimates and judgments used in preparing the financial statements are continually evaluated by the Directors and are based on historical experience and other 

factors, including expectations of future events that are believed to be reasonable under the circumstances. 

6.1 Critical judgments made in applying accounting policies 



The following are judgments made by management in the process of applying the Group’s accounting policies that have a significant effect on the amounts 

recognised in the financial statements. 


annual repor t 2010

94 





6. SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGMENTS (continued) 

6.1 Critical judgments made in applying accounting policies (continued) 

(a) Classification between investment properties and property, plant and equipment 

The Group has developed certain criteria based on FRS 140 Investment Property in making judgment whether a property qualifies as an investment 

property. Investment property is a property held to earn rentals or for capital appreciation or both. 

Some properties comprise a portion that is held to earn rentals or for capital appreciation and another portion that is held for use in the production or 

supply of goods or services or for administrative purposes. If these portions could be sold separately (or leased out separately under a finance lease), 

the Group would account for the portions separately. If the portions could not be sold separately, the property is an investment property only if an 

insignificant portion is held for use in the production or supply of goods or services or for administrative purposes. Judgment is made on an individual 

property basis to determine whether ancillary services are so significant that a property does not qualify as investment property. 

(b) Non-current assets classified as held for sale 

Certain non-current assets have been classified as non-current assets held for sale as the management has committed to a plan to sell the assets as at 

the end of the reporting period. Barring any unforeseen circumstances, the Group expects that the sale of the assets to be completed within the next 

twelve (12) months. 

(c) Contingent liabilities 

The determination and treatment of contingent liabilities is based on management’s view of the expected outcome of the contingencies for matters in 

the ordinary course of business. 

6.2 Key sources of estimation uncertainty 

The following are key assumptions concerning the future and other key sources of estimation uncertainty at the end of the reporting period that have a 

significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year. 

(a) Impairment of goodwill on consolidation 

The Group tests goodwill for impairment at least annually in accordance with its accounting policy. See accounting policy Note 4.7 to the financial 

statements on impairment of goodwill. 

For the purposes of assessing impairment, goodwill is allocated to cash-generating units that are expected to benefit from the synergies of the business 

combination in which the goodwill arose. 

Significant judgment is required in the estimation of the present value of future cash flows generated by the cash-generating units, which involve 

uncertainties and are significantly affected by assumptions used and judgment made regarding estimates of future cash flows and discount rates. 

Changes in assumptions could significantly affect the results of the Group’s tests for impairment of goodwill. The key assumptions used are disclosed in 

Note 10 to the financial statements.


6.2 Key sources of estimation uncertainty (continued) 

(b) Impairment of assets 

The Group determines whether an asset is impaired by evaluating the extent to which the recoverable amount of an asset is less than its carrying 

amount. This evaluation is subject to changes such as market performance, economic and political situation of the country. 

Recoverable amount is measured at the higher of the fair value less cost to sell for that asset and its value in use. The value in use is the net present value 

of the projected future cash flows derived from that asset discounted at an appropriate discount rate. For such discounted cash flow method, it involves 

the use of estimated future results and a set of assumptions to reflect its income and cash flows. Judgment has been used to determine the discount 

rate for the cash flows and the future growth of the business. 

(c) Depreciation and amortisation of property, plant and equipment 

The cost of property, plant and equipment is depreciated on a straight line basis over the assets’ useful lives. The estimated useful lives applied by the 

Group as disclosed in Note 4.3 to the financial statements reflects the Directors’ estimate of the period that the Group expects to derive future economic 

benefits from the use of the Group’s property, plant and equipment. These common life expectancies are applied in the various business segments of 

the Group. Changes in the expected level of usage and technological developments could impact the economic useful lives and the residual values of 

these assets; therefore future depreciation charges could be revised. 

(d) Deferred tax assets 

Deferred tax assets are recognised for all unused tax losses and unabsorbed capital allowances to the extent that it is probable that taxable profit will be 

available against which the tax losses and capital allowances can be utilised. Significant management judgment is required to determine the amount of 

deferred tax assets that can be recognised, based upon the likely timing and level of future taxable profit together with future tax planning strategies. 

(e) Impairment of receivables 

The Group makes allowance for doubtful debts based on an assessment of the recoverability of receivables. Allowances are applied to receivables 

where events or changes in circumstances indicate that the carrying amounts may not be recoverable. The management specifically analyses historical 

bad debts, receivable concentration, receivable creditworthiness, current economic trends and changes in receivable payment terms when making a 

judgment to evaluate the adequacy of allowance for doubtful debts. Where expectations differ from the original estimates, the differences will impact 

the carrying value of receivables. 

(f ) Fair values of borrowings 



The fair values of borrowings are estimated by discounting future contractual cash flows at the current market interest rates available to the Group for 

similar financial instruments. It is assumed that the effective interest rates approximate the current market interest rates available to the Group based on 

its size and its business risk. 


annual repor t 2010

96 






6.2 Key sources of estimation uncertainty (continued) 

(g) Income taxes 

The Group is subject to income taxes of different jurisdictions. Significant judgment is required in determining the capital allowances and deductibility 

of certain expenses based on the interpretation of the tax laws and legislations during the estimation of the provision for income taxes. There are 

transactions and calculations for which the ultimate tax determination is uncertain during the ordinary course of business. The Group recognised 

liabilities for tax based on estimates of assessment of the tax liability due. Where the final tax outcome is different from the amounts that were initially 

recorded, such differences will impact the income tax and deferred income tax provisions, where applicable, in the period in which such determination 

is made. 

(h) Impairment of investments in subsidiaries and amounts owing by subsidiaries 

The Directors review the material investments in subsidiaries for impairment when there is an indication of impairment and assess the impairment of 

receivables on the amounts owing by subsidiaries when the receivables are long outstanding. 

The recoverable amounts of the investments in subsidiaries and amounts owing by subsidiaries are assessed by reference to the value in use of the 

respective subsidiaries. 

Value in use is the net present value of the projected future cash flows derived from the business operations of the respective subsidiaries discounted 

at an appropriate discount rate. For such discounted cash flow method, it involves the use of estimated future results and a set of assumptions to reflect 

their income and cash flows. Judgment has been used to determine the discount rate for the cash flows and the future growth of the businesses of the 

subsidiaries.

7. PROPERTY, PLANT AND EQUIPMENT 



Furniture, 

fittings and Vehicles and 

Group Freehold Freehold Leasehold Structure and office mechanical 

land buildings buildings renovation equipment equipment Total 

RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 

2010 

Carrying amount 

At 1 January 19,445 19,726 40,916 16,971 2,434 117,244 216,736 

Additions - - - 643 4,737 22,297 27,677 

Write-offs - - - - - (9,453) (9,453) 

Disposals (4,265) - - - (1) (196) (4,462) 

Depreciation charge for the financial year - (497) (1,971) (1,597) (1,564) (12,445) (18,074) 

Assets classified as held for sale (Note 20) - (146) (130) (7) (1) - (284) 

Impairment loss for the financial year - - - - - (3,096) (3,096) 

At 31 December 15,180 19,083 38,815 16,010 5,605 114,351 209,044 

At 31 December 

Cost 15,423 24,383 60,810 28,235 31,690 252,111 412,652 

Accumulated depreciation - (5,300) (21,995) (12,201) (26,077) (134,647) (200,220) 

Accumulated impairment losses (243) - - (24) (8) (3,113) (3,388) 

Carrying amount 15,180 19,083 38,815 16,010 5,605 114,351 209,044 


annual repor t 2010

98 





7. PROPERTY, PLANT AND EQUIPMENT (continued) 

Furniture, 


Group Freehold Freehold Leasehold Structure and office mechanical 



2009 


At 1 January 19,126 20,222 48,274 17,935 2,733 87,167 195,457 

Currency translation differences 562 - - - 2 117 681 

Additions - - - 626 851 43,719 45,196 

Write-offs - - - - (90) (19) (109) 

Disposals - - - - (7) (2,253) (2,260) 

Depreciation charge for the financial year - (496) (1,970) (1,590) (1,055) (10,038) (15,149) 

Impairment losses for the financial year (243) - - - - (242) (485) 

Reclassification - - - - - (1,207) (1,207) 

Disposal of subsidiaries (Note 38(b)) - - (5,388) - - - (5,388) 

At 31 December 19,445 19,726 40,916 16,971 2,434 117,244 216,736 


Cost 19,688 24,827 61,056 27,615 26,955 264,715 424,856 

Accumulated depreciation - (5,101) (20,140) (10,620) (24,513) (147,454) (207,828) 

Accumulated impairment losses (243) - - (24) (8) (17) (292) 

Carrying amount 19,445 19,726 40,916 16,971 2,434 117,244 216,736




Furniture, 


Company Freehold Freehold Leasehold Structure and office mechanical 



2010 


At 1 January 350 1,960 37,889 9,026 677 92,052 141,954 

Additions - - - 29 144 21,127 21,300 

Write-offs - - - - - (2,911) (2,911) 

Disposals - - - - (1) (161) (162) 

Depreciation charge for the financial year - (48) (1,852) (688) (330) (9,744) (12,662) 

Assets classified as held for sale (Note 20) - (146) - (4) (1) - (151) 

Impairment loss for the financial year - - - - - (3,017) (3,017) 

At 31 December 350 1,766 36,037 8,363 489 97,346 144,351 


Cost 593 1,962 57,285 12,199 21,299 205,113 298,451 

Accumulated depreciation - (196) (21,248) (3,836) (20,810) (104,750) (150,840) 

Accumulated impairment losses (243) - - - - (3,017) (3,260) 

Carrying amount 350 1,766 36,037 8,363 489 97,346 144,351 


annual repor t 2010



100 




Furniture, 


Company Freehold Freehold Leasehold Structure and office mechanical 



2009 


At 1 January 593 2,008 39,740 9,621 500 58,404 110,866 

Additions - - - 91 509 43,076 43,676 

Write-offs - - - - (49) (1) (50) 

Disposals - - - - (7) (667) (674) 

Depreciation charge for the financial year - (48) (1,851) (686) (276) (7,311) (10,172) 

Impairment loss for the financial year (243) - - - - (242) (485) 

Reclassification - - - - - (1,207) (1,207) 

At 31 December 350 1,960 37,889 9,026 677 92,052 141,954 


Cost 593 2,406 57,285 12,180 21,157 210,576 304,197 

Accumulated depreciation - (446) (19,396) (3,154) (20,480) (118,524) (162,000) 

Accumulated impairment losses (243) - - - - - (243) 

Carrying amount 350 1,960 37,889 9,026 677 92,052 141,954


(a) The net carrying value of property, plant and equipment of the Group and of the Company pledged as security for banking facilities granted to the Group (as 

disclosed in Note 23 to the financial statements) are as follows: 

Group Company 

2010 2009 2010 2009 

RM’000 RM’000 RM’000 RM’000 

Freehold land 14,830 14,830 - - 

Freehold buildings 17,318 17,766 - - 

Vehicles and mechanical equipment - 2,618 - 2,618 

32,148 35,214 - 2,618 

(b) During the financial year, the Group and the Company made the following cash payments to purchase property, plant and equipment as follows: 

Group Company 

2010 2009 2010 2009 

RM’000 RM’000 RM’000 RM’000 

Additions of property, plant and equipment 27,677 45,196 21,300 43,676 

Financed by hire-purchase and loan arrangements (15,002) (37,173) (15,002) (37,173) 

Outstanding balances included in other payables (7,925) (3,669) (4,368) (3,669) 

Cash payments on purchase of property, plant and equipment 4,750 4,354 1,930 2,834 

(c) The net carrying values of assets under hire-purchase and loan arrangements are as follows: 



Group Company 

2010 2009 2010 2009 

RM’000 RM’000 RM’000 RM’000 

Vehicles and mechanical equipment 88,320 72,878 88,320 72,878 

Details on the minimum lease payments for hire-purchase liabilities and term loan of the Group and of the Company are disclosed in Note 23 to the financial 

statements. 


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102 



8. INVESTMENT PROPERTY 

Group and Company 

2010 2009 

RM’000 RM’000 

Freehold land, at cost 

At 1 January and 31 December 

Accumulated impairment losses 

22,991 22,991 

At 1 January (2,991) (2,991) 

Charge during the financial year (5,000) - 

At 31 December (7,991) (2,991) 

Carrying amount at 31 December 15,000 20,000 

During the financial year, a valuation was carried out by an independent qualified valuer, C H Willians Talhar & Wong Sdn. Bhd. using the Comparison Method. Based 

on this valuation, the value of the freehold land was RM15,000,000 as compared to its carrying value of RM20,000,000. The deficit of RM5,000,000 was recognised 

as an impairment loss in the financial year as disclosed in Note 27 to the financial statements. 

9. PREPAID LEASE PAYMENTS FOR LAND 

Group Company 

2010 2009 2010 2009 

RM’000 RM’000 RM’000 RM’000 

Cost 

At 1 January 34,715 37,478 20,415 21,403 

Disposals - (988) - (988) 

Disposal of a subsidiary (Note 38(b)) - (1,775) - - 

Asset classifies as held for sale (Note 20) (230) - - - 

At 31 December 34,485 34,715 20,415 20,415 

Accumulated Amortisation 

At 1 January 6,840 6,639 1,443 1,378 

Amortisation charge for the financial year 647 659 197 209 

Disposals - (144) - (144) 

Disposal of a subsidiary (Note 38(b)) - (314) - - 

Asset classifies as held for sale (Note 20) (39) - - - 

At 31 December 7,448 6,840 1,640 1,443 

Carrying amount 27,037 27,875 18,775 18,972

9. PREPAID LEASE PAYMENTS FOR LAND (continued) 



Group Company 

2010 2009 2010 2009 

RM’000 RM’000 RM’000 RM’000 

Analysed as: 

Short term leasehold (unexpired period less than 50 years) 3,001 3,220 - - 

Long term leasehold (unexpired period more than 50 years) 24,036 24,655 18,775 18,972 

27,037 27,875 18,775 18,972 

As at the end of the reporting period, the title deeds for a piece of leasehold land of the Company with a net carrying value of RM18,775,000 (2009: RM18,972,000) 

are in the process of being transferred and registered in the Company’s name. 

Following the adoption of Amendment to FRS 117 Leases contained in the Improvements to FRSs (2009), the Group had reassessed the classification of land 

elements of uexpired leases on the basis of information existing at the inception of those leases. There is no impact upon adoption of this amendment to the 

Group and the Company. 

10. GOODWILL ON CONSOLIDATION 

Group 

2010 2009 

RM’000 RM’000 

At cost 

Balance as at 1 January/ 31 December 12,826 12,826 

Accumulated impairment losses 

Balance as at 1 January/31 December (943) (943) 

Carrying amount 11,883 11,883 

(a) The carrying amounts of goodwill allocated to the Group’s cash-generating units (“CGUs”) are as follows: 

Group 

2010 2009 

RM’000 RM’000 

Logistic Service Organisation 

- Automotive Division 10,907 10,907 

- Air Freight Division 976 976 

11,883 11,883 


annual repor t 2010



104 



10. GOODWILL ON CONSOLIDATION (continued) 

(b) Recoverable amount on value in use 

For the purpose of impairment testing, the recoverable amount of a CGU is determined based on value in use calculations. These calculations use pre-tax 

cash flow projections based on recent financial budgets prepared by management, which were approved by the Directors covering a five (5) years’ period 

and applying a terminal value multiple using longer-term sustainable growth rate as stated below. 

The key assumptions used in the value in use calculations are as follows: 

% 

Growth rate 3 

Pre-tax discount rate 8 

The Directors have determined the budgeted gross margins based on the current year’s rates and past performance of the businesses. The Directors have 

forecasted cash flows based on past performance and its expectations of market development. The discount rate used is pre-tax and reflects specific risks 

relating to the relevant segments. 

Based on these calculations, the Directors are of the view that no additional impairment loss is required during the current financial year as the recoverable 

amount determined is higher than the carrying amounts of the CGUs. 

(c) Sensitivity to changes in assumptions 

The management believes that a reasonably possible change in the key assumptions on which management has based its determination of the CGU’s 

recoverable amount would not cause the CGU’s carrying amount to exceed its recoverable amount. 

11. INVESTMENTS IN SUBSIDIARIES 

Company 

2010 2009 

RM’000 RM’000 

Unquoted shares, at cost 719,787 717,932 

Less: Accumulated impairment losses (298,163) (158,882) 

421,624 559,050

11. INVESTMENTS IN SUBSIDIARIES (continued) 

The details of the subsidiaries are as follows: 



Group’s Country of 

effective interest incorporation 

2010 2009 

Name of company % % Principal activities 

North Terminal Sdn. Bhd. ∞ 100 100 Malaysia Dormant 

Kaypi Logistics Depot Sdn. Bhd. 100 100 Malaysia Dormant 

Kaypi Southern Terminal Sdn. Bhd. ∞ 100 100 Malaysia Inland container depot services 

PNSL Berhad 100 100 Malaysia Chartering and ship operators 

Cougar Logistics (Malaysia) Sdn. Bhd. 100 51 Malaysia Shipping agencies, forwarding, 

warehousing and other related services 

P.T. Kay Pi Transmalindo *# 70 70 Indonesia Inland container depot and container 

haulage services 

Malaysian Shipping Agencies Sdn. Bhd. 100 100 Malaysia Shipping agency, forwarding and 

related services 

KP Asia Auto Logistics Sdn. Bhd. 100 100 Malaysia Forwarding, shipping, warehousing and 

transport agent 

KP Distribution Services Sdn. Bhd. ∞ 100 100 Malaysia Dormant 

Westport Distripark (M) Sdn. Bhd. 100 100 Malaysia All business of a distribution park 

Inter-Fleet Engineering Services (M) Sdn. Bhd. @ - 100 Malaysia Dormant and struck-off 

Tinjauan Melati Sdn. Bhd. @ - 100 Malaysia Dormant and struck-off 

Asia Vehicle Transport Sdn. Bhd. @ - 100 Malaysia Dormant and struck-off 

Direct Fortune Sdn. Bhd. @ - 100 Malaysia Dormant and struck-off 

Diperdana Kontena Sdn. Bhd. ∞ 100 100 Malaysia Logistics and related services 

Diperdana Selatan Sdn. Bhd. 100 100 Malaysia Logistics and related services 

Diperdana Utara Sdn. Bhd. ∞ 100 100 Malaysia Logistics and related services 

Diperdana Terminal Services Sdn. Bhd. ∞ 100 100 Malaysia Dormant 

Diperdana Indah Sdn. Bhd. @ - 100 Malaysia Dormant and struck-off 

Diperdana Logistics Sdn. Bhd. @ - 100 Malaysia Dormant and struck-off 

Aman Freight (M) Sdn. Bhd. 100 100 Malaysia Freight and forwarding agency 

Asia Pacific Freight System Sdn. Bhd. 100 100 Malaysia Freight and forwarding agency 

Pengangkutan Aspacs Sdn. Bhd. 100 100 Malaysia Freight and forwarding agency 


annual repor t 2010



106 



11. INVESTMENTS IN SUBSIDIARIES (continued) 



2010 2009 


Held through PNSL Berhad 

PNSL Risk Management Sdn. Bhd. 100 100 Malaysia Insurance agency 

Parcel Tankers Malaysia Sdn. Bhd. 100 100 Malaysia Dormant 

Transworld Enterprise Limited ∞ 100 100 Liberia Dormant 

PNSL Agencies Limited *^ - 100 Hong Kong Dormant and struck-off 

Held through Malaysian Shipping Agencies Sdn. Bhd. 

Konsortium Logistik (Sabah) Sdn. Bhd. 100 100 Malaysia Shipping agency, forwarding and 


Konsortium Logistik (Sarawak) Sdn. Bhd. 100 100 Malaysia Dormant 

Held through Aman Freight (M) Sdn. Bhd. 

Maya Perkasa (M) Sdn. Bhd. 100 100 Malaysia Dormant 

Aman Freight Services Sdn. Bhd. 100 100 Malaysia Dormant 

* Not audited by BDO or member firms of BDO International. 

∞ Subsidiary with auditors’ reports that emphasised on the appropriateness of going concern assumptions in the preparation of financial statements, which are 

dependent on the continuous financial support from the Company and on the subsidiary achieving future profitable operations and cash inflows to sustain 

its operations. 

@ Not consolidated as subsidiary was struck-off during the financial year. 

^ Subsidiary ceased business since 30 November 2009 (date of cessation of business) and was struck-off during the financial year and therefore not 

consolidated. 

# Subsidiary ceased business since June 2009 (date of cessation of businsess). Consolidated using management accounts as at 31 December 2010.

12. INVESTMENTS IN ASSOCIATES 

2010 2009 

RM’000 RM’000 

Group 


Share of post-acquisition (loss)/ reserves (5,438) 1,392 

18,057 24,977 

Company 


Accumulated impairment losses (11,811) (9,611) 

Certain associates had been fully impaired up to their costs of investment. 

The summarised financial information of the associates are as follows: 



11,684 13,974 

2010 2009 

RM’000 RM’000 

Results 

Revenue 43,161 72,484 

(Loss)/Profit after tax (1,130) 681 

Assets and Liabilities 

Non-current assets 55,157 57,166 

Current assets 15,898 46,245 

Current liabilities (14,236) (30,687) 

Non-current liabilities (4,809) (6,462) 

Net assets 52,010 66,262 


annual repor t 2010



108 



12. INVESTMENTS IN ASSOCIATES (continued) 

The details of the associates are as follows: 



2010 2009 


Mitsui O.S.K. Lines (Malaysia) Sdn. Bhd. - 30 Malaysia Shipping agency, forwarding and 


KP Integrated Sdn. Bhd.* 50 50 Malaysia Inland container depot, haulage and 

warehousing 

KPB Sadao ICD Co. Ltd.* 40 40 Thailand Inland container depot and haulage services 

Chong Fui Shipping & Forwarding Sdn. Bhd.* 35 35 Malaysia Shipping and shipping related services 

Investment held by KP Integrated Sdn. Bhd. 

KPI Warehouse Holdings Inc.* 45 45 Philippines Investment holding 

* Not audited by BDO or member firms of BDO International. 

The above associates’ financial statements used for equity accounting are co-terminous with those of the Group, which is 31 December, except for Chong Fui 

Shipping & Forwarding Sdn. Bhd., which is based on the latest financial statements made up to 30 September 2010. 

Group 

2010 2009 

RM’000 RM’000 

Unrecognised amounts of the Group’s share of losses of associates 

- for the financial year (675) (1,845) 

- cumulative (11,603) (10,928) 

During the financial year, the Company had completed the disposal of its entire 30% equity interest comprising 90,001 ordinary shares of RM1.00 each, in Mitsui 

O.S.K. Lines (Malaysia) Sdn. Bhd. for a total sales consideration of RM5,141,000. As a result, Mitsui O.S.K. Lines (Malaysia) Sdn. Bhd. ceased to be the Company’s 

associate.

12. INVESTMENTS IN ASSOCIATES (continued) 

The details of the associate disposed off are as follows: 

Equity Cash (Loss)/Gain on disposal 

interest consideration Group Company 

% RM’000 RM’000 RM’000 

Mitsui O.S.K.Lines (Malaysia) Sdn. Bhd 30 5,141 (337) 5,051 

13. OTHER INVESTMENTS 

Group Company 

Carrying Market value of Carrying Market value of 

amount quoted investments amount quoted investments 

2010 RM’000 RM’000 RM’000 RM’000 

Non-current 

Financial assets, available for sale 

Quoted shares in a Malaysia 12,573 12,573 12,573 12,573 

Unquoted shares in Malaysia 135 - 135 - 

Memberships in clubs,unquoted 692 - 386 - 

Total non-current other investments 13,400 12,573 13,094 12,573 

2009 



Non-current 

At Cost 

Quoted shares in a Malaysia 16,158 18,047 16,158 18,047 

Unquoted shares in Malaysia 185 - 171 - 

Memberships in clubs, unquoted 758 - 452 - 

Total non-current other investments 17,101 18,047 16,781 18,047 

(a) As at 31 December 2010, quoted shares of the Group and the Company with a carrying amount of RM Nil (2009: RM10,114,988) had been pledged to a 

financial institution for banking facilities granted to the Group and Company as disclosed in Note 23 to the financial statements. 


annual repor t 2010



110 



13. OTHER INVESTMENTS (continued) 

(b) The comparative figures have not been presented based on the new categorisation of financial assets resulting from the adoption of FRS 139 by virtue of the 

exemption given in FRS 7.44AA. 

(c) Information on the fair value hierarchy is disclosed in Note 35(e) to the financial statements. 

14. AMOUNTS OWING BY/(TO) ASSOCIATES 

Group Company 

2010 2009 2010 2009 

RM’000 RM’000 RM’000 RM’000 

Current 

Amounts owing to associates (56) - (56) - 

Non-current 

Amounts owing by an associates 46,365 46,158 46,365 46,158 

Less: Impairment loss on amount owing by an associate (46,365) (28,578) (46,365) (28,578) 

- 17,580 - 17,580 

(a) The amounts owing by associates are denominated in Ringgit Malaysia and are unsecured, interest-free and are repayable in cash and cash equivalents. The 

amounts owing by associates are not repayable within the next twelve (12) months. 

(b) Bad debts written off against impairment loss during the financial year amounted to RM Nil (2009: RM467,000) for the Group. 

15. DEFERRED TAX 

Recognised deferred tax assets and liabilities 

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when the deferred 

taxes relate to the same taxation authority.

15. DEFERRED TAX (continued) 

Recognised deferred tax assets and liabilities (continued) 

The following amounts, determined after appropriate offsetting, are shown in the balance sheet: 

Group Company 

2010 2009 2010 2009 

RM’000 RM’000 RM’000 RM’000 

Deferred tax assets 2,130 2,050 486 - 

Deferred tax liabilities (3,148) (4,637) - (2,080) 

(a) Movements in temporary differences during the financial year are as follows: 



Group Company 

2010 2009 2010 2009 

Note RM’000 RM’000 RM’000 RM’000 

Balance as at 1 January (2,587) (3,736) (2,080) (3,987) 

Credited to statements of comprehensive income: 28 

- excess of capital allowances over corresponding depreciation (10,003) 2,327 (9,717) 2,075 

- unabsorbed tax losses (944) (1,356) - - 

- provisions (12) 346 280 478 

- unabsorbed capital allowances 12,695 - 12,003 (646) 

- others (167) (168) - - 

1,569 1,149 2,566 1,907 

At 31 December (1,018) (2,587) 486 (2,080) 


annual repor t 2010



112 



15. DEFERRED TAX (continued) 

(b) The components of deferred tax assets and liabilities at the end of the financial year comprise the tax effects of : 

Group Company 

2010 2009 2010 2009 

RM’000 RM’000 RM’000 RM’000 

Deferred tax assets (before offsetting) 

Provisions 2,434 2,446 1,679 1,399 

Unabsorbed tax losses 1,007 1,951 - - 

Unabsorbed capital allowances 12,695 - 12,693 690 

16,136 4,397 14,372 2,089 

Offsetting (14,006) (2,347) (13,886) (2,089) 

Deferred tax assets (after offsetting) 2,130 2,050 486 - 

Deferred tax liabilities (before offsetting) 

Excess of capital allowances over corresponding depreciation (16,979) (6,976) (13,886) (4,169) 

Others taxable temporary differences (175) (8) - - 

(17,154) (6,984) (13,886) (4,169) 

Offsetting 14,006 2,347 13,886 2,089 

Deferred tax liabilities (after offsetting) (3,148) (4,637) - (2,080) 

(c) Unrecognised deferred tax assets 

The amount of temporary differences for which no deferred tax assets have been recognised in the statements of financial position are as follows: 

Group 

2010 2009 

RM’000 RM’000 

Deductible temporary differences 3,862 3,775 

Unabsorbed tax losses 18,479 14,187 

22,341 17,962 

Deferred tax assets of certain subsidiaries have not been recognised in respect of these items as it is not probable that taxable profit will be available against 

which the deductible temporary differences can be utilised. 

The deductible temporary differences do not expire under the current tax legislation.

16. TRADE AND OTHER RECEIVABLES 

Group Company 

2010 2009 2010 2009 

RM’000 RM’000 RM’000 RM’000 

Trade receivables 88,626 110,842 22,940 22,931 

Less: Impairment loss (14,795) (11,474) (7,172) (4,142) 

73,831 99,368 15,768 18,789 

Other receivables 16,811 36,312 15,881 35,349 

Less: Impairment loss (15,376) - (15,376) - 

1,435 36,312 505 35,349 

Sundry deposits 9,226 7,457 559 502 

Prepayments 5,800 4,726 4,461 3,636 

(a) The currency exposure profile of trade and other receivables are as follows: 



90,292 147,863 21,293 58,276 

Group Company 

2010 2009 2010 2009 

RM’000 RM’000 RM’000 RM’000 

- Ringgit Malaysia 80,687 122,030 21,278 58,276 

- US Dollar 9,580 25,441 15 - 

- Indonesian Rupiah - 344 - - 

- Others 25 48 - - 

90,292 147,863 21,293 58,276 


annual repor t 2010



114 



16. TRADE AND OTHER RECEIVABLES (continued) 

(b) The ageing analysis of trade receivables of the Group and of the Company are as follows: 

Group Company 

2010 2009 2010 2009 

RM’000 RM’000 RM’000 RM’000 

Neither pass due nor impaired 

Pass due not impaired 

60,631 78,367 14,382 12,939 

31 to 180 days 10,753 6,168 1,386 3,313 

181 to 360 days 2,055 2,807 - 479 

More than 360 days - 12,026 - 2,058 

12,808 21,001 1,386 5,850 

Pass due and impaired 15,187 11,474 7,172 4,142 

88,626 110,842 22,940 22,931 

(c) Receivables that are neither past due nor impaired 

Trade receivables that are neither past due nor impaired are creditworthy debtors with good payment records with the Group and the Company. These 

customers maintain a long working relationship with the Group and the Company have never defaulted. Trade receivables of the Group and of the Company 

of more than 68% (2009: 71%) and 63% (2009: 56%) respectively have never defaulted. 

Receivables that are past due but not impaired 

Trade receivables that are past due but not impaired relates to creditworthy debtors who have maintained a long working relationship with the Group and 

the Company. These customers are consistent revenue contributors to the Group and the Company coupled with consistent payment records and maintain 

minimal debts exceeding their credit period.


(c) Receivables that are past due and impaired 

Trade receivables of the Group and of the Company that are past due and impaired at the end of the reporting period are as follows: 

Collectively impaired Individually impaired Total 

2010 2009 2010 2009 2010 2009 

Group RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 

Trade receivables, gross 9,358 11,474 5,829 - 15,187 11,474 

Less: Impairment loss (9,358) (11,474) (5,437) - (14,795) (11,474) 

Company 

- - 392 - 392 - 

Trade receivables, gross 1,735 4,142 5,437 - 7,172 4,142 

Less: Impairment loss (1,735) (4,142) (5,437) - (7,172) (4,142) 

The reconciliation of movement in the impairment loss are as follows: 



- - - - - - 

Group Company 

2010 2009 2010 2009 

RM’000 RM’000 RM’000 RM’000 

At 1 January 11,474 9,022 4,142 3,289 

Charge for the financial year (Note 27) 3,706 3,742 2,784 1,368 

Written off (631) (1,290) - (515) 

Reversal of impairment loss 246 - 246 - 

At 31 December 14,795 11,474 7,172 4,142 

Trade receivables that are individually determined to be impaired at the end of the reporting period relate to those debtors that exhibit significant financial 

difficulties and have defaulted on payments. These receivables are not secured by any collateral or credit enhancements. 

(d) The credit terms offered by the Group and the Company in respect of trade receivables are 30 days from date of invoice (2009: 30 days). 

(e) Bad debts written off against impairment loss during the financial year amounted to RM630,992 (2009: RM1,290,000) and RM Nil (2009: RM515,000) for the 

Group and Company respectively. 


annual repor t 2010



116 




(f ) Included in other receivables of the Group and the Company is a refundable deposit of RM Nil (2009: RM16,334,719) paid to a third party for the provision of 

financial arrangement, management and procurement of hardware and software services. This deposit has been fully impaired during current financial year. 

17. AMOUNTS OWING BY/(TO) SUBSIDIARIES 

The amounts owing by/(to) subsidiaries are trade in nature and repayable upon demand in cash and cash equivalents. 

18. ADVANCES TO/(FROM) SUBSIDIARIES 

2010 

Company 

2009 

RM’000 RM’000 


Advances to subsidiaries 23,593 78,104 

Less: Impairment loss (890) (23,175) 

22,703 54,929 


Advances from subsidiaries (51,055) (508,502) 

The advances to subsidiaries are denominated in Ringgit Malaysia, unsecured, incurs interest of 5.6% p.a (2009: interest-free) and repayable upon demand in cash 

and cash equivalents. 

The advances from subsidiaries are denominated in Ringgit Malaysia, unsecured, incurs interest of 5.6% p.a (2009: interest-free) and are repayable in cash and cash 

equivalents.

19. CASH AND CASH EQUIVALENTS 

Group Company 

2010 2009 2010 2009 

RM’000 RM’000 RM’000 RM’000 

Deposits with licensed banks 8,921 8,911 1,264 1,264 

Cash and bank balances 64,530 29,997 21,852 8,858 

As reported in the statements of financial position 73,451 38,908 23,116 10,122 

Less: Deposits pledged with licensed banks (8,921) (8,811) (1,264) (1,264) 

Bank overdrafts (Note 23) - (1,052) - - 

As reported in cash flow statements 64,530 29,045 21,852 8,858 

(a) Deposits pledged with licensed banks of the Group is to secure performance guarantees on contracts entered into by the Group with third parties and 

banking facilities granted to certain subsidiaries as disclosed in Note 23 to the financial statements. 

(b) The currency exposure profile of cash and cash equivalents are as follows: 

Group Company 

2010 2009 2010 2009 

RM’000 RM’000 RM’000 RM’000 


- US Dollar 12,014 8,911 - - 

- Hong Kong Dollar - 11 - - 


73,451 38,908 23,116 10,122 

(c) The weighted average interest rate per annum of deposits that was effective as at the end of the reporting period is as follows: 

Group Company 

2010 2009 2010 2009 

% % % % 

Deposits with licensed banks 2.32 2.11 2.32 2.22 

(d) Deposits of the Group and of the Company have an average maturity period of 30 to 365 days (2009: 30 to 365 days). Bank balances are deposits held at call 

with banks. 

Information on financial risks of cash and cash equivalents are disclosed in Note 36 to the financial statements. 




annual repor t 2010



118 



20. ASSETS CLASSIFIED AS HELD FOR SALE 

Group Company 

2010 2009 2010 2009 

RM’000 RM’000 RM’000 RM’000 

Property, plant and equipment 284 - 151 - 

Prepaid lease payments for land 191 - - - 

475 - 151 - 

During the financial year, the Company and certain subsidiaries of the Group entered into Sale and Purchase Agreements to dispose off three (3) units of residential 

apartments with total carrying amount of RM475,000 to independent third parties for a total consideration of RM660,000. The disposals have yet to be completed 

as at the balance sheet date. 

21. SHARE CAPITAL 


2010 2009 

Number Number 

of shares of shares 

’000 RM’000 ’000 RM’000 

Authorised ordinary shares of RM1.00 each 

At 1 January/ 31 December 300,000 300,000 300,000 300,000 

Issued and fully paid ordinary shares of RM1.00 each 

At 1 January/31 December 240,719 240,719 240,719 240,719 

The holders of ordinary shares are entitled to receive dividends as and when declared by the Company and are entitled to one (1) vote per share at meetings of 

the Company. All ordinary shares rank pari passu with regard to the Company’s residual assets.

22. RESERVES 

Non-distributable: 

Group Company 

2010 2009 2010 2009 

RM’000 RM’000 RM’000 RM’000 

Share premium 51,923 58,396 51,923 58,396 

Exchange translation reserve 

- Arising from the translation of the financial statements of foreign operations (1,457) (10,047) - - 

- Arising from Group’s net investment in foreign operations - (192) - - 

(1,457) (10,239) - - 

Treasury shares, at cost (5,436) (8,042) (5,436) (8,042) 

Available for sale reserve 610 - 610 - 

45,640 40,115 47,097 50,354 

Distributable: 

Retained earnings (33,056) 37,330 232,790 18,611 

(a) Exchange translation reserve 

12,584 77,445 279,887 68,965 

The exchange translation reserve is used to record foreign currency exchange differences arising from the translation of the financial statements of foreign 

operations whose functional currencies are different from that of the Group’s presentation currency. It is also used to record the exchange differences arising 

from monetary items which form part of the Group’s net investment in foreign operations, where the monetary item is denominated in either the functional 

currency of the reporting entity or the foreign operation. 

(b) Treasury shares 



The shareholders of the Company, by a special resolution passed at the Extraordinary General Meeting held on 21 March 2008, authorised the Company’s 

plan to purchase its own shares. The authority granted by the shareholders was subsequently renewed during subsequent Annual General Meetings of the 

Company, including the last meeting held on 23 June 2010. The Directors of the Company are committed to enhancing the value of the Company to its 

shareholders and believe that the repurchase plan can be applied in the best interest of the Company and its shareholders. 


annual repor t 2010



120 



22. RESERVES (continued) 

(b) Treasury shares (continued) 

(i) During the financial year, the Company repurchased 2,927,600 and resold 10,000 of its own shares as follows: 

Price per share Average cost 

No. of share RM per share Total cost 

purchased Lowest Highest RM RM’000 

2010 

At beginning of financial year 

Purchased during the financial year 

7,660,529 - - 1.05 8,042 

January 575,800 1.17 1.27 1.21 699 

February 178,400 1.18 1.31 1.18 211 

March 403,900 1.21 1.49 1.43 577 

April 442,200 1.38 1.44 1.42 628 

May 727,000 1.25 1.36 1.31 955 

June 491,100 1.26 1.39 1.34 657 

August 109,200 1.40 1.42 1.40 153 

2,927,600 - - 1.33 3,880 

Resold during the financial year 

May (10,000) 1.33 1.33 1.33 (13) 

Distributed as dividend (Note 30) (5,749,658) - - 1.13 (6,473) 

At end of financial year 4,828,471 - - 1.13 5,436



(ii) In the previous financial year, the Company repurchased 9,350,600 and resold 120,000 of its own shares as follows: 



Price per share Average cost 

No. of share RM per share Total cost 

purchased Lowest Highest RM RM’000 

2009 

At beginning of financial year 

Purchased during the financial year 

14,344,300 - - 1.02 14,620 

January 529,900 0.78 0.83 0.80 426 

February 510,600 0.80 0.86 0.83 424 

March 481,500 0.70 0.86 0.77 372 

April 1,784,500 0.76 0.93 0.84 1,502 

May 1,324,900 0.90 0.94 0.91 1,214 

June 2,255,300 0.95 1.30 1.14 2,581 

July 278,400 1.11 1.65 1.22 342 

August 413,000 1.54 1.60 1.56 648 

September 184,200 1.36 1.53 1.44 265 

October 135,900 1.02 1.41 1.34 183 

November 428,800 1.19 1.29 1.22 525 

December 1,023,600 1.13 1.19 1.15 1,179 

9,350,600 - - 1.03 9,661 

Resold during the financial year 

May (10,000) 0.95 0.95 0.95 (10) 

June (38,000) 1.09 1.19 1.11 (42) 

July (72,000) 1.30 1.65 1.37 (98) 

(120,000) - - 1.25 (150) 

Distributed as dividend (Note 30) (15,914,371) - - 1.01 (16,089) 

At end of financial year 7,660,529 - - 1.05 8,042 

The repurchase transactions were financed by internally generated funds and external borrowings. The shares repurchased are being held as treasury shares 

in accordance with Section 67A of the Companies Act, 1965 and carried at historical cost of purchase. The Company has the right to reissue these shares at a 

later date. As treasury shares, the right attached as to voting, dividend and participation in other distribution are suspended. 

Of the total 240,718,829 (2009: 240,718,829) issued and fully paid ordinary shares of RM1.00 each as at 31 December 2010, 4,828,471 (2009: 7,660,529) ordinary 

shares of RM1.00 each amounting to RM5,435,816 (2009: RM8,042,000) are held as treasury shares by the Company. 


annual repor t 2010



122 





The number of outstanding ordinary shares of RM1.00 each in issue after deducting the treasury shares is 235,890,358 (2009: 233,058,300) as at 31 December 

2010. 

As at 31 December 2010, treasury shares of the Group and Company with a carrying amount of RM Nil (2009: RM7,851,405) had been pledged to a financial 

institution for banking facilities granted to the Group and Company as disclosed in Note 23 to the financial statements. 

(c) Available-for-sale reserve 

Fair value gains or losses arising on financial assets classified as available-for-sale. 

(d) Retained earnings 

Effective 1 January 2008, the Company is given the option to make an irrevocable election to move to a single tier system or to continue to use its tax credit 

under Section 108 of the Income Tax Act, 1967 for the purpose of dividend distribution until the tax credit is fully utilised or latest, by 31 December 2013. 

The Company has decided not to make this election and has sufficient tax credit under Section 108 of the Income Tax Act, 1967 and the balance in the tax 

exempt account to frank the payment of dividends out of its entire retained earnings without incurring additional tax liabilities. 

(e) Supplementary information on realised and unrealised profits or losses 

The retained earnings as at 31 December 2010 is analysed as follows: 

Group Company 

RM’000 RM’000 

Total retained profits of Konsortium Logistik Berhad and its subsidiaries : 

- Realised 262,936 232,304 

- Unrealised (1,323) 486 

261,613 232,790 

Total share of accumulated losses from associates: 

- Realised (5,438) - 

- Unrealised - - 

256,175 232,790 

Less : Consolidation adjustments (289,231) - 

Total Group/Company (accumulated losses)/retained profits as at 31 December 2010 (33,056) 232,790



23. BORROWINGS 

Group Company 

2010 2009 2010 2009 

RM’000 RM’000 RM’000 RM’000 

Current 

Secured 

Term loans 7,595 18,507 7,595 16,647 

Revolving credits 22,000 17,000 10,000 10,000 

Hire-purchase liabilities 9,132 9,176 9,132 9,176 

38,727 44,683 26,727 35,823 

Unsecured 

Term loans - 600 - - 


Bank overdraft (Note 19) - 1,052 - - 

5,000 14,152 5,000 5,000 

Total current portion 43,727 58,835 31,727 40,823 

Non-current 

Secured 

Term loans 18,836 19,791 18,836 17,951 


36,003 41,083 36,003 39,243 

Unsecured 


Total non-current portion 36,003 41,233 36,003 39,243 

Total borrowings 79,730 100,068 67,730 80,066 

Secured 

Term loans 26,431 38,298 26,431 34,598 



74,730 85,766 62,730 75,066 

Unsecured 



Bank overdraft (Note 19) - 1,052 - - 

5,000 14,302 5,000 5,000 

Total borrowings 79,730 100,068 67,730 80,066 


annual repor t 2010



124 



23. BORROWINGS (continued) 

23.1 Term loans 

Term loans of the Group are secured by way of: 

(i) fixed charges over certain property, plant and equipment of the Group and of the Company as disclosed in Note 7 to the financial statements; and 

(ii) deposits pledged with licensed banks as disclosed in Note 19 to the financial statements. 

The term loans of the Group and of the Company incur interest at 5.7% to 7.00% (2009: 5.30% to 9.04 %) per annum. 

The term loans are repayable by instalments of varying amounts over the following periods: 

Group Company 

2010 2009 2010 2009 

RM’000 RM’000 RM’000 RM’000 

Not later than 1 year 7,595 19,107 7,595 16,647 

1 - 2 years 7,596 7,471 7,596 5,481 

2 - 3 years 7,596 5,481 7,596 5,481 

3 - 4 years 3,297 5,481 3,297 5,481 

4 - 5 years 347 1,508 347 1,508 

Significant covenant for the secured term loans of RM26,431,000 (2009: RM23,433,000) of the Company is as follows: 

- Leverage ratio of the Company shall not exceed 2:1 throughout the tenure of the loans. 

Information on financial risks and their remaining maturity of term loans are disclosed in Note 36 to the financial statements. 

23.2 Revolving Credits 

Revolving credits of the Group and of the Company are secured by way of: 

26,431 39,048 26,431 34,598 

(i) fixed charges over certain property, plant and equipment of the Group and of the Company as disclosed in Note 7 to the financial statements; and 

(ii) deposits pledged with licensed banks as disclosed in Note 19 to the financial statements. 

The revolving credits of the Group and of the Company incur interest at the range of 5.20% to 6.40% (2009: 3.97% to 7.32%) per annum. 

Information on financial risks of revolving credits are disclosed in Note 36 to the financial statements.

23. BORROWINGS (continued) 

23.3 Hire Purchase Liabilities 

Hire purchase liabilities are effectively secured and the right to the leased assets revert to the lessor in the event of default. The minimum lease payments for 

hire-purchase liabilities of the Group and of the Company at the end of the reporting period are as follows: 

Group Company 

2010 2009 2010 2009 

RM’000 RM’000 RM’000 RM’000 

Not later than one (1) year 10,548 11,045 10,548 11,045 

Later than 1 year and not later than five (5) years 18,705 23,580 18,705 23,580 

29,253 34,625 29,253 34,625 

Future finance charges (2,954) (4,157) (2,954) (4,157) 

Present value of hire-purchase liabilities 26,299 30,468 26,299 30,468 

Current 9,132 9,176 9,132 9,176 

Non-current 17,167 21,292 17,167 21,292 

Hire purchase liabilities bear fixed interest rates ranging from 6.69% (2009: 7.27%) per annum. 

Information on financial risks of hire purchase liabilities are disclosed in Note 36 to the financial statements. 

23.4 Bank Overdraft 

26,299 30,468 26,299 30,468 

In prior year, bank overdraft of the Group was secured by a corporate guarantee from a minority shareholder of a subsidiary, Cougar Logistics (Malaysia) Sdn. 

Bhd. The bank overdraft incurred interest at 7.1% per annum. 

24. PROVISION FOR RETIREMENT BENEFITS 



The Group and the Company operate an unfunded defined benefit plan for its unionised employees in Malaysia under the terms and conditions of a Collective 

Agreement. During the financial year, an actuarial valuation of the plan was carried out and the latest actuarial valuation of the plan was dated 21 March 2011. 


annual repor t 2010



126 



24. PROVISION FOR RETIREMENT BENEFITS (continued) 

The amounts recognised in the statements of financial position are determined as follows: 

Group Company 

2010 2009 2010 2009 

RM’000 RM’000 RM’000 RM’000 

Present value of unfunded obligations 2,079 1,970 1,813 1,571 

Unrecognised actuarial losses (223) (55) (272) - 

Liability in the balance sheet 1,856 1,915 1,541 1,571 

The total expenses recognised in the statements of comprehensive income may be analysed as follows: 

Group Company 

2010 2009 2010 2009 

Note RM’000 RM’000 RM’000 RM’000 

Current service cost 118 168 119 145 

Interest cost 13 6 - - 

Expenses recognised in statements of comprehensive income 27 131 174 119 145 

The movement during the financial year in the amount recognised in the statements of financial position in respect of the defined benefit plans are as follows: 

Group Company 

2010 2009 2010 2009 

RM’000 RM’000 RM’000 RM’000 

Balance as at 1 January 1,915 1,954 1,571 1,511 

Amounts recognised in the statements of comprehensive income 131 174 119 145 

Payments made during the year (190) (213) (149) (85) 

Balance as at 31 December 1,856 1,915 1,541 1,571 

The principal actuarial assumptions used in respect of the Group’s and the Company’s defined benefit plans were as follows: 

2010 2009 

% % 

Discount rate 5.6 7.0 

Expected rate of salary increases 3.0 5.0

25. TRADE AND OTHER PAYABLES 

Group Company 

2010 2009 2010 2009 

RM’000 RM’000 RM’000 RM’000 

Trade payables 

Third parties 51,060 68,008 9,412 7,450 

Other payables 

Other payables 31,161 22,863 7,867 4,833 

Accruals 13,948 14,168 9,163 8,736 

45,109 37,031 17,030 13,569 

(a) The currency exposure profile of payables is as follows: 

96,169 105,039 26,442 21,019 

Group Company 

2010 2009 2010 2009 

RM’000 RM’000 RM’000 RM’000 


- US Dollar 12,991 14,099 - - 


- Hong Kong Dollar - 13 - - 

- Singapore Dollar 441 5 381 - 

- Others 733 98 - - 

96,169 105,039 26,442 21,019 

(b) The credit terms offered to the Group and the Company in respect of trade payables are 30 days from date of invoice (2009: 30 days). 

26. REVENUE 



Group Company 

2010 2009 2010 2009 

RM’000 RM’000 RM’000 RM’000 

Provision of total logistics services and inventory solutions 172,006 129,946 1,968 685 

Provisions of transport and storage services 122,404 109,189 107,196 93,209 

294,410 239,135 109,164 93,894 


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128 



27. (LOSS)/PROFIT BEFORE TAX 

Group Company 

2010 2009 2010 2009 

Note RM’000 RM’000 RM’000 RM’000 

(Loss)/Profit before tax is arrived at after charging: 

Auditors’ remuneration 

- statutory audit 319 303 130 125 

- under-provision in prior year 

Bad debts written off 

16 - 5 - 

- trade receivables 381 - - - 

- subsidiary - - 9,410 - 

Provision for retirement benefits 24 131 174 119 145 

Employee benefits 27(a) 43,002 41,256 27,259 24,274 

Contract wages 

Property, plant and equipment 

10,156 1,608 42 107 

- depreciation 7 18,074 15,149 12,662 10,172 

- write-offs 7 9,453 109 2,911 50 

- impairment loss 

Impairment loss on: 

7 3,096 485 3,017 485 

- trade receivables 3,706 3,742 2,784 1,368 

- other receivable 15,376 - 15,376 - 

- subsidiaries - - 1,842 - 

- amount owing by an associate 17,787 - 17,787 - 

Loss on disposal of property, plant and equipment 

Loss on foreign exchange 

37 314 21 929 

- realised 157 55 5 25 

- unrealised 83 - - - 

Management fee payable to a subsidiary 

Prepaid lease payments for land: 

- - 496 496 

- amortisation 647 659 197 209 

Professional and consultation fees 1,806 1,956 1,379 1,653



27. (LOSS)/PROFIT BEFORE TAX (continued) 

Group Company 

2010 2009 2010 2009 

Note RM’000 RM’000 RM’000 RM’000 

(Loss)/Profit before tax is arrived at after charging: (continued) 

Rental of land and buildings 

- subsidiaries - - 84 69 

- others 4,136 4,134 169 189 

Rental of equipment 

- subsidiaries - - 2,539 2,233 

- others 3,326 4,316 1,577 950 

Repair and maintenance of vehicles and mechanical equipment 9,274 7,760 7,869 6,063 

Vehicle operations comprising diesel, tyres, tubes and toll charges 26,917 26,279 26,470 25,523 

Impairment loss on investments in subsidiaries 11 - - 145,339 5,100 

Impairment loss on investments in associates 12 - 109 2,200 109 

Impairment loss on investment property 8 5,000 - 5,000 - 

Other investment written off 79 - 66 - 

Loss on disposal of an associate 337 - (5,051) - 

Loss on disposal of property by a subsidiary 

Interest expense 

6,495 - - - 

- term loans 1,669 2,099 1,265 1,483 

- overdrafts 45 61 4 10 

- hire-purchase 3,111 2,597 3,111 2,597 

- revolving credits 1,368 1,203 860 638 

- bankers’ acceptance 256 255 256 255 

- subsidiaries - - 2,782 - 

- others 30 487 11 71 

And crediting: 

Gain on disposal of property, plant and equipment (122) (732) (98) (551) 

Gain on foreign exchange 

- unrealised - (144) - - 

Interest income 

- subsidiaries - - (168) (62) 

- others (383) (212) (125) - 

Rental income 

- subsidiaries - - (4,512) (4,518) 

- premises (1,211) (1,374) (467) (1,517) 

Rental income on vehicle and equipment receivable from subsidiaries - - (345) (359) 


annual repor t 2010



130 




Group Company 

2010 2009 2010 2009 

Note RM’000 RM’000 RM’000 RM’000 

And crediting: (continued) 

Gross dividend received from 

- quoted shares (405) (259) (405) (259) 

- associates - - (350) (522) 

- subsidiaries * - - (457,180) (7,200) 

Gain on disposal of prepaid lease payment for land - (140) - (140) 

Gain on disposal of subsidiaries - (935) - (935) 

Management fees receivable from subsidiaries - - 804 804 

Excess of interest in the fair value of the identifiable assets, liabilities and 

contingent liabilities over cost arising from additional interest acquired in a subsidiary 37 (2,749) - - - 

Gain on disposal of other investments (583) (72) (574) (72) 

Waiver of debt due to subsidiaries 

Bad debt recovered 

- - (9,480) (5,098) 

- trade (110) - (84) - 

- subsidiary - - (4) - 

* The subsidiaries of the company had declared a total dividend of RM457,180,000 to the company. Part of the total dividend declared amounting to RM453.722,000 

was offset against the amounts owing to the subsidiaries by the company. 

(a) Employee benefits, including remuneration of Executive Directors, are as follows: 

Group Company 

2010 2009 2010 2009 

Note RM’000 RM’000 RM’000 RM’000 

Wages, salaries and bonus 36,025 34,812 23,041 20,340 

Defined contribution plan 4,274 4,003 2,677 2,508 

Defined benefit retirement plan 24 131 174 119 145 

Other employees benefits 2,572 2,267 1,422 1,281 

43,002 41,256 27,259 24,274


(b) Directors’ remuneration 

28. TAXATION 



The aggregate amount of emoluments received/receivable by the Directors of the Company during the financial year was as follows: 

Group Company 

2010 2009 2010 2009 

RM’000 RM’000 RM’000 RM’000 

Non-executive Directors 

- fees 

Executive Directors 

328 316 328 316 

- salaries and other emoluments 1,783 1,858 1,285 1,352 

- defined contribution plan 257 274 189 198 

- estimated monetary value of benefits-in-kind 64 125 52 111 

- fees 30 60 - - 

2,462 2,633 1,854 1,977 

Group Company 

2010 2009 2010 2009 

Note RM’000 RM’000 RM’000 RM’000 

Current tax expense based on results for the financial year 

- Malaysian income tax 9,349 10,107 2,165 117 

- Under/(Over) provision of tax expense in prior years 516 (377) 809 103 

9,865 9,730 2,974 220 

Deferred tax 15 

- Current year (2,768) (3,479) (2,295) (3,947) 

- Under/(Over)-provision of tax in prior years 1,199 2,330 (271) 2,040 

(1,569) (1,149) (2,566) (1,907) 

8,296 8,581 408 (1,687) 


annual repor t 2010



132 



28. TAXATION (continued) 

The numerical reconciliation between the average effective tax rate and the applicable tax rate of the Group and of the Company are as follows: 

Group Company 

2010 2009 2010 2009 

% % % % 

Applicable tax rate 25.0 25.0 25.0 25.0 

Tax effects of: 

- expenses not deductible for tax purposes (71.3) 0.2 (26.7) 426.2 

- tax exempt income 16.2 (5.9) 1.7 - 

- non-taxable income - - - (646.0) 

- deferred tax assets not recognised (6.0) 1.5 - - 

- utilisation of deferred tax assets previously not recognised - - - (656.3) 

(Over)/Under-provision in prior years 

- current tax (2.8) (1.2) 0.3 22.9 

- deferred tax (6.6) 7.3 (0.1) 453.3 

Average effective tax rate (45.5) 26.9 0.2 (374.9) 

Malaysian income tax is calculated at the statutory tax rate of 25% (2009: 25%) of the estimated assessable profit for the year. Deferred tax is calculated on temporary 

differences between the tax base of assets and liabilities and their carrying amounts in the financial statements. 

Tax expense for other taxation authorities are calculated at the rates prevailing in those respective jurisdictions. 

In the current and previous financial year, there are no tax savings for the Group and Company arising from the recognition of previously unrecognised unused tax 

losses or utilisation of current year’s tax losses. 

29. (LOSS)/EARNINGS PER ORDINARY SHARE 

Basic (loss)/earnings per ordinary share 

Basic (loss)/earnings per ordinary share of the Group is calculated by dividing the loss/profit attributable to equity holders of the parent for the financial year by 

the weighted average number of ordinary shares in issue during the financial year, excluding ordinary shares purchased by the Company and held as treasury 

shares (Note 22(b)).

29. (LOSS)/EARNINGS PER ORDINARY SHARE (continued) 

Basic (loss)/earnings per ordinary share (continued) 

Group 

2010 2009 

(Loss)/Profit attributable to equity holders of the parent (RM’000) (26,364) 24,979 

Weighted average number of ordinary shares in issue (’000) 236,693 229,234 

Basic (loss)/earnings per ordinary share (sen) (11.14) 10.90 

Diluted earnings per ordinary share 

Diluted earnings per ordinary share is not applicable and not presented because there are no dilutive potential ordinary shares to be issued. 

30. DIVIDEND 

Dividend declared or paid in respect of ordinary shares for the financial year are as follows: 




2010 2009 

RM’000 RM’000 

Interim gross dividend of one (1) treasury share for every twenty five (25) existing 

ordinary shares of RM1 each in respect of financial year 2008, distributed on 31 March 2009 - 9,156 

Final gross dividend of 4.00 sen per ordinary share, less tax at 25% 

(3.00 sen net per ordinary share) in respect of financial year 2008, paid on 10 September 2009 - 6,855 

Interim gross dividend of one (1) treasury share for every thirty three (33) existing 

ordinary shares of RM1 each in respect of financial year 2009, distributed on 8 October 2009 - 6,933 

Final gross dividend of 8.00 sen per ordinary share, less tax at 25%, 

(6.00 sen net per ordinary share) in respect of financial year 2009, paid on 9 September 2010 13,815 - 

Interim gross dividend of one (1) treasury share for every forty (40) existing ordinary share of 

RM1 each in respect of financial year 2010, distributed on 30 September 2010 6,473 - 

2 nd interim gross dividend of 17.00 sen per per ordinary share, less tax of 25% 

(12.75 sen net per ordinary share) in respect of financial year 2010, to be paid on 24 January 2011 30,076 - 

50,364 22,944 


annual repor t 2010



134 



31. NON-CANCELLABLE OPERATING LEASE COMMITMENTS 

The Group as lessee 

The Group as lessee has entered into non-cancellable lease agreements for a piece of land for 16 years and renewable at the end of the lease period subject to an 

increase clause. 

The Group has aggregate future minimum lease commitments as at the end of the reporting period as follows: 

Group 

2010 2009 

RM’000 RM’000 

Future minimum lease payments: 

Not later than one (1) year 1,277 1,277 

Later than one (1) year and not later than two (2) years 1,277 1,277 

Between two (2) to five (5) years 3,832 3,832 

Later than five (5) years 11,072 12,349 

32. CONTINGENT LIABILITIES 

17,458 18,735 

The Company had guaranteed the bank credit facilities of certain subsidiaries of RM26,398,000 (2009: RM21,898,000) of which the outstanding balance is 

RM15,201,000 (RM2009: RM16,465,000). 

33. RELATED PARTY DISCLOSURES 

(a) Identities of related parties 

For the purpose of these financial statements, parties are considered to be related to the Group if the Group has the ability, directly or indirectly, to control the 

party or exercise significant influence over the party in making financial and operating decisions, or vice versa, or where the Group and the party are subject 

to common control or common significant influence. Related parties may be individuals or other entities.

33. RELATED PARTY DISCLOSURES (continued) 

(a) Identities of related parties (continued) 

Related parties of the Group include: 

(i) direct and indirect subsidiaries as disclosed in Note 11 to the financial statements; 

(ii) associates as disclosed in Note 12 to the financial statements; 



(iii) Pelikan International Corporation Berhad (“Pelikan”), a company in which a former Director, Loo Hooi Keat, has substantial interests; and 

(iv) key management personnel which comprises persons (including the Directors of the Company) having authority and responsibility for planning, 

directing and controlling the activities of the Group directly or indirectly. 

(b) In addition to transactions detailed elsewhere in the financial statements, the Group and the Company had the following transactions with related parties 

during the financial year: 

Group 

2010 2009 

RM’000 RM’000 

Pelikan: 

- Logistic services rendered 513 429 

- Rental income on building 664 844 

- Purchase of stationery and printing services (873) (739) 

2010 

Company 

2009 

RM’000 RM’000 

Logistic services rendered 

- Aman Freight (M) Sdn. Bhd. (2,487) (2,158) 

- KP Asia Auto Logistics Sdn. Bhd. (5,483) (4,511) 

- Others - (318) 

Rental income on land and buildings receivable from: 

- Westport Distripark (M) Sdn. Bhd. (4,512) (4,511) 

- Cougar Logistics (Malaysia) Sdn. Bhd. - (7) 

Rental income on vehicle and equipment receivable from: 

- KP Asia Auto Logistics Sdn. Bhd. (55) (104) 

- PNSL Berhad - (1) 

- Diperdana Utara Sdn. Bhd. (263) (254) 

- Westport Distripark (M) Sdn. Bhd. (1) - 

- Diperdana Kontena Sdn. Bhd. (26) - 


annual repor t 2010



136 





during the financial year: (continued) 

2010 

Company 

2009 

RM’000 RM’000 

Management fee receivable from: 

- KP Asia Auto Logistics Sdn. Bhd. (264) (264) 

- PNSL Berhad (540) (540) 

Dividend income received from: 

- KP Asia Auto Logistics Sdn. Bhd. (3,333) (2,200) 

- PNSL Berhad (433,949) (5,000) 

- Malaysian Shipping Agencies Sdn. Bhd. (4,309) - 

- Asia Pasific Freight System Sdn. Bhd. (3,514) - 

- Aman Freight (M) Sdn. Bhd. (11,193) - 

- Diperdana Terminal Services Sdn. Bhd. (613) - 

- Westport Distripark (M) Sdn. Bhd. (269) - 

Management fee payable to: 

- PNSL Risk Management Sdn. Bhd. 496 496 

Rental on land and buildings payable to: 

- KP Asia Auto Logistics Sdn. Bhd. 84 69 

Rental on vehicle and equipment payable to: 

- Diperdana Kontena Sdn. Bhd. 2,326 2,003 

- Diperdana Selatan Sdn. Bhd. 2 12 

- Diperdana Utara Sdn. Bhd. 14 20 

- Kaypi Southern Terminal Sdn. Bhd. 197 198 

Transaction with a Director: 

- Consultancy fees paid 80 60 

Interest expenses payable to: 

- PNSL Berhad 2,782 -



during the financial year: (continued) 

The related party transactions described above were carried out based on negotiated terms and conditions and mutually agreed with the respective related 

parties. 

Information regarding outstanding balances arising from related party transactions as at 31 December 2010 are disclosed in Notes 17 and 18 to the financial 

statements. 

(c) Compensation of key management personnel 

The remuneration of key management personnel during the financial year was as follows: 

Group Company 

2010 2009 2010 2009 

Directors of the Company RM’000 RM’000 RM’000 RM’000 

Short term employee benefits 1,980 2,234 1,373 1,668 

Contributions to defined contribution plans 294 274 205 198 

Estimated monetary value of benefits-in-kind 124 125 85 111 

34. OPERATING SEGMENTS 

2,398 2,633 1,663 1,977 

Management has determined the operating segments based on the reports reviewed by the Executive Committee (“Exco”) that are used to make strategic 

decisions. The Exco comprises certain Directors, Chief Executive Officer, Chief Financial Officer, and representatives from penultimate holding company. 

The Group has arrived at three (3) reportable segments that are organised and managed separately according to the nature of products and services and specific 

expertise which requires different business and marketing strategies. Segment analysis by geographical location is not presented, as the Group’s operations are 

located mainly in Malaysia. The reportable segments are summarised as follows: 

(i) Logistics Service Organisation (“LSO”) 

- Provides total logistics services and inventory solutions 

(ii) Internal and External Affiliate Organisation (“IAO/EAO”) 

- Provides transport, storage and value added services to LSO 



(iii) Shared Services Organisation (“SSO”) 

- Provides common support to both LSO and IAO/EAO which mainly includes finance, human resource and administration, business process and information 

technology, insurance, corporate communications and internal audit 


annual repor t 2010



138 



34. OPERATING SEGMENTS (continued) 

The accounting policies of operating segments are the same as those described in the summary of significant accounting policies. 

The Group evaluates performance on the basis of profit or loss from operations before tax not including non-recurring losses, such as restructuring costs. 

Inter-segment revenue is priced on a negotiated basis along the same lines as sales to external customers and is eliminated in the consolidated financial statements. 

These policies have been applied consistently throughout the current and previous financial years. 

The following table provides an analysis of the Group’s revenue, results, assets, liabilities and other information by operating segments: 

LSO IAO/EAO SSO Group 

2010 RM’000 RM’000 RM’000 RM’000 

Revenue from external customers 172,006 122,404 - 294,410 

Inter-segment revenue - 12,276 - 12,276 

Total revenue 172,006 134,680 - 306,686 

Segment results 37,803 (850) (47,981) (11,028) 

Interest income 136 77 170 383 

Finance costs (510) (3,405) (2,564) (6,479) 

Share of results of associates - (1,092) - (1,092) 

Loss before tax (18,216) 

Tax expense (8,296) 

Loss for the financial year (26,512) 

Assets 

Segment assets 91,762 311,933 42,709 446,404 

Investment in associates - 18,057 - 18,057 

Total assets 464,461 

Liabilities 

Segment liabilities 51,396 97,546 62,216 211,158


The following table provides an analysis of the Group’s revenue, results, assets, liabilities and other information by operating segments: (continued) 


2010 RM’000 RM’000 RM’000 RM’000 

Other segment information: 

- Capital expenditure (5,280) (22,365) (32) (27,677) 

- Depreciation of property, plant and equipment (1,855) (14,082) (2,137) (18,074) 

- Amortisation of prepaid lease payments for land - (647) - (647) 

- Excess of interest in the fair value of the identifiable assets, liabilities and contingent 

liabilities over cost arising from additional interest acquired in a subsidiary - - 2,749 2,749 

- Impairment loss on investment property - - (5,000) (5,000) 

- Impairment loss on property, plant and equipment (3,017) (79) - (3,096) 

- Impairment loss on amount owing from an associate - - (17,787) (17,787) 

- Impairment loss on trade and other receivables - (3,706) (15,376) (19,082) 

- Loss on disposal of property by a subsidiary - - (6,495) (6,495) 

- Loss on disposal of an associate - - (337) (337) 

- Net gain on disposal of property, plant and equipment - 85 - 85 

- Gain on disposal of other investments - - 583 583 

- Written off of property, plant and equipment - (9,090) (363) (9,453) 

2009 



Revenue from external customers 129,946 109,189 - 239,135 

Inter-segment revenue - 7,055 - 7,055 

Total revenue 129,946 116,244 - 246,190 

Segment results 38,040 4,268 (4,183) 38,125 

Interest income 110 41 61 212 

Finance costs (891) (2,951) (2,860) (6,702) 

Share of results of associates - 220 - 220 

Profit before tax 31,855 

Tax expense (8,581) 

Profit for the financial year 23,274 

Assets 

Segment assets 87,772 300,896 98,029 486,697 

Investment in associates - 24,977 - 24,977 

Amount owing by associates - 17,580 - 17,580 

529,254 


annual repor t 2010



140 




The following table provides an analysis of the Group’s revenue, results, assets, liabilities and other information by operating segments: (continued) 


2009 RM’000 RM’000 RM’000 RM’000 

Liabilities 

Segment liabilities 79,065 108,079 27,499 214,643 

Other segment information: 

- Capital expenditure (1,072) (44,014) (110) (45,196) 

- Depreciation of property, plant and equipment (1,627) (11,163) (2,359) (15,149) 

- Amortisation of prepaid lease payments for land - - (659) (659) 

- Gain on disposal of subsidiaries - - 935 935 

- Impairment losses on receivables (1,323) (2,419) - (3,742) 

- Gain on disposal of other investments - - 72 72 

- Gain on disposal of prepaid lease payment for land - 140 - 140 

Reconciliation of reportable segment revenue to the Group’s corresponding amounts are as follows: 

2010 2009 

Revenue RM’000 RM’000 

Total revenue for reportable segments 306,686 246,190 

Elimination of inter-segmental revenue (12,276) (7,055) 

Group’s revenue per consolidated statement of comprehensive income 294,410 239,135 

35. FINANCIAL INSTRUMENTS 

(a) Capital management 

The primary objective of the Group’s capital management is to ensure that entities of the Group would be able to continue as going concerns while 

maximising the return to shareholders through the optimisation of the debt and equity balance. The overall strategy of the Group remains unchanged from 

financial year ended 31 December 2009. 

The Group manages its capital structure and makes adjustments to it, in light of changes in economic conditions. To maintain or adjust the capital structure, 

the Group may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. No changes were made to the objectives, 

policies or processes of the Group and the Company during the financial years ended 31 December 2010 and 31 December 2009.

35. FINANCIAL INSTRUMENTS (continued) 

(a) Capital management (continued) 

During the financial year 2010, the Group’s strategy unchanged from financial year 2009, which is to maintain the debt-to-equity ratio at the lower end range 

within 0.2:1 to 0.7:1. The debt-to-equity ratios at 31 December 2010 and at 31 December 2009 are as follows: 

Group 

2010 2009 

RM’000 RM’000 

Total borrowings (Note 23) 79,730 100,068 

Less: Cash and cash equivalents (Note 19) (73,451) (38,908) 

Net debt 6,279 61,160 

Total equity 253,303 314,611 

Debt-to-equity ratio 0.02 0.19 

The Group is also required to maintain a maximum debt-to-equity ratio of 2:1 to comply with a bank loan covenant, failing which, the bank may call an event 

of default. 

(b) Financial Instruments 

Certain comparative figures have not been presented for 31 December 2009 by virtue of the exemption given in paragraph 44AA of FRS 7. 

(i) Categories of financial instruments 



Loans and Available 

Group receivables for sale Total 

2010 RM’000 RM’000 RM’000 

Financial assets 

Other investments - 13,400 13,400 

Trade and other receivables 90,292 - 90,292 

Cash and cash equivalents 73,451 - 73,451 

163,743 13,400 177,143 


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142 




(b) Financial Instruments (continued) 

(i) Categories of financial instruments (continued) 

Other 

financial 

Group liabilities Total 

2010 RM’000 RM’000 

Financial liabilities 

Borrowings 79,730 79,730 

Trade and other payables 96,169 96,169 

175,899 175,899 

Loans and Available 

Company receivables for sale Total 

2010 RM’000 RM’000 RM’000 

Financial assets 

Other investments - 13,094 13,094 

Trade and other receivables 21,293 - 21,293 


44,409 13,094 57,503 

Other 

financial 

liabilities Total 

RM’000 RM’000 

Financial liabilities 

Borrowings 67,730 67,730 

Trade and other payables 26,442 26,442 

94,172 94,172


(c) Fair value of financial instruments 



The fair values of financial instruments that are not carried at fair value and whose carrying amounts do not approximate their fair values are as follows: 

2010 2009 

Carrying Fair Carrying Fair 

amount Value amount Value 

At 31 December Note RM’000 RM’000 RM’000 RM’000 

Group 

Recognised 

Other investments 13 

- unquoted shares 135 135 185 185 

- club membership 692 692 758 758 

Amounts owing by/(to) associates 14 (56) (56) 17,580 * 

Fixed rate term loans 23 (26,431) (25,987) (27,883) (27,443) 

Hire-purchase liabilities 23 (26,299) (24,941) (30,468) (28,738) 

2010 2009 

Carrying Fair Carrying Fair 

amount Value amount Value 

At 31 December Note RM’000 RM’000 RM’000 RM’000 

Company 

Recognised 

Other investments 13 

- unquoted shares 135 135 171 171 

- club membership 386 386 452 452 

Amounts owing by/(to) associates 14 (56) (56) 17,580 * 

Advances from subsidiaries 18 (51,055) (51,055) (508,502) * 

Fixed rate term loans 23 (26,431) (25,987) (23,433) (23,018) 

Hire-purchase liabilities 23 (26,299) (24,941) (30,468) (28,738) 

The Company provides guarantees to banks for credit facilities extended to a certain subsidiaries. The fair value of such financial guarantees is negligible as 

the probability of the subsidiaries defaulting on the credit lines is remote. 

*In respect of amounts owing by associates and advances from subsidiaries in the previous financial year which were accounted for as long term financial 

assets and financial liabilities respectively, it was not practicable to estimate the fair values of these amounts receivable/ payable as they were receivable/ 

repayable after twelve (12) months but without fixed terms of repayment. The Directors do not anticipate that the carrying amounts at the end of the 

reporting period to be significantly different from the values that would eventually be settled/recovered. 


annual repor t 2010



144 




(d) Determination of fair value 

Methods and assumptions used to estimate fair value 

I. Financial instruments that are not carried at fair value and whose carrying amounts are a reasonable approximation of fair value 

The carrying amounts of financial assets and liabilities, such as trade and other receivables, trade and other payables and short-term borrowings are 

reasonable approximation of fair value, either due to their short-term nature or that they are floating rate instruments that are re-priced to market 

interest rates on or near the end of the reporting period. 

The carrying amounts of the current portion of loans and borrowings are reasonable approximations of fair values due to the insignificant impact of 

discounting. 

The fair value of these borrowings has been determined using discounted cash flows technique. The discount rates used are based on the current 

market information and rates applicable to financial instruments with similar yield, credit quality and maturity characteristics. 

II. Quoted shares 

The fair value of quoted investments in Malaysia is determined by reference to the exchange quoted market bid prices at the close of the business on 

the end of the reporting period. 

III. Unquoted shares and club memberships 

It was not practicable to estimate the fair value of the Group’s investment in uquoted shares due to the lack of comparable quoted market prices and 

the inability to estimate fair value without incurring excessive costs. 

IV. Advances from subsidiaries and amounts owing by/(to) associates, finance lease obligations and fixed rate term loans 

The fair value of these financial instruments are estimated by discounting expected future cash flows at market incremental lending rate for similar types 

of lending, borrowing or leasing arrangements at the end of the reporting period.


(e) Fair value hierarchy 

The following table provides an analysis of financial instruments that are measured subsequent to initial recognition at fair value, grouped into Levels 1 to 3 

based on the degree to which the fair value is observable. 

Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical assets or liabilities. 

Level 2 fair value measurements are those derived from inputs other than quoted prices included within Level 1 that are observable for the asset or liability, 

either directly (i.e. as prices) or indirectly (i.e. derived from prices). 

Level 3 fair value measurements are those derived from inputs for the asset or liability that are not based on observable market data (unobservable inputs). 

As at 31 December 2010, the Group and the Company held the following financial instruments carried at fair value on the statement of financial position: 

Assets measured at fair value 



31 December 2010 Level 1 Level 2 Level 3 

Group RM’000 RM’000 RM’000 RM’000 

Available-for-sale financial assets 

- Quoted shares 12,573 12,573 - - 

- Unquoted shares and club memberships 827 - - 827 

During the reporting period ending 31 December 2010, there were no transfers between Level 1 and Level 3 fair value measurement. 

31 December 2010 Level 1 Level 2 Level 3 

Company RM’000 RM’000 RM’000 RM’000 

Available-for-sale financial assets 

- Quoted shares 12,573 12,573 - - 

- Unquoted shares and club memberships 521 - - 521 

During the reporting period ending 31 December 2009, there were no transfers between Level 1 and Level 3 fair value measurements. 


annual repor t 2010



146 



36. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES 

The Group’s financial risk management objective is to optimise value creation for shareholders whilst minimising the potential adverse impact arising from 

fluctuations in foreign currency exchange and interest rates and the unpredictability of the financial markets. 

The Group operates within an established risk management framework and clearly defined guidelines that are regularly reviewed by the Board of Directors and 

does not trade in derivative financial instruments. Financial risk management is carried out through risk review programmes, internal control systems, insurance 

programmes and adherence to the Group’s financial risk management policies. The Group is exposed mainly to foreign currency risk, liquidity and cashflow risk, 

interest rate risk, credit risk and market price risk. Information on the management of the related exposures is detailed below. 

(i) Credit risk 

Cash deposits and trade receivables may give rise to credit risk which requires the loss to be recognised if a counter party fails to perform as contracted. It is 

the Group’s policy to monitor the financial standing of these counter parties on an ongoing basis to ensure that the Group is exposed to minimal credit risk. 

Credit risk refers to the risk that counterparty will default on their contractual obligations resulting in financial loss to the Group. The Group seeks to invest cash 

assets safely and profitably. It also seeks to control credit risk by setting counterparty limits and ensuring that sales of services are made to customers with 

an appropriate credit history. The Group considers the risk of material loss arising in the event of non-performance by a financial counterparty to be unlikely, 

except when management deems recoverability of specific debtors as doubtful. 

The Group’s primary exposure to credit risk arises through its trade receivables. Each customer has a maximum credit limit and the Group seeks to maintain 

strict control over its outstanding receivables via a credit control department to minimise credit risk. Overdue balances are reviewed regularly by senior 

management. 

As at the end of the reporting period, the Company has significant exposure in respect of amounts owing by and advances to subsidiaries but there were no 

significant concentration of credit risk for the Group. 

Exposure to credit risk 

At the end of the reporting period, the Group’s and the Company’s maximum exposure to credit risk is represented by the carrying amount of each class of 

financial assets recognised in the statements of financial position. 

Information regarding credit enhancement for trade and other receivables is disclosed in Note 16 to the financial statements. 

Credit risk concentration profile 

The Group determines concentration of credit risk by monitoring the segments profits of its trade receivables on an ongoing basis. 

The trade receivables of the Group and of the Company comprise 6 debtors (2009: 7 debtors) and 2 debtors (2009: 2 debtors) respectively that individual 

represented 4-10% of trade receivables.

36. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (continued) 

(i) Credit risk (continued) 

Credit risk concentration profile (continued) 

The credit risk concentration profile of the Group’s trade receivables at the end of the reporting period are as follows: 

Group Company 

2010 2009 2010 2009 

RM’000 RM’000 RM’000 RM’000 

By segment 

LSO 40,248 50,085 917 1,820 

IAO 33,583 49,283 14,851 16,969 

Financial assets that are neither past due nor impaired 

73,831 99,368 15,768 18,789 

Information regarding trade and other receivables that are neither past due nor impaired is disclosed in Note 16 to the financial statements. Deposits with 

banks and other financial institutions, that are neither past due nor impaired are placed with or entered into with reputable financial institutions with high 

credit ratings and no history of default. 

Financial assets that are either past due or impaired 

Information regarding financial assets that are either past due or impaired is disclosed in Note 16 to the financial statements. 

(ii) Liquidity and cash flow risk 

The Group actively manages its operating cash flows and the availability of funding to ensure all financing, repayment and funding needs are met. Due to 

the dynamic nature of the underlying business, the Group aims at maintaining flexibility in funding by keeping committed credit lines available. In liquidity 

risk management strategy, the Group measures and forecasts its cash commitments and maintains a level of cash and cash equivalents deemed adequate 

to finance the Group’s activities. 

Analysis of financial instruments by remaining contractual maturities 



The table below summarises the maturity profile of the Group’s and the Company’s liabilities at the end of the reporting period based on contractual 

undiscounted repayment obligations. 


annual repor t 2010



148 




(ii) Liquidity and cash flow risk (continued) 

Analysis of financial instruments by remaining contractual maturities (continued) 

2010 

On demand or One to Over 

within one year five years five years Total 

RM’000 RM’000 RM’000 RM’000 

Group 

Financial liabilities: 

Trade and other payables 94,323 2,022 - 96,345 

Loans and borrowings 43,727 39,056 - 82,783 

Total undiscounted financial liabilities 138,050 41,078 - 179,128 

Company 

Financial liabilities: 

Trade and other payables 26,442 - - 26,442 

Loans and borrowings 31,727 39,056 - 70,783 

Total undiscounted financial liabilities 58,169 39,056 - 97,225 

(iii) Interest rate risk 

Interest rate risk is the risk that the fair value or future cash flows of the Group’s and the Company’s financial instruments will fluctuate because of changes 

in market interest rates. 

The Group’s and the Company’s exposure to interest rate risk arises primarily from their loans and borrowings. 

The Group’s income and operating cash flows are substantially independent of changes in market interest rates. Interest rate exposure arises from the 

Group’s borrowings and is managed through the use of fixed and floating rate borrowings. The Group’s deposits are placed at fixed rates and management 

endeavours to obtain the best rate available in the market. 

Sensitivity analysis for interest rate risk 

At 31 December 2010, if interest rates at the date had been 50 basis points lower with all other variables held constant, post-tax profit for the year would have 

been RM355,000 (2009: RM 364,000) higher, arising mainly as a result of lower interest expense on borrowings and interest income from deposits. If interest 

rates had been 50 basis points higher, with all other variables held constant, post-tax profit would have been RM355,000 (2009: RM364,000) lower, arising 

mainly as a result of higher interest expense on borrowings and interest income from deposits. Profit is more sensitive to interest rate decreases than increases 

because of borrowings with capped interest rates. The sensitivity is higher in 2009 than in 2010 because of a decrease in outstanding borrowings that has 

occurred. The assumed movement in basis points for interest rate sensitivity analysis is based on the currently observable market environment.


(iii) Interest rate risk (continued) 

Effective interest rates and repricing analysis 

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 

maturities of the Group’s and the Company’s financial instruments that are exposed to interest rate risk: 

Weighted 

average effective Total 

interest rate carrying 1-2 2-3 3-4 4-5 

(per annum) amount < 1 year year year year year >5 years 

Group Note RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 

At 31 December 2010 

Fixed rate instruments 

Deposits with licensed banks 19 2.32% 8,921 8,921 - - - - - 

Term loans 23 6.55% 26,431 7,595 7,596 7,596 3,297 347 - 

Hire-purchase liabilities 23 6.69% 26,299 9,132 6,393 6,415 3,347 1,012 - 

Floating rate instruments 

Revolving credits 23 5.76% 27,000 27,000 - - - - - 






Term loans 23 5.41% 27,883 7,942 7,471 5,481 5,481 1,508 - 




Bank overdraft 23 7.10% 1,052 1,052 - - - - - 

Term loans 23 8.76% 11,165 11,165 - - - - - 


annual repor t 2010



150 




(iii) Interest rate risk (continued) 

Effective interest rates and repricing analysis (continued) 

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 

maturities of the Group’s and the Company’s financial instruments that are exposed to interest rate risk: (continued) 

Weighted 

average effective Total 

interest rate carrying 1-2 2-3 3-4 4-5 

(per annum) amount < 1 year year year year year >5 years 

Company Note RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 




Term loans 23 6.55% 26,431 7,595 7,596 7,596 3,297 347 - 







Term loans 23 5.34% 23,433 5,482 5,481 5,481 5,481 1,508 - 




Term loans 23 6.76% 11,165 11,165 - - - - -


(iv) Foreign currency exchange risk 

Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. 

The Group is exposed to currency risk as a result of the foreign currency transactions in currencies other than its functional currency. The Group primarily 

operates in the domestic sector and has minimal exposure to foreign currency exchange risk. Where the Group transacts in currencies other than its functional 

currency, payments for foreign currency payables are matched against receivables denominated in the same foreign currency. The Group does not enter into 

any forward exchange contracts. 

The Group also hold cash and cash equivalents denominated in foreign currencies for working capital purposes. At the end of the reporting period, such 

foreign currency balances (in US Dollar) amount to RM12,014,000 (2009: RM8,911,000) for the Group. 

Sensitivity analysis for foreign currency exchange risk 

The following table demonstrates the sensitivity of the Group’s profit net of tax to a reasonably possible change in the United States Dollars (“USD”) exchange 

rate against the respective functional currencies of the Group entities, with all other variables held constant: 

Group Company 

2010 2009 

RM’000 RM’000 

Profit net Profit net 

of tax of tax 

USD/RM 

- Strengthen by 2% (2009: 2%) 172 1 

- Weaken by 2% (2009: 2%) (172) (1) 

(v) Market price risk 



Market price risk is the risk that the fair value of future cash flows of the Group’s financial instruments will fluctuate because of changes in market prices (other 

than interest or exchange rates). 

The Group is exposed to price risks arising from quoted investments held by the Group. They are held for strategic rather than trading purposes. The Group 

does not actively trade these investments. These instruments are classified as financial assets designated at available-for-sale. 

To manage its price risk arising from investments in equity securities, the Group diversifies its portfolio in accordance with the limits set by the Group. 


annual repor t 2010



152 




(v) Market price risk (continued) 

Equity price risk sensitivity analysis 

As 31 December 2010, if the market value of the quoted investment had been 10% higher/lower, with all other variables held constant , the Group’s availablefor-sale 

reserve would have been RM1,257,000 higher/lower arising as a result of an increase/decrease in the fair value of these quoted shares. 

37. ACQUISITION OF SUBSIDIARY 

Transaction with minority interest 

On 30 April 2010, the Company entered into a Settlement cum Parting Agreement with Mitsui O.S.K. Lines Ltd. to acquire 6,695,000 ordinary shares of RM1.00 each 

representing the remaining forty-nine percent (49%) equity interest in Cougar Logistics (Malaysia) Sdn. Bhd. (“Cougar”) for a total cash consideration of RM1.00. The 

acquisition was completed on 30 April 2010 and as a result, Cougar is now a 100% wholly-owned subsidiary of the Group. 

Details of net assets acquired are as follows: 

2010 

RM’000 

Fair value of identifiable assets and liabilities of Cougar as at acquisition 5,611 

Less: Fair value of 51% equity interest held previously as subsidiary (2,862) 

Identifiable net assets acquired (at 49%) 2,749 

Excess of interest in the fair value of the identifiable assets, liabilities and contingent liabilities over cost arising from 

additional interest acquired (Note 27 to the financial statements) (2,749) 

Purchase consideration* - 

*Consideration of RM1.00

38. DISPOSAL OF SUBSIDIARIES 

(a) During the financial year, the Company struck-off seven (7) wholly owned subsidiaries, Inter-Fleet Engineering Service (M) Sdn. Bhd., Tinjauan Melati Sdn. 

Bhd., Asia Vehicle Transport Sdn.Bhd., Direct Fortune Sdn. Bhd., Diperdana Indah Sdn. Bhd., Diperdana Logistics Sdn. Bhd. and PNSL Agencies Limited. These 

companies are dormant and inactive. The disposals have no major impact on the results of the operations of the Group and of the Company. 

(b) On 30 April 2009, the Company entered into a Share Sale Agreement with a third party to dispose off its entire equity interest in a wholly owned subsidiary, 

Fleet Engineering Services Sdn. Bhd. (“Fleet”) for a consideration of RM1,500,000. The sale of Fleet was completed on 30 April 2009. At the same date, the 

acquirer assumed the liabilities owed by Fleet to the Company. The details of fair value of the net assets disposed and cash outflow on disposal of the 

subsidiary is as follows: 

2010 

Note RM’000 

Property, plant and equipment 7 5,388 

Prepaid lease payments for land 9 1,461 

Net current liabilities (6,284) 

Net assets disposed 565 

Less: Proceeds from disposal included in other receivables (1,500) 

Gain on disposal of a subsidiary (935) 

Cash consideration for the disposal - 

Less: cash and cash equivalents of subsidiary disposed (44) 

Cash outflow on disposal of a subsidiary (44) 

The effect of the above disposal on the financial results of the Group amounting to RM935,000 which is equivalent to the gain on disposal of the subsidiary. 

39. SIGNIFICANT EVENTS DURING THE FINANCIAL YEAR 



(a) On 30 April 2010, the Company entered into a Settlement cum Parting Agreement with Mitsui O.S.K. Lines Ltd. to acquire 6,695,000 ordinary shares of RM1.00 

each representing the remaining forty-nine percent (49%) equity interest in Cougar Logistics (Malaysia) Sdn. Bhd. (“Cougar”) for a total cash consideration of 

RM1.00. The acquisition was completed on 30 April 2010 and as a result, Cougar is now a 100% wholly-owned subsidiary of the Group. 

(b) During the financial year, the Company had completed the disposal of its entire 30% equity interest comprising 90,001 ordinary shares of RM1.00 each, in 

Mitsui O.S.K. Lines (Malaysia) Sdn. Bhd. for a total sales consideration of RM5,141,000. As a result, Mitsui O.S.K. Lines (Malaysia) Sdn. Bhd. ceased to be the 

Company’s associate. 


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154 



39. SIGNIFICANT EVENTS DURING THE FINANCIAL YEAR (continued) 

(c) During the financial year, the Company struck-off seven (7) wholly owned subsidiaries, Inter-Fleet Engineering Service (M) Sdn. Bhd., Tinjauan Melati Sdn. 

Bhd., Asia Vehicle Transport Sdn. Bhd., Direct Fortune Sdn. Bhd., Diperdana Indah Sdn. Bhd., Diperdana Logistics Sdn. Bhd. and PNSL Agencies Limited. These 

companies are dormand and inactive. The disposals have no major impact on the results of the operations of the Group and of the Company. 

(d) During the financial year, P.T. Kay Pi Transmalindo (“P.T. Transmalindo”), a 70% owned subsidiary of the Group completed the disposal of its properties to a third 

party for a cash consideration of RM8,635,000, resulting in a gain of RM4,370,000 at the subsidiary level. 

During the financial year, the Company had also entered into negotiation with a third party to dispose off its 70% equity in P.T. Transmalindo for a cash 

consideration of RM1. 

The above proposed disposal of the subsidiary will result in a loss of RM6,495,000 to the Group. The loss to the Group has been taken to loss on disposal 

of property, plant and equipment as the loss is in respect of the debit balance of foreign exchange reserve arising from translation of the properties upon 

consolidation. 

40. OPENING STATEMENT OF FINANCIAL POSITION 

The opening statement of financial position as at 1 January 2010, primarily reflect the effects arising from the adoption of FRS 139 as follows: 

Effection 

As previosly adoption of 

reported FRS 139 As restated 

Group RM’000 RM’000 RM’000 

Statement of Financial Position 

Assets 


Property, plant and equipment 216,736 - 216,736 

Investment property 20,000 - 20,000 

Prepaid lease payments for land 27,875 - 27,875 

Goodwill on consolidation 11,883 - 11,883 

Investments in subsidiaries - - - 

Investments in associates 24,977 - 24,977 

Other investments 17,101 1,890 18,991 

Amounts owing by associates 17,580 - 17,580 

Deferred tax assets 2,050 - 2,050 

338,202 1,890 340,092

40. OPENING STATEMENT OF FINANCIAL POSITION (continued) 

The opening statement of financial position as at 1 January 2010, primarily reflects the effects arising from the adoption of FRS 139 as follows: (continued) 

Effection 






Consumable stores, at cost 37 - 37 

Trade and other receivables 147,863 (791) 147,072 

Amounts owing by subsidiaries - - - 

Advances to subsidiaries - - - 

Current tax assets 4,244 - 4,244 


191,052 (791) 190,261 

TOTAL ASSETS 529,254 1,099 530,353 

EQUITY AND LIABILITIES 



Equity attributable to equity holders of the Company 

Share capital 240,719 - 240,719 

Reserves 77,445 1,759 79,204 

318,164 1,759 319,923 

Minority interest (3,553) - (3,553) 

TOTAL EQUITY 314,611 1,759 316,370 


Borrowings 41,233 - 41,233 

Provision for retirement benefits 1,915 - 1,915 

Deferred tax liabilities 4,637 - 4,637 

Advances from subsidiaries - - - 

47,785 - 47,785 


annual repor t 2010



156 





Effection 






Trade and other payables 105,039 (660) 104,379 

Amounts owing to subsidiaries - - - 

Borrowings 58,835 - 58,835 

Current tax payable 2,984 - 2,984 

166,858 (660) 166,198 

TOTAL LIABILITIES 214,643 (660) 213,983 

TOTAL EQUITY AND LIABILITIES 529,254 1,099 530,353 

Company 


Assets 


Property, plant and equipment 141,954 - 141,954 

Investment property 20,000 - 20,000 

Prepaid lease payments for land 18,972 - 18,972 

Goodwill on consolidation - - - 

Investments in subsidiaries 559,050 - 559,050 

Investments in associates 13,974 - 13,974 

Other investments 16,781 1,890 18,671 

Amounts owing by associates 17,580 - 17,580 

Deferred tax assets - - - 

788,311 1,890 790,201



Effection 



Company RM’000 RM’000 RM’000 



Consumable stores, at cost 37 - 37 

Trade and other receivables 58,276 (268) 58,008 

Amounts owing by subsidiaries 9,572 - 9,572 

Advances to subsidiaries 54,929 - 54,929 

Current tax assets 2,376 - 2,376 


135,312 (268) 135,044 

TOTAL ASSETS 923,623 1,622 925,245 

EQUITY AND LIABILITIES 



Equity attributable to equity holders of the Company 

Share capital 240,719 - 240,719 

Reserves 68,965 1,622 70,587 

309,684 1,622 311,306 

Minority interest - - - 

TOTAL EQUITY 309,684 1,622 311,306 


Borrowings 39,243 - 39,243 

Provision for retirement benefits 1,571 - 1,571 

Deferred tax liabilities 2,080 - 2,080 

Advances from subsidiaries 508,502 - 508,502 

551,396 - 551,396 


annual repor t 2010



158 




The opening statement of financial position as at 1 January 2010, primary reflect the effects arising from the adoption of FRS 139 as follows: (continued) 

Effection 



Company RM’000 RM’000 RM’000 



Trade and other payables 21,019 - 21,019 

Amounts owing to subsidiaries 701 - 701 

Borrowings 40,823 - 40,823 

Current tax payable - - - 

62,543 - 62,543 

TOTAL LIABILITIES 613,939 - 613,939 

TOTAL EQUITY AND LIABILITIES 923,623 1,622 925,245 

41. SIGNIFICANT EVENT SUBSEQUENT TO END OF THE REPORTING PERIOD 

On 26 January 2011, 4,828,471 ordinary shares of RM1.00 each held as treasury shares by the Company were cancelled. Subsequent to the cacellation of the 

treasury shares, the Company’s issued and paid-up share capital RM240,718,829 has been reduced to RM235,890,358 comprising 235,890,358 ordinary shares of 

RM1.00 each.

Group Properties 

Build-up NBV as at Date of 

# REGISTERED Existing (approx. age 31 Dec 2010 Last Date of 

OWNER Location Land area use of building) Tenure (RM’000) Revaluation Acquisition 

1. KONSORTIUM Lot No. 2523 & 2524 0.09 acres Vacant 2,480 sq. ft Freehold 350 - 1992 

LOGISTIK HS(D) No. 728 & 729, (15 years) 

BERHAD Section 4, Butterworth, 

Daerah Seberang Prai Utara, 

Pulau Pinang 

2 KONSORTIUM Lot No. 1-11A, 4.66 acres Interchange/ – Freehold 1,766 - 1992 

LOGISTIK Fasa 1, Cheng Industrial Estate, Transshipment 

BERHAD Mukim Bertam, Melaka, 

73250 Melaka 

3 KONSORTIUM Lot No. 832, Grant 823, 29.45 acres Vacant – Freehold 15,000 2010 1995 

LOGISTIK Mukim 6, Province, 

BERHAD Wellesley Central, Pulau Pinang 

4 KONSORTIUM No.4, Block A, 11th Floor, 1,768 sq. ft. Residential 1,768 sq. ft. Freehold 146 - 1993 

LOGISTIK Jalan USJ6/21, Subang Jaya, apartment (13 years) 

BERHAD 47500 Petaling Jaya, (guest house) 


5 KONSORTIUM Lot No. 5628, Pulau Indah, 35 acres Warehouse 478,000 sq. ft. Leasehold 21,333 - 1998 

LOGISTIK 42009 Pelabuhan Klang, (10 years) 27 years 

BERHAD Selangor Darul Ehsan (expiring 

31/8/2024 

6 KONSORTIUM PLO No. 492, Jalan Keluli 12, – Haulage 2,906 sq. ft. Leasehold 1,585 2002 1993 

LOGISTIK Kawasan Perindustrian, Operations (13 years) 30 years 

BERHAD Pasir Gudang, (expiring 

81700 Pasir Gudang, 11/11/2023, 

Johor Darul Takzim with 30 years 

option to renew) 

7 KONSORTIUM Lot 6, Jalan Mohamed 3, 1.5246 Haulage 104,337 sq.ft. Leasehold 31,895 2010 2001 

LOGISTIK Bandar Sultan Suleiman, million sq.ft Operations (11 years) 99 years 

BERHAD 42000 Port Klang, (title not 

Selangor Darul Ehsan issued yet 


annual repor t 2010



160 

Group Properties (continued) 

Build-up NBV as at Date of 

# REGISTERED Existing (approx. age 31 Dec 2010 Last Date of 

OWNER Location Land area use of building) Tenure (RM’000) Revaluation Acquisition 

8 DIPERDANA No. 2001, Mukim 1, 435,774 sq.ft Haulage 91,337 sq.ft. Leasehold 7,963 2008 1995 

KONTENA Lorong Perusahaan 1, Operations (30 years) 60 years 

SDN. BHD. Prai Industrial Estate, (expiring in 

13600 Prai, Pulau Pinang year 2034) 

9 KAYPI PLO No. 492, 12.87 acres Haulage – Leasehold 3,001 2002 1993 

SOUTHERN Jalan Keluli 12, Operations 30 years 

TERMINAL Kawasan Perindustrian, (expiring 

SDN. BHD. Pasir Gudang, 11/11/2023, 

81700 Pasir Gudang, with 30 years 

Johor Darul Takzim option to renew) 

10 PNSL BERHAD Plot No.19, 1,238 sq.ft. Shophouse 1,238 sq.ft. Leasehold 76 - 1986 

Kawasan Padang Lalang, (22 years) 

Mukim Air Hangat, 

Daerah Langkawi, 

Kedah Darul Aman 

11 PNSL BERHAD Unit No. LA/16, 835 sq.ft. Residential 835 sq.ft Leasehold 130 - 1987 

4th Floor , Main Block, apartment (21 years) 

Awana Condominium, 

Genting Highlands, 

Pahang Darul Makmur 

12 MALAYSIAN 12th Floor, Unit No.13/006 1,181 sq.ft. Residential 1,181 sq.ft. Leasehold 191 - 1995 

SHIPPING Casa Mila Tower, apartment (13 years) 99 years 

AGENCIES. Bukit Idaman, Batu Caves, (expiring 2094) 

SDN. BHD. 68100 Selangor Darul Ehsan 

13 KP ASIA AUTO Lot 3410, Mukim Petaling, 370,754 sq.ft. Warehouse/ 289,440 sq.ft. Freehold 32,148 2010 1999 

LOGISTICS 12 1/2 Miles, Jalan Puchong, office (9 years) 

SDN. BHD. 47100 Puchong, 

Selangor Darul Ehsan

The following information is provided in compliance with the Main Market Listing Requirements of Bursa Malaysia Securities Berhad (“Bursa Securities”): 

1. Utilisation of Proceeds Raised from Corporate Proposals 

There were no proceeds raised from corporate proposals during the financial year. 

2. Share Buy-back 

Additional Compliance Information 

Konsortium Logistik Berhad (“Konsortium” or “the Company”) had at the Twenty-Fourth Annual General Meeting of the Company held on 23 June 2010, obtained 

its shareholders’ approval to continue the share buy-back exercise, to purchase up to ten percent (10%) of the total issued and paid-up ordinary share capital of 

the Company at any point of time through Bursa Securities. During the financial year ended 31 December 2010, the Company repurchased a total of 2,927,600 

Konsortium shares at a total cost of RM3,878,851 and resold of 10,000 treasury shares at a total consideration of RM13,343 All the shares so purchased by the 

Company were retained as treasury shares. 

On 18 August 2010, the Board declared an interim share dividend on the basis of one (1) treasury share for every forty (40) shares held in the Company in respect 

of the Company’s financial year ended 31 December 2010. In connection thereto, a total of 5,749,658 treasury shares were credited to the respective shareholders’ 

securities account on 30 September 2010 as share dividend. As at 31 December 2010, the number of treasury shares held after the resale of treasury shares and 

distribution of share dividend was 4,828,471. 

Thereafter, the Company had on 26 January 2011 cancelled the entire treasury shares of 4,828,471 held by the Company. Following the cancellation of the treasury 

shares, the Company’s paid-up share capital of RM240,718,829 had diminished to RM235,890,358 comprising of 235,890,358 ordinary shares of RM1.00 each and 

the amount of RM4,828,471was transferred to the Capital Redemption Reserve. 

The details of the shares purchased and resale of treasury shares by the Company during the financial year under review are shown in the following tables: 

No. of Minimum Maximum Average *Total 

Monthly breakdown shares price price price consideration 

on shares purchased purchased per share per share per share paid 

(RM) (RM) (RM) (RM) 

January 2010 575,800 1.17 1.27 1.21 698,752 

February 2010 178,400 1.18 1.31 1.18 210,882 

March 2010 403,900 1.21 1.49 1.43 576,393 

April 2010 442,200 1.38 1.44 1.42 628,121 

May 2010 727,000 1.25 1.36 1.31 954,435 

June 2010 491,100 1.26 1.39 1.34 656,944 

August 2010 109,200 1.40 1.42 1.40 153,323 

Total 2,927,600 3,878,851 


annual repor t 2010



162 

Additional Compliance Information (continued) 

2. Share Buy-back (continued) 

No. of Minimum Maximum Average *Total 

Monthly breakdown treasury price price price consideration 

on resale of share sold per share per share per share paid 

treasury share (RM) (RM) (RM) (RM) 

May 2010 (10,000) 1.33 1.33 1.33 13,343 

Total (10,000) 13,343 

* Including brokerage, commission, clearing house fee and stamp duty. 

At the forthcoming Twenty-Fifth Annual General Meeting, the Company will not be seeking for the shareholders’ approval to renew the share buy-back exercise. 

3. Options, Warrants or Convertible Securities 

During the financial year ended 31 December 2010, the Company did not issue any options, warrants or convertible securities. 

4. American Depository Receipt (“ADR”) or Global Depository Receipt (“GDR”) Programme 

During the financial year under review, the Company did not sponsor any ADR or GDR programme. 

5. Imposition of Sanctions and/or Penalties 

There were no sanctions and/or penalties imposed on the Company and its subsidiaries, Directors or management by the relevant regulatory bodies during the 

financial year. 

6. Non-Audit Fees 

There were no non-audit fees incurred for services rendered to the Company or subsidiaries during the financial year. 

7. Variation in Results 

There was no deviation of 10% or more between the unaudited financial results announced and the audited financial results of the Company and the Group for 

the financial year ended 31 December 2010. 

The Company did not release any profit estimate, forecast or projections during the financial year.

8. Profit Guarantee 

During the financial year under review, there was no profit guarantee received by the Company. 

9. Material Contracts 

There is no material contract, not being contract entered into in the ordinary course of business of the Company and its subsidiaries, involving the interest of the 

Directors and major shareholders of the Company, either still subsisting at the end of the financial year or entered into since the end of the previous financial 

year. 

10. Revaluation of Landed Properties 

The Company does not have a revaluation policy on its landed properties. 

Additional Compliance Information (continued) 


annual repor t 2010



164 

Analysis of Shareholdings 

As At 15 April 2011 

Authorised Share Capital : RM300,000,000 

Issued and Paid-up Share Capital : RM235,890,358 

Class of Shares : Ordinary Shares of RM1.00 each 

Voting Rights : One (1) vote per Ordinary Share 

DISTRIBUTION OF SHAREHOLDINGS 

No. of No. of 

Size of Shareholdings Shareholders % Shares % 

1 – 99 436 8.14 19,696 0.01 

100 – 1,000 225 4.20 96,641 0.04 

1,001 – 10,000 3,820 71.30 10,584,652 4.49 

10,001 – 100,000 802 14.97 20,049,638 8.50 

100,001 to less than 5% of issued shares 72 1.34 27,038,652 11.46 

5% and above of issued shares 3 0.06 178,101,079 75.50 

Total 5,358 100.00 235,890,358 100.00 

DIRECTORS’ SHAREHOLDINGS 

(Based on the Register of Directors’ Shareholdings) 

 

Direct Indirect 

Name of Directors Interest % Interest % 

1. Haji Ismett Azyze bin Hamad Abbdul Azyze - - - - 

2. Che Azizuddin bin Che Ismail 864,016 0.37 - - 

3. Zulkifli bin Sarkam 352,554 0.15 - - 

4. Mohd Aminudin bin Mustapha - - 7,178,542 (1) 3.04 

5. Dato’ Seri Talaat bin Husain - - - - 

6. Syed Yasir Arafat bin Syed Abd Kadir - - - - 

7. Nik Johaan bin Nik Hashim - - - - 

8. Dato’ Rosli bin Sharif - - - - 

Save as disclosed above, none of the Directors of the Company has any interest, direct or indirect, in the related corporation of Konsortium. 

Notes: 

(1) Deemed interested by virtue of his substantial shareholdings in Peringkat Prestasi (M) Sdn Bhd.

SUBSTANTIAL SHAREHOLDERS’ SHAREHOLDINGS 

(Based on the Register of Substantial Shareholders) 

 

Direct Indirect 

Name of Substantial Shareholders Interest % Interest % 

1. Lembaga Tabung Haji 22,638,757 9.60 - - 

2. Bendahara 1 Sdn Bhd 155,462,322 65.90 - - 

3. E-Cap (Internal) One Sdn Bhd - - 155,462,322 (1) 65.90 

4. Ekuinas Capital Sdn Bhd - - 155,462,322 (2) 65.90 

5. Yayasan Ekuiti Nasional - - 155,462,322 (3) 65.90 

Notes : 

(1) Deemed interested by virtue of its substantial shareholdings in Bendahara 1 Sdn Bhd. 

(2) Deemed interested by virtue of its substantial shareholdings in E-Cap (Internal) One Sdn Bhd. 

(3) Deemed interested by virtue of its substantial shareholdings in Ekuinas Capital Sdn Bhd. 


15 April 2011 (continued) 


annual repor t 2010



166 



LIST OF TOP THIRTY (30) SHAREHOLDERS 

(Based on the Record of Depositors) 

Name of Shareholders No. of Shares % 

1. Amsec Nominees (Tempatan) Sdn Bhd 99,940,205 42.37 

Pledged Securities Account – Ambank (M) Berhad for Bendahara 1 Sdn Bhd 

2. Bendahara 1 Sdn Bhd 55,522,117 23.54 

3. Lembaga Tabung Haji 22,638,757 9.60 

4. Amsec Nominees (Tempatan) Sdn Bhd 7,178,508 3.04 

Pledged Securities Account – Ambank (M) Berhad for Peringkat Prestasi (M) Sdn Bhd 

5. Raja Eleena Binti Raja Azlan Shah 1,898,965 0.81 

6. HDM Nominees (Tempatan) Sdn Bhd 1,723,025 0.73 

Pledged Securities Account for Oh Chee Wei (M02) 

7. HSBC Nominees (Asing) Sdn Bhd 936,100 0.40 

Exempt an for Credit Suisse (SG BR-TST-Asing) 

8. Che Azizuddin bin Che Ismail 864,016 0.37 

9. HSBC Nominees (Tempatan) Sdn Bhd 

RBS Coutts HK for Julian Suresh Candiah 

700,000 0.30 

10. Chung Hon Cheong 697,000 0.30 

11. Thong Weng Kin 614,296 0.26 

12. Cheah Lam Mooi 606,160 0.26 

13. RHB Capital Nominees (Tempatan) Sdn Bhd 566,723 0.24 

Pledged Securities Account for Noor Azman @ Noor Hizam B Mohd Nordin (CEB) 

14. Foo Loke Weng 380,740 0.16 

15. Zulkifli bin Sarkam 352,554 0.15 

16. Choy Wee Chiap 350,010 0.15 

17. Ng Swee Seong 348,500 0.15 

18. Public Nominees (Tempatan) Sdn Bhd 323,900 0.14 

Pledged Securities Account for Tan Kong Han (SS2/PIV)

LIST OF TOP THIRTY (30) SHAREHOLDERS (continued) 

(Based on the Record of Depositors) 



Name of Shareholders No. of Shares % 

19. Lee Kook Fong @ Lee Kok Fong 307,573 0.13 

20. Ahmad Mustaffa bin Abdul Manaf 300,000 0.13 

21. AIBB Nominees (Tempatan) Sdn Bhd 300,000 0.13 

Pledged Securities Account for Phua Sin Mo 

22. Abdul Rahim bin Idris 291,049 0.12 

23. Ben Eng Par 272,767 0.12 

24. Maybank Nominees (Tempatan) Sdn Bhd 270,000 0.11 

Pledged Securities Account for Teh Siew Wah 

25. CIMSEC Nominees (Tempatan) Sdn Bhd 266,300 0.11 

CIMB for Tee Ching Chew (PB) 

26. CIMSEC Nominees (Tempatan) Sdn Bhd 

CIMB Bank for Md Zin bin Baharom (MY0490) 

251,000 0.11 

27. Tee Ah Ling 251,000 0.11 

28. Citigroup Nominees (Asing) Sdn Bhd 250,000 0.11 

UBS AG Singapore for Keen Capital Investments Limited 

29. ECML Nominees (Asing) Sdn.Bhd 250,000 0.11 

Pledged Securities Acccount for Lee Choong Onn (MG0000026) 

30. JF Apex Nominees (Tempatan) Sdn Bhd 230,625 0.10 

Pledged Securities Account for Teh Siew Wah (MARGIN) 

Total 198,881,890 84.36 


annual repor t 2010



168 

Notice of Annual General Meeting 

NOTICE IS HEREBY GIVEN THAT the Twenty-Fifth Annual General Meeting of Konsortium Logistik Berhad (“Konsortium” or “the Company”) will be held at Multipurpose 

Hall of Konsortium, Lot 3410, Mukim Petaling, Batu 12½, Jalan Puchong, 47100 Puchong, Selangor Darul Ehsan, Malaysia on Thursday, 2 June 2011 at 10.30 a.m. for the 

following purposes: 

AS ORDINARY BUSINESS 

1. To receive the Audited Financial Statements for the financial year ended 31 December 2010 and the Reports of the 

Directors and Auditors thereon. 

2. To approve the payment of Directors’ fees of RM316,000.00 for the financial year ended 31 December 2010. 

3. To re-elect the following Directors who retire pursuant to Article 82(1) of the Company’s Articles of Association: 

(a) Zulkifli bin Sarkam 

(b) Che Azizuddin bin Che Ismail 

4. To re-elect the following Directors who retire pursuant to Article 82(5) of the Company’s Articles of Association: 

(a) Syed Yasir Arafat bin Syed Abd Kadir 

(b) Nik Johaan bin Nik Hashim 

(b) Dato’ Rosli bin Sharif 

5. To re-appoint Messrs BDO as Auditors of the Company and to authorise the Directors to fix the Auditors’ 

remuneration. 

AS SPECIAL BUSINESS 

To consider and if thought fit, to pass the following resolutions: 

6. To approve the proposed renewal of authority for Directors to issue shares pursuant to Section 132D of the Companies 

Act 1965. 

“THAT, pursuant to Section 132D of the Companies Act 1965, the Articles of Association of the Company and subject to 

the approvals of the relevant government and/or regulatory authorities, the Directors be and are hereby authorised to 

issue shares of the Company from time to time upon such terms and conditions for such purposes and to such person 

or persons whomsoever as the Directors may, in their absolute discretion deem fit and expedient in the best interest of 

the Company, provided that the aggregate number of shares to be issued pursuant to this resolution does not exceed 

10% of the total issued and paid-up share capital of the Company for the time being AND THAT such authority shall 

continue in force until the conclusion of the next Annual General Meeting of the Company.” 

(Ordinary Resolution 1) 








(Ordinary Resolution 9)

7. To transact any other business for which due notice has been given in accordance with the Articles of Association of the Company. 

BY ORDER OF THE BOARD 

LEONG OI WAH (MAICSA 7023802) 

TAI LI CHING (MAICSA 7053542) 

LIM SIAU CHENG (MAICSA 7060871) 

Company Secretaries 


11 May 2011 

NOTES: 

1. A Member entitled to attend and vote at the meeting is entitled to appoint a proxy but shall not be more than two (2) proxies to attend and vote at the same 

meeting and such appointment shall be invalid unless he specifies the proportions of his holding to be represented by each proxy. A proxy may but need not be a 

Member of the Company and the provisions of Section 149(1)(b) of the Companies Act 1965 shall not apply to the Company. 

2. The Proxy Form must be signed by the appointor or his attorney duly authorised in writing or in the case of a corporation, executed under its common seal or under 

the hand of an officer or attorney duly recognised. 

3. A proxy shall be entitled to vote on a show of hands on any questions at any General Meeting. Where more than one (1) Member appoints the same person as their 

proxy, then the proxy’s vote, on a show of hands will be counted only as one (1) vote. 

4. The signature of the instrument appointing the proxy executed outside Malaysia must be attested by a solicitor, notary public, consul or magistrate. 

5. If no name is inserted in the space for the name of your proxy or proxies, the Chairman of the Meeting will act as your proxy, provided always that the rest of the 

proxy form, other than the particulars of the proxy have been duly completed by the Member. 

6. The Form of Proxy must be lodged at the office of the Share Registrar, Symphony Share Registrars Sdn Bhd at Level 6, Symphony House, Pusat Dagangan Dana 1, 

Jalan PJU 1A/46, 47301 Petaling Jaya, Selangor Darul Ehsan, Malaysia not less than forty-eight (48) hours before the time set for holding of the meeting. 

Explanatory Notes on Special Business: 

Notice of Annual General Meeting (continued) 

Ordinary Resolution 9 

To approve the proposed renewal of authority for Directors to issue shares pursuant to Section 132D of the Companies Act 1965. 

The proposed Ordinary Resolution 9 if passed, will give powers to the Directors to issue up to a maximum ten percent (10%) of the issued share capital of the 

Company for the time being for such purposes as the Directors would consider in the best interest of the Company. This authority, unless revoked or varied by the 

Company at a general meeting, will expire at the next Annual General Meeting of the Company. 

The general mandate sought for issue of securities is a renewal to a general mandate sought in the preceding year. The Company did not utilize the mandate sought 

during the financial year ended 31 December 2010. The renewal of the general mandate is to provide flexibility to the Company to issue new securities without 

the need to convene separate general meeting to obtain its shareholders’ approval so as to avoid incurring additional cost and time. The purpose of this general 

mandate is for possible fund raising exercises including but not limited to further placement of shares for purpose of funding current and/or future investment 

projects, working capital and/or acquisitions. 


annual repor t 2010

This page had been intentionally left blank.

FORM OF PROXY 

Number of Shares Held 

CDS Account No. 

I/We (Full name in capital letters) 

NRIC No./Company No. of 

(Full address) 

being a Member of KONSORTIUM LOGISTIK BERHAD (89243-A), hereby appoint 

(Proxy A) (Full name in capital letters) 

NRIC No. of 


*and/or failing him/her 

(Proxy B) (Full name in capital letters) 

NRIC No. of 


and/or failing him/her, *the Chairman of the Meeting as my/our proxy/proxies to attend and vote for me/us on my/our behalf at the Twenty-Fifth Annual General Meeting of the Company to 

be held at Multipurpose Hall of Konsortium, Lot 3410, Mukim Petaling, Batu 12½, Jalan Puchong, 47100 Puchong, Selangor Darul Ehsan, Malaysia on Thursday, 2 June 2011 at 10.30 a.m. or any 

adjournment thereof. 

The proportions of my/our holding to be represented by my/our proxy/proxies are as follows: 

Proxy A % 

Proxy B % 

100 % 

My/our proxy/proxies shall vote as follows: 

(Please indicate with an “X” in the spaces provided below how you wish your votes to be cast. If you do not do so, the proxy/proxies will vote or abstain from voting at his/her discretion.) 

NO. ORDINARY RESOLUTIONS FOR AGAINST 

1. To receive the Audited Financial Statements for the financial year ended 31 December 2010 and the Reports of the Directors and Auditors thereon 

2. To approve the payment of the Directors’ fees 

3. To re-elect Zulkifli bin Sarkam as Director of the Company 

4. To re-elect Che Azizuddin bin Che Ismail as Director of the Company 

5. To re-elect Syed Yasir Arafat bin Syed Abd Kadir as Director of the Company 

6. To re-elect Nik Johaan bin Nik Hashim as Director of the Company 

7. To re-elect Dato’ Rosli bin Sharif as Director of the Company 

8. To re-appoint Messrs BDO as Auditors of the Company and to authorise the Directors to fix the Auditors’ remuneration 

9. To approve the proposed renewal of authority for Directors to issue shares 

Signed this day of , 2011 

Signature(s) of Member/Common Seal 

* Strike out whichever not applicable 

NOTES: 

KONSORTIUM LOGISTIK BERHAD 

(Company No. 89243-A) 

(Incorporated in Malaysia) 

1. A Member entitled to attend and vote at the meeting is entitled to appoint a proxy but shall not be more than two (2) proxies to attend 

and vote at the same meeting and such appointment shall be invalid unless he specifies the proportions of his holding to be represented 

by each proxy. A proxy may but need not be a Member of the Company and the provisions of Section 149 (1)(b) of the Companies Act 

1965 shall not apply to the Company. 

2. The Proxy Form must be signed by the appointor or his attorney duly authorised in writing or in the case of a corporation, executed under 

its common seal or under the hand of an officer or attorney duly recognised. 

3. A proxy shall be entitled to vote on a show of hands on any questions at any General Meeting. Where more than one (1) Member 

appoints the same person as their proxy, then the proxy’s vote, on a show of hands will be counted only as one (1) vote. 

4. The signature of the instrument appointing the proxy executed outside Malaysia must be attested by a solicitor, notary public, consul or 

magistrate. 

5. If no name is inserted in the space for the name of your proxy or proxies, the Chairman of the Meeting will act as your proxy, provided 

always that the rest of the proxy form, other than the particulars of the proxy have been duly completed by the Member. 

6. The Form of Proxy must be lodged at the office of the Share Registrar, Symphony Share Registrars Sdn Bhd at Level 6, Symphony House, 

Pusat Dagangan Dana 1, Jalan PJU 1A/46, 47301 Petaling Jaya, Selangor Darul Ehsan, Malaysia not less than forty-eight (48) hours before 

the time set for holding of the meeting.

Please fold here 

Please fold here 

Symphony Share Registrars Sdn Bhd 

Level 6, Symphony House 

Pusat Dagangan Dana 1 

Jalan PJU 1A/46 

47301 Petaling Jaya 



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