Annual
Report
2016
TAKING ON CHALLENGES
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civil engineering
& construction
VISION
We aim to be outstanding
in all our business activities
as we grow to become a
major corporate entity
oil & Gas
mining
manufacturing
To instill
To continuously
superior and positive
cognitions through overall
excellence and dedication
amongst the employees
enforce strict requirements of
producing quality products and
services
MISSION
To create
and enhance shareholders value,
whilst maintaining harmony with
society to enhance our sustainability
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TABLE OF
CONTENTS
03
04
Corporate
Structure
Corporate
Information
19
21
23
36
37
41
45
142
145
147
Five-Year
Performance
Highlights
Statement on Risk
Management and
Internal Control
Corporate
Social
Responsibility
Financial
Statements
148
Notice of Annual
General Meeting
Form of Proxy
07
Directors’
Profile
Corporate
Governance
Statement
Analysis of
Shareholdings
14
Group Key
Senior
Management
Additional
Compliance
Information
Analysis of
Warrant Holdings
15
Chairman’s
Statement
Audit
Committee
Report
List of
Properties
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Annual Report 2016
3
CORPORATE
STRUCTURE
Civil Engineering
and Construction
Oil and Gas
Mining
100%
100%
49%
MISI SETIA OIL &
GAS SDN BHD
WZS KENKEONG
SDN BHD
SE SATU SDN BHD
30%
SE SATU PELANGI
SDN BHD
Manufacturing
•
key operating units
Others
100%
100%
WZS INDUSTRIES SDN BHD
WENG ZHENG
TRADING SDN BHD
20%
60%
WZS TECHNOLOGIES
SDN BHD
WZS POWERGEN
SDN BHD
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4
WZ SATU BERHAD (666098-X)
CORPORATE
INFORMATION
BOARD OF DIRECTORS
EXECUTIVE DIRECTORS
INDEPENDENT NON-EXECUTIVE DIRECTORS
YM Tengku Dato' Sri Uzir Bin
Tengku Dato' Ubaidillah
Executive Chairman/Chief Executive Officer
Dato' Amin Rafie Bin Othman
Deputy Chairman/
Senior Independent Non-Executive Director
Dato' Ir. William Tan Chee Keong
Senior Executive Director/Chief Operating Officer
Datuk Idris Bin Haji Hashim
Independent Non-Executive Director
Tan Teng Heng
Executive Director/Chief Financial Officer
Dato’ Syed Kamarulzaman Bin Dato’
Syed Zainol Khodki Shahabudin
Independent Non-Executive Director
Tan Ching Kee
Senior Executive Director
Dato' Yeong Kok Hee
Independent Non-Executive Director
Tan Chong Boon
Executive Director
Rosli Bin Shafiei
Independent Non-Executive Director
Dato' Ir. Mohd Ghazali Bin Kamaruzaman
Executive Director
Datuk Ahmad Nizam Bin Salleh
Independent Non-Executive Director
(Appointed on 11 April 2016)
ALTERNATE DIRECTORS
Ng Chong Tin
Alternate Director to Tan Chong Boon
Choi Chee Ken
Alternate Director to Dato' Ir. Mohd Ghazali Bin
Kamaruzaman
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5
Annual Report 2016
CORPORATE
INFORMATION
(Cont’d)
NOMINATION COMMITTEE
AUDIT COMMITTEE
REMUNERATION COMMITTEE
Dato' Amin Rafie Bin Othman
(Chairman)
Datuk Idris Bin Haji Hashim
Dato' Yeong Kok Hee
Rosli Bin Shafiei
(Chairman)
Dato’ Amin Rafie Bin Othman
Dato' Yeong Kok Hee
Dato’ Amin Rafie Bin Othman
(Chairman)
Dato' Ir. William Tan Chee Keong
Tan Ching Kee
Dato' Yeong Kok Hee
Rosli Bin Shafiei
SHARIAH ADVISORY COMMITTEE
LONG TERM INCENTIVE
PLAN COMMITTEE
INVESTMENT COMMITTEE
Dato’ Syed Kamarulzaman Bin Dato’
Syed Zainol Khodki Shahabudin
(Chairman)
Tan Teng Heng
Marizan Nor Bin Basirun
Tuan Haji Sabar @ Sabal Bin Haji
Abdul Rahaman (Advisor)
Mahamahpoyi Hj Walah (Advisor)
YM Tengku Dato' Sri Uzir Bin
Tengku Dato' Ubaidillah
(Chairman)
Tan Teng Heng
Rosli Bin Shafiei
YM Tengku Dato' Sri Uzir Bin
Tengku Dato' Ubaidillah
(Chairman)
Dato' Ir. William Tan Chee Keong
Tan Teng Heng
COMPANY SECRETARIES
AUDITORS
PRINCIPAL BANKERS
Chua Siew Chuan
(MAICSA 0777689)
Pan Seng Wee
(MAICSA 7034299)
Baker Tilly Monteiro Heng (AF 0117)
Baker Tilly MH Tower
Level 10, Tower 1, Avenue 5
Bangsar South City
59200 Kuala Lumpur
Tel
: 03-2297 1000
Fax
: 03-2282 9980
United Overseas Bank (Malaysia) Berhad
(271809-K)
OCBC Al-Amin Bank Berhad
(818444-T)
AmBank Islamic Berhad
(295576-U)
PRINCIPAL PLACE OF BUSINESS
REGISTERED OFFICE
SHARE REGISTRAR
Lot 1890, Jalan KPB 9
Kawasan Perindustrian Balakong
43300 Seri Kembangan
Selangor Darul Ehsan
Tel
: 03-8962 2228
Fax
: 03-8962 2226
E-mail : [email protected]
Website : www.wzs.my
Level 7, Menara Milenium
Jalan Damanlela
Pusat Bandar Damansara
Damansara Heights
50490 Kuala Lumpur
Tel
: 03-2084 9000
Fax
: 03-2094 9940
Securities Services (Holdings)
Sdn Bhd (36869-T)
Level 7, Menara Milenium
Jalan Damanlela
Pusat Bandar Damansara
Damansara Heights
50490 Kuala Lumpur
Tel
: 03-2084 9000
Fax
: 03-2094 9940
STOCK EXCHANGE
Main Market
Bursa Malaysia Securities Berhad
Stock Name
: WZSATU
Stock Code
: 7245
Warrant Name
: WZSATU-WA
Warrant Code
: 7245WA
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6
WZ SATU BERHAD (666098-X)
SOLID
FOUNDATION
Our impressive track record is proof of our ability to handle
major infrastructural and architectural projects. Our top-notch
expertise and extensive experience enable us to turn every
project into an achievement.
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Annual Report 2016
7
DIRECTORS’ PROFILE
YM TENGKU DATO’ SRI UZIR BIN
TENGKU DATO’ UBAIDILLAH
DATO’ IR.
WILLIAM TAN CHEE KEONG
Executive Chairman / Chief Executive Officer
Senior Executive Director / Chief Operating Officer
YM Tengku Dato’ Sri Uzir Bin Tengku Dato’ Ubaidillah, aged 57,
graduated from City University, UK, with a Bachelor of Science
(Honours) Degree in Civil Engineering in 1983. He started his
career with Jabatan Kerja Raya as an engineer before joining the
private sectors.
Dato’ Ir. William Tan Chee Keong, aged 61, is a member of
The Institution of Engineers Malaysia and registered Professional
Engineer. He graduated from The University of Nottingham with
an honours degree of Bachelor of Science in Civil Engineering.
He was appointed to the Board on 12 May 2014. He was
re-designated to Senior Executive Director cum Chief Operating
Officer of the Company on 2 July 2015. He is also a member of
the Remuneration Committee and Investment Committee.
He was the Managing Director cum Chief Executive Officer of
Malaysian General Investment Corporation Berhad (now known
as Sumatec Resources Berhad) from 1990 to 1993. He has also
served on the Board of Road Builder (M) Holdings Berhad, Kurnia
Setia Berhad and Project Penyelenggaran Lebuhraya Berhad, all
of which were public listed companies. He was appointed as an
Executive Director of Tanah Makmur Berhad in 2011 until he was
re-designated as the Alternate Director in 2013 pursuant to his
appointment as Executive Chairman cum Chief Executive Officer
of the Group on 24 October 2013. He is also the Chairman of the
Long Term Incentive Plan Committee and Investment Committee.
He has vast business experience in various industries, especially
in civil engineering, construction, plantation and property
development.
He started his career in Jabatan Kerja Raya and worked there
from 1980 to 1984. He was involved in numerous road
construction projects and bridge designing assignments. Later,
he joined Ken Holdings Sdn Bhd and Dayapi Bhd as a project
manager tasked with overseeing various road and bridge
construction projects.
He joined the Road Builder (M) Holdings Berhad group in 1992
as a Senior Project Manager (later Project Director) and he was
involved in leading a team to complete several large-scale
construction contracts and infrastructure developments. He was
subsequently appointed as an Executive Director in Road Builder
(M) Sdn Bhd and as a Director in several subsidiaries within the
group. During that period, he was directly responsible for the
engineering, procurement and implementation aspects of
construction projects and the management of highway
concessions.
He founded KenKeong Sdn Bhd in 2007 after he left the Road
Builder group of companies. Under his leadership, the company
secured several middle and large scale projects. KenKeong Sdn
Bhd was acquired by WZ Satu Berhad in May 2014 and renamed
as WZS KenKeong Sdn. Bhd.
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8
WZ SATU BERHAD (666098-X)
DIRECTORS’
PROFILE
(Cont’d)
TAN TENG HENG
TAN CHING KEE
Executive Director / Chief Financial Officer
Senior Executive Director
Mr. Tan Teng Heng, aged 52, is a member of the The Malaysian
Institute of Certified Public Accountants. He was appointed as
the Group’s Chief Financial Officer cum Executive Director on
24 October 2013. He is also a member of the Long Term
Incentive Plan Committee, Investment Committee and Shariah
Advisory Committee.
He was trained in the big four audit and consultancy firms during
his time. He was working under an articleship with a view to
complete his professional accountancy studies to qualify as a
Certified Public Accountant. His studies was under the auspices
of The Malaysian Association of Certified Public Accountants
(now known as MICPA). As a student, he not only excelled and
passed all examinations in single sittings but most notably,
he was a prize winner in two professional subjects i.e. Financial
Accounting and Management Accounting.
He is well exposed to the capital markets through various
capacities in senior management positions, principally in
Malaysia with a stint in Hong Kong. He was the CEO of an options
and futures company which was then a member of KLOFFE
(Kuala Lumpur Options and Financial Futures Exchange).
Prior to joining WZ Satu Berhad, he was with HwangDBS
Investment Bank Berhad as Senior Vice President.
Mr. Tan Ching Kee is the founder of WZ Satu Berhad (previously
known as Weng Zheng Resources Berhad which was listed on
Bursa Malaysia Securities Berhad on 2 January 2008).
Mr. Tan Ching Kee, aged 57, was appointed to the Board on
26 October 2007 and is a Senior Executive Director. He is also a
member of the Remuneration Committee.
Mr. Tan commenced his career in the iron and steel industry in
1978. He started his own steel company in 1985. Mr. Tan
launched the Company into the downstream value-added
production of cold drawn bright steel polished shafts to service
the engineering support industry.
Mr. Tan has accumulated extensive knowledge during his
38 years of experience in the steel trading business, with an
overlap of 20 years of having been involved in the daily
operations and management of cold drawn bright steel polished
shaft production. He is responsible for the Group’s steel division.
Mr. Tan Ching Kee is the brother of Mr. Tan Chong Boon,
a Director of the Company and brother-in-law of Mr. Ng Chong
Tin, an Alternate Director of the Company.
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Annual Report 2016
9
DIRECTORS’
PROFILE
(Cont’d)
TAN CHONG BOON
DATO’ IR. MOHD GHAZALI
BIN KAMARUZAMAN
Executive Director
Executive Director
Mr. Tan Chong Boon, aged 51, graduated from Universiti Putra
Malaysia (UPM) with an honours degree in Civil Engineering and
was appointed to the Board on 26 October 2007.
Dato’ Ir. Mohd Ghazali Bin Kamaruzaman, aged 51, is a member
of The Institution of Engineers, Malaysia and Board of Engineers,
Malaysia. He holds a Bachelor’s Degree in Civil Engineering from
Victoria University of Technology, Melbourne, Australia and a
Master’s Degree in Project Management from Universiti
Teknologi Mara (UiTM). He has over 27 years of experience in
civil engineering works. He was involved in the planning,
designing and building of drainage, buildings and roads. He was
appointed as an Executive Director on 24 October 2013.
He has experience in the areas of designing and building civil
and structural works. Upon graduation in 1991, he joined a civil
and structural consulting company as a Design Engineer before
joining the Group in 1994. He successfully established the
Group’s cold drawn bright steel production plant in 1995 and
later, he managed the Group’s venture into the production of
high-end free cutting polished shafts for office automation.
Mr. Tan Chong Boon is the brother of Mr. Tan Ching Kee,
a Director and major shareholder of the Company.
He started his career in 1988 with the Shire of Melton, Victoria,
Australia as a design engineer in Water and Sewerage Division
responsible for design, tendering and construction of Water and
Sewerage within the Shire. Upon returning to Malaysia he joined
PATI Sdn Bhd as an engineer responsible for tendering,
execution and implementation of Continuously Reinforced
Concrete Pavement (CRCP) from Bukit Raja, Klang to Tapah,
Perak. He was later attached to PATI Pave Sdn Bhd, responsible
for the tendering, execution and implementation of pavement
works. Among notable projects that he was involved include
North South Expressway, Second Link, Central Link, Manila
Cavite Expressway, Jalan Pahang, Lebuhraya Pantai Timur
(LPT), PUTRA LRT, KL - Salak Expressway, Bangi Seremban
Third Lane Widening and Simpang Pulai - Blue Valley.
In 2005, he founded Prisma Simfoni Sdn Bhd, which specialised
in road construction, earthworks, building construction and
waterworks. Some of the notable projects delivered were Third
Lane Widening Tg. Malim to Slim River, Missing Link Awan Besar
to KESAS Highway, UPSI infrastructure works, Batu Embun
Water Intake and Treatment Plant, Herbal Centre Phase 2 for
Technology Park Malaysia, Commercial & Office Building for
UDA (North) in Seberang Prai and Non Revenue Water (NRW)
for PAIP.
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10
WZ SATU BERHAD (666098-X)
DIRECTORS’
PROFILE
(Cont’d)
DATO’ AMIN RAFIE
BIN OTHMAN
DATUK IDRIS
BIN HAJI HASHIM
Deputy Chairman /
Senior Independent Non-Executive Director
Independent Non-Executive Director
Dato’ Amin Rafie Bin Othman, aged 57, was appointed to the
Board on 26 October 2007. He is the Deputy Chairman and
Senior Independent Non-Executive Director of the Board. He is
also the Chairman of the Nomination Committee, Remuneration
Committee and a member of the Audit Committee. He graduated
from the University College of Wales, Aberystwyth, with a joint
honours degree in Economics and International Politics in 1982.
He also holds a Master of Business Administration degree from
the City University of London, United Kingdom.
Dato’ Amin is currently the Chairman of Asia Solar Generation
Ventures Sdn Bhd, and the Managing Director of Plynlymon
Capital Sdn Bhd and Rampai Ulltima Sdn Bhd. He is also a
Director of PDAC Formis Sdn Bhd (Brunei) and MYP Ltd.
(Singapore).
In a career spanning over 29 years, Dato’ Amin has also served
as the Managing Director of Dubai Group Sdn Bhd, CEO of
Mayban Investment Sdn Bhd, Managing Director of PJB Capital
Sdn Bhd, Executive Director of Smith Zain Securities, Senior
General Manager and a Director of Rashid Hussain Asset
Management Sdn Bhd. He is also a past President of the
Malaysian Association of Asset Managers and was a member of
the Listing Committee of Bursa Malaysia Securities Berhad.
Datuk Idris bin Haji Hashim, aged 64, was appointed as an
Independent Non-Executive Director on 20 November 2014.
He is a member of the Nomination Committee. He graduated
from Universiti Teknologi Mara (UiTM) with a Diploma in Town
and Regional Planning in 1975. Later, he furthered his studies in
United States and graduated with a postgraduate degree of
Master of Science, City and Regional Planning from Illinois
Institute of Technology, Chicago in 1978.
He started his career as an assistant town planner with Arkitek
Bersekutu Malaysia in 1975, where he participated in projects
such as Pusat Bandar Bukit Raden, Kompleks Perdagangan
Kuantan in Pahang and Bangunan Sri Mara in Kuala Lumpur.
Upon completion of his postgraduate studies, he was attached
to North-Eastern Illinois Planning Commission, Chicago as a
Planner where he was involved in various large projects in the
State of Illinois as well as the New Jeddah International Airport,
King Abdul Aziz University and Automotive Centre for Sears
Roebuck & Co. He was appointed as a lecturer in the School of
Architecture, Planning and Surveying of UiTM in 1980. He served
as Chairman of Perbadanan Nasional Berhad from 2009 to 2015.
He retired upon attaining the mandatory retirement age.
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Annual Report 2016
11
DIRECTORS’
PROFILE
(Cont’d)
DATO’ SYED KAMARULZAMAN BIN DATO’
SYED ZAINOL KHODKI SHAHABUDIN
DATO’ YEONG KOK HEE
Independent Non-Executive Director
Independent Non-Executive Director
Dato’ Syed Kamarulzaman Bin Dato’ Syed Zainol Khodki
Shahabudin, aged 51, was appointed as Independent
Non-Executive Director on 23 April 2015 and is the Chairman of
the Shariah Advisory Committee. He is also the Managing
Director of Perbadanan Nasional Berhad (PNS) since
1 December 2007 and is also a member of PNS’s Directors
Investment Committee.
Dato’ Yeong Kok Hee, a Malaysian, aged 56, was appointed to
the Board on 26 October 2007 as an Independent Non-Executive
Director. He is a member of the Audit Committee, Remuneration
Committee and Nomination Committee. Dato’ Yeong is known not
only in the information technology arena, but also in the financial
services and corporate sector.
He is a holder of Master in Science and Corporate
Communication from School of Modern Languages &
Communication, Universiti Putra Malaysia (UPM), Bachelor in
Business Administration from School of Business, Royal
Melbourne Institute of Technology (RMIT) and Diploma in
Business Studies from Mara Institute of Technology.
He was previously the Managing Director of Yayasan Tekun
Nasional and prior to that, he had accumulated over 20 years of
experience in banking operations, corporate management,
property and information technology with a last attachment at
Bank Muamalat Malaysia Berhad as a Branch Manager. He had
also served as a Lecturer at Universiti Tenaga Nasional
(UNITEN).
Currently, he is a Director of Focus Point Holdings Berhad.
Dato’ Yeong is currently a consultant of CSC Malaysia Sdn Bhd,
a position that he has held since 1999. As the company’s
consultant, he is focused in the areas of Managed Services,
Technology Consulting and Complex System Integration.
He has established and developed a significant number of
strategic relationships and alliances with the senior management
of the financial and governmental sectors.
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12
WZ SATU BERHAD (666098-X)
DIRECTORS’
PROFILE
(Cont’d)
ROSLI BIN SHAFIEI
DATUK AHMAD NIZAM
BIN SALLEH
Independent Non-Executive Director
Independent Non-Executive Director
Encik Rosli Bin Shafiei, aged 64, was appointed an Independent
Non-Executive Director on 28 October 2014. He is the Chairman
of the Audit Committee and a member of Remuneration
Committee and Long Term Incentive Plan Committee. He holds
an Advanced Diploma in Accountancy from Universiti Teknologi
Mara and is a member of the Malaysian Institute of Accountants.
Datuk Ahmad Nizam Bin Salleh, aged 61, was appointed to the
Board on 11 April 2016 as an Independent Non-Executive
Director.
He has extensive experience in finance, insurance and banking,
infrastructure and building construction, offshore construction,
installation and oil and gas related services industries; having
held senior positions in private and public listed companies.
Following the acquisition by UEM Group, he was appointed as
the Chief Operating Officer/Director of PATI Sdn Bhd, responsible
for the operations of the group which was primarily involved in
construction, quarrying and supplying construction materials.
Subsequently in 2003, upon completion of acquisition of Intria
Bhd and restructuring of the UEM Group, he assumed the
position of Chief Financial Officer for UEM Builders Bhd. He left
UEM Builders Bhd upon attaining the mandatory retirement age
in 2007.
Thereafter, he was also appointed as Chief Financial Officer for
Willis (Malaysia) Sdn Bhd, insurance brokers and consultants
from January 2011 to February 2013.
Datuk Ahmad is the holder of a Bachelor’s Degree in Business
Administration from Ohio University, USA and attended the
Advanced Management Program at Wharton School University
of Pennsylvania, USA.
He held various positions such as Analyst, Planner and Project
Coordinator in Corporate Planning and Finance divisions in
Petronas Corporate Head Office from the years 1981 to 1987.
Subsequently, he held various senior positions in Petronas
Holding Company from years 1988 to 2002, including Head of
Crude Oil Group and Group Treasury. In 2004, he assumed the
position of Managing Director/Chief Executive Officer
(“MD/CEO”) of Malaysia LNG Group of Companies and was
promoted to Vice President, Corporate Services Division of
Petronas in year 2007. From July 2010 to August 2015, he was
the MD/CEO of Engen Ltd, South Africa, which operated in
20 countries in southern Africa and Indian Ocean Islands.
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Annual Report 2016
13
DIRECTORS’
PROFILE
(Cont’d)
NG CHONG TIN
CHOI CHEE KEN
Alternate Director to Mr. Tan Chong Boon
Alternate Director to Dato’ Ir.
Mohd Ghazali Bin Kamaruzaman
Mr. Ng Chong Tin, aged 51, was appointed to the Board on
26 October 2007. On 12 May 2014, he was re-designated as an
Alternate Director to Mr. Tan Chong Boon. He embarked on his
career in the steel industry in 1985 and joined the Group in its
early days as a co-founder and Director.
Mr. Choi Chee Ken, aged 53, was appointed as an Alternate
Director to Dato’ Ir. Mohd Ghazali Bin Kamaruzaman on
28 October 2014. He holds a Bachelor’s Degree in Civil
Engineering from Ohio University, USA.
To date, Mr. Ng has 33 years of experience in the development
of sales and marketing strategies based on customer feedback
as well as analysing changing consumer trends. Mr. Ng is
primarily in charge of the sales and marketing functions of the
Group’s steel trading business.
Mr. Ng Chong Tin is the brother-in-law of Mr. Tan Ching Kee,
a Director and major shareholder of the Company.
He has over 26 years of working experience in the construction
and building materials industry. He began his career as an
Engineer in Associated Concrete Product Sdn Bhd in 1989. Later,
he joined Sepakat Setia Perunding Sdn Bhd as a Consultant
Engineer. From 1996 until 2005, he was a Senior Project Manager
in Road Builder (M) Sdn Bhd.
He teamed up with Dato’ Ir. William Tan Chee Keong to form
KenKeong Sdn Bhd in 2007 which was acquired by WZ Satu
Berhad in May 2014 and renamed as WZS KenKeong Sdn. Bhd.
Currently, he is an Executive Director of WZS KenKeong Sdn
Bhd.
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WZ SATU BERHAD (666098-X)
Group key senior
management
YM TENGKU DATO’ SRI UZIR BIN
TENGKU DATO’ UBAIDILLAH
DATO’ IR. WILLIAM
TAN CHEE KEONG
Executive Chairman / Chief Executive Officer
Aged 57
Senior Executive Director / Chief Operating Officer
Aged 61
He was appointed as Executive Chairman cum Chief Executive
Officer of the Group on 24 October 2013. His profile is listed in
the Profile of Directors on page 7 of this Annual Report.
He was appointed to the Board on 12 May 2014 and was
re-designated to Senior Executive Director cum Chief Operating
Officer of the Company on 2 July 2015. His profile is listed in the
Profile of Directors on page 7 of this Annual Report.
TAN TENG HENG
MARIZAN NOR BIN BASIRUN
Executive Director / Chief Financial Officer
Aged 52
Chief Technical Officer
Aged 58
He was appointed as the Group’s Chief Financial Officer cum
Executive Director on 24 October 2013. His profile is listed in the
Profile of Directors on page 8 of this Annual Report.
Encik Marizan Nor Bin Basirun was appointed as Chief Technical
Officer on 2 July 2015. He holds a BSc. (Hons) Mechanical
Engineering from Leeds University, United Kingdom. He also
holds a Master of Business Administration degree from Sheffield
Business School, Sheffield Hallam University, United Kingdom.
He has accumulated over 30 years of experience in power,
energy, alternative fuels, wind turbines, marine engineering and
homogenizer product systems. He was previously an Executive
Director of Rohas-Euco Industries Bhd.
•
All Directors and members of the Key Senior Management are Malaysian and of male gender.
•
Save as disclosed, none of the Directors and members of the Key Senior Management have:
1.
any other directorships in public companies and listed issuers;
2.
any family relationship with any Director and/or major shareholder;
3.
any conflict of interest with the Company;
4.
any convictions for offences within the past 5 years other than traffic offences, if any; and
5.
any public sanction or penalty imposed by the relevant regulatory bodies during the financial year.
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Annual Report 2016
CHAIRMAN’S STATEMENT
DEAR SHAREHOLDERS,
ON BEHALF OF THE BOARD OF DIRECTORS OF WZ SATU BERHAD (THE
GROUP), I AM DELIGHTED TO PRESENT TO YOU OUR ANNUAL REPORT AND
AUDITED FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED
31 AUGUST 2016
This financial year tested the
resilience of the Group as the
operating conditions were
challenging. The overall macro
conditions have not improved
and the level of uncertainties
have impacted the operations
of key operating units
COMMENDABLE PROFIT GROWTH
Despite the difficult operating
environment, the financial year
under review continued to
produce commendable results
for the Group.
The increase in turnover is principally contributed by the increase
in contribution from WZS KenKeong Sdn Bhd (WZS KenKeong),
the civil engineering and construction subsidiary of RM257.6
million as compared with its preceding year’s turnover of only
RM155.0 million. The oil and gas subsidiary, Misi Setia Oil & Gas
Sdn Bhd (Misi) contributed a turnover of RM113.9 million and the
balance turnover was contributed by the manufacturing and
other businesses.
The Group’s profit after tax achieved a growth of 12.7% to
RM23.0 million from RM20.4 million in the previous financial year.
GROUP’S FINANCIAL PERFORMANCE
For the financial year ended 31 August 2016, the Group
generated RM465.9 million in turnover as compared with
RM351.4 million for the preceding financial year.
The Group’s turnover did not include any contribution from the
mining division as the results of the associated companies were
only equity accounted.
The major contributors to the Group’s bottom line were bauxite
mining and civil engineering and construction with a contribution
of RM9.7 million and RM8.7 million, respectively. Whilst the oil
and gas division contributed RM3.3 million, the manufacturing
and other businesses collectively turned around and posted net
profits of RM1.6 million as compared to a loss of RM6.1 million in
the preceding year.
The Group’s order book stands at RM931.8 million as at
31 August 2016.
15
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16
WZ SATU BERHAD (666098-X)
CHAIRMAN’S
STATEMENT
(Cont’d)
OPERATIONAL REVIEWS AND
PROSPECTS
Civil Engineering and Construction
Division
The Group’s civil engineering and
construction arm, WZS KenKeong was
impacted by the intense competition
inherent in this industry. After laying the
foundation with talent pool and investment
in plants and machineries, it is poised to
taking on greater challenges and bigger
ticket items.
The existing jobs in hand will sustain WZS
KenKeong for the next two to three years.
Having said that, the Group is confident
that its order book will grow well beyond
the run-off rate. Presently, all our jobs are
infrastructure related works and we are not
involved in the construction of buildings.
The Group has entered into a
collaboration agreement with UEM Group
Berhad and has also proposed the
implementation of the Central Spine Road
project to the government. The Group is
optimistic that the collaboration with UEM
Group will be successful.
Oil and Gas Industry Division
The continued weakness in the price
of crude oil has severely affected the
entire oil and gas industry. Misi, being an
onshore oil and gas industry service
provider, was not as highly affected by the
recent turmoil in oil prices as compare with
that of the offshore oil and gas players.
Misi’s investment in the Automated Pipe
Spooling fabrication plant in Gebeng,
Kuantan has kicked off with the maiden
contract to provide pipe spool prefabrication work to The Refinery and
Petrochemical Integrated Development
(RAPID) Package 4 - Amine Recovery Units,
Sulfur Recovery Units, Sour Water
Stripping Units, Liquid Sulfur Storage Units
and Sulfur Solidification Units. This facility
has enhanced Misi’s position in providing
a more comprehensive suite of services
and enabled Misi to strategically position
itself to fill the vacuum in the pipe spooling
capacity in the local market.
Misi continued to perform well in the areas
of products and services for valves and
metering for the oil and gas industry.
Presently, Misi holds the agency for an
extensive metering, valve and related
measuring solutions from GE Sensing, IMI
CCI, Cameron and Scott Safety.
Given the current circumstances, Misi’s
performance is commendable and the
Group is optimistic that it will contribute
meaningfully to the Group’s profitability
going forward.
Revenue
RM465,933,207
Gross Profit
RM81,459,389
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Annual Report 2016
17
CHAIRMAN’S
STATEMENT
(Cont’d)
“
“
The Group has realigned its
businesses that require
intensive capital and long
gestation period with the
disposal, amongst others, of its
bright steel manufacturing
operations in Indonesia.
Mining Division
Manufacturing and Other Businesses
The Group’s mining operations through its
associate companies were adversely
affected by the moratorium imposed by
the regulatory authorities. The after tax
contribution from this division fell sharply
to RM9.7million from RM18.5 million in the
preceding year.
The Group’s bright steel manufacturing
business in Malaysia continued to
operate under difficult market conditions.
Despite the turnaround in the results, the
Group remains cautious on the outlook of
our manufacturing operations in the
coming year.
Despite the uncertainties surrounding the
moratorium, the Group is optimistic that
issues resulting in the moratorium, given
time, will be resolved. Hence, the Group
is optimistic of the mining division's
continued significant contribution to its
profitability in the foreseeable future.
The Group’s power generation business
under WZS Powergen Sdn Bhd has
secured orders for supplying standby
mobile diesel generators to Sabah
Electricity Sdn Bhd and operationally
turnaround.
The Group has realigned its businesses
that require intensive capital and long
gestation period with the disposal,
amongst others, of its bright steel
manufacturing operations in Indonesia.
The disposals of these businesses are to
optimise the Group’s return on assets
deployed and shareholders’ value.
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18
WZ SATU BERHAD (666098-X)
CHAIRMAN’S
STATEMENT
(Cont’d)
CORPORATE SOCIAL RESPONSIBILITY
DIVIDEND
During the financial year, the Group Corporate Social
Responsibility initiatives include visits to an orphanage and an
orang asli settlement, namely, Pusat Jagaan Kanak-Kanak
Yatim/Miskin Rukaiyah at Sungai Merab Kajang, Selangor and
Perkampungan Orang Asli Kampung Donglai Baru, Hulu Langat,
Selangor. During the visits, we conducted various activities
including birthday celebrations with the orphans, “gotongroyong” to clean and spruce the orphanage and settlement and
provided basic assistance.
The Group has proposed a final dividend of 2 sen per share and
a special dividend of 1 sen per share to the shareholders.
This final dividend of 2 sen per share represents a pay-out of
30% of its profit after taxation and the special dividend of 1 sen
per share represents a pay-out of an additional 15% of its profit
after taxation.
The Group is committed to its corporate social responsibility and
going forward, we will continue to engage in corporate social
responsibility initiatives.
Cumulatively, this is well above the dividend policy of distributing
20% to 35% of the Group’s consolidated profit after taxation and
non-controlling interests in respect of any financial year to its
shareholders.
ACKNOWLEDGEMENT
I wish to extend a warm welcome to Datuk Ahmad Nizam Bin Salleh as an Independent Non-Executive Director. The Group will stand
to benefit from his vast experience in the oil and gas industry. I would like to thank our stakeholders, whom comprise shareholders,
bankers, customers and suppliers, for their support and trust in the Group. Lastly, I wish to express my sincere gratitude to the Board
of Directors, management and staff for their contributions, which are crucial to the Group’s continued success.
On behalf of the Board,
YM TENGKU DATO’ SRI UZIR BIN TENGKU DATO’ UBAIDILLAH
Executive Chairman/Chief Executive Officer
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Annual Report 2016
19
FIVE-YEAR
PERFORMANCE HIGHLIGHTS
12 months
2012
12 months
2013
16 months
2014
12 months
2015
12 months
2016
RM’000
RM’000
RM’000
RM’000
RM’000
Revenue
84,684
86,932
160,388
351,422
465,933
Gross Profit
10,133
8,907
29,294
62,486
81,459
6,311
7,594
22,959
42,130
46,308
Depreciation and amortisation
(3,515)
(2,825)
(3,382)
(5,072)
(7,300)
Finance costs
(1,524)
(1,963)
(2,144)
(3,437)
(6,026)
EBITDA
Share of results of an associate, net of tax
Profit before tax
Taxation
Loss for the financial period/year from
discontinued operation, net of tax
-
-
4,476
18,537
9,392
1,272
2,806
15,373
26,734
27,996
(1,774)
(4,101)
(4,976)
(1,918)
(2,207)
(471)
(93)
-
-
801
2,713
11,681
20,426
23,020
99,075
98,858
124,662
298,176
329,648
11.97%
10.25%
18.26%
17.78%
17.48%
PAT margin (%)
0.95%
3.12%
7.28%
5.81%
4.94%
Basic EPS (sen)
0.81
2.74
9.37
6.95
7.00
Profit after tax
Weighted Average Number of WZ Satu shares (’000)
Gross margin (%)
-
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20
WZ SATU BERHAD (666098-X)
FIVE-YEAR
PERFORMANCE HIGHLIGHTS
(Cont’d)
+33%
Revenue
(RM’000)
+30%
GROSS PROFIT
(RM’000)
84,684
86,932
160,388
351,422
465,933
10,133
8,907
29,294
62,486
81,459
2012
2013
2014
2015
2016
2012
2013
2014
2015
2016
+10%
EBITDA
(RM’000)
+13%
PROFIT AFTER TAX
(RM’000)
6,311
7,594
22,959
42,130
46,308
801
2,713
11,681
20,426
23,020
2012
2013
2014
2015
2016
2012
2013
2014
2015
2016
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Annual Report 2016
21
CORPORATE
SOCIAL RESPONSIBILITY
PUSAT JAGAAN KANAK-KANAK YATIM / MISKIN RUKAIYAH
On 31 October 2015, the Group visited Pusat Jagaan Kanak-Kanak Yatim / Miskin Rukaiyah at Sungai Merab, Kajang with the
objective of bringing cheer and joy to underprivileged children. The Group contributed much needed basic food items and
stationeries to the children. The Group assisted in clean-up efforts of the area, planting, housekeeping, painting and giving talks to
the children on basic health, safety and environmental awareness issues. The visit not only benefited the children but also fostered
greater camaraderie amongst the Group’s employees who volunteered in this programme.
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22
WZ SATU BERHAD (666098-X)
corporate
social responsibility
(Cont’d)
ORANG ASLI KG. DONGLAI BARU, HULU LANGAT, SELANGOR
On 27 August 2016, the Group visited Orang Asli Community at Kg. Donglai Baru, Hulu Langat, Selangor. This programme saw a
good participation of 60 employees with 250 Orang Asli. The programme included exercises, tele-matches and gift packs to Orang
Asli children. Our Group’s Health, Safety and Environment Representative promoted awareness on food nutrition and cleanliness
and a joint luncheon was held afterwards. This programme brought much warmth and cheer to the Orang Asli and our employees.
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Annual Report 2016
23
Corporate Governance
Statement
The Board of Directors of WZ Satu Berhad (the Board) continues to uphold its commitments to the highest standard of corporate
governance and best practices that are set out in the Malaysian Code on Corporate Governance 2012 (the Code) issued by the
Securities Commission Malaysia and provisions in the Main Market Listing Requirements of Bursa Malaysia Securities Berhad (MMLR)
throughout the Group.
The Board will continue to review and enhance the Group’s corporate governance framework to ensure its relevance and ability in
meeting future challenges in its course to enhance shareholders value and establish long term sustainable value for other
stakeholders. The Board is pleased to report below on the extent to which the principles and best practices of the Code were applied
throughout the financial year ended 31 August 2016.
PRINCIPLE 1: ESTABLISHING CLEAR ROLES AND RESPONSIBILITIES OF THE BOARD
THE BOARD OF DIRECTORS
It is the overall governance responsibilities of the Board to lead and control the Group. Amongst others, these responsibilities include
charting the strategic direction of the Group and supervising its affairs to ensure its success; implementation of suitable and effective
system of internal control and risk management; and ensuring compliance with the relevant laws, regulations, guidelines and
directives.
Clear Roles and Responsibilities of the Board
The Board has established clear functions reserved for its members and those delegated to management. This allocation of
responsibilities reflects the dynamic nature of the relationship necessary for the Group to adapt to changing circumstances.
Key matters such as approval of interim and annual financial results, acquisitions and disposals, investments, as well as material
agreements are reserved for the Board, while a capable and experienced management team is put in charge to oversee the
day-to-day operations of the Group.
In line with the practice of good corporate governance, the Board has established and implemented various processes to assist
members of the Board in the discharge of their roles and responsibilities. The Board’s roles and responsibilities include the following:
(a) reviewing and adopting strategic plans for the Group;
(b) overseeing the conduct of the Group’s businesses to evaluate whether the businesses are being properly managed;
(c) reviewing principal risks and ensuring the implementation of appropriate systems of internal control to manage risks and adoption
of relevant mitigation measures;
(d) reviewing the adequacy and integrity of the Group’s internal control systems and management information systems, including
systems for compliance with applicable laws, regulations, rules, directives and guidelines;
(e) reviewing and approving succession planning, including appointing, training, compensating and where appropriate replacing
key principal officers; and
(f) developing and implementing investors’ relations programmes and shareholder communication policy for the Group.
Board Committees
To ensure effectiveness in discharging its responsibilities, the Board delegates specific powers to other Board Committees as follows:
(a)
(b)
(c)
(d)
(e)
(f)
Nomination Committee;
Remuneration Committee;
Audit Committee;
Shariah Advisory Committee;
Long Term Incentive Plan Committee; and
Investment Committee.
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24
WZ SATU BERHAD (666098-X)
Corporate Governance
Statement
(CONT’D)
Board Diversity
The Board recognises that board diversity is an essential element contributing to the sustainable development of the Group and
does not discriminate on the basis of ethnicity, age, gender, nationality, political affiliation, religious affiliation, marital status, education
background or physical ability. There is no specific target in the composition in terms of gender, age or ethnic of its Board members
or members of Senior Management.
The Board acknowledges the recommendation of the Code on gender diversity but believes that the overriding factors in selection
of a Director must be based on skill, experience, competency and wealth of knowledge, while taking into consideration diversity of
the Board. The Group had established a Board Diversity Policy to formalise its diversity approach as above.
Board Charter
The Board Charter which broadly sets out the Board’s governance process and Board-Management relationship, has been reviewed
and adopted by the Board.
The Board Charter sets out, among others, the following:
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
(i)
the principal role of the Board;
the functions, roles, responsibilities and powers of the Board;
the functions, roles, responsibilities and powers of its various committees;
processes and procedures for convening Board Meetings;
Board’s access to information and professional advice;
continuing development and training;
succession plan;
the role of Secretary; and
division of authority between the Board and the Management.
The Board Charter was last reviewed and updated on 8 December 2016 in accordance with the needs of the Group and any new
regulations to ensure its relevance.
Code of Conduct
The Group established appropriate standards of business conduct and ethical behaviour to govern the exercise of the Directors’
duties and responsibilities as Directors of the Company in order to uphold good corporate integrity.
The Code of Conduct sets out the general principles and standards of business conduct and ethical behaviour for the Directors in
the performance and exercise of their responsibilities as Directors of the Company or when representing the Group and includes
the expectation of professionalism and trustworthiness from the Directors.
Whistle Blowing Policy
The policy provides an avenue for any Director, officer, employee and members of the public to report instances of unethical, unlawful
or undesirable conduct on a confidential basis without fear of intimidation or reprisal. Nothing in this policy shall interfere with other
established operational policies and processes. All disclosures pursuant to this policy are to be made to an Independent
Non-Executive Director. The Board shall be apprised of disclosure matters which are serious in nature or of grave repercussions.
Confidential reports can be channeled online via this email address: [email protected].
Sustainability Policy
The Board has formalised the Group’s strategies on promoting sustainability. The Board and the Management are committed to
continually improving the integration of sustainability into working environment and business processes, together with the
accountability and transparency in the sustainability performance.
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Annual Report 2016
25
Corporate Governance
Statement
(CONT’D)
In order to operate with sustainability, the key impact areas are to ensure operations and services are safe for the employees,
customers and that environmental quality considerations are incorporated into the Group’s daily business activities which are
undertaken and accountable by every employee; create an inspiring workplace that helps to build a diverse work force which
contributes to highest potential and commits to a harassment free working environment, where every employee is treated fairly and
with respect; and to adhere to the requirements of all laws and regulatory requirements, standards and best practices to which the
Group subscribes and establish and adopt high ethical values and ensure these practices are upheld across the business.
The Board Diversity Policy, Board Charter, Code of Conduct, Whistle Blowing Policy and Sustainability Policy are published on the
Company’s corporate website at www.wzs.my.
Supply and Access to Information
The Board, in order to enable them to discharge their duties effectively, has full and unrestricted access to the Management and
Company Secretaries for all information pertaining to the businesses and corporate affairs of the Group. If need arises, the Board
may also seek appropriate external independent professional advice at the Group’s expense.
Prior to Board or Board Committee meetings, the agenda, minutes of previous meeting and board papers are circulated to the
Directors to allow sufficient time to ensure that they receive the necessary information in advance so that they can review, consider
and deliberate on the matters, and where necessary, obtain further information to facilitate informed decision making.
Qualified and Competent Company Secretary
The Board is supported by experienced and competent Company Secretaries in discharging its duties and responsibilities.
The Board receives regular advice, updates and notices from the Company Secretaries to ensure compliance with applicable laws,
regulations and corporate governance matters. The Company Secretaries attend and ensure that all Board and Board Committee
meetings are properly convened and all deliberations and decisions are properly minuted and kept. They are also responsible in
ensuring that Board’s policies and procedures are followed, and the applicable statutory and regulatory requirements are observed.
PRINCIPLE 2: STRENGTHENING THE BOARD’S COMPOSITION
Composition and Balance of the Board
The Board has fourteen (14) members comprising six (6) Executive Directors, six (6) Independent Non-Executive Directors and two
(2) Alternate Directors. The present composition of the Board has the requisite number of Independent Non-Executive Directors as
prescribed by the MMLR to facilitate effective and independent decision making and balance of power.
The Board Members have diverse backgrounds and experience in various fields. Collectively, these Board members bring their
strength to bear on issues of oversight, strategy, performance, control, resource allocation and integrity. The Board is also well
balanced as both the major and minority shareholders are also represented.
The Chairman of the Board is presently held by an Executive Director and in such instances, the Code recommends that the Board
composition should consist of a majority of Independent Directors. Despite the Chairman being an Executive member of the Board,
the Board considers its current size adequate given the existing scope and nature of the Group’s operations. The Board takes comfort
in the presence of Independent Non-Executive Directors with distinguished records and credentials to ensure that there are
independent views and judgments. The Independent Non-Executive Directors vocalise their concerns whenever necessary to ensure
proper checks and balances are in place in Board decisions and implementation of policies.
The Board is satisfied that notwithstanding Tengku Dato’ Sri’s Executive Chairmanship, he has shown deep commitment, impartial
leadership, and abilities in discharging his duties effectively. In order to ensure effective conduct of the Board, the Board conducts
its proceedings in accordance with the statutory requirements and best practices. The Board has also appointed a Deputy Chairman
of the Board, who is a Senior Independent Non-Executive Director. During the financial year, the Board had also appointed an
additional Independent Non-Executive Director to reinforce independence and corporate governance.
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26
WZ SATU BERHAD (666098-X)
Corporate Governance
Statement
(CONT’D)
In addition, the Board has identified Dato’ Amin Rafie Bin Othman, the Deputy Chairman cum Senior Independent Non-Executive
Director to whom concerns may be conveyed by shareholders and the general public. Dato’ Amin Rafie Bin Othman is also the
Chairman of the Nomination Committee and Remuneration Committee and a member of the Audit Committee.
The profiles of the members of the Board, are set out on pages 7 to 13 of this Annual Report.
Criteria for Recruitment
The Nomination Committee has the responsibility of evaluating, proposing and recommending new candidates for appointment to
the Board and Committees to the Board. In reviewing and recommending to the Board any new appointment of a Director,
the Nomination Committee considers:
(a) age, expertise, experience, professionalism, integrity, capability and such other factors which would contribute to the Board’s
collective skills;
(b) composition requirements for the Board and Committees; and
(c) the number of directorships held by the candidate in other public listed companies i.e., not more than five (5). This ensures that
their commitments, resources and time are focused on the affairs of the Group to enable them to discharge their duties effectively
and to comply with the MMLR.
The process flow for the appointment of a new director is as follows:
Identification of
Candidates
Evaluation of
Suitability
Deliberation by
NC
Recommendation
to the Board
At the time of appointment, the Board shall obtain the Directors’ commitment to devote sufficient time to carry out their responsibilities.
Directors are required to notify the Chairman before accepting any new directorship and they are aware of this requirement. In
addition, they are required to indicate the time expected to be spent on the new appointment.
Board Performance Evaluation and Review
The Board carried out an annual assessment on the overall effectiveness of the Board as a whole, its Board committees and individual
Directors. The objective is to improve the Board’s effectiveness by identifying gaps, addressing weaknesses and maximising
strengths. Using a combination of self and peer assessments, Directors obtain feedback on their level of effectiveness on various
performance aspects via a series of questions and answers. Responses from the Directors were analysed and presented to the
Board, and areas requiring improvements are addressed by the Board and Management.
Re-election and Re-appointment of Directors
All newly appointed Directors are subject to re-election by the shareholders at the next Annual General Meeting (AGM) in accordance
with the Company’s Articles of Association (the Articles).
The Articles also provide that at least one-third (1/3), or the number nearest one-third (1/3) of the remaining Directors shall retire
from office and be eligible for re-election at each AGM provided that all Directors shall retire from office at least once in every three
(3) years but shall be eligible for re-election.
Accordingly, YM Tengku Dato’ Sri Uzir Bin Tengku Dato’ Ubaidillah, Mr. Tan Teng Heng, Mr. Tan Ching Kee and Dato’ Ir. Mohd
Ghazali Bin Kamaruzaman will be retiring in accordance with Article 84 of the Articles; whilst Datuk Ahmad Nizam Bin Salleh will be
retiring in accordance with Article 91 of the Articles.
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27
Annual Report 2016
Corporate Governance
Statement
(CONT’D)
Board Committees
To ensure the effective discharge of its fiduciary duties and responsibilities more effectively, the Board delegates specific
responsibilities to Board Committees, namely the Audit Committee, Nomination Committee, Remuneration Committee, Shariah
Advisory Committee, Long Term Incentive Plan Committee and Investment Committee.
All Committees function within and in accordance with clearly defined terms of reference that were approved by the Board.
These Committees have unrestricted authority to examine issues and submit reports of their findings to the Board. As the Committees
have no authority to make decisions on matters reserved for the Board, the recommendations would be deliberated by the Board for
decisions.
The responsibilities, compositions and activities of the abovementioned Committees are described below:
(a) Nomination Committee
The Nomination Committee is empowered by the Board among others to recommend to the Board the right candidate with the
necessary skills, experience and competencies to be filled in the Board and Board Committees, re-election and re-appointment
of Directors.
The Nomination Committee also assesses the effectiveness of the Board as a whole, the Board Committees and the contribution
of each individual Director, including Independent Non-Executive Directors on an annual basis. The Directors are provided with
a questionnaire to carry out the assessments with absolute anonymity and are based on their competence, capability,
time commitment, integrity, participation and contribution in Board and committees. The results are then tabulated and presented
to the Nomination Committee for its review and recommendation to the Board for notation. A summarised version of the results
is circulated to each Director for their information. The criteria that are used in the assessments of the Board/Committees include
the required mix of skills and experience and the effectiveness of the Board/Committees.
During the financial year under review, the Nomination Committee held two (2) meetings to deliberate and report to the Board
on the following:
•
•
•
•
•
•
•
•
review of the profile and nomination of new Board member;
assessment of the independence of independent directors;
review of the Directors who were due for re-election by rotation and re-appointment;
review of the retention of independent directors whose tenure have exceeded nine (9) years;
review of the Board’s representation and the required mix of skills and experience and assessing the effectiveness of the
Board as a whole;
review of the current size and composition of the Board;
review and deliberation on the findings and outcomes of the assessments of the Board, Board Committees and Directors;
and
review of the term of office and performance of the Audit Committee and each of its members.
The terms of reference of the Nomination Committee is available for reference on the Company’s website at www.wzs.my
All members of the Nomination Committee are Independent Non-Executive Directors. The details of the members and their
attendance during the financial year are as follows:
Name
Attendance
Dato’ Amin Rafie Bin Othman (Chairman)
2/2
Datuk Idris Bin Haji Hashim
2/2
Dato’ Yeong Kok Hee
2/2
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28
WZ SATU BERHAD (666098-X)
Corporate Governance
Statement
(CONT’D)
(b) Remuneration Committee
This Committee is primarily responsible for reviewing and recommending the appropriate level of remuneration for the Executive
Directors and the Non-Executive Directors.
The Remuneration Committee’s responsibilities include the following:
•
•
•
To set, review, recommend and advise the policy framework on all elements of the remuneration such as reward structure,
fringe benefits and other terms of employment of Executive Directors having regard to the overall Group policy
guidelines/framework;
To advise the Board on the performance of the Chief Executive Officer and Executive Directors, and an assessment of their
entitlements to performance related pay; and
To review the history of and proposals for the remuneration package of the Board’s committees.
Remuneration Policy
The Board believes that appropriate and competitive remuneration is important to attract, retain and motivate Directors of the
necessary calibre, expertise and experience to lead the Group. In line with this philosophy, remuneration for the Executive
Directors is aligned to individual and corporate performance. For Non-Executive Directors, the fees are set based on the
responsibilities shouldered by the respective Directors. Individual Directors do not participate in determining their own
remuneration package.
The Remuneration Committee recommends the policy for assessing the compensation package for the Executive Directors.
It also reviews and recommends to the Board for approval the remuneration packages and other employment conditions for the
Executive Directors.
The remuneration of Executive Directors is made up of basic salaries, monetary incentives and fringe benefits; and is linked to
the achievement of corporate performance targets. Salaries for Executive Directors consist of both fixed (i.e. base salary) and
variable (performance-based incentive) remuneration components. The remuneration levels of Executive Directors are structured
to enable the Company to attract and retain the most qualified Executive Board members. The Company may provide competitive
benefits to Executive Directors, such as a fully expensed car or cash alternative in lieu of car, company driver, fuel expenses,
private medical insurance and life insurance. Allowances relating to business expenses (i.e. entertainment and travel) incurred
are reimbursed such that no additional compensation is given to the Executive Directors.
The remuneration of Non-Executive Directors is made up of Directors’ fees and meeting allowances. The level of remuneration
for Non-Executive Directors shall reflect the experience and level of responsibilities undertaken by the Non-Executive Director
concerned. The remuneration of a Non-Executive Director shall not be based on commission, the percentage of profits,
or turnover. Non-Executive Directors are not entitled to receive performance-based bonuses nor participate in short-term and/or
long-term incentive plans. The emoluments of Non-Executive Directors are reviewed by the Remuneration Committee and Board
annually.
Details of the Directors’ remuneration for the financial year ended 31 August 2016 are as follows:
Company
Amount (RM’000)
Executive
Non-Executive
Fee
Salary
Other remuneration and emoluments
Estimated value of benefits-in-kind
1,320
802
28
296
32
7
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29
Annual Report 2016
Corporate Governance
Statement
(CONT’D)
Group
Amount (RM’000)
Executive
Non-Executive
Fee
Salary
Other remuneration and emoluments
Estimated value of benefits-in-kind
3,121
1,428
37
306
32
7
The aggregate remuneration paid to Directors by the Company during the year, is analysed into the followings bands:
Company
Range of Remuneration
RM1 to RM50,000
RM50,001 to RM100,000
RM650,001 to RM700,000
RM700,001 to RM750,000
RM750,001 to RM800,000
Number of Directors
Executive
Non-Executive
1
1
1
1
5
-
Group
Range of Remuneration
RM1 to RM50,000
RM50,001 to RM100,000
RM350,001 to RM400,000
RM450,001 to RM500,000
RM500,001 to RM550,000
RM700,001 to RM750,000
RM750,001 to RM800,000
RM800,001 to RM850,000
Number of Directors
Executive
Non-Executive
2
2
1
1
1
1
1
5
-
During the financial year, the Committee conducted one (1) meeting to review the remuneration of all Executive Directors,
their performance, their terms of service agreement, bonuses and to perform a self-assessment of its performance. The details
of the members and their attendance during the financial year are as follows:
Name
Dato’ Amin Rafie Bin Othman (Chairman)
Dato’ Ir. William Tan Chee Keong
Tan Ching Kee
Dato’ Yeong Kok Hee
Rosli Bin Shafiei
Attendance
1/1
1/1
1/1
1/1
1/1
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30
WZ SATU BERHAD (666098-X)
Corporate Governance
Statement
(CONT’D)
(c) Audit Committee
Composition of the Audit Committee, its function and a summary of its activities are set out on pages 37 to 40 of this Annual
Report.
(d) Shariah Advisory Committee
The Shariah Advisory Committee was established on 1 April 2016 to perform an oversight role on Shariah matters related to the
Group’s business operations and activities. The Shariah Advisory Committee shall be responsible and accountable for all its
decisions, views and opinions related to Shariah matters. The Shariah Advisory Committee shall ensure that decisions are made
after undergoing rigorous and robust research and deliberation exercises.
The details of the members and their attendance during the financial year are as follows:
Name
Dato’ Syed Kamarulzaman Bin Dato’ Syed Zainol Khodki Shahabudin (Chairman)
Tan Teng Heng
Marizan Nor Bin Basirun
Tuan Haji Sabar @ Sabal Bin Haji Abdul Rahaman (Advisor)
Mahamahpoyi Hj Walah (Advisor)
Attendance
1/1
1/1
1/1
1/1
0/1
Main duties of the Shariah Advisory Committee shall include:
•
Provide Advice to the Board
The Shariah Advisory Committee shall advise the Board and provide input to the Group on Shariah matters in order for the
Group to comply with Shariah principles at all times.
•
Endorse Shariah Policies and Procedures
The Shariah Advisory Committee shall endorse Shariah policies and procedures prepared by the Company and ensure that
the contents do not contain any elements which are not in line with Shariah principles.
•
Assist Related Parties on Shariah Matters upon Request for Advice
The related parties of the Company such as its legal counsel, auditors or consultant may seek advice on Shariah matters
from the Shariah Advisory Committee. The Shariah Advisory Committee is expected to provide the necessary assistance to
the requesting party to ensure compliance and subscription with Shariah principles.
•
Provide Written Shariah Opinion
The Shariah Advisory Committee is required to record any opinion given. In particular, the Shariah Advisory Committee shall
prepare written Shariah opinions where by the Company makes reference to the Shariah Advisory Committee for further
deliberation.
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Annual Report 2016
31
Corporate Governance
Statement
(CONT’D)
(e) Long Term Incentive Plan Committee
The Long Term Incentive Plan Committee was established to implement and administer the Executive Share Option Scheme
and Executive Share Grant Scheme.
The details of the members are as follows:
Name
YM Tengku Dato’ Sri Uzir Bin Tengku Dato’ Ubaidillah (Chairman)
Tan Teng Heng
Rosli Bin Shafiei
The Long Term Incentive Plan Committee’s terms of reference includes the following:
•
•
•
•
•
•
•
set the criteria and determine the eligibility of any employee or any Director to participate in the Long Term Incentive Plan
Scheme;
determine the number of shares to be comprised in an offer to be made to any employee or any Director;
impose condition(s), if any, on any Long Term Incentive Plan option granted, preventing its exercise unless such condition(s)
has been complied with;
determine the manner in which any employee or any Director being made an offer to participate in the Long Term Incentive
Plan Scheme may accept such an offer;
suspend, reinstate, vary or cancel the rights of a Grantee where it is deemed appropriate;
determine the rate of discount to and the subscription price of the option; and
hear any dispute raised by any employee on any matter in relation to the Long Term Incentive Plan Scheme and after due
consideration, issue its decision.
(f) Investment Committee
The Investment Committee was established on 23 September 2016 with the principle objective to make day-to-day investment
decisions up to the pre-approved limit determined by the Board of Directors.
The details of the members are as follows:
Name
YM Tengku Dato’ Sri Uzir Bin Tengku Dato’ Ubaidillah (Chairman)
Dato’ Ir. William Tan Chee Keong
Tan Teng Heng
The Investment Committee’s terms of reference includes the following:
•
•
•
•
•
to invest up to the prescribed amount as determined by the Board from time to time;
to evaluate and recommend to the Board, proposals on new investments and divestments of significant value for the Board’s
approval;
to conduct annual evaluations of the Group’s investment activities;
to act in line with the directions of the Board of Directors; and
to consider and examine such other matters as the Investment Committee considers appropriate.
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32
WZ SATU BERHAD (666098-X)
Corporate Governance
Statement
(CONT’D)
PRINCIPLE 3: REINFORCING INDEPENDENCE
Board Independence
Independence is important for ensuring objectivity and fairness in the Board’s decision making. In order to uphold the independence
of Independent Directors, the Board has adopted the following recommendations of the Code as the Board’s policies:
(a) subject to the Board’s justification and shareholders’ approval, tenure of Independent Directors should not exceed a cumulative
year of nine (9) years; and
(b) undertake annual assessment of independence of its Independent Directors based on a set of criteria established by the
Nomination Committee focusing on events that would affect the ability of Independent Directors to continue bringing independent
and objective judgment for board deliberation and the regulatory definition of Independent Directors and apply these criteria
upon admission, annually and when any new interest or relationship develops.
Based on the annual assessment carried out, the Nomination Committee and the Board are satisfied that Dato’ Amin Rafie Bin
Othman and Dato’ Yeong Kok Hee, who have served the Board for more than nine (9) years to-date, remain objective and
independent in expressing their views and in participating in deliberations and decision makings of the Board and Board Committees.
The length of their service on the Board does not in any way interfere with their exercise of independent judgment and ability to act
in the best interests of the Company.
The Board concurred that the continuous contributions of Dato’ Amin Rafie Bin Othman and Dato’ Yeong Kok Hee are beneficial to
the Board and the Company as a whole. In view thereof, the Board recommends and supports their retention as Independent
Directors of the Company which will be tabled for shareholders’ approval at the forthcoming Twelfth Annual General Meeting of
the Company. Details of the assessments are disclosed in the Notice of the Twelfth Annual General Meeting enclosed in this
Annual Report.
PRINCIPLE 4: FOSTERING COMMITMENT
Board Meetings
The Board meets at least once every quarter and on other occasions, as and when necessary, inter-alia, to approve quarterly financial
results, annual report, business plans and budgets as well as to review the performance of the Group, its operating subsidiaries and
other business development activities. Management and external advisors (when needed) are invited to attend the Board and Board
Committee meetings and to provide their inputs and advices on relevant matters.
The attendance record of individual Directors at the Board meetings for the financial year ended 31 August 2016 is detailed below:
Name
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
YM Tengku Dato’ Sri Uzir Bin Tengku Dato’ Ubaidillah
Dato’ Ir. William Tan Chee Keong
Tan Teng Heng
Tan Ching Kee
Tan Chong Boon
Dato’ Ir. Mohd Ghazali Bin Kamaruzaman
Dato’ Amin Rafie Bin Othman
Datuk Idris Bin Haji Hashim
Dato’ Syed Kamarulzaman Bin Dato’ Syed Zainol Khodki Shahabudin
Dato’ Yeong Kok Hee
Rosli Bin Shafiei
Datuk Ahmad Nizam Bin Salleh (Appointed on 11 April 2016)
Attendance
5/5
5/5
5/5
5/5
5/5
5/5
5/5
5/5
4/5
5/5
5/5
2/2
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Annual Report 2016
33
Corporate Governance
Statement
(CONT’D)
The Board is satisfied with the level of commitment given by the Directors towards fulfilling their roles and responsibilities as Directors.
This, amongst others, is evidenced by the attendance record of the Directors at Board meetings.
The minimum 50% attendance requirement as stipulated in the MMLR has been complied with.
Directors’ Training
The Board recognises the need to attend training to enable the Directors to discharge their duties effectively. Under the Code,
the training needs of each Director would be identified and proposed by the individual Director and the Nomination Committee
annually upon the completion of Director performance appraisals. The Nomination Committee continues to evaluate and assess the
training needs of the Directors to ensure professionalism in discharging their duties and recommends to the Board accordingly.
The Board encourages its members to enhance their skills and knowledge on relevant new laws, regulations and changing
commercial risks and to keep abreast with the developments in the economy, industry and technology. During the financial year
under review, the Directors attended the following seminars, conferences and programmes:
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
(i)
(j)
(k)
(l)
(m)
(n)
(o)
Corporate Governance (“CG”) Breakfast Series with Directors: Future of Auditor Reporting - The Game Changer for Boardroom
2015 Business and Tax Seminar
CG Breakfast Series with Directors: “Board Reward and Recognition”
Corporate Seminar February 2016 Global Market Outlook
TS 16949 Training - Statistical Process Control (SPC) and Measurement System Analysis (MSA)
Risk Management & Internal Control Workshop 2015
Audit Committee Conference 2016
Risk Management Programme for Audit and Risk Committee: I Am Ready to Manage Risks
Bursa Malaysia's Breakfast Series: Future of Auditor Reporting - The Game Changer for Boardroom
Malaysian Property Seminar - Laws Critical Issues and Future Developments
Risk Management Assessment Overview in line with ISO 9001 requirement
Risk Management Review
Corporate Governance Breakfast Series with Directors: The Strategy, the Leadership, the Stakeholders and the Board
3rd International OTEC Symposium Kuala Lumpur 2015
The 11th Malaysia Plan Realising Green Growth: Sustainable and Resilient Infrastructure as the Game Changer
PRINCIPLE 5: UPHOLDING INTEGRITY IN FINANCIAL REPORTING
Financial Reporting
The Board is responsible for ensuring that the quarterly financial reporting and annual audited financial statements of the Company
present a true and fair view of the Group’s financial position, performance and prospects. The Board ensures that the Group’s
financial statements are drawn up in accordance with the provisions of the Companies Act, 1965, MMLR and applicable financial
reporting standards.
The Board is assisted by the Audit Committee in reviewing and scrutinising the information in terms of the appropriateness, accuracy
and completeness of disclosure and in ensuring that the Group’s financial statements comply with applicable financial reporting
standards. The Audit Committee reviews and monitors the accuracy and integrity of the Group’s quarterly and annual financial
statements and submits these statements to the Board for the Board’s approval and release within the stipulated time frame.
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34
WZ SATU BERHAD (666098-X)
Corporate Governance
Statement
(CONT’D)
Independence of External Auditors
The Board has maintained a transparent and professional relationship with the Group’s External Auditors through the Audit Committee.
The Group’s External Auditors are invited to attend the Audit Committee meetings when deemed necessary. During the year, the
Audit Committee has met with the External Auditors on 22 October 2015 and 21 July 2016 without the presence of the management
to review the scope and adequacy of the audit process, the financial statements and their audit findings that may require the attention
of the Audit Committee and Board.
The Audit Committee, as part of its review processes, has obtained assurance from the External Auditors confirming that they have
in place policies on rotation (every 5 years) for partners of an audit engagement to ensure objectivity, independence and integrity
of the audit and declared their independence throughout the conduct of the audit engagement in accordance with the terms of all
relevant professional and regulatory requirements. Annually, the Audit Committee also reviews the appointment, performance and
remuneration of the External Auditors including audit and non-audit services, to ensure that the independence and objectivity of the
External Auditors are not compromised, before recommending them to the shareholders for re-appointment in the Annual General
Meeting. The Group has adopted a Policy on the Provision of Non-Audit Services by External Auditors which governs the
circumstances under which contracts for the provision of non-audit services can be entered into and procedures that must be
followed by the External Auditors. The Audit Committee has ensured that the External Auditors are a suitable service provider of the
non-audit services based on their skills and experience. The Audit Committee also considered the nature of the non-audit services
and the related fee levels (both individually and in aggregate) relative to the audit fee to ensure independence of the External Auditors.
The Audit Committee, after due deliberations has recommended the reappointment of Messrs. Baker Tilly Monteiro Heng as External
Auditors for the financial year ending 31 August 2017. The Board at its meeting held on 8 December 2016 approved the Audit
Committee’s recommendation. The appointment of Messrs. Baker Tilly Monteiro Heng will be presented for shareholders’ approval
at the forthcoming Twelfth Annual General Meeting.
PRINCIPLE 6: RECOGNISING AND MANAGING RISK
The Board acknowledges that risk management is an integral part of good management practices. Risk is inherent in all business
activities. It is not the Group’s objective to eliminate risk totally, but to review, prioritise and manage the risks involved in all the
Group’s activities and to balance between the cost of managing and treating risks, and the anticipated benefits that will be derived.
Further details of the Group’s state of risk management and internal control systems are reported in the Statement on Risk
Management and Internal Control on pages 41 to 43.
The Board has established an internal audit function which is currently outsourced to a professional firm. Functionally, the Internal
Auditors’ report to the Audit Committee directly and they are responsible for conducting reviews and appraisals of the effectiveness
of the governance, internal controls and processes within the Group.
PRINCIPLE 7: ENSURING TIMELY AND HIGH QUALITY DISCLOSURE
The Group has in place the Corporate Disclosure Policy, which aims to assist the Board in furnishing information which is
comprehensive and accurate and is made on a timely basis and to ensure that communications to the investing public are accurate,
timely, factual, informative, balanced, broadly disseminated and in compliance with applicable legal and regulatory requirements.
The policy applies to all Directors, employees and authorised spokespersons of the Group on the handling and disclosing of material
information irrespective of their seniority or designation.
The Board maintains strict confidentiality and employs best efforts to ensure that no disclosure of material information is made
selectively to any third parties.
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Annual Report 2016
35
Corporate Governance
Statement
(CONT’D)
The Board is advised by the Management, the Company Secretaries and the External and Internal Auditors on the contents and
timing of disclosure requirements of the MMLR on the financial results and various announcements.
The Board leverages on its corporate website (www.wzs.my) to communicate, disseminate and add depth to its governance reporting.
The Board Charter was formalised and published in the section dedicated for corporate governance in its present corporate website.
Other principal governance information such as the Committees’ terms of reference are published in the website to avoid the dilution
of issues in the Annual Report or various other announcements.
PRINCIPLE 8: STRENGTHENING RELATIONSHIP BETWEEN THE COMPANY AND ITS SHAREHOLDERS
The Board recognises the need for transparency and accountability to the Company’s shareholders and for regular communications
with its shareholders, stakeholders and investors on the performance and major developments in the Group. This is achieved through
timely releases of quarterly financial results, circulars, annual reports, corporate announcements and press releases.
The Management attends meetings with institutional shareholders, analysts and members of the press to clarify information
announced regarding the Group’s performance and strategic direction as and when needed and/or requested.
General meetings are an important avenue through which shareholders can exercise their rights. The Board will ensure suitability of
venue and timing of meeting and undertake other measures to encourage shareholders’ participation in the meetings. At general
meetings, shareholders are given the opportunity to seek clarification on any matter pertaining to the business activities and financial
performance of the Group.
Pursuant to the MMLR, any resolution set out in the notice of any general meeting, or in any notice of resolution which may properly
be moved and is intended to be moved at any general meeting, must be voted by poll. Hence, voting for all the resolutions as set
out in the forthcoming and future general meetings will be conducted as such.
COMPLIANCE WITH THE CODE
The Board has reviewed, deliberated and approved the statement on Corporate Governance. The Board is satisfied that the Corporate
Governance Statement provides the information necessary to enable shareholders to evaluate how the Code has been applied and
that the Company has fulfilled its obligation under the Code, MMLR and all applicable laws and regulations throughout the financial
year, save for the relevant exceptions as highlighted.
DIRECTORS’ RESPONSIBILITY STATEMENT
The Directors are responsible for ensuring that:
(a) The annual audited financial statements of the Group and the Company are drawn up in accordance with applicable approved
Malaysian Financial Reporting Standards, the provisions of the Companies Act, 1965 and the MMLR so as to give a true and fair
view of the state of affairs of the Group and the Company for the financial year, and
(b) Proper accounting and other records are kept which enable the preparation of the financial statements with reasonable accuracy
and by taking reasonable steps to ensure that appropriate systems are in place to safeguard the assets of the Group and to
prevent and detect fraud and other irregularities.
In the preparation of the financial statements for the financial year ended 31 August 2016, the Directors have adopted appropriate
accounting policies and have applied them consistently in the financial statements with reasonable and prudent judgments and
estimates. The Directors are satisfied that all relevant approved Malaysian Financial Reporting Standards have been followed in the
preparation of the financial statements.
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36
WZ SATU BERHAD (666098-X)
Additional Compliance
Information
In conformance with the Main Market Listing Requirements of Bursa Malaysia Securities Berhad (MMLR), the following information
is provided:
Status of Utilisation of Proceeds
During the financial year, the Company has issued 25,290,900 ordinary shares of RM0.50 each at an issuance price of RM1.21 per
share by way of private placement pursuant to Section 132D of the Companies Act, 1965. The status of utilisation of the gross
proceeds raised from placement as at 31 August 2016 is as follows:
Working capital
Corporate exercise expenses
Proposed
RM'000
Actual
Utilisation
RM'000
Balance
RM'000
30,209
393
30,209
393
-
30,602
30,602
-
Audit and Non-Audit Fees
The fees payable to the External Auditors in relation to the audit and non-audit services rendered to the Company and its subsidiaries
for the financial year ended 31 August 2016 are as follows:
The Group
RM’000
The Company
RM’000
Audit fees
Non-audit fees
226
28
40
28
Total Fees
254
68
Revaluation Policy on Landed Properties
The Group has adopted a policy to revalue its land and buildings in every five (5) years.
Material Contracts
There was no material contract involving the Directors’, chief executives’ (who are not directors) and major shareholders’ interests
either still subsisting at the end of the financial year ended 31 August 2016 or entered into since the end of the previous financial
year.
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Annual Report 2016
37
Audit Committee
Report
The Board of Directors of WZ Satu Berhad is pleased to present the Audit Committee (“the Committee”) Report for the financial year
ended 31 August 2016.
ROLE OF AUDIT COMMITTEE
The Committee is to assist the Board of Directors in discharging its statutory duties and responsibilities relating to accounting and
reporting practices of the holding company and each of its subsidiaries. In addition, the Committee shall:
(a) assess the risk and control environment;
(b) oversee financial reporting;
(c) evaluate the internal and external audit process; and
(d) review conflict of interest situations and related party transactions.
COMPOSITION AND MEETINGS
Members of the Committee shall be appointed by the Board from amongst the Directors and the Committee shall fulfill the following
requirements:
(a) membership shall consist of no fewer than three (3) members;
(b) all the members shall be Independent Non-Executive Directors (INED); and
(c) shall not comprise any Alternate Director of the Company.
The Committee meets at least four (4) times in each financial year and at least two (2) members whom must be Independent Directors
must be present to constitute a quorum. The Company Secretary shall be the Secretary of the Committee. Other Board members
and designated members of Senior Management may also attend these meetings on the invitation of the Committee.
During the financial year ended 31 August 2016, the Committee conducted five (5) meetings. The composition of the Committee
and the attendance of the respective members at the meetings during the financial year ended 31 August 2016 are disclosed as
follows:
Name
Rosli bin Shafiei
Dato’ Amin Rafie Bin Othman
Dato’ Yeong Kok Hee
Designation
Directorship
Attendance
Chairman
Member
Member
INED
INED
INED
5/5
5/5
5/5
The terms of reference of the Committee is available for reference on the Company’s website at www.wzs.my
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38
WZ SATU BERHAD (666098-X)
Audit Committee
Report
(Cont’d)
SUMMARY OF WORK OF THE AUDIT COMMITTEE
A summary of the main activities carried out by the Committee during the financial year under review is as described below:
Financial Reporting
(a) reviewed and discussed the interim and year end financial statements, prior to recommendations to the Board. The key areas
of focus are the following:
•
change in accounting policies and practices;
•
significant adjustments arising from the audit;
•
going concern assumption;
•
compliance with accounting standards and other legal requirements;
•
significant matters highlighted in the financial statements; and
•
significant judgements made by the Management.
(b) reviewed and recommended the Corporate Governance Statement, Audit Committee Report and Statement on Risk Management
and Internal Control to the Board for consideration and approval for inclusion in the Annual Report;
(c) reviewed and recommended to the Board for approval on any material related party transactions and recurrent related party
transactions arising during the financial year; and
(d) the dates the Committee met during the financial year to deliberate on financial reporting matters as detailed below:
Date of meetings
Financial Reporting Statements Reviewed
22 October 2015
Fourth quarter results as well as the unaudited results of the Group for the financial year ended
31 August 2015
10 December 2015
Corporate Governance Statement, Audit Committee Report and Statement On Risk Management and
Internal Control for the Board’s approval and disclosure in the Company’s Annual Report 2015
28 January 2016
First quarter results for the financial year ended 31 August 2016
21 April 2016
Second quarter results for the financial year ended 31 August 2016
21 July 2016
Third quarter results for the financial year ended 31 August 2016
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Annual Report 2016
39
Audit Committee
Report
(Cont’d)
External Audit
(a) reviewed, discussed and approved the External Auditors’ audit planning memorandum;
(b) reviewed, discussed and approved the External Auditors’ scope of works, key areas of audit emphasis, audit approach and
timetable;
(c) reviewed, discussed and assessed the problems and reservations arising from the interim and final audits together with
corresponding action plans and recommendations made by the External Auditors;
(d) reviewed, discussed and assessed the external auditor’s management letter and the adequacy and effectiveness of
management’s response; and
(e) reviewed the performance, independence and effectiveness of the External Auditors and made recommendations to the Board
on the re-appointment and remuneration of the External Auditors.
During the financial year, the Audit Committee had two private meetings with the External Auditors on 22 October 2015 and
21 July 2016 without the presence of the Executive Directors and Management of the Group.
Internal Audit
The internal audit function is essential for assisting the Audit Committee in reviewing the state of the systems of internal control
maintained by Management. During the financial year, the Audit Committee engaged RSM Corporate Consulting (Malaysia) Sdn
Bhd (RSM), an external professional firm to provide independent internal audit services to the Group. The internal audit team adopted
a risk-based approach towards the planning and conduct of their audits and reports directly to the Committee.
The Committee reviews and approves the annual internal audit plan before the internal audit team carries out its audit functions.
All audit findings are reported to the Committee and areas of improvements and audit recommendations identified are communicated
to Management for further action. The internal audit scope of work also covers the follow-up review on the status of actions
implemented by Management.
The main internal audit activities performed are as follows:
(a) understand and evaluate business processes and related business controls from a risk perspective along the complete lifecycle;
(b) ascertain the extent of compliance with established policies and procedures;
(c) identify control inadequacies within the Group and recommend viable solutions; and
(d) provide assurance in regards to process effectiveness and efficiency in terms of integrity and process improvement opportunities.
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40
WZ SATU BERHAD (666098-X)
Audit Committee
Report
(CONT’D)
During the financial year ended 31 August 2016, the key process controls audited were as follows:
(a) Civil Engineering and Construction Segment
•
•
•
Fixed Asset Management
Procurement Management
Sales and Marketing
(b) Oil and Gas Segment
•
•
•
Fixed Asset Management
Project Management
Sales and Marketing
The Audit Committee had met the Internal Auditors on 22 October 2015, 21 April 2016 and 21 July 2016 without the presence of the
Management to review the internal audit reports of the Group.
The Committee has reviewed, discussed and assessed all significant matters highlighted by the Internal Auditors on financial reporting
and operating issues. The Committee noted that there were no material misstatements, frauds and deficiencies in the systems of
internal control not addressed by the Management. The Committee has also reviewed all significant judgements made by the
Management as follows:
(a) impairment of assets and long term contracts involving significant estimates of revenue and expenses;
(b) impairment loss on receivables;
(c) write-down of inventories and
(d) depreciation method/estimation of useful lives of property, plant and equipment
The Committee is satisfied that the systems of internal controls are adequate and operating effectively.
The fee incurred during the current financial year for the internal audit function of the Group was RM36,000 (2015: RM23,000).
BOARD’S CONCLUSION
The Board is satisfied that the Committee and its members have carried out their functions, duties and responsibilities in accordance
with the terms of reference.
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Annual Report 2016
41
Statement on Risk Management
and Internal Control
INTRODUCTION
The Board of Directors (the Board) is pleased to present its Statement on Risk Management and Internal Control for the financial
year ended 31 August 2016. This Statement is prepared pursuant to paragraph 15.26(b) of the Bursa Malaysia Securities Berhad
(Bursa Securities) Main Market Listing Requirements (MMLR).
The Board is also guided by the latest “Statement on Risk Management and Internal Control - Guidelines for Directors of Listed
Issuers” issued by the Task Force on Internal Control with the support and endorsement of the Bursa Securities and Principle 6 of
the Malaysian Code on Corporate Governance 2012 (the Code).
BOARD’S RESPONSIBILITIES
The Board affirms its responsibility to maintain a sound system of internal control and risk management to safeguard the Group’s
investments and assets. The system will provide reasonable assurance in ensuring the effectiveness and efficiency of operations,
reliability of financial reporting and compliance with applicable laws and regulations.
However, due to inherent limitations of any system of internal control and risk management, it should be noted that the system is
designed to manage rather than to eliminate the risk of failure to achieve the objectives. Therefore, any system of internal control for
that matter could only provide a reasonable and not complete assurance against any material misstatement or omission.
The Board is assisted by the Internal Auditors and Management to identify, approve, and implement policies and procedures on risk
management and internal control. Management identifies and evaluates the risks faced by the Group and designs, implements and
monitors an appropriate system of internal control in line with the policies approved by the Board.
The Board with the assistance of the Audit Committee and Internal Auditors, RSM Corporate Consulting (Malaysia) Sdn Bhd (RSM),
continuously review existing risks and identify new risks that the Group faces. In addition, the management action plans that manage
such risks are also being reviewed to ensure its adequacy.
RISK MANAGEMENT FRAMEWORK
Risk management is regarded by the Board as part of the business operation activities of the Group. It is the Board’s priority to
ensure that the uncertainties and investment risks in new business ventures are managed in order to safeguard the interest of the
shareholders. Collectively, the Board oversees and reviews the conduct of the Group’s businesses while the Executive Directors
and Management execute measures and controls to ensure that risks are effectively managed.
The other key elements of the systems of internal control and the Board’s review mechanisms are as follows:
(a) establishment of the Nomination, Remuneration, Long Term Incentive Plan, Shariah and Investment Committees, apart from the
Audit Committee;
(b) documentation of written policies and procedures for certain key operational areas;
(c) limits of Management’s approvals and authorities;
(d) periodic review of Group’s management accounts and performance analyses by Executive Directors and Management; and
(e) organisation structure with well-defined delegation of responsibilities and accountabilities for the Group’s operating units.
Besides reviewing the systems of internal control, the Audit Committee also reviews the financial information and reports produced
by Management. With Management’s consultation, the Board and the Audit Committee deliberate the integrity of the financial results,
Annual Report and audited financial statements before presenting these financial information to the shareholders, investors and
public.
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WZ SATU BERHAD (666098-X)
Statement on Risk Management
and Internal Control
(CONT’D)
In accordance with the Statement on Risk Management and Internal Control - Guidelines for Directors of Listed Issuers issued by
Bursa Securities, the Management is responsible to the Board for:
(a) continuously reviewing the risk profile and action plan to be undertaken to manage the principle risks relevant to the businesses
of the Group;
(b) designing, implementing and monitoring the risk management framework in accordance with the Group’s strategic vision and
overall risk appetite; and
(c) identifying changes to risks or emerging risks, taking actions as appropriate and promptly bringing these to the attention of the
Board.
The Board has received assurances from the Executive Chairman, Chief Operating Officer and Chief Financial Officer that, to the
best of their knowledge, the Group’s risk management and system of internal control, in all material aspects, are operating effectively.
INTERNAL AUDIT FUNCTION
The Audit Committee engaged RSM, an external professional firm to provide independent internal audit services to the Group. RSM
provides the Audit Committee with quarterly reports of their audit findings and observations together with recommendations and
management action plans to enhance the systems of internal control. The Audit Committee reviews the internal audit reports and
reports to the Board on significant control issues noted. A follow-up audit is carried out to ascertain if management actions are
effectively implemented.
The principal roles of the Internal Auditors are to assist the Audit Committee in discharging its duties and responsibilities in respect
of reviewing the adequacy and effectiveness of the internal control system, risk management framework, governance and control
processes.
OTHER RISK MITIGATION PROCESSES
The Board has also adopted various other processes to complement the system of internal control which include:
(a) the establishment of Board Charter and Code of Conduct which assist Directors and employees of the Group in defining the
minimal ethical standards and conducts in discharging their responsibilities; and
(b) the implementation of a whistle-blowing policy and procedures to provide a channel for legitimate concerns to be raised by
employees or other stakeholders to the Senior Independent Non-Executive Director and the Audit Committee.
BOARD ASSURANCE AND LIMITATION
The Board confirms that there is an ongoing process for identifying, evaluating and managing significant risks faced by the Group.
While the Board reiterates that the risk management and systems of internal control should be continuously improved in line with
evolving business developments, it should also be noted that all risk management systems and systems of internal control can only
manage rather than eliminate the risks of the failure to achieve business objectives. Therefore, these systems of internal control and
risk management in the Group can only provide reasonable but not absolute assurance against material misstatements, frauds and
losses.
The Group has invested in associated companies, SE Satu Sdn. Bhd.,SE Satu Pelangi Sdn. Bhd. and WZS Technologies Sdn.Bhd..
While the Group has board representatives in the associated companies, the Group does not have management control in their
operations. Accordingly, the associated companies have not been dealt with and considered for the purposes of this Statement.
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Annual Report 2016
43
Statement on Risk Management
and Internal Control
(CONT’D)
REVIEW OF STATEMENT ON INTERNAL CONTROL BY EXTERNAL AUDITORS
Pursuant to Paragraph 15.23 of the MMLR, the External Auditors have conducted an assurance engagement on this Statement on
Risk Management and Internal Control for inclusion in the Annual Report for the financial year ended 31 August 2016. Their assurance
engagement was performed pursuant to the scope set out in Recommended Practice Guide 5 (Revised) (RPG 5) : Guidance for
Auditors on Engagements to Report on the Statement on Risk Management and Internal Control issued by Malaysia Institute of
Accountants.
Based on their procedures performed, the External Auditors have reported to the Board that nothing has come to their attention that
causes them to believe that this Statement is not prepared, in all material respect, in accordance with disclosure required by
paragraphs 41 and 42 of the Statement on Risk Management and Internal Control: Guidance for Directors of Listed Issuers to be set
out, nor it is factually inaccurate. RPG 5 does not require the External Auditors to consider whether this Statement covers all risks
and controls, or to form an opinion on the adequacy and effectiveness of the Group’s risk and control system.
BOARD’S CONCLUSION
For the financial year under review, no significant control failures, weaknesses that result in material losses and require disclosure
were identified. The Board is of the view that the systems of internal control and risk management, procedures and processes in
place are reasonable, adequate and effective in safeguarding the assets of the Group, interests of shareholders and other
stakeholders.
This Statement has been approved by the Board on 8 December 2016.
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FINANCIAL
STATEMENTS
46
52
Directors’
Report
Statements of
Financial Position
61
138
Notes to the
Financial
Statements
Supplementary
Information on the
Disclosures
of Realised and
Unrealised Profits
or Losses
54
Statements of
Profit or Loss
and Other
Comprehensive
Income
139
Statement by
Directors
56
Statements of
Changes in Equity
139
Statutory
Declaration
59
Statements of
Cash Flows
140
Independent
Auditors’ Report
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46
WZ SATU BERHAD (666098-X)
Directors’
Report
The directors hereby submit their report together with the audited financial statements of WZ Satu Berhad (“the Company”) and its
subsidiaries (“the Group”) for the financial year ended 31 August 2016.
PRINCIPAL ACTIVITIES
The principal activities of the Company are investment holding and the provision of management services to its subsidiaries. The
principal activities of the subsidiaries are set out in Note 8 to the financial statements.
There have been no significant changes in the nature of these principal activities during the financial year.
RESULTS
Group
RM'000
Company
RM'000
Profit for the financial year
23,020
5,187
Attributable to:Owners of the Company
Non-controlling interests
23,072
(52)
5,187
-
23,020
5,187
DIVIDENDS
The amount of dividend declared and paid by the Company since the end of the previous financial year was as follows:RM'000
Single tier final dividend of 2 sen per ordinary share of RM0.50 each
in respect of the financial year ended 31 August 2015 as reported
on that year, paid on 29 February 2016
5,565
The directors have yet to recommend the payment of any final dividend in respect of the financial year ended 31 August 2016.
RESERVES AND PROVISIONS
There were no material transfers to or from reserves and provisions during the financial year other than as disclosed in the financial
statements.
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Annual Report 2016
47
Directors’
Report
(CONT’D)
BAD AND DOUBTFUL DEBTS
Before the statements of profit or loss and other comprehensive income and statements of financial position of the Group and of the
Company were made out, the directors took reasonable steps to ascertain that action had been taken in relation to the writing off of
bad debts and the making of allowance for doubtful debts, and had satisfied themselves that all known bad debts had been written
off and adequate allowance had been made for doubtful debts.
At the date of this report, the directors are not aware of any circumstances that would render the amount written off for bad debts or
the amount of the allowance for doubtful debts in the financial statements of the Group and of the Company inadequate to any
substantial extent.
CURRENT ASSETS
Before the statements of profit or loss and other comprehensive income and statements of financial position of the Group and of the
Company were made out, the directors took reasonable steps to ensure that any current assets, other than debts, which were unlikely
to be realised in the ordinary course of business, their values as shown in the accounting records of the Group and of the Company
had been written down to an amount that they might be expected to be realised.
At the date of this report, the directors are not aware of any circumstances that would render the values attributed to the current
assets in the financial statements of the Group and of the Company misleading.
VALUATION METHODS
At the date of this report, the directors are not aware of any circumstances 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.
CONTINGENT AND OTHER LIABILITIES
At the date of this report, there does not exist:(i)
any charge on the assets of the Group and of the Company that has arisen since the end of the financial year which secures the
liabilities of any other person; or
(ii) any contingent liabilities in respect of the Group and of the Company that has arisen since the end of the financial year.
No contingent or other liabilities of the Group and of the Company has become enforceable, or is likely to become enforceable within
the period of twelve months after the end of the financial year which, in the opinion of the directors, will or may substantially affect
the ability of the Group and of the Company to meet their obligations as and when they fall due.
CHANGE OF CIRCUMSTANCES
At the date of this report, the directors are not aware of any circumstances, not otherwise dealt with in this report or the financial
statements of the Group and of the Company that would render any amount stated in the financial statements misleading.
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48
WZ SATU BERHAD (666098-X)
Directors’
Report
(CONT’D)
ITEMS OF AN UNUSUAL NATURE
The results of the operations of the Group and of the Company for the financial year were not, in the opinion of directors, substantially
affected by any item, transaction or event of a material and unusual nature.
No item, transaction or event of a material and unusual nature has arisen in the interval between the end of the financial year and at
the date of this report which is 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.
ISSUE OF SHARES AND DEBENTURES
During the financial year, the Company increased its authorised share capital from 500,000,000 units to 750,000,000 units of ordinary
shares via the creation of 250,000,000 units of RM0.50 each.
During the financial year, the issued and paid-up capital of the Company increased from RM126,454,618 to RM167,933,698 by way of:
(a) Issuance of 39,300 and 1,980,080 new ordinary shares arising from the exercise of warrants at an exercise price of RM0.60 and
RM0.50 respectively;
(b) Private placement of 25,290,900 new ordinary shares of RM0.50 each at an issue price of RM1.21; and
(c) Bonus issue of 55,647,880 new ordinary shares of RM0.50 each via the capitalisation of the share premium account on the basis
of one (1) bonus share for every existing five (5) ordinary shares held.
The new ordinary shares issued during the financial year rank pari-passu in all respects with the existing ordinary shares of the
Company.
The Company did not issue any debentures during the financial year.
SHARE OPTION
No option is granted to any person to take up unissued shares of the Company during the financial year.
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Annual Report 2016
49
Directors’
Report
(CONT’D)
WARRANTS
The Warrants issued on 29 October 2014 are constituted under a Deed Poll dated 9 October 2014 executed by the Company.
The Warrants are listed on the Bursa Malaysia Securities Berhad.
The outstanding Warrants during the financial year ended 31 August 2016 are stated as below:-
At
1.9.2015
Warrants
94,679
Number of Warrants ('000)
Bonus
At
Issue
Exercised
31.8.2016
18,928
(2,019)
111,588
The salient features of the Warrants are as follows:(i) Each Warrants entitles the registered holder/(s) at any time prior to 28 October 2024 to subscribe for one (1) new ordinary shares
of RM0.50 each. The Warrants entitlement is subject to adjustments under the terms and conditions set out in the Deed Poll
dated 9 October 2014;
(ii) Pursuant to the issuance of bonus shares on the basis of one (1) bonus share for every five (5) existing shares held by
shareholders whose name appeared in the record of depositors on 17 March 2016, a total of 18,927,934 additional warrants
were issued arising from the adjustment made in relation to the bonus issue and the exercise price of the outstanding warrants
were revised from RM0.60 to RM0.50. This is in accordance to the deed poll dated 9 October 2014 and Notice to Warrant Holders
dated 17 March 2016;
(iii) The exercise period is ten (10) years from the date of issuance until the maturity date. Upon the expiry of the exercise period,
any unexercised rights will lapse and cease to be valid for any purposes; and
(iv) The holders of the Warrants are not entitled to vote in any general meetings or to participate in any dividends, rights, allotment
and/or other forms of distribution other than on winding-up, compromise or arrangement of the Company unless and until the
holders of the Warrants becomes a shareholder of the Company by exercising his warrants into new shares or unless otherwise
resolved by the Company in general meeting.
As at the reporting date, 98,627,554 Warrants remained unexercised.
DIRECTORS
The names of the directors/alternate directors of the Company in office since the date of the last report and at the date of this report
are:YM Tengku Dato’ Sri Uzir Bin Tengku Dato’ Ubaidillah
Dato’ Ir. William Tan Chee Keong
Tan Teng Heng
Tan Ching Kee
Tan Chong Boon
Dato’ Ir. Mohd Ghazali Bin Kamaruzaman
Dato’ Amin Rafie Bin Othman
Datuk Idris Bin Haji Hashim
Dato’ Syed Kamarulzaman Bin Dato’ Syed Zainol Khodki Shahabudin
Dato’ Yeong Kok Hee
Rosli Bin Shafiei
Datuk Ahmad Nizam Bin Salleh (Appointed on 11 April 2016)
Ng Chong Tin (Alternate Director to Tan Chong Boon)
Choi Chee Ken (Alternate Director to Dato’ Ir. Mohd Ghazali Bin Kamaruzaman)
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50
WZ SATU BERHAD (666098-X)
Directors’
Report
(CONT’D)
DIRECTORS’ INTERESTS
According to the Register of Directors’ shareholdings kept by the Company under Section 134 of the Companies Act, 1965 in
Malaysia, the interests of those directors/alternate directors who held office at the end of the financial year in shares and warrants in
the Company and its related corporations during the financial year ended 31 August 2016 are as follows:Number of ordinary shares of RM0.50 each
At
Bought/
At
1.9.2015
Bonus Issue*
Sold
31.8.2016
Direct Interest
YM Tengku Dato' Sri Uzir Bin Tengku Dato' Ubaidillah
Dato' Ir. William Tan Chee Keong
Tan Teng Heng
Tan Ching Kee
Tan Chong Boon
Dato' Amin Rafie Bin Othman
Dato' Yeong Kok Hee
Ng Chong Tin
Choi Chee Ken
61,231,847
11,625,000
4,500,000
39,382,860
5,307,100
2,000
71,000
2,467,534
11,625,000
27,457,089
2,325,000
2,100,000
7,776,572
1,061,420
400
14,200
493,506
2,325,000
131,500
3,501,992
103,500
134,300
700,398
20,700
(1,100,000)
(220,000)
-
88,688,936
13,950,000
6,600,000
46,059,432
6,148,520
2,400
85,200
2,961,040
13,950,000
Indirect Interest**
Dato' Ir. William Tan Chee Keong
Tan Ching Kee
Tan Chong Boon
At
1.9.2015
-
265,800
4,202,390
124,200
Number of Warrants
Bought/
Bonus Issue*
Sold
At
31.8.2016
Direct Interest
YM Tengku Dato' Sri Uzir Bin Tengku Dato' Ubaidillah
Dato' Ir. William Tan Chee Keong
Tan Teng Heng
Tan Ching Kee
Tan Chong Boon
Dato' Amin Rafie Bin Othman
Dato' Yeong Kok Hee
Ng Chong Tin
Choi Chee Ken
27,373,723
5,812,500
2,250,000
20,391,430
2,843,600
1,000
252,500
1,383,767
5,812,500
9,086,744
- 36,460,467
1,162,500
6,975,000
450,000
2,700,000
3,778,286 (13,000,000) 11,169,716
568,720
3,412,320
200
1,200
50,500
303,000
276,753
1,660,520
1,162,500
6,975,000
Indirect Interest**
Dato' Ir. William Tan Chee Keong
Tan Ching Kee
Tan Chong Boon
*
**
50,750
1,750,996
51,750
10,150
350,199
10,350
-
60,900
2,101,195
62,100
Bonus issue on 17 March 2016
Deemed interests pursuant to Section 134(12)(c) of the Companies Act, 1965 by virtue of their spouse direct interests in the
Company
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Annual Report 2016
51
Directors’
Report
(CONT’D)
By virtue of his interests in the ordinary shares of the Company and pursuant to Section 6A(4)(c) of the Companies Act, 1965,
YM Tengku Dato’ Sri Uzir Bin Tengku Dato’ Ubaidillah is deemed to have an interest in the ordinary shares of all subsidiaries to the
extent that the Company has an interest.
Other than as disclosed above, none of the other directors in office at the end of the financial year had any interests in shares of the
Company and its related corporations.
DIRECTORS’ BENEFITS
Since the end of the previous financial year, no director of the Company has received or become entitled to receive a benefit (other
than benefits included in the aggregate amount of emoluments received or due and receivable by the directors shown in Note 25 to
the financial statements) 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.
Neither during, nor at the end of the financial year, was the Company a party to any arrangement whose object was to enable the
directors to acquire benefits by means of the acquisition of shares in, or debentures of, the Company or any other body corporate.
SIGNIFICANT AND SUBSEQUENT EVENTS
Significant and subsequent events during the financial year are disclosed in Note 35 to the financial statements.
AUDITORS
The auditors, Messrs. Baker Tilly Monteiro Heng, have expressed their willingness to continue in office.
Signed on behalf of the Board of Directors in accordance with a resolution of the directors:-
YM TENGKU DATO’ SRI UZIR BIN TENGKU DATO’ UBAIDILLAH
Executive Chairman/Chief Executive Officer
DATO’ Ir. WILLIAM TAN CHEE KEONG
Senior Executive Director/Chief Operating Officer
Kuala Lumpur
Date: 16 November 2016
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52
WZ SATU BERHAD (666098-X)
STATEMENTS OF
FINANCIAL POSITION
AS AT 31 AUGUST 2016
Group
Company
2016
2015
RM'000
RM'000
Note
2016
RM'000
2015
RM'000
5
6
7
8
9
10
11
81,813
41,024
28,076
205
4,416
211
85,867
41,024
21,087
205
9,737
671
771
2,360
128,692
6,116
-
575
1,763
125,013
9,737
-
155,745
158,591
137,939
137,088
30,186
133,714
2,762
51,057
1,498
95
128,324
30,372
119,047
4,764
61,255
575
78,538
17,755
5
305
82,996
26,412
147
36,753
Total current assets
347,636
294,551
101,061
63,312
TOTAL ASSETS
503,381
453,142
239,000
200,400
ASSETS
Non-current assets
Property, plant and equipment
Goodwill on consolidation
Investment in associates
Investment in subsidiaries
Club memberships
Trade and other receivables
Deferred tax assets
Current assets
Inventories
Trade and other receivables
Prepayments
Amount due from contract customers
Tax recoverable
Derivative financial assets
Short term deposits, cash and bank balances
12
10
13
14
15
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Annual Report 2016
53
STATEMENTS OF
FINANCIAL POSITION
AS AT 31 AUGUST 2016 (CONT’D)
Note
2016
RM'000
Group
2015
RM'000
Company
2016
2015
RM'000
RM'000
16
17
167,934
127,716
126,455
120,849
167,934
61,258
126,455
71,969
Non-controlling interests
295,650
1,443
247,304
2,036
229,192
-
198,424
-
TOTAL EQUITY
297,093
249,340
229,192
198,424
2,485
15,899
1,993
13,178
229
4
238
18,384
15,171
229
242
12,793
94,143
80,314
73
24
557
996
127,041
59,432
359
803
9,322
257
-
1,584
150
-
Total current liabilities
187,904
188,631
9,579
1,734
TOTAL LIABILITIES
206,288
203,802
9,808
1,976
TOTAL EQUITY AND LIABILITIES
503,381
453,142
239,000
200,400
EQUITY AND LIABILITIES
Equity attributable to owners of the Company
Share capital
Reserves
Non-current liabilities
Deferred tax liabilities
Borrowings
11
18
Total non-current liabilities
Current liabilities
Amount due to contract customers
Trade and other payables
Borrowings
Derivative financial liabilities
Provision for liabilities
Tax payables
13
19
18
14
20
The accompanying notes form an integral part of these financial statements.
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54
WZ SATU BERHAD (666098-X)
STATEMENTS OF PROFIT OR LOSS
AND OTHER COMPREHENSIVE INCOME
FOR THE FINANCIAL YEAR ENDED 31 AUGUST 2016
Group
Continuing operations
Revenue
Cost of sales
Note
2015
RM'000
21
22
465,933
(384,474)
351,422
(288,936)
6,577
-
6,181
-
81,459
62,486
6,577
6,181
9,937
(1,191)
(44,237)
(21,338)
3,653
(785)
(35,343)
(18,377)
4,600
(4,370)
(1,514)
1,393
(4,710)
(1,025)
24,630
11,634
5,293
1,839
(6,026)
(3,437)
9,392
18,537
-
-
5,183
1,820
4
1
5,187
1,821
-
1,826
Gross profit
Other income
Distribution costs
Administrative expenses
Other expenses
Results from operating activities
Finance costs
23
Share of results of associates, net of tax
Profit before taxation
24
27,996
26,734
Taxation
26
(4,976)
(4,101)
23,020
22,633
Profit from continuing operations
Discontinued operation
(Loss)/Profit for the financial year
from discontinued operation, net of tax
Profit for the financial year
Other comprehensive income, net of tax items that
may be reclassified subsequently to profit or loss
Exchange differences on translation of foreign operations
Reclassification of foreign currency translation reserve
to profit or loss upon disposal of a subsidiary
Total comprehensive income for the financial year
Company
2016
2015
RM'000
RM'000
2016
RM'000
27
-
(2,207)
(110)
(19)
23,020
20,426
5,187
3,647
-
1,603
-
-
-
-
-
22,029
5,187
3,647
(213)
22,807
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Annual Report 2016
55
STATEMENTS OF PROFIT OR LOSS
AND OTHER COMPREHENSIVE INCOME
FOR THE FINANCIAL YEAR ENDED 31 AUGUST 2016 (CONT’D)
Group
Note
2016
RM'000
2015
RM'000
Company
2016
2015
RM'000
RM'000
Profit/(Loss) attributable to:Owners of the Company
- Continuing operations
- Discontinuing operation
23,072
-
22,932
(2,207)
5,187
-
1,821
1,826
Non-controlling interests
23,072
(52)
20,725
(299)
5,187
-
3,647
-
23,020
20,426
5,187
3,647
Total comprehensive income/(loss) attributable to:Owners of the Company
- Continuing operations
- Discontinuing operation
22,859
-
24,535
(2,207)
5,187
-
1,821
1,826
Non-controlling interests
22,859
(52)
22,328
(299)
5,187
-
3,647
-
22,807
22,029
5,187
3,647
Earnings per share attributable to
owners of the Company
Basic earnings per share (sen)
- from continuing operations
- from discontinued operation
Diluted earnings per share (sen)
- from continuing operations
- from discontinued operation
28
28
28
28
The accompanying notes form an integral part of these financial statements.
7.00
-
7.69
(0.74)
7.00
6.95
5.85
-
6.35
(0.61)
5.85
5.74
-
Total comprehensive income
for the financial year
(27,824)
4
17,957
(470)
(10,333)
57,222
27,824
1,010
12,645
-
41,479
167,934
Total transactions with
owners of the Company
At 31 August 2016
-
-
Changes in revaluation reserve
Subscription of shares in subsidiaries
by non-controlling interest
Changes in ownership interest in
subsidiary companies
Issuance of shares persuant to:
- Bonus issue
- Exercise of warrants
- Private placement
Dividend paid on shares
Transaction costs of share issue
-
-
-
67,555
-
At 1 September 2015
-
126,455
Group
-
-
-
-
-
-
(213)
(213)
-
213
5,036
(128)
-
-
-
(128)
-
-
-
5,164
65,458
(5,531)
(5,565)
-
-
45
(11)
23,072
-
23,072
47,917
295,650
25,487
1,014
30,602
(5,565)
(470)
-
45
(139)
22,859
(213)
23,072
247,304
1,443
(541)
-
(896)
355
-
(52)
-
(52)
2,036
297,093
24,946
1,014
30,602
(5,565)
(470)
(896)
400
(139)
22,807
(213)
23,020
249,340
Total
RM'000
56
Profit for the year
Reclassification of foreign currency
translation reserve to profit or loss
upon disposal of a subsidiary
Share
Capital
RM'000
Attributable to owners of the Company
Non-distributable
Distributable
NonShare Translation Revaluation Retained
Controlling
Premium
Reserve
Reserve Earnings Sub-Total
Interests
RM'000
RM'000
RM'000
RM'000
RM'000
RM'000
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WZ SATU BERHAD (666098-X)
STATEMENTS OF
CHANGES IN EQUITY
FOR THE FINANCIAL YEAR ENDED 31 AUGUST 2016
-
Total comprehensive income
for the financial year
20,541
32
32,113
52,686
67,555
5,294
161
26,000
31,455
126,455
Total transactions with
owners of the Company
At 31 August 2015
-
-
Changes in revaluation reserve
Subscription of shares in subsidiaries
by non-controlling interest
Dilution in effective interest in a
subsidiary of an associate
Issuance of shares persuant to:
- Acquisition of a subsidiary
- Exercise of warrants
- Private placement
-
-
-
14,869
-
At 1 September 2014
-
95,000
Group
Profit for the year
Exchange differences on translation
of foreign operations
Share
Capital
RM'000
213
-
-
-
-
-
1,603
1,603
-
(1,390)
5,164
(146)
-
-
-
(146)
-
-
-
5,310
47,917
(73)
-
(259)
215
(29)
20,725
-
20,725
27,265
247,304
83,922
25,835
193
58,113
(259)
215
(175)
22,328
1,603
20,725
141,054
2,036
2,335
-
-
2,335
-
(299)
-
(299)
-
Attributable to owners of the Company
Non-distributable
Distributable
NonShare Translation Revaluation Retained
Controlling
Premium
Reserve
Reserve Earnings Sub-Total
Interests
RM'000
RM'000
RM'000
RM'000
RM'000
RM'000
249,340
86,257
25,835
193
58,113
(259)
2,550
(175)
22,029
1,603
20,426
141,054
Total
RM'000
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Annual Report 2016
57
STATEMENTS OF
CHANGES IN EQUITY
FOR THE FINANCIAL YEAR ENDED 31 AUGUST 2016 (CONT’D)
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58
WZ SATU BERHAD (666098-X)
STATEMENTS OF
CHANGES IN EQUITY
FOR THE FINANCIAL YEAR ENDED 31 AUGUST 2016 (CONT’D)
Attributable to owners of the Company
NonDistributable Distributable
Share
Share
Retained
Capital
Premium
Earnings
Total
RM'000
RM'000
RM'000
RM'000
Company
At 1 September 2015
126,455
67,555
4,414
198,424
-
-
5,187
5,187
Total comprehensive income for the financial year
Issuance of shares pursuant to:
- Bonus issue
- Exercise of warrants
- Private placement
Dividend paid
Transaction costs of share issue
27,824
1,010
12,645
-
(27,824)
4
17,957
(470)
(5,565)
-
1,014
30,602
(5,565)
(470)
Total transactions with owners of the Company
41,479
(10,333)
(5,565)
25,581
167,934
57,222
4,036
229,192
At 31 August 2016
Attributable to owners of the Company
NonDistributable Distributable
Share
Share
Retained
Capital
Premium
Earnings
Total
RM'000
RM'000
RM'000
RM'000
95,000
14,869
767
110,636
-
-
3,647
3,647
Issuance of shares pursuant to:
- Acquisition of a subsidiary
- Exercise of warrants
- Private placement
5,294
161
26,000
20,541
32
32,113
-
25,835
193
58,113
Total transactions with owners of the Company
31,455
52,686
-
84,141
126,455
67,555
4,414
198,424
At 1 September 2014
Total comprehensive income for the financial year
At 31 August 2015
The accompanying notes form an integral part of these financial statements.
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Annual Report 2016
59
STATEMENTS OF
CASH FLOWS
FOR THE FINANCIAL YEAR ENDED 31 AUGUST 2016
Group
Note
2016
RM'000
2015
RM'000
Company
2016
2015
RM'000
RM'000
CASH FLOWS FROM OPERATING ACTIVITIES
Profit before taxation
- Continuing operations
- Discontinued operation
Adjustments for:Impairment loss on receivables
Reversal of impairment loss on receivables
Corporate expenses for disposal of a subsidiary company
Depreciation of property, plant and equipment
Deposit written off
Dividend income
Fair value loss on financial assets and liabilities
Net fair value gain on derivatives
Property, plant and equipment written off
Gain on disposal of property, plant and equipment
(Gain)/Loss on disposal of subsidiaries
Realised gain on translation reserves
Interest income
Interest expenses
Provision for liabilities
Share of results of associates
Unrealised (gain)/loss on foreign exchange
27,996
-
26,734
(2,207)
5,183
-
1,820
1,826
27,996
24,527
5,183
3,646
391
(259)
(127)
7,300
772
(22)
51
(648)
(3,013)
(162)
(2,817)
6,026
(279)
(9,392)
(160)
959
(102)
(372)
5,249
55
727
47
(281)
2,070
(1,736)
3,455
359
(18,537)
240
(127)
170
(6,500)
(39)
(2,434)
110
-
74
(3,430)
1,826
(1,392)
19
-
Operating cash flows before changes in working capital
Changes in working capital:Inventories
Trade and other receivables
Trade and other payables
Contract customers
25,657
16,660
(3,637)
743
(1,562)
(12,859)
(13,609)
21,995
6,209
(47,255)
81,698
(48,496)
3,220
24
-
(8,933)
(163)
-
Net cash flows generate from/(used in) from operations
Interest paid
Interest received
Dividend received
Net taxes paid
19,622
(6,026)
2,817
6,430
(5,638)
8,816
(3,455)
1,736
(5,103)
(393)
(110)
2,434
6,430
(158)
(8,353)
(19)
1,392
(206)
Net cash generated from/(used in) operating activities
17,205
1,994
8,203
(7,186)
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WZ SATU BERHAD (666098-X)
STATEMENTS OF
CASH FLOWS
FOR THE FINANCIAL YEAR ENDED 31 AUGUST 2016 (CONT’D)
Group
Company
2016
2015
RM'000
RM'000
2016
RM'000
2015
RM'000
4,586
(15,060)
2,886
(432)
3,535
(293)
(9,345)
4,398
(22,325)
281
(3,098)
(80)
122
(4,506)
4,493
(61)
14,020
(1,280)
-
(293)
(17,094)
(16,200)
6,079
(156)
10,638
(3,138)
-
(4,485)
(30,340)
12,666
(20,164)
400
1,014
(470)
1,061
30,602
(6,925)
18,743
(5,565)
2,550
193
3,983
58,113
(1,726)
12,838
-
1,014
(470)
30,602
(207)
(5,565)
193
58,113
(72)
-
Net cash generated from financing activities
38,860
75,951
25,374
58,234
NET CHANGE IN CASH AND CASH EQUIVALENTS
CASH AND CASH EQUIVALENTS AT BEGINNING
OF THE FINANCIAL YEAR
Effect of the exchange rate fluctuations
51,580
47,605
46,243
30,884
52,569
(545)
4,572
392
36,753
-
5,869
-
52,569
82,996
36,753
Note
CASH FLOWS FROM INVESTING ACTIVITIES
Investment in associates
Subsciption of shares in subsidiaries
Acqusition of a subsidiary, net of cash acquired
Proceeds from disposal of a subsidiary, net of cash disposed
Purchase of property, plant and equipment
Proceeds from disposal of property, plant and equipment
Repayment from subsidiaries
Advance to associates
Purchase of club membership
Deposits pledged to licensed banks
(a)
Net cash (used in)/generated from investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Net proceeds from issuance of shares to non-controlling interest
Net proceeds from conversion of warrants
Shares issuance expenses
Drawdown of term loan
Proceeds from private placement
Repayment of finance lease liabilities
Drawdown of bank borrowings
Dividend paid
CASH AND CASH EQUIVALENTS AT END
OF THE FINANCIAL YEAR
15
103,604
(a) During the financial year, the Group and the Company made the following cash payments for the purchase of property, plant
and equipment:Group
2016
RM'000
Purchase of property, plant and equipment
Acquired by means of finance lease arrangement
Cash payments on purchase of property, plant and equipment
The accompanying notes form an integral part of these financial statements.
2015
RM'000
Company
2016
2015
RM'000
RM'000
33,684
(18,624)
30,645
(8,320)
366
(305)
616
(460)
15,060
22,325
61
156
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Annual Report 2016
61
Notes to the
Financial Statements
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 Company’s registered office is at Level 7, Menara Milenium, Jalan Damanlela, Pusat
Bandar Damansara, Damansara Heights, 50490 Kuala Lumpur. The Company’s principal place of business is at Lot 1890, Jalan
KPB 9, Kawasan Perindustrian Balakong, 43300 Seri Kembangan, Selangor Darul Ehsan.
The principal activities of the Company are investment holding and provision of management services to its subsidiaries. The
principal activities of the subsidiaries are set out in Note 8 to the financial statements.
There have been no significant changes in the nature of these principal activities during the financial year.
The financial statements were authorised for issue by the board of directors in accordance with a resolution of the directors on
16 November 2016.
2.
BASIS OF PREPARATION
2.1 Statement of compliance
The financial statements of the Group and of the Company have been prepared in accordance with the Malaysian Financial
Reporting Standards (“MFRSs”), International Financial Reporting Standards and the requirements of the Companies Act,
1965 in Malaysia.
2.2 Basis of measurement
The financial statements of the Group and of the Company have been prepared under the historical cost basis, other than
as disclosed in the significant accounting policies in Note 3 to the financial statements.
2.3 Use of estimates and judgement
The preparation of financial statements in conformity with MFRSs requires the use of certain critical accounting estimates
and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities
at the date of the financial statements, and the reported amounts of the revenue and expenses during the reported period.
It also requires Directors to exercise their judgement in the process of applying the Group’s and the Company’s accounting
policies. Although these estimates and judgement are based on the Directors’ best knowledge of current events and actions,
actual results may differ.
The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant
to the financial statements are disclosed in Note 4 to the financial statements.
2.4 Functional and presentation currency
The individual financial statements of each entity in the Group are measured using the currency of the primary economic
environment in which they operate (“the functional currency”). The consolidated financial statements are presented in Ringgit
Malaysia (“RM”), which is also the Company’s functional currency, and has been rounded to the nearest thousand, unless
otherwise stated.
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WZ SATU BERHAD (666098-X)
Notes to the
Financial Statements
(CONT’D)
2.
BASIS OF PREPARATION (CONTINUED)
2.5 New MFRSs and amendments/improvements to MFRSs that have been issued, but yet to be effective
The Group and the Company have not adopted the following new MFRSs and amendments/improvements to MFRSs that
have been issued, but yet to be effective:Effective for
financial periods
beginning on or after
New MFRSs
MFRS 9
MFRS 15
MFRS 16
Financial Instruments
Revenue from Contracts with Customers
Leases
Amendments/Improvements to MFRSs
MFRS 2
Share-based Payment
MFRS 5
Non-current Assets Held for Sale and Discontinued Operations
MFRS 7
Financial Instruments: Disclosures
MFRS 10
Consolidated Financial Statements
MFRS 11
MFRS 12
MFRS 101
MFRS 107
MFRS 112
MFRS 116
MFRS 119
MFRS 127
MFRS 128
Joint Arrangements
Disclosure of Interests in Other Entities
Presentation of Financial Statements
Statement of Cash Flows
Income Taxes
Property, Plant and Equipment
Employee Benefits
Separate Financial Statements
Investments in Associates and Joint Ventures
MFRS 138
MFRS 141
Intangible Assets
Agriculture
1 January 2018
1 January 2018
1 January 2019
1 January 2018
1 January 2016
1 January 2016
Deferred/
1 January 2016
1 January 2016
1 January 2016
1 January 2016
1 January 2017
1 January 2017
1 January 2016
1 January 2016
1 January 2016
Deferred/
1 January 2016
1 January 2016
1 January 2016
A brief discussion on the above significant new MFRSs and amendments/improvements to MFRSs are summarised below.
Due to the complexity of these new MFRSs and amendments/improvements to MFRSs, the financial effects of their adoption
are currently still being assessed by the Group and the Company.
MFRS 9 Financial Instruments
Key requirements of MFRS 9:•
MFRS 9 introduces an approach for classification of financial assets which is driven by cash flow characteristics and
the business model in which an asset is held. The new model also results in a single impairment model being applied
to all financial instruments.
In essence, if a financial asset is a simple debt instrument and the objective of the entity’s business model within which
it is held is to collect its contractual cash flows, the financial asset is measured at amortised cost. In contrast, if that
asset is held in a business model the objective of which is achieved by both collecting contractual cash flows and
selling financial assets, then the financial asset is measured at fair value in the statements of financial position, and
amortised cost information is provided through profit or loss. If the business model is neither of these, then fair value
information is increasingly important, so it is provided both in the profit or loss and in the statements of financial position.
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63
Notes to the
Financial Statements
(CONT’D)
2.
BASIS OF PREPARATION (CONTINUED)
2.5 New MFRSs and amendments/improvements to MFRSs that have been issued, but yet to be effective (Continued)
MFRS 9 Financial Instruments (Continued)
•
MFRS 9 introduces a new, expected-loss impairment model that will require more timely recognition of expected credit
losses. Specifically, this Standard requires entities to account for expected credit losses from when financial instruments
are first recognised and to recognise full lifetime expected losses on a more timely basis. The model requires an entity
to recognise expected credit losses at all times and to update the amount of expected credit losses recognised at each
reporting date to reflect changes in the credit risk of financial instruments. This model eliminates the threshold for the
recognition of expected credit losses, so that it is no longer necessary for a trigger event to have occurred before credit
losses are recognised.
•
MFRS 9 introduces a substantially-reformed model for hedge accounting, with enhanced disclosures about risk
management activity. The new model represents a significant overhaul of hedge accounting that aligns the accounting
treatment with risk management activities, enabling entities to better reflect these activities in their financial statements.
In addition, as a result of these changes, users of the financial statements will be provided with better information about
risk management and the effect of hedge accounting on the financial statements.
MFRS 15 Revenue from Contracts with Customers
The core principle of MFRS 15 is that an entity recognises revenue to depict the transfer of promised goods or services to
customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods
or services. An entity recognises revenue in accordance with the core principle by applying the following steps:(i)
(ii)
(iii)
(iv)
(v)
identify the contracts with a customer;
identify the performance obligation in the contract;
determine the transaction price;
allocate the transaction price to the performance obligations in the contract; and
recognise revenue when (or as) the entity satisfies a performance obligation.
MFRS 15 also includes new disclosures that would result in an entity providing users of financial statements about the nature,
amount, timing and uncertainty of revenue and cash flows from contracts with customers.
The following MFRSs and IC Interpretations will be withdrawn on the application of MFRS15:MFRS 111
MFRS 118
IC Interpretation 13
IC Interpretation 15
IC Interpretation 18
IC Interpretation 131
Construction Contracts
Revenue
Customer Loyalty Programmes
Agreements for the Construction of Real Estate
Transfers of Assets from Customers
Revenue - Barter Transactions Involving Advertising Services
MFRS 16 Leases
Currently under MFRS 117 Leases, leases are classified either as finance leases or operating leases. A lessee recognises
on its statement of financial position assets and liabilities arising from the finance leases.
MFRS 16 eliminates the distinction between finance and operating leases for lessees. All leases will be brought onto its
statement of financial position except for short-term and low value asset leases.
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WZ SATU BERHAD (666098-X)
Notes to the
Financial Statements
(CONT’D)
2.
BASIS OF PREPARATION (CONTINUED)
2.5 New MFRSs and amendments/improvements to MFRSs that have been issued, but yet to be effective (Continued)
Amendments to MFRS 5 Non-current Assets Held for Sale and Discontinued Operations
Amendments to MFRS 5 introduce specific guidance on when an entity reclassifies an asset (or disposal group) from held
for sale to held for distribution to owners (or vice versa), or when held-for-distribution is discontinued.
Amendments to MFRS 7 Financial Instruments: Disclosures
Amendments to MFRS 7 provides additional guidance to clarify whether servicing contracts constitute continuing involvement
for the purposes of applying the disclosure requirements of MFRS 7.
The Amendments also clarify the applicability of Disclosure - Offsetting Financial Assets and Financial Liabilities
(Amendments to MFRS 7) to condensed interim financial statements.
Amendments to MFRS 11 Joint Arrangements
Amendments to MFRS 11 clarify that when an entity acquires an interest in a joint operation in which the activity of the joint
operation constitutes a business, as defined in MFRS 3, it shall apply the relevant principles on business combinations
accounting in MFRS 3, and other MFRSs, that do not conflict with MFRS 11. Some of the impact arising may be the
recognition of goodwill, recognition of deferred tax assets/ liabilities and recognition of acquisition-related costs as expenses.
The amendments do not apply to joint operations under common control and also clarify that previously held interests in a
joint operation are not re-measured if the joint operator retains joint control.
Amendments to MFRS 101 Presentation of Financial Statements
Amendments to MFRS 101 improve the effectiveness of disclosures. The amendments clarify guidance on materiality and
aggregation, the presentation of subtotals, the structure of financial statements and the disclosure of accounting policies.
Amendments to MFRS 107 Statement of Cash Flows
Amendments to MFRS 107 require entities to provide disclosures that enable users of financial statements to evaluate
changes in liabilities arising from financing activities, including changes from cash flows and non-cash changes. The
disclosure requirement could be satisfied in various ways, and one method is by providing reconciliation between the
opening and closing balances in the statements of financial position for liabilities arising from financing activities.
Amendments to MFRS 112 Income Taxes
Amendments to MFRS 112 clarify that decreases in value of debt instrument measured at fair value for which the tax base
remains at its original cost give rise to a deductible temporary difference. The estimate of probable future taxable profits
may include recovery of some of an entity’s assets for more that their carrying amounts if sufficient evidence exists that it is
probable the entity will achieve this.
The amendments also clarify that deductible temporary differences should be compared with the entity’s future taxable
profits excluding tax deductions resulting from the reversal of those deductible temporary differences when an entity
evaluates whether it has sufficient future taxable profits. In addition, when an entity assesses whether taxable profits will be
available, it should consider tax law restrictions with regards to the utilisation of the deduction.
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65
Notes to the
Financial Statements
(CONT’D)
2.
BASIS OF PREPARATION (CONTINUED)
2.5 New MFRSs and amendments/improvements to MFRSs that have been issued, but yet to be effective (Continued)
Amendments to MFRS 116 Property, Plant and Equipment
Amendments to MFRS 116 prohibit revenue-based depreciation because revenue does not reflect the way in which an item
of property, plant and equipment is used or consumed.
Amendments to MFRS 127 Separate Financial Statements
Amendments to MFRS 127 allow a parent and investors to use the equity method in its separate financial statements to
account for investments in subsidiaries, joint ventures and associates, in addition to the existing options.
Amendments to MFRS 138 Intangible Assets
Amendments to MFRS 138 introduce a rebuttable presumption that the revenue-based amortisation method is inappropriate.
This presumption can be overcome only in the following limited circumstances:•
when the intangible asset is expressed as a measure of revenue, i.e. in the circumstance in which the predominant
limiting factor that is inherent in an intangible asset is the achievement of a revenue threshold; or
•
when it can be demonstrated that revenue and the consumption of the economic benefits of the intangible asset are
highly correlated.
Amendments to MFRS 10 Consolidated Financial Statements and MFRS 128 Investments in Associates and Joint
Ventures
These amendments address an acknowledged inconsistency between the requirements in MFRS 10 and those in MFRS
128, in dealing with the sale or contribution of assets between an investor and its associate or joint venture.
The main consequence of the amendments is that a full gain or loss is recognised when a transaction involves a business,
as defined in MFRS 3. A partial gain or loss is recognised when a transaction involves assets that do not constitute a
business.
Amendments to MFRS 10 Consolidated Financial Statements, MFRS 12 Disclosures of Interests in Other Entities
and MFRS 128 Investments in Associates and Joint Ventures
These amendments address the following issues that have arisen in the application of the consolidation exception for
investment entities:•
Exemption from presenting consolidated financial statements: the amendments clarify that the exemption from
presenting consolidated financial statements applies to a parent entity that is a subsidiary of an investment entity, when
the investment entity measures all of its subsidiaries at fair value.
•
Consolidation of intermediate investment entities: the amendments clarify that only a subsidiary is not an investment
entity itself and provides support services to the investment entity is consolidated. All other subsidiaries of an investment
entity are measured at fair value.
•
Policy choice for equity accounting for investments in associates and joint ventures: the amendments allow a
non-investment entity that has an interest in an associate or joint venture that is an investment entity, when applying the
equity method, to retain the fair value measurement applied by the investment entity associate or joint venture to its
interest in subsidiaries, or to unwind the fair value measurement and instead perform a consolidation at the level of the
investment entity associate or joint venture.
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WZ SATU BERHAD (666098-X)
Notes to the
Financial Statements
(CONT’D)
2.
BASIS OF PREPARATION (CONTINUED)
2.5 New MFRSs and amendments/improvements to MFRSs that have been issued, but yet to be effective (Continued)
Amendments to MFRS 116 Property, Plant and Equipment and Amendments to MFRS 141 Agriculture
With the amendments, bearer plants would come under the scope of MFRS 116 and would be accounted for in the same
way as property, plant and equipment. A bearer plant is defined as a living plant that is used in the production or supply of
agricultural produce, is expected to bear produce for more than one period and has a remote likelihood of being sold as
agricultural produce, except for incidental scrap sales.
Nevertheless, the produce growing on the bearer plant would remain within the scope of MFRS 141. This is because the
growth of the produce directly increases the expected revenue from the sale of the produce. Moreover, fair value
measurement of the growing produce provides useful information to users of financial statements about future cash flows
that an entity will actually realise as the produce will ultimately be detached from the bearer plants and sold separately.
3.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Unless otherwise stated, the following accounting policies have been applied consistently to all the financial years presented in
the financial statements of the Group and of the Company.
3.1 Basis of consolidation
The consolidated financial statements comprise the financial statements of the Company and its subsidiaries. The financial
statements of the subsidiaries, associates, and joint operators used in the preparation of the consolidated financial
statements are prepared for the same reporting date as the Company. Consistent accounting policies are applied to like
transactions and events in similar circumstances.
(i) Subsidiaries and business combination
Subsidiaries are entities (including structured entities) over which the Group is exposed, or has rights, to variable returns
from its involvement with the acquirees and has the ability to affect those returns through its power over the acquirees.
The financial statements of subsidiaries are included in the consolidated financial statements from the date the Group
obtains control of the acquirees until the date the Group loses control of the acquirees.
The Group applies the acquisition method to account for business combinations from the acquisition date.
For a new acquisition, goodwill is initially measured at cost, being the excess of the following:•
the fair value of the consideration transferred, calculated as the sum of the acquisition-date fair value of assets
transferred (including contingent consideration), the liabilities incurred to former owners of the acquiree and the
equity instruments issued by the Group. Any amounts that relate to pre-existing relationships or other arrangements
before or during the negotiations for the business combination, that are not part of the exchange for the acquiree,
will be excluded from the business combination accounting and be accounted for separately; plus
•
the recognised amount of any non-controlling interests in the acquiree either at fair value or at the proportionate
share of the acquiree’s identifiable net assets at the acquisition date (the choice of measurement basis is made on
an acquisition-by-acquisition basis); plus
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67
Notes to the
Financial Statements
(CONT’D)
3.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
3.1 Basis of consolidation (Continued)
(i) Subsidiaries and business combination (Continued)
•
if the business combination is achieved in stages, the acquisition-date fair value of the previously held equity interest
in the acquiree; less
•
the net fair value of the identifiable assets acquired and the liabilities assumed at the acquisition date.
The accounting policy for goodwill is set out in Note 3.7(i).
When the excess is negative, a bargain purchase gain is recognised immediately in profit or loss at the acquisition date.
Transaction costs, other than those associated with the issue of debt or equity securities, that the Group incurs in
connection with a business combination are expensed as incurred.
If the business combination is achieved in stages, the Group remeasures the previously held equity interest in the
acquiree to its acquisition-date fair value, and recognises the resulting gain or loss, if any, in profit or loss. Amounts
arising from interests in the acquiree prior to the acquisition date that have been previously been recognised in other
comprehensive income are reclassified to profit or loss or transferred directly to retained earnings, on the same basis
as could be required if the acquirer had disposed directly of the previously held equity interest.
If the initial accounting for a business combination is incomplete by the end of the reporting period in which the business
combination occurs, the Group uses provisional fair value amounts for the items for which the accounting is incomplete.
The provisional amounts are adjusted to reflect new information obtained about facts and circumstances that existed
as of the acquisition date, including additional assets or liabilities identified in the measurement period. The measurement
period for completion of the initial accounting ends as soon as the Group receives the information it was seeking about
facts and circumstances or learns that more information is not obtainable, subject to the measurement period not
exceeding one year from the acquisition date.
Upon the loss of control of subsidiary, the Group derecognises the assets and liabilities of the former subsidiary, any
non-controlling interests and the other components of equity related to the former subsidiary from the consolidated
statement of financial position. Any surplus or deficit arising on the loss of control is recognised in profit or loss. If the
Group retains any interest in the former subsidiary, then such interest is measured at fair value at the date that control
is lost. Subsequently, it is accounted for as an associate, joint venture, an available-for-sale financial asset or a held for
trading financial asset.
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. The difference between the Group’s share of net assets before and after the change, and the fair
value of the consideration received or paid, is recognised directly in equity.
(ii) Non-controlling interests
Non-controlling interests represent the equity in subsidiaries not attributable, directly or indirectly, to owners of the
Company and are presented separately in the consolidated statement of financial position within equity.
Losses attributable to the non-controlling interests are allocated to the non-controlling interests even if the losses exceed
the non-controlling interests.
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Notes to the
Financial Statements
(CONT’D)
3.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
3.1 Basis of consolidation (Continued)
(iii) Associates
Associates are entities over which the Group has significant influence, but not control, to the financial and operating
policies.
Investments in associates are accounted for in the consolidated financial statements using the equity method.
Under the equity method, the investments in associates are initially recognised at cost. The cost of investment includes
transaction costs. Subsequently, the carrying amount is adjusted to recognise changes in the Group’s share of net
assets of the associate.
When the Group’s share of losses exceeds its interest in an associate, the carrying amount of that interest including
any long-term investments is reduced to zero, and the recognition of further losses is discontinued except to the extent
that the Group has an obligation or has made payments on behalf of the associate.
When the Group ceases to have significant influence over an associate, any retained interest in the former associate at
the date when significant influence is lost is measured at fair value and this amount is regarded as the initial carrying
amount of a financial asset. Any difference between the carrying amount of the associate upon loss of significant
influence and the fair value of the retained investment and proceeds from disposal is recognised in profit or loss.
When the Group’s interest in an associate decreases but does not result in a loss of significant influence, any retained
interest is not remeasured. Any gain or loss arising from the decrease in interest is recognised in profit or loss. Any
gains or losses previously recognised in other comprehensive income are also reclassified proportionately to the profit
or loss if that gain or loss would be required to be reclassified to profit or loss on the disposal of the related assets or
liabilities.
(iv) Joint arrangements
Joint arrangements arise when the Group and another party or parties are bound by a contractual arrangement, and
the contractual arrangement gives the Group and the other party or parties, joint control of the arrangement. Joint control
exists when there is contractually agreed sharing of control of an arrangement whereby decisions about the relevant
activities require the unanimous consent of the parties sharing control.
Joint arrangements are classified and accounted for as follows:•
A joint arrangement is classified as a “joint operation” when the Group has rights to the assets and obligations for
the liabilities relating to the arrangement. The Group accounts for its share of its assets (including its share of any
assets held jointly), its liabilities (including its share of any liabilities incurred jointly), its revenue from the sale of its
share of the output arising from the joint operation, its share of the revenue from the sale of the output by the joint
operation and its expenses (including its share of any expenses incurred jointly).
•
A joint arrangement is classified as “joint venture” when the Group has rights to the net assets of the arrangements.
The Group accounts for its interest in the joint venture using the equity method in accordance with MFRS 128
Investments in Associates and Joint Ventures.
The Group has assessed the nature of its joint arrangement and determined them to be joint operations and accounted
for its interest in the joint venture using the proportionate consolidation method.
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Notes to the
Financial Statements
(CONT’D)
3.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
3.1 Basis of consolidation (continued)
(v) Transactions eliminated on consolidation
Intra-group balances and transactions, and any unrealised income and expenses arising from intra-group transactions
are eliminated in preparing the consolidated financial statements.
Unrealised gains arising from transactions with equity-accounted associates are eliminated against the investment to
the extent of the Group’s interest in the investee. Unrealised losses are eliminated in the same way as unrealised gains,
but only to the extent that there is no evidence of impairment.
3.2 Separate financial statements
In the Company’s statement of financial position, investments in subsidiaries and associates are measured at cost less any
impairment losses, unless the investment is classified as held for sale or distribution. The cost of investment includes
transaction costs. The policy for the recognition and measurement of impairment losses shall be applied on the same basis
as could be required for impairment of non-financial assets as disclosed in Note 3.11(ii).
3.3 Foreign currency transactions and operations
(i) Translation of foreign currency transactions
Foreign currency transactions are translated to the respective functional currencies of the Group entities at the exchange
rates prevailing at the dates of the transactions.
At the end of each reporting date, monetary items denominated in foreign currencies are retranslated at the exchange
rates prevailing at the reporting date.
Non-monetary items denominated in foreign currencies that are carried at fair value are retranslated at the rates
prevailing at the dates the fair values were determined. Non-monetary items denominated in foreign currencies that are
measured at historical cost are translated at the historical rates as at the dates of the initial transactions.
Foreign exchange differences arising on settlement or retranslation of monetary items are recognised in profit or loss
except for monetary item that is designated as a hedging instrument in either a cash flow hedge or a hedge of the
Group’s net investment of a foreign operation. When settlement of a monetary item receivable from or payable to a
foreign operation is neither planned nor likely to occur in the foreseeable future, exchange differences are recognised
in profit or loss in the separate financial statements of the parent company or the individual financial statements of the
foreign operation. In the consolidated financial statements, the exchange differences are considered to form part of a
net investment in a foreign operation and are recognised initially in other comprehensive income until its disposal, at
which time, the cumulative amount is reclassified to profit or loss.
The gain or loss arising on translation of non-monetary items measured at fair value is treated in line with the recognition
of the gain or loss on the change in fair value of the item (i.e. translation differences on items whose fair value gain or
loss is recognised in other comprehensive income or profit or loss are also recognised in other comprehensive income
or profit or loss, respectively).
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Notes to the
Financial Statements
(CONT’D)
3.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
3.3 Foreign currency transactions and operations (Continued)
(ii) Translation of foreign operations
Exchange differences arising on the translation are recognised in other comprehensive income. However, if the foreign
operation is a non-wholly owned subsidiary, then the relevant proportionate share of the translation difference is allocated
to the non-controlling interests.
The assets and liabilities of foreign operations denominated in the functional currency different from the presentation
currency, including goodwill and fair value adjustments arising on acquisition, are translated into the presentation
currency at exchange rates prevailing at the reporting date. The income and expenses of foreign operations are
translated at exchange rates at the dates of the transactions.
When a foreign operation is disposed of such that control, significant influence or joint control is lost, the cumulative
amount in foreign exchange translation reserve related to that foreign operation is reclassified to profit or loss. For a
partial disposal not involving loss of control of a subsidiary that includes a foreign operation, the proportionate share of
cumulative amount in foreign exchange translation reserve is reattributed to non-controlling interests. For partial
disposals of associates or joint ventures that do not result in the Group losing significant influence or joint control, the
proportionate share of the cumulative amount in foreign exchange translation reserve is reclassified to profit or loss.
3.4 Financial instruments
Financial instruments are recognised in the statements of financial position when, and only when, the Group and the
Company become a party to the contract provisions of the financial instrument.
When financial instruments are recognised initially, they are measured at fair value plus, in the case of financial instruments
not at fair value through profit or loss, transaction costs that are directly attributable to the acquisition or issue of the financial
instruments.
(i) Subsequent measurement
The Group and the Company categorise the financial instruments as follows:(a) Financial assets
Financial assets at fair value through profit or loss
Financial assets are classified as fair value through profit or loss when the financial assets is either held for trading,
including derivatives (except for a derivative that is a financial guarantee contract or a designated and effective
hedging instrument) or it is designated into this category upon initial recognition.
Subsequent to initial recognition, financial assets at fair value through profit or loss are measured at fair value with
the gain or loss recognised in profit or loss.
The Group has not designated any financial assets at fair value through profit or loss.
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Notes to the
Financial Statements
(CONT’D)
3.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
3.4 Financial instruments (Continued)
(i) Subsequent measurement (Continued)
(a) Financial assets (Continued)
Loans and receivables
Financial assets with fixed or determinable payments that are not quoted in an active market are classified as loans
and receivables.
Subsequent to initial recognition, loans and receivables are measured at amortised cost using the effective interest
method less accumulated impairment losses, if any. The policy for the recognition and measurement of impairment
losses is in accordance with Note 3.11(i). Gains and losses are recognised in profit or loss through the amortisation
process.
Held-to-maturity investments
Financial assets with fixed or determinable payments and fixed maturities are classified as held-to-maturity when
the Group has the positive intention and ability to hold them to maturity.
Subsequent to initial recognition, held-to-maturity investments are measured at amortised cost using the effective
interest method less accumulated impairment losses. The policy for the recognition and measurement of impairment
losses is in accordance with Note 3.11(i). Gains and losses are recognised in profit or loss through the amortisation
process.
Available-for-sale financial assets
Available-for-sale financial assets comprise investment in equity and debt securities that are designated as available
for sale or are not classified in any of the three preceding categories.
Subsequent to initial recognition, available-for-sale financial assets are measured at fair value. Gains or losses from
changes in fair value of the financial assets are recognised in other comprehensive income, except for impairment
losses and foreign exchange gains and losses arising from monetary items and gains and losses of hedged items
attributable to hedge risks of fair values hedges which are recognised in profit or loss. The cumulative gain or loss
previously recognised in other comprehensive income is reclassified from equity to profit or loss as a reclassification
adjustment when the financial asset is derecognised. Interest income calculated using the effective interest method
is recognised in profit or loss. Dividends on an available-for-sale equity instrument are recognised in profit or loss
when the Group’s and the Company’s right to receive payment is established.
Unquoted equity instruments carried at cost
Investments in equity instruments that do not have a quoted market price in an active market and whose fair value
cannot be reliably measured are measured at cost less accumulated impairment losses, if any. The policy for the
recognition and measurement at impairment losses is in accordance with Note 3.11(i).
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WZ SATU BERHAD (666098-X)
Notes to the
Financial Statements
(CONT’D)
3.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
3.4 Financial instruments (Continued)
(i) Subsequent measurement (Continued)
(b) Financial liabilities
Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss include financial liabilities held for trading, including derivatives
(except for a derivative that is a financial guarantee contract or a designated and effective hedging instrument) or
financial liabilities designated into this category upon initial recognition.
Subsequent to initial recognition, financial liabilities at fair value through profit or loss are measured at fair value
with the gain or loss recognised in profit or loss.
Derivatives that are linked to and must be settled by delivery of equity instruments that do not have a quoted price
in an active market for identical instruments whose fair values otherwise cannot be reliably measured are measured
at cost.
The Group has not designated any financial liabilities at fair value through profit or loss.
Other financial liabilities
Subsequent to initial recognition, other financial liabilities are measured at amortised cost using the effective interest
method. Gains and losses are recognised in profit or loss through the amortisation process.
(ii) Financial guarantee contracts
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.
Financial guarantee contracts are recognised initially as a liability at fair value, net of transaction costs that are directly
attributable to the issuance of the guarantee. Subsequent to initial recognition, the liability is measured at the higher of
the best estimate of the expenditure required to settle the present obligation at the reporting date and the amount initially
recognised less cumulative amortisation.
(iii) Regular way purchase or sale of financial assets
A regular way purchase or sale is a purchase or sale of a financial asset under a contract whose terms require delivery
of the asset within the time frame established generally by regulation or convention in the marketplace concerned.
A regular way purchase or sale of financial assets is recognised and derecognised, as applicable, using trade date
accounting (i.e. the date the Group and the Company itself purchase or sell an asset). Trade date accounting refers
to:(a) the recognition of an asset to be received and the liability to pay for it on the trade date; and
(b) derecognition of an asset that is sold, recognition of any gain or loss on disposal and the recognition of a receivable
from the buyer for payment on the trade date
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Notes to the
Financial Statements
(CONT’D)
3.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
3.4 Financial instruments (Continued)
(iv) Derecognition
A financial asset or a part of it is derecognised when, and only when, the contractual rights to receive the cash flows
from the financial asset expire or control of the asset is not retained or substantially all of the risks and rewards of
ownership of the financial asset are transferred to another party. On derecognition of a financial asset, the difference
between the carrying amount and the sum of the consideration received (including any new asset obtained less any
new liability assumed) and any cumulative gain or loss that had been recognised in other comprehensive income is
recognised in profit or loss.
A financial liability or a part of it is derecognised when, and only when, the obligation specified in the contract is
discharged, cancelled or expires. On derecognition of a financial liability, the difference between the carrying amount
and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised in profit or
loss.
(v) Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount is presented in the statements of financial position
if there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net
basis, to realised the assets and settle the liabilities simultaneously.
3.5 Property, plant and equipment
Recognition and measurement
Property, plant and equipment (other than freehold land and buildings, long term leasehold land and buildings and low cost
apartments) are measured at cost less accumulated depreciation and accumulated impairment losses. The policy for the
recognition of measurement of impairment losses is in accordance with Note 3.11(ii).
Cost of assets includes expenditures that are directly attributable to the acquisition of the asset and any other costs that are
directly attributable to bringing the asset to working condition for its intended use, and the costs of dismantling and removing
the items and restoring the site on which they are located. The cost of self-constructed assets also includes cost of materials,
direct labour, and any other direct attributable costs but excludes internal profits. For qualifying assets, borrowing costs are
capitalised in accordance with the accounting policy on borrowing costs in Note 3.16.
Freehold land and buildings, long term leasehold land and buildings and low cost apartments are measured at fair value,
based on valuations by external independent valuers, less accumulated depreciation on buildings and accumulated
impairment losses recognised after the date of revaluation. Valuations are performed with sufficient regularity to ensure that
the fair value of the freehold land and buildings, long term leasehold land and buildings and low cost apartments do not
differ materially from the carrying amount. Any accumulated depreciation as at the date of revaluation is eliminated against
the gross carrying amount of the asset and the net amount is restated to the revalued amount of the asset.
A revaluation surplus is recognised in other comprehensive income and credited to the revaluation reserve. However, the
increase shall be recognised in profit or loss to the extent that it reverses a revaluation decrease of the same asset previously
recognised in profit or loss. If an asset’s carrying amount is decreased as a result of a revaluation, the decrease shall be
recognised in profit or loss. However, the decrease shall be recognised in other comprehensive income to the extent of any
credit balance existing in the revaluation reserve in respect of that asset.
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WZ SATU BERHAD (666098-X)
Notes to the
Financial Statements
(CONT’D)
3.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
3.5 Property, plant and equipment (Continued)
Recognition and measurement (Continued)
Purchased software that is integral to the functionality of the related equipment is capitalised as part of that equipment.
When significant parts of an item of property, plant and equipment have different useful lives, they are accounted for as a
separate items of property, plant and equipment.
The revaluation reserve is transferred to retained earnings as the assets are used. The amount of revaluation reserve
transferred is the difference between depreciation based on the revalued carrying amount of the asset and depreciation
based on the asset’s original cost.
Subsequent costs
The cost of replacing a part of an item of property, plant and equipment is included in the asset’s carrying amount or
recognised as a separate asset, as appropriate, only when it is probable that the future economic benefits associated with
the part will flow to the Group or the Company and its cost can be measured reliably. The carrying amount of the replaced
part is derecognised. All other repairs and maintenance are charged to the profit or loss as incurred.
Depreciation
Freehold land has an unlimited useful life and therefore is not depreciated. Asset under construction included in property,
plant and equipment are not depreciated as these assets are not yet available for use.
All other property, plant and equipment are depreciated on straight-line basis by allocating their depreciable amounts over
their remaining useful lives.
%
Freehold buildings
Long term leasehold land
Long term leasehold buildings
Low cost apartments
Fabrication yard
Plant, machinery and equipment
Cranes
Motor vehicles
Furniture, fittings and office equipment
Container/Cabin
Renovations
2
67 - 81 years
67 - 81 years
2
20
10 - 20
20
20
10 - 30
10 - 20
10
The residual values, useful lives and depreciation methods are reviewed at the end of each reporting period and adjusted
as appropriate.
Derecognition
An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected
from its use or disposal. Any gain or loss arising on derecognition of the asset is recognised in profit or loss.
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Notes to the
Financial Statements
(CONT’D)
3.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
3.6 Leases
The determination of whether an arrangement is, or contains, a lease is based on the substance of the arrangement at the
inception of the lease. The arrangement is, or contains, a lease if fulfilment of the arrangement is dependent on the use of
a specific asset or assets and the arrangement conveys a right to use the asset or assets.
A lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental to ownership. All other
leases that do not meet this criterion are classified as operating leases.
(i) Lessee accounting
If an entity in the Group is a lessee in a finance lease, it capitalises the leased asset and recognises the related liability.
The amount recognised at the inception date is the fair value of the underlying leased asset or, if lower, the present
value of the minimum lease payments. Subsequent to initial recognition, the asset is accounted for in accordance with
the accounting policy applicable to that assets.
Minimum lease payments are apportioned between the finance charge and the reduction of the outstanding liability.
The finance charge is allocated to each period during the lease term so as to produce a constant periodic rate of interest
on the remaining balance of the liability. Contingent lease payments are charged as expenses in the periods in which
they are incurred.
The capitalised leased asset is classified by nature as property, plant and equipment.
For operating leases, the Group does not capitalise the leased asset or recognise the related liability. Instead lease
payments under an operating lease are recognised as an expense on the straight-line basis over the lease term unless
another systematic basis is more representative of the time pattern of the user’s benefit.
(ii) Lessor accounting
If an entity in the Group is a lessor in operating lease, the underlying asset is not derecognised but is presented in the
statements of financial position according to the nature of the asset. Lease income from operating leases is recognised
in profit or loss on a straight-line basis over the lease term, unless another systematic basis is more representative of
the time pattern in which use benefit derived from the leased asset is diminished.
3.7 Goodwill and other intangible assets
(i) Goodwill
Goodwill arises on business combinations is initially measured at cost, being the excess of the aggregate of the
consideration transferred and the amount recognised for non-controlling interests, and any previous interest held, over
the net identifiable assets acquired and liabilities assumed. After initially recognition, goodwill is measured at cost less
accumulated impairment losses. The policy for the recognition and measurement of impairment losses is in accordance
with Note 3.11(ii).
In respect of equity-accounted associates, goodwill is included in the carrying amount of the investment and is not
tested for impairment individually. Instead, the entire carrying amount of the investment is tested for impairment as a
single asset.
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WZ SATU BERHAD (666098-X)
Notes to the
Financial Statements
(CONT’D)
3.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
3.7 Goodwill and other intangible assets (Continued)
(ii) Other intangible assets
Intangible assets acquired separately are measured initially at cost. The cost of intangible assets acquired in a business
combination is their fair value as at the date of acquisition. Following initial acquisition, intangible assets are carried at
cost less any accumulated amortisation and any accumulated impairment losses.
Intangible assets with finite useful lives are amortised over the estimated useful lives and assessed for impairment
whenever there is an indication that the intangible asset may be impaired. The amortisation period and the amortisation
method are reviewed at least at each financial year end. Changes in the expected useful life or the expected pattern of
consumption of future economic benefits embodied in the asset is accounted for by changing the amortisation period
or method, as appropriate, and are treated as changes in accounting estimates. The amortisation expense on intangible
assets with finite useful lives is recognised in profit or loss in the expense category consistent with the function of the
intangible asset.
Gains or losses arising from de-recognition of an intangible asset are measured as the difference between the net
disposal proceeds and the carrying amount of the asset and are recognised in the profit or loss when the asset is
derecognised.
3.8 Inventories
Inventories are measured at the lower of cost and net realisable value.
Costs incurred in bringing the inventories to their present location and condition are accounted for as follows:•
•
raw materials: purchase costs on weighted average cost basis.
finished goods and work-in-progress: costs of direct materials and labour and a proportion of manufacturing overheads
based on normal operating capacity. These costs are assigned on a weighted average cost basis.
Where necessary, allowance is provided for damaged, obsolete and slow moving items to adjust the carrying value of
inventories to the lower of cost and net realisable value.
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.
3.9 Construction contracts
The Group principally operates fixed price contracts. Contract revenue and contract costs are recognised as revenue and
expenses respectively by reference to the stage of completion of the contract activity at the end of the reporting period (the
percentage of completion method), when the outcome of a construction contract can be estimated reliably.
The outcome of a construction contract can be estimated reliably when: (i) total contract revenue can be measured reliably;
(ii) it is probable that the economic benefits associated with the contract will flow to the entity; (iii) the costs to complete the
contract and the stage of completion can be measured reliably; (iv) the contract costs attributable to the contract can be
clearly identified and measured reliably so that actual contract costs incurred can be compared with prior estimates.
When the outcome of a construction contract cannot be estimated reliably (principally during early stages of a contract),
contract revenue is recognised only to the extent of contact costs incurred that are likely to be recoverable and contract
costs are recognised as expense in the period in which they are incurred.
An expected loss on the construction contract is recognised as an expense immediately when it is probable that total contract
costs will exceed total contract revenue.
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Notes to the
Financial Statements
(CONT’D)
3.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
3.9
Construction contracts (Continued)
In applying the percentage of completion method, revenue recognised corresponds to the total contract revenue multiplied
by the actual completion rate based on the proportion of total contract costs incurred to date and the estimated costs to
complete.
Construction work-in-progress is presented as part of the contract assets as amount owing by contract customers in the
statements of financial position for all contract in which costs incurred plus recognised profits exceed progress billings. If
progress billings exceed costs incurred plus recognised profits, then the difference is presented as amount owing to
contract customers which is part of the contract liabilities in the statements of financial position.
3.10 Cash and cash equivalents
For the purpose of the statements of cash flows, cash and cash equivalents comprise cash on hand, bank balances and
deposits with a maturity of three months or less, that are readily convertible to known amount of cash and which are subject
to an insignificant risk of changes in value. Cash and cash equivalents are presented net of bank overdrafts.
3.11 Impairment of assets
(i)
Impairment and uncollectibility of financial assets
At each reporting date, all financial assets (except for financial assets categorised as fair value through profit or loss
and investment in subsidiaries and associates) are assessed whether there is any objective evidence of impairment
as a result of one or more events having an impact on the estimated future cash flows of the financial asset that can
be reliably estimated. Losses expected as a result of future events, no matter how likely, are not recognised.
Evidence of impairment may include indications that the debtors or a group of debtors are experiencing significant
financial difficulty, default or delinquency in interest or principal payments, the probability that they will enter
bankruptcy or other financial reorganisation, and where observable data indicate that there is a measurable decrease
in the estimated future cash flows, such as changes in arrears or economic conditions that correlate with defaults.
Loans and receivables and held-to-maturity investments
The Group and the Company first assess whether objective evidence of impairment exists individually for financial
assets that are individually significant, and individually or collectively for financial assets that are not individually
significant. If there is no objective evidence for impairment exists for an individually assessed financial asset, whether
significant or not, the Group and the Company include the financial asset in a group of financial assets with similar
credit risk characteristics and collectively assess them for impairment. Financial assets that are individually assessed
for impairment for which an impairment loss is or continues to be recognised are not included in a collective
assessment of impairment.
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
carrying amount of the financial asset is reduced through the use of an allowance account and the loss is recognised
in profit or loss.
If, in a subsequent period, the amount of the impairment loss decreases because of an event occurring after the
impairment was recognised, the previously recognised impairment loss is reversed by adjusting an allowance account
to the extent that the carrying amount of the financial asset does not exceed what the amortised cost would have
been had the impairment not been recognised.
Loan together with the associated allowance are written off when there is no realistic prospect of future recovery and
all collateral has been realised or has been transferred to the Group and the Company. If a write-off is later recovered,
the recovery is credited to the profit or loss.
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Notes to the
Financial Statements
(CONT’D)
3.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
3.11 Impairment of assets (Continued)
(i)
Impairment and uncollectibility of financial assets (Continued)
Available-for-sale financial assets
In the case of equity investments classified as available for sale, a significant or prolonged decline in the fair value
below its cost is considered to be objective evidence of impairment. The Group and the Company use their judgement
to determine what is considered as significant or prolonged decline, evaluating past volatility experiences and current
market conditions.
When a decline in the fair value of an available-for-sale financial asset has been recognised in the other comprehensive
income, the cumulative loss that has been recognised in other comprehensive income shall be reclassified from equity
to profit or loss as a reclassification adjustment even though the financial asset has not been derecognised. The
amount of cumulative loss that is reclassified from equity to profit or loss shall be the difference between its cost (net
of any principal repayment and amortisation) and its current fair value, less any impairment loss previously recognised
in profit or loss.
Impairment losses on available-for-sale equity investments are not reversed through profit or loss in the subsequent
periods. Increase in fair value, if any, subsequent to impairment loss is recognised in other comprehensive income.
For available-for-sale debt investments, impairment losses are subsequently reversed through profit or loss if an
increase in the fair value of the investment can be objectively related to loss event occurring after the recognition of
the impairment loss in profit or loss.
Unquoted equity instruments carried at cost
In the case of unquoted equity instruments carried at cost, the amount of the impairment loss is measured as the
difference between the carrying amount of financial asset and the present value of estimated future cash flows
discounted at the current market rate of return for a similar financial asset. Such impairment shall not be reversed.
(ii) Impairment of non-financial assets
The carrying amounts of non-financial assets (except for inventories, amount due from customers for contract work
and deferred tax assets) are reviewed at the end of each reporting period to determine whether there is any indication
of impairment. If any such indication exists, the Group and the Company make an estimate of the asset’s recoverable
amount. For goodwill and intangible assets that have indefinite useful life and are not yet available for use, the
recoverable amount is estimated at each reporting date.
For the purpose of impairment testing, assets are grouped together into the smallest group of assets that generates
cash inflows from continuing use that are largely independent of the cash inflows of non-financial assets or cashgenerating units (“CGUs”). Subject to an operating segment ceiling test, for the purpose of goodwill impairment
testing, CGUs to which goodwill has been allocated are aggregated so that the level at which impairment testing is
performed reflects the lowest level at which goodwill is monitored for internal reporting purposes. The goodwill
acquired in a business combination, for the purpose of impairment testing, is allocated to a CGU or a group of CGUs
that are expected to benefit from the synergies of business combination.
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79
Notes to the
Financial Statements
(CONT’D)
3.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
3.11 Impairment of assets (Continued)
(ii) Impairment of non-financial assets (Continued)
The recoverable amount of an asset of CGU is the higher of its fair value less costs of disposal and its value in use.
In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax
discount rate that reflects current market assessments of the time value of money and the risks specific to the asset
or CGU. In determining the fair value less costs of disposal, recent market transactions are taken into account. If no
such transactions can be identified, an appropriate valuation model is used.
Where the carrying amount of an asset exceed its recoverable amount, the carrying amount of asset is reduced to its
recoverable amount. Impairment losses recognised in respect of a CGU or groups of CGUs are allocated first to
reduce the carrying amount of any goodwill allocated to those units or groups of units and then, to reduce the carrying
amount of the other assets in the unit or groups of units on a pro-rata basis.
Impairment losses are recognised in profit or loss except for assets that are previously revalued with the revaluation
taken to other comprehensive income. In this case, the impairment is recognised in other comprehensive income up
to the amount of any previous revaluation.
An impairment loss in respect of goodwill is not reversed. In respect of other assets, an assessment is made at each
reporting date as to whether there is any indication that previously recognised impairment losses may no longer exist
or may have decreased. An impairment loss is reversed 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 previously. Such
reversal is recognised in profit or loss unless the asset is measured at revalued amount, in which case the reversal is
treated as a revaluation increase.
3.12 Share capital
(i)
Ordinary shares
Ordinary shares are equity instruments and classified as equity. An equity instrument is a contract that evidences a
residual interest in the assets of the Company after deducting all of its liabilities. Ordinary shares are recorded at the
proceeds received, net of directly attributable incremental transaction costs. Dividends on ordinary shares are
recognised in equity in the period in which they are declared.
(ii) Warrants
Warrants are classified as equity. The issue of ordinary shares upon exercise of the warrants are treated as new
subscription of ordinary shares for the consideration equivalent to the warrants exercise price.
3.13 Employee benefits
(i)
Short-term employee benefits
Short-term employee benefit obligations in respect of wages, salaries, social security contributions, annual bonuses,
paid annual leave, sick leave and non-monetary benefits are recognised as an expense in the financial year where
the employees have rendered their services to the Group and the Company.
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WZ SATU BERHAD (666098-X)
Notes to the
Financial Statements
(CONT’D)
3.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
3.13 Employee benefits (Continued)
(ii) Post-employment benefits
As required by law, the Group and the Company contribute to the Employees Provident Fund (“EPF”), the national
defined contribution plan. Certain foreign subsidiaries make contributions to their respective countries’ statutory
pension scheme. Such contributions are recognised as an expense in the profit or loss in the period in which the
employees render their services.
3.14 Provisions
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is
probable that an outflow of economic resources will be required to settle the obligation and the amount of the obligation
can be estimated reliably.
Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market
assessments of the time value of money and the risks specific to the liability. The unwinding of the discount is recognised
as finance cost.
Provisions are reviewed at each reporting date and adjusted to reflect the current best estimate. If it is no longer probable
that an outflow of economic resources will be required to settle the obligation, the provision is reversed.
3.15 Revenue
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue
can be reliably measured, regardless of when payment is made. Revenue is measured at fair value of consideration
received or receivable, taking into account contractually defined terms of payment and excluding taxes and duty. The
Group concluded that it is acting as a principal in all of its revenue arrangement. The following specific recognition criteria
must also be met before revenue is recognised:Sale of goods
Revenue from sale of goods is recognised upon the transfer of significant risk and rewards of ownership of the goods to
the customer, usually on delivery of goods. Revenue is not recognised to the extent where there are significant uncertainties
regarding recovery of the consideration due, associated costs or the possible return of goods.
Rental income
Rental income is recognised on a straight-line basis over the term of the lease. Lease incentives granted are recognised
as an integral part of the total rental income, over the term of the lease.
Interest income
Interest income is recognised as it accrues using the effective interest method.
Dividend income
Dividend income is recognised when the right to receive payment is established.
Management fee
Management fee is recognised on an accrual basis, net of taxes.
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81
Notes to the
Financial Statements
(CONT’D)
3.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
3.15 Revenue (Continued)
Construction contracts
Revenue from construction contracts is accounted for by the stage of completion method. The stage of completion method
is measured by reference to the proportion of contract costs incurred for work performed to date to the estimated total
contracts costs.
Rendering of services
Revenue from services rendered is recognised net of taxes and discounts as and when the services are performed.
3.16 Borrowing costs
Borrowing costs are interests and other costs that the Group and the Company incur in connection with borrowing of funds.
Borrowing costs that are not directly attributable to the acquisition, construction or production of a qualifying asset are
recognised in profit or loss using the effective interest method.
Borrowing costs that are directly attributable to the acquisition, construction or production of qualifying assets, which are
assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost
of those assets, until such time as the assets are substantially ready for their intended use or sale.
The Group and the Company begin capitalising borrowing costs when the Group and the Company have incurred the
expenditures for the asset, incurred related borrowing costs and undertaken activities that are necessary to prepare the
asset for its intended use or sale.
Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying
assets is deducted from the borrowing costs eligible for capitalisation.
3.17 Income taxes
Income tax expense comprises current and deferred tax. Current and deferred tax are recognised in profit or loss except
to the extent that it relates to a business combination or items recognised directly in equity or other comprehensive income.
(i)
Current tax
Current tax is the expected taxes payable or receivable on the taxable income or loss for the financial year, using the
tax rates that have been enacted or substantively enacted by the end of the reporting period, and any adjustment to
tax payable in respect of previous financial years.
(ii) Deferred tax
Deferred tax is provided using the liability method on temporary differences at the reporting date between the tax
bases of assets and liabilities and their carrying amounts in the statements of financial position. Deferred tax liabilities
are generally recognised for all taxable temporary differences. Deferred tax assets are generally recognised for all
deductible temporary differences, unused tax losses and unused tax credits, to the extent that it is probable that
future taxable profit will be available against which the deductible temporary differences, unused tax losses and
unused tax credits can be utilised.
Deferred tax is not recognised if the temporary difference arises from the initial recognition of assets and liabilities in
a transaction that is not a business combination and that affects neither the taxable profit nor the accounting profit.
In addition, deferred tax liabilities are not recognised if the temporary difference arises from the initial recognition of
goodwill.
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Notes to the
Financial Statements
(CONT’D)
3.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
3.17 Income taxes (Continued)
(ii) Deferred tax (Continued)
Deferred tax liabilities are recognised for taxable temporary differences associated with investments in subsidiaries
and associates, except where the Group is able to control the timing of the reversal of the temporary differences and
it is probable that the temporary differences will not reverse in the foreseeable future. Deferred tax assets arising from
deductible temporary differences associated with such investments and interests are only recognised to the extent
that it is probable that there will be sufficient taxable profits against which to utilise the benefits of the temporary
differences and they are expected to reverse in the foreseeable future.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that 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 utilised. Unrecognised deferred tax assets are reassessed at each reporting date and are recognised to the
extent that it has become probable that future taxable profit will allow the deferred tax assets to be utilised.
Deferred tax is measured at the tax rates that are expected to apply in the period when the asset is realised or the
liability is settled, based on tax rates and tax laws that have been enacted or substantively enacted at the reporting
date.
Deferred tax relating to items recognised outside profit or loss is recognised outside profit or loss. Deferred tax items
are recognised in correlation to the underlying transaction either in other comprehensive income or directly in equity.
Deferred tax assets and deferred tax liabilities are offset if there is a legally enforceable right to offset current tax
assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority on the
same taxable entity, or on different tax entities, but they intends to settle their income tax recoverable and income tax
payable on a net basis or their tax assets and liabilities will be realised simultaneously.
(iii) Goods and services tax
Revenues, expenses and assets are recognised net of the amount of goods and services tax (“GST”) except:•
where the GST incurred in a purchase of assets or services is not recoverable from the taxation authority, in
which case the GST is recognised as part of the cost of acquisition of the asset or as part of the expense item
as applicable; and
•
receivables and payables that are stated with the amount of GST included.
The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or
payables in the statements of financial position.
3.18 Discontinued operation
A disposal group qualifies as discontinued operation if it is a component of an entity that either has been disposed of, or
is classified as held for sale, and:•
•
•
represents a separate major line of business or geographical area of operations;
is part of a single co-ordinated plan to dispose of a separate major line of business or geographical area of operations;
or
is a subsidiary acquired exclusively with a view to resale.
Classification as a discontinued operation occurs upon disposal or when the operation meets the criteria to be classified
as held for sale, if earlier. When an operation is classified as a discontinued operation, the comparative statements of profit
or loss and other comprehensive is re-presented as if the operation has been discontinued from the start of the comparative
period.
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Notes to the
Financial Statements
(CONT’D)
3.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
3.19 Operating segments
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decisionmaker. The chief operating decision-maker, who is responsible for allocating resources and assessing performance of the
operating segments, has been identified as the Chief Executive Officer of the Group that makes strategic decisions.
3.20 Fair value measurements
Fair value of an asset or a liability, except for lease transactions, is determined as the price that would be received to sell
an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The
measurement assumes that the transaction to sell the asset or transfer the liability takes place either in the principal market
or in the absence of a principal market, in the most advantageous market.
For non-financial asset, the fair value measurement takes into account a market participant’s ability to generate economic
benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset
in its highest and best use.
When measuring the fair value of an asset or a liability, the Group uses observable market data as far as possible. Fair
value are categorised into different levels in a fair value hierarchy based on the input used in the valuation technique as
follows:Level 1:
Level 2:
Level 3:
Quoted prices (unadjusted) in active markets for identical assets or liabilities that the Group can access at the
measurement date.
Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly
or indirectly.
Unobservable inputs for the asset or liability.
There were no transfers between levels of the fair value hierarchy as of the date of the event or change in circumstances.
3.21 Contingencies
A contingent liability or asset is a possible obligation or asset that arises from past events and whose existence will be
confirmed only by the occurrence or non-occurrence of uncertain future event(s) not wholly within the control of the Group
and of the Company.
Contingent liability is also referred as a present obligation that arises from past events but is not recognised because:•
it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation; or
•
the amount of the obligation cannot be measured with sufficient reliability.
Contingent liabilities and assets are not recognised in the statements of financial position.
3.22 Earnings Per Share
The Group present basic and diluted earnings per share data for its ordinary shares (“EPS”). Basic EPS is calculated by
dividing the profit or loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary
shares outstanding during the period, adjusted for own shares held.
Diluted EPS is determined by adjusting the profit or loss attributable to ordinary shareholders and weighted average number
of ordinary shares outstanding, adjusted for own shares held, for the effects of all dilutive potential ordinary shares.
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WZ SATU BERHAD (666098-X)
Notes to the
Financial Statements
(CONT’D)
4.
SIGNIFICANT ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS
Significant areas of estimation, uncertainty and critical judgements in applying accounting policies that have significant effect
in determining the amount recognized in the financial year include the following:(a) Impairment of goodwill
The Group assesses at each reporting date whether there is any indication that goodwill may be impaired. For the purpose
of assessing impairment, assets (including goodwill) are grouped at the lowest level where there are separately identifiable
cash flows (cash-generating units). In determining the value-in-use of a cash-generating unit, management estimates the
discounted cash flows using reasonable and supportable inputs about sales, costs of sales and other expenses based on
past experience, current events and reasonably possible future developments. Cash flows that are projected based on
those inputs or assumptions and the discount rate applied in the measurement of value-in-use may have a significant effect
on the Group’s financial position and results if the actual cash flows are less than the expected.
The carrying amount of the Group’s goodwill and key assumptions used to determine the recoverable amount for different
cash-generating units, including sensitivity analysis, are disclosed in Note 6.
(b) Depreciation of property, plant and equipment
The cost of an item of property, plant and equipment is depreciated on the straight-line method or another systematic method
that reflects the consumption of the economic benefits of the asset over its useful life. Estimates are applied in the selection
of the depreciation method, the useful lives and the residual values. The actual consumption of the economic benefits of the
property, plant and equipment may differ from the estimates applied.
The carrying amounts of the Group’s and the Company’s property, plant and equipment are disclosed in Note 5.
(c) Impairment of financial assets
The Group recognizes impairment losses for loans and receivables using the incurred loss model. Individually significant
loans and receivables are tested for impairment separately by estimating the cash flows expected to be recoverable. All
others are grouped into credit risk classes and tested for impairment collectively, using the Group’s past experience of loss
statistics, ageing of past due amounts and current economic trends. The actual eventual losses may be different from the
allowance made and this may affect the Group’s financial position and results.
The carrying amounts of the Group’s and Company’s financial assets are disclosed in Note 31.
(d) Impairment of non-financial assets
The Group and the Company review the carrying amount of its property, plant and equipment, to determine whether there
is an indication that those assets have suffered an impairment loss in accordance with relevant accounting policies on the
property, plant and equipment. Independent professional valuations to determine the carrying amount of these assets will
be procured when the need arises.
As at the end of the financial year under review, the directors are of the view that there is no indication of impairment to
these assets and therefore no independent professional valuation was procured by the Group during the financial year to
determine the carrying amount of these assets.
The carrying amounts of property, plant and equipment are disclosed in Note 5 to the financial statements.
(e) Income taxes
The Group is subject to income taxes in numerous jurisdictions. Significant judgement is required in determining the capital
allowances and deductibility of certain expenses during the estimation of the provision for income taxes. There are many
transactions and calculations for which the ultimate tax determination is uncertain during the ordinary course of business.
Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will
impact the income tax and deferred income tax provisions in the period in which such determination is made.
The income tax expense of the Group and of the Company are disclosed in Note 26.
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85
Notes to the
Financial Statements
(CONT’D)
4.
SIGNIFICANT ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS
(f) Deferred tax assets
Deferred tax assets are recognised for all deductible temporary differences, 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 profits together with future tax planning
strategies.
The carrying amount of the Group’s recognised deferred tax assets is disclosed in Note 11.
(g) Construction contract
Significant judgement is used in determining the stage of completion, the extent of the contract costs incurred, the estimated
total contract revenue and costs, as well as the recoverability of the contracts. The total contract revenue also includes an
estimation of the work that are recoverable from the customers. In making judgements, the Group and the Company evaluate
based on the past experience and work of specialists.
The carrying amounts of amount due from contract customers and amount due to contract customers are disclosed in
Note 13.
(h) Write-down of obsolete or slow moving inventories
The Group and the Company write down their obsolete or slow moving inventories based on the assessment of their
estimated net selling price. Inventories are written down when events or changes in circumstances indicate that the carrying
amounts may not be recoverable. The management specifically analyses sales trend and current economic trends when
making a judgement to evaluate the adequacy of the write-down of obsolete or slow moving inventories. Where expectations
differ from the original estimates, the differences will impact the carrying amount of inventories.
The carrying amounts of the Group’s and of the Company’s inventories are disclosed in Note 12.
(i)
Classification between operating lease and finance lease for leasehold land
The Group has developed certain criteria based on MFRS 117 Leases in making judgement whether a leasehold land should
be classified either as operating lease or finance lease.
Finance lease is a lease that transfers substantially all the risks and rewards incidental to ownership of an assets and
operating lease is a lease that does not transfer substantially all the risks and rewards incidental to ownership. If the leasehold
land meets the criteria of the financial lease, the lease will be classified as property, plant and equipment if it is for own use.
Judgements are made on the individual leasehold land to determine whether the leasehold land qualifies as operating lease
or finance lease.
The Group has classified the leases period of more than 50 years as finance leases as they have met the criteria of a finance
lease under MFRS 117.
(j)
Provisions
The Group recognises provisions when it has a present legal or constructive obligation arising as a result of a past event,
and is probable that an outflow of economic benefits will be required to settle the obligation and a reliable estimate can be
made. The recording of provisions requires the application of judgements about the ultimate resolutions of these obligations.
As a result, provisions are reviewed at each reporting date and adjusted to reflect the Group’s current best estimate.
The carrying amounts of the Group’s provisions are disclosed in Note 20 to the financial statements.
5.
2,662
(1,813)
(5,818)
36
1,263
(399)
16
2,862
38,422
At 31 August 2016
Carrying amount
At 31 August 2016
23,508
20,880
25,813
44,388
1,982
41,284
At 31 August 2016
46,970
13,996
(18,788)
(5,420)
7,308
322
Accumulated Depreciation
At 1 September 2015
Depreciation charge
for the financial year
Disposal of subsidiaries
Disposal/written-offs
Exchange differences
48,165
156
(10,910)
3,387
486
2016
Cost/Valuation
At 1 September 2015
Additions
Disposal of subsidiaries
Disposal/written-offs
Transfer
Exchange differences
Group
Plant,
machinery
and
equipment
RM'000
-
48
-
48
48
48
-
Cranes
RM'000
15,753
3,795
2,447
(108)
(1,044)
3
2,497
19,548
8,414
12,801
(603)
(1,076)
12
Motor
vehicles
RM'000
2,577
2,009
711
(75)
(164)
2
1,535
4,586
4,506
779
(743)
(253)
280
17
1,358
325
189
(18)
-
154
1,683
1,590
391
(298)
-
174
61
28
(25)
-
58
235
318
93
(176)
-
Total
RM'000
21
-
-
-
81,813
29,980
7,300
(2,413)
(7,051)
57
32,087
21 111,793
7,943 117,954
5,468 33,684
- (31,342)
(2,415) (9,340)
(10,975)
837
Cost
Furniture,
fittings
and office
Container/ Asset under
equipment Renovations
Cabin construction
RM'000
RM'000
RM'000
RM'000
86
Properties #
RM'000
PROPERTY, PLANT AND EQUIPMENT
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WZ SATU BERHAD (666098-X)
Notes to the
Financial Statements
(CONT’D)
5.
2,228
(385)
(3)
47
1,062
(2)
24
1,982
46,183
At 31 August 2015
Carrying amount
At 31 August 2015
21,157
25,813
23,926
46,970
898
48,165
At 31 August 2015
32,874
14,193
372
(1,207)
(11)
749
Accumulated Depreciation
At 1 September 2014
Depreciation charge
for the financial year
Disposal of a subsidiary
Disposal/written-offs
Exchange differences
38,602
803
7,433
(39)
318
1,048
2015
Cost/Valuation
At 1 September 2014
Additions
Acquisition of a subsidiary
Disposal of a subsidiary
Disposal/written-offs
Transfer
Exchange differences
Group
Properties #
RM'000
Plant,
machinery
and
equipment
RM'000
PROPERTY, PLANT AND EQUIPMENT (CONTINUED)
-
48
-
48
48
48
-
Cranes
RM'000
5,917
2,497
1,223
(189)
(1,809)
4
3,268
8,414
5,409
5,045
183
(430)
(1,809)
16
Motor
vehicles
RM'000
2,971
1,535
577
(5)
(61)
3
1,021
4,506
2,307
1,462
806
(37)
(63)
31
1,436
154
129
-
25
1,590
758
791
41
-
260
58
30
(7)
-
35
318
67
90
189
(28)
-
80,065
30,645
9,024
(1,702)
(1,922)
1,844
Total
RM'000
7,943
-
-
-
85,867
32,087
5,249
(586)
(1,875)
78
29,221
7,943 117,954
8,261
(318)
-
Cost
Furniture,
fittings
and office
Container/ Asset under
equipment Renovations
Cabin construction
RM'000
RM'000
RM'000
RM'000
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87
Notes to the
Financial Statements
(CONT’D)
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WZ SATU BERHAD (666098-X)
Notes to the
Financial Statements
(CONT’D)
5.
PROPERTY, PLANT AND EQUIPMENT (CONTINUED)
# Properties consist of:-
Group
Freehold
land
RM'000
Freehold
buildings
RM'000
Long term
leasehold
land
RM'000
Long term
leasehold
buildings
RM'000
Low cost
apartments
RM'000
Fabrication
yard
RM'000
Total
RM'000
2016
Cost/Valuation
At 1 September 2015
Additions
Disposal of subsidiaries
Transfer
Exchange differences
14,244
(465)
21
8,234
-
11,788
(4,403)
196
11,146
12
(6,042)
269
150
-
2,603
144
3,387
-
48,165
156
(10,910)
3,387
486
At 31 August 2016
13,800
8,234
7,581
5,385
150
6,134
41,284
Accumulated Depreciation
At 1 September 2015
Depreciation charge
for the financial year
Disposal of subsidiaries
Exchange differences
-
682
470
358
12
460
1,982
-
205
-
157
(174)
7
145
(225)
9
4
-
752
-
1,263
(399)
16
At 31 August 2016
-
887
460
287
16
1,212
2,862
13,800
7,347
7,121
5,098
134
4,922
38,422
Carrying amount
At 31 August 2016
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89
Notes to the
Financial Statements
(CONT’D)
5.
PROPERTY, PLANT AND EQUIPMENT (CONTINUED)
# Properties consist of:-
Group
Freehold
land
RM'000
Freehold
buildings
RM'000
Long term
leasehold
land
RM'000
Long term
leasehold
buildings
RM'000
Low cost
apartments
RM'000
Fabrication
yard
RM'000
Total
RM'000
2015
Cost/Valuation
At 1 September 2014
Additions
Acquisition of a subsidiary
Disposal/written-offs
Transfer
Exchange differences
13,800
414
30
8,273
(39)
-
8,673
2,681
434
7,706
271
2,585
584
150
-
118
2,167
318
-
38,602
803
7,433
(39)
318
1,048
At 31 August 2015
14,244
8,234
11,788
11,146
150
2,603
48,165
898
Accumulated Depreciation
At 1 September 2014
Depreciation charge
for the financial year
Disposal/written-offs
Exchange differences
-
425
284
181
8
-
-
259
(2)
-
174
12
165
12
4
-
460
-
1,062
(2)
24
At 31 August 2015
-
682
470
358
12
460
1,982
14,244
7,552
11,318
10,788
138
2,143
46,183
Carrying amount
At 31 August 2015
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WZ SATU BERHAD (666098-X)
Notes to the
Financial Statements
(CONT’D)
5.
PROPERTY, PLANT AND EQUIPMENT (CONTINUED)
Motor
vehicles
RM'000
Office
equipment
RM'000
Total
RM'000
2016
Cost
At 1 September 2015
Additions
591
331
60
35
651
366
At 31 August 2016
922
95
1,017
Accumulated Depreciation
At 1 September 2015
Depreciation charge for the financial year
69
162
7
8
76
170
At 31 August 2016
231
15
246
Carrying Amount
At 31 August 2016
691
80
771
2015
Cost
At 1 September 2014
Additions
591
35
25
35
616
At 31 August 2015
591
60
651
Accumulated depreciation
At 1 September 2014
Depreciation charge for the financial year
69
2
5
2
74
At 31 August 2015
69
7
76
Carrying Amount
At 31 August 2015
522
53
575
Company
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Annual Report 2016
Notes to the
Financial Statements
(CONT’D)
5.
PROPERTY, PLANT AND EQUIPMENT (CONTINUED)
Included in property, plant and equipment of the Group and of the Company are assets acquired under finance lease instalment
plans with carrying amounts as follows:Group
Plant and machinery
Motor vehicles
Company
2016
2015
RM'000
RM'000
2016
RM'000
2015
RM'000
6,574
14,950
4,687
5,469
691
522
21,524
10,156
691
522
The carrying amount of property, plant and equipment pledged to financial institutions for banking facilities granted to the Group
as mentioned in Note 18 and are as follows:Group
Freehold land
Freehold buildings
Long term leasehold land
Long term leasehold buildings
Plant and machinery
Asset under construction
2016
RM'000
2015
RM'000
13,800
7,347
2,618
2,526
7,243
-
13,800
7,552
11,318
10,788
1,326
5,121
33,534
49,905
The freehold land and buildings, and low cost apartments are stated at valuation based on an independent professional valuation
by Messrs. Raine & Horne International Zaki + Partners Sdn Bhd using the market value basis on 30 April 2012.
The long term leasehold land and building, are stated at valuation based on an independent professional valuation by SMY
Valuers & Consultants Sdn Bhd and Messrs. Raine & Horne International Zaki Partners Sdn Bhd using the market value basis
on 5 April 2012 and 30 April 2012 respectively.
Leasehold land consist of land with unexpired lease period of more than 50 years.
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WZ SATU BERHAD (666098-X)
Notes to the
Financial Statements
(CONT’D)
5.
PROPERTY, PLANT AND EQUIPMENT (CONTINUED)
Had the revalued freehold land and buildings, long term leasehold land and buildings and low cost apartments been carried at
historical cost less accumulated depreciation, the carrying amount of each class of properties would have been as follows:Group
Freehold land
Freehold buildings
Long term leasehold land
Long term leasehold buildings
Low cost apartments
6.
2016
RM'000
2015
RM'000
5,255
5,361
4,795
4,689
103
5,255
5,507
4,875
4,767
106
20,203
20,510
GOODWILL ON CONSOLIDATION
The principal activities of the subsidiaries are disclosed in Note 8 to the financial statements. The carrying amount of the goodwill
is allocated to each of those companies (collectively known as cash generating units (“CGU”)), which represent the lowest level
within the Group at which the goodwill is monitored for internal management purposes.
Group
2016
RM'000
2015
RM'000
At 1 September
Addition
41,024
-
20,768
20,256
At 31 August
41,024
41,024
Goodwill
The carrying amounts of goodwill allocated to the CGUs are as follows:Group
WZS KenKeong Sdn. Bhd. ("CGU 1")
Misi Setia Oil & Gas Sdn. Bhd. ("CGU 2")
2016
RM'000
2015
RM'000
20,768
20,256
20,768
20,256
41,024
41,024
The Group tests goodwill annually for impairment or more frequently if there are indication that the goodwill might be impaired.
The recoverable amount of CGU is determined from value-in-use calculations using cash flow projections based on financial
budgets approved by management covering a three-year period.
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93
Notes to the
Financial Statements
(CONT’D)
6.
GOODWILL ON CONSOLIDATION (CONTINUED)
For each of the CGUs, the value-in-use calculation is most sensitive to the following key assumptions:-
Annual growth rate
Long-term growth rate
Discount rate
CGU 1
CGU 2
9%
2%
13%
7%
2%
15%
The gross margin used in the value-in-use calculation range from 8% to 27%.
These key assumptions have been used for the analysis of each CGU. The values assigned to the key assumptions represent
management’s assessment of future trends in the respective industry and are based on both external sources and internal
sources (historical data).
(i)
Revenue is the forecasted annual growth rate over the three-year projection period. It is based on the average growth levels
experienced over the past four years.
(ii) Gross margin is the forecasted margin as a percentage of revenue over the three-year projection period. These are based
on the average gross margin of the existing projects.
(iii) Long-term growth rate does not exceed the long-term average growth rates for the industries relevant to the CGU. Cash
flows beyond the three-year projection period are extrapolated using the long-term growth rates.
(iv) Discount rate was estimated based on the industry weighted average cost of capital. The discount rate applied to the cash
flow projections is pre-tax and reflects management’s estimate of the risks specific to the CGU at the date of assessment.
Based on the sensitivity analysis performed, management believes that there is no reasonably possible change in key
assumptions that would cause the carrying values of the CGUs to exceed its recoverable amounts. The estimated recoverable
amount of the CGUs exceed the carrying amount. As a result of the analysis, management did not identify an impairment for the
CGUs.
7.
INVESTMENT IN ASSOCIATES
Group
Unquoted shares, at cost
Share of post-acquisition profit
Company
2016
2015
RM'000
RM'000
2016
RM'000
2015
RM'000
2,360
25,716
1,763
19,324
2,360
-
1,763
-
28,076
21,087
2,360
1,763
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WZ SATU BERHAD (666098-X)
Notes to the
Financial Statements
(CONT’D)
7.
INVESTMENT IN ASSOCIATES (CONTINUED)
Details of the associates are as follows:-
Name of Entities
Principal place
of business/ country
of incorporation
Held by the Company
SE Satu Sdn. Bhd. # ^
("SSSB")
SE Satu Pelangi Sdn. Bhd. # ^
("SSPSB")
WZS Technologies Sdn. Bhd.
(''WZST'')
Held by SE Satu Sdn. Bhd.
SE Sinaran Sdn. Bhd. # ^
Group's
Ownership
Interest
2016
2015
%
%
Nature of relationship
Malaysia
49
49
Mining operations and activities
Malaysia
30
30
Mining operations and activities
Malaysia
20
-
Engage in precision engineering
Malaysia
39
-
Providing port services
#
Audited by firms other than Messrs. Baker Tilly Monteiro Heng.
^
The financial year end of these associates is not coterminous with the Group. As such, for the purpose of applying equity
method of accounting, the management financial statements of these associates for the financial year ended 31 August
2016 have been used.
The summarised financial information of the Group’s material associates, adjusted for any differences in accounting policies is
as follows:WZST
RM'000
SSSB
RM'000
SSPSB
RM'000
Total
RM'000
Current assets
Non-current assets
3,285
11,229
41,579
25,791
39,573
-
84,437
37,020
Total assets
14,514
67,370
39,573
121,457
8,577
4,297
17,323
5,962
18,823
-
44,723
10,259
12,874
23,285
18,823
54,982
-
162
-
162
As at 31 August 2016
Current liabilities
Non-current liabilities
Total liabilities
Non-controlling interests
Year ended 31 August 2016
Included in total comprehensive income is:
Revenue
Expenses including finance costs and tax expense
1,569
(2,915)
(Loss)/Profit for the financial year
(1,346)
106,068
(98,921)
7,147
126,303
(105,773)
233,940
(207,609)
20,530
26,331
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95
Notes to the
Financial Statements
(CONT’D)
7.
INVESTMENT IN ASSOCIATES (CONTINUED)
The summarized financial information of the Group’s material associates, adjusted for any differences in accounting policies is
as follows:- (Continued)
WZST
SSSB
SSPSB
Total
RM'000
RM'000
RM'000
RM'000
Reconciliation of net assets to carrying amount
Share of net assets at the acquisition date
Share of post-acquisition (loss)/profit
597
(269)
1,470
20,053
293
5,932
2,360
25,716
Carrying amount in statement of financial position
328
21,523
6,225
28,076
Group's share of results
Group's share of profit or loss
Group's share of other comprehensive income
(269)
-
3,502
-
6,159
-
9,392
-
Group's share of total comprehensive income
(269)
3,502
6,159
9,392
-
3,000
3,000
SSSB
RM'000
SSPSB
RM'000
Total
RM'000
Current assets
Non-current assets
47,663
14,595
37,897
-
85,560
14,595
Total assets
62,258
37,897
100,155
Current liabilities
Non-current liabilities
23,932
1,549
27,677
-
51,609
1,549
Total liabilities
25,481
27,677
53,158
133,493
(101,851)
125,604
(104,384)
259,097
(206,235)
Profit for the financial year
31,642
21,220
52,862
Reconciliation of net assets to carrying amount
Share of net assets at the acquisition date
Share of post-acquisition profit
1,470
16,551
293
2,773
1,763
19,324
Carrying amount in statement of financial position
18,021
3,066
21,087
Other information
Dividend received by the Group
-
As at 31 August 2015
Year ended 31 August 2015
Included in total comprehensive income is:
Revenue
Expenses including finance costs and tax expense
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WZ SATU BERHAD (666098-X)
Notes to the
Financial Statements
(CONT’D)
7.
INVESTMENT IN ASSOCIATES (CONTINUED)
SSSB
RM'000
SSPSB
RM'000
Total
RM'000
Group's share of results
Group's share of profit or loss
Group's share of other comprehensive income
15,764
-
2,773
-
18,537
-
Group's share of total comprehensive income
15,764
2,773
18,537
3,430
-
3,430
Other information
Dividend received by the Group
8.
INVESTMENT IN SUBSIDIARIES
Company
2016
2015
RM'000
RM'000
Unquoted shares, at cost
As at 1 September
Additions
Disposal
125,013
8,600
(4,921)
As at 31 August
128,692
(i)
73,790
52,985
(1,762)
125,013
Details of the subsidiaries are as follows:-
Name of Entities
Principal place
of business/ country
of incorporation
Effective
Ownership Interest/
Voting Rights
2016
2015
%
%
Principal Activities
Direct subsidiaries
WZS Industries Sdn. Bhd.
Malaysia
100
100
Manufacturing and processing of
cold drawn bright steel products
and related steel products
Weng Zheng Trading Sdn. Bhd.
Malaysia
100
100
Dealers in steel products
PT WZ Steel*
Indonesia
-
100
Manufacturing and processing of
cold drawn bright steel products
WZS KenKeong Sdn. Bhd.
Malaysia
100
100
Construction and civil engineering
Misi Setia Oil & Gas Sdn. Bhd.
Malaysia
100
100
Contractor, subcontractor and to
carry on fabrication, assembly and
testing works in oil & gas industries
WZS Engineering Sdn. Bhd.
Malaysia
100
100
Dormant
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Annual Report 2016
Notes to the
Financial Statements
(CONT’D)
8.
INVESTMENT IN SUBSIDIARIES (CONTINUED)
(i)
Details of the subsidiaries are as follows:- (Continued)
Name of Entities
Principal place
of business/ country
of incorporation
Effective
Ownership Interest/
Voting Rights
2016
2015
%
%
Principal Activities
Direct subsidiaries
WZS Prisma Sdn. Bhd.
Malaysia
100
100
WZS Geoassets Sdn. Bhd.
Malaysia
65
65
Trading in mineral resources
WZ Satu Sysbuild Sdn. Bhd.
Malaysia
80
80
Dormant
WZS Technologies Sdn. Bhd.
Malaysia
-
70
Engage in precision engineering
WZS Powergen Sdn. Bhd.
Malaysia
60
70
Engage in the provision of power
generation and power solutions to oil
and gas industry and power sector
WZS Land Sdn. Bhd.
Malaysia
100
100
Dormant
WZS Minerals Sdn. Bhd.
Malaysia
100
100
Dormant
WZS Bina Sdn. Bhd.
Malaysia
100
100
Transportation agent, trading in sand
and quarry products
WZS Capital Sdn. Bhd.
Malaysia
100
-
*
Civil engineering and other related
works to construction
Dormant
audited by firms other than Messrs. Baker Tilly Monteiro Heng.
(ii) Acquisition of subsidiaries
2016
On 4 March 2016, the Company acquired 2 ordinary shares of RM1 each in the share capital of WZS Capital Sdn. Bhd.
(“Capital”), representing 100% equity interest in Capital for a purchase consideration of RM2.
2015
On 31 October 2014, the Company completed the acquisition of 5,000,000 ordinary shares of RM1 each in the share capital
of Misi Setia Oil & Gas Sdn. Bhd. ("MISI"), representing 100% equity interest in MISI for a purchase consideration of
RM42,035,294.
The following summarises the consideration transferred and recognised amount of assets acquired and liabilities assumed
of MISI at acquisition date:Fair value of consideration transferred
2015
RM'000
Cash consideration
10,588,235 ordinary shares of the Company
16,200
25,835
42,035
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WZ SATU BERHAD (666098-X)
Notes to the
Financial Statements
(CONT’D)
8.
INVESTMENT IN SUBSIDIARIES (CONTINUED)
(ii) Acquisition of subsidiaries (Continued)
Fair value of consideration transferred (Continued)
Acquisition related costs of RM231,773 have been charged to administrative expenses in the consolidated statement of
profit or loss and other comprehensive income for the financial year ended 31 August 2015.
The fair value of 10,588,235 ordinary shares issued as part of the consideration paid for MISI was determined on the basis
of the closing market price of the Company’s ordinary shares of RM2.44 per share on the acquisition date.
As part of the Share Sale Agreement, the remaining vendors of MISI irrevocably and unconditionally guarantee to the
Company that the profit after tax and non-controlling interest (“PATNCI”) of MISI will not be less than RM12 million for the
period commencing on 1 January 2015 and ending on 31 December 2017. In the event that the actual PATNCI is less than
RM12 million, the remaining vendors shall pay the Company the shortfall in cash. The Share Sale Agreement also provided
that if PATNCI is more than RM12 million, MISI will have to pay the remaining vendors an amount equivalent to 20% of the
excess amount. The profit guarantee provided by the remaining vendors is realistic and no excess profit is expected.
Fair value of identifiable assets acquired and liabilities recognised
2015
RM'000
Assets
Property, plant and equipment (Note 5)
Club memberships
Inventories
Trade and other receivables
Prepayments
Tax recoverable
Short term deposit
Cash and bank balances
9,024
125
8,180
27,040
413
23
9,622
6,855
61,282
Liabilities
Trade and other payables
Borrowings
Deferred tax liabilities
(32,707)
(6,548)
(248)
(39,503)
Total identifiable net assets acquired
Goodwill arising from acquisition (Note 6)
21,779
20,256
Fair value of consideration transferred
42,035
Goodwill comprises the non-identifiable intangible assets which are not separately recognised.
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99
Notes to the
Financial Statements
(CONT’D)
8.
INVESTMENT IN SUBSIDIARIES (CONTINUED)
(ii) Acquisition of subsidiaries (Continued)
Effects if acquisition on cash flows
Net cash outflow arising from acquisition of subsidiary
2015
RM'000
Fair value of consideration transferred
Less: Non-cash consideration
Consideration paid in cash
Less: Cash and cash equivalents of a subsidiary acquired
Net cash outflows on acquisition
42,035
(25,835)
16,200
(6,855)
9,345
Effects of acquisition in the statements of profit or loss and other comprehensive income
From the date of acquisition, the subsidiary’s contributed revenue and profit after tax are as follows:2015
RM'000
Revenue
Profit for the financial year
114,017
5,012
If the acquisition had occurred on 1 September 2014, the consolidated results for the financial year ended 31 August 2015
would have been as follows:2015
RM'000
Revenue
Profit for the financial year
364,428
20,878
(iii) Disposal of subsidiaries
2016
(a) On 24 February 2016, the Company completed the disposal of the entire issued and paid-up share capital of PT WZ
Steel (“PTWZ”), comprising 5,000 ordinary shares of USD100 each, for a cash consideration of USD500,000 or
approximately RM2,097,430.
(b) On 29 February 2016, the Company completed the disposal of 50% interest in WZS Technologies Sdn. Bhd. (“WZST”),
comprising 2,500,000 ordinary shares of RM1 each, for a cash consideration of RM2,500,000. Subsequent to the
disposal, the Group retained significant influence over 20% interest in WZST and the investment is reclassified as
investment in associates.
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WZ SATU BERHAD (666098-X)
Notes to the
Financial Statements
(CONT’D)
8.
INVESTMENT IN SUBSIDIARIES (CONTINUED)
(iii) Disposal of subsidiaries (Continued)
The effects of the disposal of the investment in subsidiaries on the financial position of the Group are as follows:-
PTWZ
RM'000
2016
WZST
RM'000
TOTAL
RM'000
17,426
254
1,856
2,637
67
480
11,503
1,489
198
108
28,929
254
1,856
4,126
198
67
588
22,720
13,298
36,018
17,652
5,105
4,430
5,881
22,082
10,986
22,757
10,311
33,068
(37)
-
2,987
(896)
(597)
2,950
(896)
(597)
Net assets
Corporate exercise expense on disposal of subsidiaries
Cash consideration
(37)
103
(2,097)
1,494
24
(2,500)
1,457
127
(4,597)
Gain on disposal of subsidiaries
(2,031)
(982)
(3,013)
Cash consideration
Less: Cash and cash equivalents of subsidiaries
2,097
*97
2,500
(108)
4,597
(11)
Net cash inflows on disposal
2,194
2,392
4,586
Assets
Plant and equipment
Deferred tax assets
Inventories
Trade and other receivables
Prepayments
Tax recoverable
Cash and bank balances
Liabilities
Trade and other payables
Borrowings
Non controlling interest
Fair value of retained investment treated as an associate
*
This represent bank overdraft balance
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101
Notes to the
Financial Statements
(CONT’D)
8.
INVESTMENT IN SUBSIDIARIES (CONTINUED)
(iii) Disposal of subsidiaries (Continued)
2015
On 22 May 2015, the Company completed the disposal of the entire issued and paid-up share capital of Weng Zheng
Marketing Sdn. Bhd., comprising 2,000,000 ordinary shares of RM1 each, for a cash consideration of RM6,079,394.
The effects of the disposal of the investment in subsidiary on the financial position of the Group are as follows:2015
RM'000
Assets
Plant and equipment
Deferred tax assets
Inventories
Trade and other receivables
Prepayments
Tax recoverable
Cash and bank balances
1,116
298
16,469
3,149
55
48
1,681
22,816
Liabilities
Trade and other payables
Borrowings
14,765
274
15,039
Net assets
Corporate exercise expense on disposal of a subsidiary company
Cash consideration
Loss on disposal of a subsidiary company
Cash consideration
Less: Cash and cash equivalents of subsidiary disposed
Net cash inflows on disposal
7,777
372
(6,079)
2,070
6,079
(1,681)
4,398
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WZ SATU BERHAD (666098-X)
Notes to the
Financial Statements
(CONT’D)
8.
INVESTMENT IN SUBSIDIARIES (CONTINUED)
(iv) Additional investment in subsidiaries
2016
During the financial year:(a) a subsidiary, WZS Powergen Sdn. Bhd. increased its issued and fully paid ordinary shares from 2,000,000 units to
2,500,000 units of RM1 each. The Company subscribed 100,000 ordinary shares of RM1 each in WZS Powergen Sdn.
Bhd.. Further to the subscription of shares, the Company’s effective ownership in WZS Powergen Sdn. Bhd. decreased
from 70% to 60%.;
(b) a subsidiary, WZS Prisma Sdn. Bhd. increased its issued and fully paid ordinary shares from 1,000,000 units to 2,000,000
units of RM1 each and was fully subscribed by the Company;
(c) a subsidiary, WZS Engineering Sdn. Bhd. increased its issued and fully paid ordinary shares from 500,000 units to
1,000,000 units of RM1 each and was fully subscribed by the Company;
(d) a subsidiary, WZS KenKeong Sdn. Bhd. increased its issued and fully paid ordinary shares from 7,000,000 units to
10,500,000 units of RM1 each and was fully subscribed by the Company; and
(e) a subsidiary, WZS Bina Sdn. Bhd. increased its issued and fully paid ordinary shares from 2 units to 3,500,000 units of
RM1 each and was fully subscribed by the Company.
2015
During the previous financial year:(a) a subsidiary, WZS Geoassets Sdn. Bhd. increased its issued and fully paid ordinary shares from 2 units to 1,000,000
units of RM1 each. The Company purchased an additional 649,998 ordinary shares of RM1 each in WZS Geoassets
Sdn. Bhd.. As a result, the Company’s effective ownership in WZS Geoassets Sdn. Bhd. decreased from 100% to 65%;
(b) a subsidiary, WZS Technologies Sdn. Bhd. increased its issued and fully paid up ordinary shares from 2 units to
5,000,000 units of RM1 each. The Company subscribed of an additional 3,499,998 ordinary shares of RM1 each in WZS
Technologies Sdn. Bhd.. As a result, the Company’s effective ownership in WZS Technologies Sdn. Bhd. decreased
from 100% to 70%;
(c) a subsidiary, WZS Powergen Sdn. Bhd. increased its issued and fully paid up ordinary shares from 2 units to 2,000,000
units of RM1 each. The Company subscribed 1,399,998 ordinary shares of RM1 each in WZS Powergen Sdn. Bhd.. As
a result, the Company’s effective ownership in WZS Powergen Sdn. Bhd. decreased from 100% to 70%; and
(d) a subsidiary, WZ Satu Sysbuild Sdn. Bhd. increased its issued and fully paid up ordinary shares from 2 units to 500,000
units of RM1 each. The Company subscribed for additional 399,998 ordinary shares of RM1 each in WZ Satu Sysbuild
Sdn. Bhd.. Further to the subscription of shares, the Company’s effective ownership in WZ Satu Sysbuild Sdn. Bhd.
decreased from 100% to 80%.
(v) Non-controlling interests in subsidiaries
The Group’s subsidiaries which have non-controlling interests are not material individually or in aggregate to the financial
position, financial performance and cash flows of the Group.
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Annual Report 2016
Notes to the
Financial Statements
(CONT’D)
9.
CLUB MEMBERSHIPS
Group
Club memberships, at cost
2016
RM'000
2015
RM'000
205
205
10. TRADE AND OTHER RECEIVABLES
Group
Company
2016
2015
RM'000
RM'000
2016
RM'000
2015
RM'000
4,416
9,737
6,116
9,737
96,068
9
22,217
91,235
13,789
-
-
118,294
105,024
-
-
-
-
Non-current:
Other receivables
Other receivables
Current:
Trade receivables
Trade receivables
Amount due from associate companies
Retention sum
Less: Impairment loss
- Trade receivables
Trade receivables, net
Other receivables
Other receivables
Amount due from associate companies
Amount due from subsidiaries
Deposits
Advance payment to suppliers
(2,951)
(2,819)
115,343
102,205
-
-
11,317
3,612
2,035
1,407
10,778
3,137
2,209
937
5,081
3,587
9,039
48
-
4,689
3,137
18,542
44
-
18,371
17,061
17,755
26,412
-
-
Less: Impairment loss
- Other receivables
-
Other receivables, net
18,371
16,842
17,755
26,412
Total trade and other receivables (current)
133,714
119,047
17,755
26,412
Total trade and other receivables (non-current and current)
138,130
128,784
23,871
36,149
(219)
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WZ SATU BERHAD (666098-X)
Notes to the
Financial Statements
(CONT’D)
10. TRADE AND OTHER RECEIVABLES (CONTINUED)
Included in other receivables of the Group and of the Company is an amount owing by a former subsidiary company, Weng
Zheng Marketing Sdn. Bhd. (“WZ Marketing”) of RM9,416,252 (2015: RM14,416,252). During the previous financial year, the
Group had entered into a settlement agreement with WZ Marketing to settle the amount of RM14,416,252 over a period of 3
years with repayment amounts ranging from RM5,000,000 to RM6,535,398 annually.
Included in the other receivables of the Group and of the Company is GST refundable amounted to RM905,474 and RM76,862
respectively (2015: RM145,286 and RM4,622).
Trade receivables are non-interest bearing and are generally on 30 to 120 (2015: 30 to 120) days terms. They are recognised
at their original amounts which represent their fair values on initial recognition.
The amount due from subsidiaries are unsecured, bear interest at rate of 6.85% (2015: 6.85%) per annum, repayable upon
demand and are expected to be settled in cash.
The non-trade amount due from associates are unsecured, bear interest at rate of 6.85% (2015: Nil) per annum, repayable upon
demand and are expected to be settled in cash.
The trade receivables of the Group in the foreign currencies are as follows:Group
United States Dollar
Singapore Dollar
2016
RM'000
2015
RM'000
7,077
-
4,939
21
Analysis of trade receivables
The Group only maintains an ageing analysis in respect of trade receivables.
The ageing analysis of the Group’s trade receivables are as follows:Group
2016
RM'000
2015
RM'000
Neither past due nor impaired
78,355
68,498
1 - 30 days past due not impaired
31 - 60 days past due not impaired
61 - 90 days past due not impaired
More than 91 days past due not impaired
13,082
7,618
2,052
14,236
12,937
8,370
3,699
8,701
Impaired
36,988
2,951
33,707
2,819
118,294
105,024
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.
Most of the Group’s trade receivables arise from long standing customers with the Group.
Included in trade receivables of the Group are amounts totalling of RM20,350,970 (2015: RM36,733,000) due from 1 (2015: 2)
of its significant receivables.
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Annual Report 2016
Notes to the
Financial Statements
(CONT’D)
10. TRADE AND OTHER RECEIVABLES (CONTINUED)
Receivables that are past due but not impaired
The Group has not made any allowance for impairment for receivables that are past due as there has not been a significant
change in the credit quality of these receivables and the amounts due are still recoverable.
In determining the recoverability of a trade receivable, the Group considers any change in the credit quality of the trade receivable
from the date the credit was initially granted up to the reporting date. The Group has policies in place to ensure that credit is
extended only to customers with acceptable credit history and payment track records. Allowances for impairment are made on
specific trade receivables when there is objective evidence that the Group will not be able to collect the amounts due.
Receivables that are impaired
The Group’s trade receivables that are impaired at the reporting date and the movement of the allowance accounts used to
record the impairment are as follows:Individually impaired
Group
2016
2015
RM'000
RM'000
Trade receivables - nominal amounts
Less: Impairment loss
2,951
(2,951)
2,819
(2,819)
-
-
Movement in allowance accounts:Group
2016
RM'000
2015
RM'000
Trade receivables
At 1 September
Impairment loss on trade receivables
Reversal of impairment loss
Disposal of a subsidiary
Exchange differences
2,819
391
(259)
-
2,239
740
(102)
(58)
*-
At 31 August
2,951
2,819
Other receivables
At 1 September
Impairment loss on other receivables
Written-off
At 31 August
*
219
(219)
-
219
219
Less than RM1,000
Trade receivables that are individually determined to be impaired at the reporting date relate to debtors that are in significant
financial difficulties and have defaulted on payments. These receivables are not secured by any collateral or credit
enhancements.
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WZ SATU BERHAD (666098-X)
Notes to the
Financial Statements
(CONT’D)
11. DEFERRED TAX ASSETS/(LIABILITIES)
Deferred tax assets/(liabilities) relate to the following:-
Group
Deferred tax liabilities:
Temporary differences between
net carrying amounts and the
corresponding tax written down
values of property, plant and
equipments
Revaluation on property, plant and
equipment
Unabsorbed reinvestment allowance
Other temporary differences
Deferred tax assets:
Temporary differences between
net carrying amounts and the
corresponding tax written down
values of property, plant and
equipments
Unabsorbed tax losses
Other deductible differences
At Recognised
1 September
in profit Recognised Disposal of
Exchange
2015
or loss
in equity subsidiary differences
RM'000
RM'000
RM'000
RM'000
RM'000
(930)
(1,427)
-
At
31 August
2016
RM'000
-
-
(2,357)
(1,296)
350
(117)
57
884
133
(139)
-
-
-
(1,378)
1,234
16
(1,993)
(353)
(139)
-
-
(2,485)
254
242
175
(403)
185
-
(254)
-
12
-
(149)
360
671
(218)
-
(254)
12
211
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Annual Report 2016
107
Notes to the
Financial Statements
(CONT’D)
11. DEFERRED TAX ASSETS/(LIABILITIES)
Deferred tax assets/(liabilities) relate to the following:- (Continued)
Group
At Recognised
Acquisition
1 September
in profit Recognised
of Disposal of
Exchange
2014
or loss
in equity subsidiary subsidiary differences
RM'000
RM'000
RM'000
RM'000
RM'000
RM'000
Deferred tax liabilities:
Temporary differences
between net carrying
amounts and the
corresponding tax written
down values of property,
plant and equipments
Revaluation on property,
plant and equipment
Unabsorbed reinvestment
allowance
Other temporary differences
(1,275)
593
(1,132)
11
402
(2,005)
Deferred tax assets:
Temporary differences
between net carrying
amounts and the
corresponding tax written
down values of property,
plant and equipments
Unabsorbed tax losses
Other deductible differences
(52)
(117)
435
(175)
(175)
(248)
At
31 August
2015
RM'000
-
-
(930)
-
-
-
(1,296)
-
-
-
350
(117)
-
-
(1,993)
(248)
222
497
-
32
18
175
-
-
(298)
-
25
-
254
242
175
719
225
-
-
(298)
25
671
Company
2016
2015
RM'000
RM'000
Property, plant and equipment
At 1 September
Recognised in profit or loss
At 31 August
(4)
4
(4)
-
-
(4)
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WZ SATU BERHAD (666098-X)
Notes to the
Financial Statements
(CONT’D)
11. DEFERRED TAX ASSETS/(LIABILITIES) (CONTINUED)
Presented after appropriate offsetting as follows:Group
2016
RM'000
Deferred tax assets
Deferred tax liabilities
2015
RM'000
Company
2016
2015
RM'000
RM'000
211
(2,485)
671
(1,993)
-
(4)
(2,274)
(1,322)
-
(4)
The estimated amounts of temporary differences for which no deferred tax assets are recognised in the financial statements are
as follows:Group
2016
2015
RM'000
RM'000
Deductible temporary differences
Unutilised tax losses
Potential deferred tax assets not recognised at 24%
112
2,830
117
2,092
2,942
2,209
706
530
12. INVENTORIES
Group
At cost
Raw materials
Work-in-progress
Finished goods
At net realisable value
Finished goods
2016
RM'000
2015
RM'000
11,578
3,439
14,920
8,441
451
21,072
29,937
29,964
249
408
30,186
30,372
The cost of inventories of the Group recognised as expense in cost of sales during the financial year is RM122,442,000 (2015:
RM111,205,000).
The cost of inventories of the Group recognised as expense in cost of sales during the financial year in respect of write-down of
inventories to net realisable value was RM225,041 (2015: RM878,000).
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Annual Report 2016
Notes to the
Financial Statements
(CONT’D)
13. AMOUNT DUE FROM/(TO) CONTRACT CUSTOMERS
Group
Aggregrate of costs incurred to date
Attributable profits
Progress billings
2016
RM'000
2015
RM'000
583,814
125,374
373,082
85,030
709,188
(670,924)
458,112
(397,853)
38,264
60,259
51,057
(12,793)
61,255
(996)
38,264
60,259
Represented by:Amount due from contract customers
Amount due to contract customers
14. DERIVATIVE FINANCIAL ASSETS/(LIABILITIES)
Group
2016
Assets
Liabilities
RM'000
RM'000
Derivatives used for hedging:Forward foreign contract exchange contracts
- buy contracts
95
(73)
Forward exchange contracts are used to manage the foreign exchange currency exposures arising from the Group’s receivables
and payables denominated in currencies other than the functional currencies of the Group. Most of the foreign exchange
contracts have maturities of less than one year after the end of the reporting period. When necessary, the forward contracts are
rolled over at maturity. The notional principal amounts of the Group’s outstanding forward foreign exchange contracts as at 31
August 2016 were RM9,495,792.
15. SHORT TERM DEPOSITS, CASH AND BANK BALANCES
Group
Company
2016
2015
RM'000
RM'000
2016
RM'000
2015
RM'000
Cash on hand and at banks
Deposits with licensed banks
110,345
17,979
56,953
21,585
77,768
5,228
31,711
5,042
Cash and bank balances
Less: Bank overdrafts (Note 18)
128,324
(11,969)
78,538
(9,426)
82,996
-
36,753
-
Deposits pledged to licensed bank
116,355
(12,751)
69,112
(16,543)
82,996
-
36,753
-
Cash and cash equivalents
103,604
52,569
82,996
36,753
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WZ SATU BERHAD (666098-X)
Notes to the
Financial Statements
(CONT’D)
15. SHORT TERM DEPOSITS, CASH AND BANK BALANCES (CONTINUED)
The foreign currency exposure profile of cash and bank balances are as follows:Group
United States Dollar
2016
RM'000
2015
RM'000
1,650
2,392
The deposits with licensed banks of the Group amounting to RM12,750,887 (2015: RM16,543,211) have been pledged to
licensed banks for banking facilities granted to subsidiaries. The fixed deposits of the Group earn interest at rates ranging from
2.55% to 3.35% (2015: 2.55% to 4.80%) per annum. The deposits of the Group have maturity period ranged from 30 days to
365 days (2015: 30 days to 365 days).
16. SHARE CAPITAL
Group and Company
2016
2015
2016
Number of shares
Units('000) Units('000)
RM'000
Ordinary shares of RM0.50 each
Authorised:At 1 September
Created during the financial year
At 31 August
Issued and fully paid:At 1 September
Issuance of ordinary shares pursuant to:- Acquisition of a subsidiary company
- Bonus issue
- Exercise of warrants
- Private placement
At 31 August
2015
RM'000
500,000
250,000
200,000
300,000
250,000
125,000
100,000
150,000
750,000
500,000
375,000
250,000
252,909
190,000
126,455
95,000
55,648
2,019
25,291
10,588
321
52,000
27,824
1,010
12,645
5,294
161
26,000
335,867
252,909
167,934
126,455
During the financial year, the Company increased its authorised share capital from 500,000,000 units to 750,000,000 units of
ordinary shares via the creation of 250,000,000 units of RM0.50 each.
During the financial year, the issued and paid-up capital of the Company was increased from RM126,454,618 to RM167,933,698
by way of:(a) Issuance of 39,300 and 1,980,080 new ordinary shares arising from the exercise of warrants at exercise price of RM0.60
and RM0.50 respectively;
(b) Private placement of 25,290,900 new ordinary shares of RM0.50 each at issue price RM1.21; and
(c) Bonus issue of 55,647,880 new ordinary shares of RM0.50 each by capitalisation of the share premium accounts on the
basis of one (1) bonus share for every existing five (5) ordinary shares held.
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Annual Report 2016
111
Notes to the
Financial Statements
(CONT’D)
16. SHARE CAPITAL (CONTINUED)
The new ordinary shares issued during the financial year rank pari-passu in all respects with the existing ordinary shares of the
Company.
The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per
share at meetings of the Company. All ordinary shares rank equally with regard to the Company’s residual assets.
Warrants
The Warrants issued on 29 October 2014 are constituted under a Deed Poll dated 9 October 2014 executed by the Company.
The Warrants are listed on the Bursa Malaysia Securities Berhad.
The outstanding Warrants during the financial year ended 31 August 2016 are stated as below:-
At
1.9.2015
Warrants
94,679
Number of Warrants ('000)
Bonus
At
Issue
Exercised
31.8.2016
18,928
(2,019)
111,588
The salient features of the Warrants are as follows:(i)
Each Warrant entitles the registered holder/(s) at any time prior to 28 October 2024 to subscribe for one (1) new ordinary
share of RM0.50 each. The Warrants entitlement is subject to adjustments under the terms and conditions as set out in the
Deed Poll dated 9 October 2014;
(ii) Pursuant to the issuance of bonus shares on the basis of one (1) bonus share for every five (5) existing shares held by
shareholders whose name appeared in the Record of Depositors on 17 March 2016 (“Bonus Issue”), a total of 18,927,934
additional warrants were issued arising from the adjustment made in relation to the Bonus Issue and the exercise price of
the outstanding warrants was revised from RM0.60 to RM0.50. This is in accordance to the Deed Poll dated 9 October 2014
and Notice to Warrant Holders dated 17 March 2016;
(iii) The exercise period is ten (10) years from the date of issuance until the maturity date. Upon the expiry of the exercise period,
any unexercised warrants will lapse and cease to be valid for any purposes; and
(iv) The holders of the Warrants are not entitled to vote in any general meetings or to participate in any dividends, rights, allotment
and/or other forms of distribution other than on winding-up, compromise or arrangement of the Company unless and until
the holders of the Warrants become a shareholder of the Company by exercising his Warrants into new shares or unless
otherwise resolved by the Company in general meeting.
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WZ SATU BERHAD (666098-X)
Notes to the
Financial Statements
(CONT’D)
17. RESERVES
Group
Non-distributable
Share premium
Translation reserve
Revaluation reserve
Distributable
Retained earnings
Company
2016
2015
RM'000
RM'000
2016
RM'000
2015
RM'000
57,222
5,036
67,555
213
5,164
57,222
-
67,555
-
62,258
72,932
57,222
67,555
65,458
47,917
4,036
4,414
127,716
120,849
61,258
71,969
(i) Share premium
The share premium is arrived at after accounting for the premium received over the nominal value of the shares issued to
the public, less subsequent capitalisation for bonus issue of the Company, if any, and share issuance expenses. The share
premium is not distributable by way of cash dividends but may be utilised in the manner set out in Section 60(3) of the
Companies Act, 1965 in Malaysia.
(ii) Foreign currency translation reserve
The foreign currency translation reserve represents 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.
(iii) Revaluation reserve
The revaluation reserve represents increases in the fair value of freehold land and buildings, long term leasehold land and
buildings and low cost apartments, net of tax, and decreases to the extent that such decrease relates to an increase on the
same asset previously recognised in other comprehensive income.
(iv) Retained earnings
The Company will be able to distribute dividends out of its entire retained earnings under the single tier system.
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113
Notes to the
Financial Statements
(CONT’D)
18. BORROWINGS
Group
Company
2016
2015
RM'000
RM'000
2016
RM'000
2015
RM'000
Current
Secured
Finance lease liabilities
Floating rate bank loan
Bank overdrafts
Trade financing
5,381
1,820
37
27,457
4,344
2,061
9,426
37,572
257
-
150
-
Unsecured
Bank overdrafts
Trade financing
11,932
33,687
6,029
-
-
80,314
59,432
257
150
13,303
2,596
8,673
4,505
229
-
238
-
15,899
13,178
229
238
96,213
72,610
486
388
Non-current
Secured
Finance lease liabilities
Floating rate bank loan
Total loans and borrowings
Floating rate bank loan of a subsidiary of RM4,415,832 (2015: RM3,141,592) bear interest at 5.5% (2015: 5.5%) per annum and
is repayable by monthly instalments of RM140,000 and interest shall be calculated monthly and repaid in arrears over 5 years
commencing from first day of the month following the month of full drawdown of the loan or the expiry of the availability period,
whichever is earlier.
(a) Finance lease liabilities
Group
Company
2016
2015
RM'000
RM'000
2016
RM'000
2015
RM'000
Minimum lease payment
On demand and within one year
Later than one year but not later than five years
Later than five years
6,364
14,600
16
4,989
9,231
155
272
235
-
165
246
-
Future interest charge
20,980
(2,296)
14,375
(1,358)
507
(21)
411
(23)
Present value of minimum lease payment
18,684
13,017
486
388
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WZ SATU BERHAD (666098-X)
Notes to the
Financial Statements
(CONT’D)
18. BORROWINGS (CONTINUED)
(a) Finance lease liabilities (Continued)
Group
Company
2016
2015
RM'000
RM'000
2016
RM'000
2015
RM'000
5,381
4,344
257
150
13,288
15
8,522
151
229
-
238
-
18,684
13,017
486
388
Represented by:
Current
- On demand and within one year
Non-current
- Later than one year but not later than five years
- Later than five years
The effective interest rate ranges from 3.22% to 7.03% (2015: 3.22% to 12.66%) per annum. Interest rates are fixed at the
inception of the finance lease arrangements.
The finance lease liabilities are effectively secured on the rights of the assets under finance lease.
(b) Loan and borrowings
The remaining maturities of the loans and borrowings (excluding finance lease liabilities) as at 31 August 2016 are as follows:Group
On demand and within one year
Later than one year but not later than two years
Later than two years but not later than five years
2016
RM'000
2015
RM'000
74,933
1,680
916
55,088
2,363
2,142
77,529
59,593
The borrowings of the Group are secured by :(i)
Legal charges over the leasehold land and buildings and the freehold land and buildings of certain subsidiaries as
mentioned in Note 5;
(ii) Corporate guarantee given by the Company and a subsidiary;
(iii) Joint and several guarantees by certain directors of the subsidiaries;
(iv) Deposits with licensed banks (Note 15); and
(v) Assignment of contract proceeds.
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115
Notes to the
Financial Statements
(CONT’D)
18. BORROWINGS (CONTINUED)
(b) Loan and borrowings (Continued)
Effective interest rates per annum:Group
Floating rate bank loan
Bank overdrafts
Trade financing
2016
%
2015
%
5.50
7.25 to 8.20
4.10 to 8.10
5.26 to 13.00
7.35 to 13.00
4.46 to 12.75
19. TRADE AND OTHER PAYABLES
Group
Company
2016
2015
RM'000
RM'000
2016
RM'000
2015
RM'000
Trade payables
Retention sums
Accrued costs
63,029
9,856
3,396
70,277
6,251
4,936
-
-
Total trade payables
76,281
81,464
-
-
2,823
4,966
27
10,046
2,670
5,450
1,826
213
35,418
73
381
8,868
-
56
374
1,154
-
17,862
45,577
9,322
1,584
94,143
127,041
9,322
1,584
Trade payables
Other payables
Accruals
Other payables
Amount due to directors
Amount due to subsidiaries
Refundable deposits
Advance payment from contract customers
Total trade and other payables
The trade and other payables are non-interest bearing and are normally settled on 30 to 120 (2015: 14 to 120) days terms.
During the previous financial year, the amounts due to directors were unsecured, non-interest bearing, repayable on demand
and were expected to be received in cash.
The amounts due to subsidiaries are unsecured, bear interest at rate of 6.85% (2015: 6.85%) per annum, repayable upon demand
and are expected to be settled in cash.
Included in other payables of the Group is GST payables amounted to RM576,667 (2015:RM763,106).
The advance payment received from contract customers represent advance which are unsecured and interest free.
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WZ SATU BERHAD (666098-X)
Notes to the
Financial Statements
(CONT’D)
19. TRADE AND OTHER PAYABLES (CONTINUED)
The foreign currency exposure profile of trade payables are as follows:Group
United States Dollar
Singapore Dollar
Euro
Pound Sterling
New Taiwan Dollar
2016
RM'000
2015
RM'000
4,831
519
340
141
41
4,025
7,600
1,135
7
2
20. PROVISION FOR LIABLITIES
Group
2016
RM'000
At 1 September
Provision during the year
Utilised during the year
Reversal during the year
At 31 August
2015
RM'000
(359)
56
279
(359)
-
(24)
(359)
Provision for liquidated and ascertained damages is recognised in respect of the delayed projects undertaken by a subsidiary.
The provision has been recognised for the expected liquidated ascertained damages claims based on the applicable terms
and conditions stated in the purchase order.
21. REVENUE
Group
Construction revenue
Sale of goods
Services rendered
Dividend income
- Subsidiary
- Associates
Others
Company
2016
2015
RM'000
RM'000
2016
RM'000
2015
RM'000
320,079
139,549
6,062
225,614
122,961
2,847
-
-
243
-
3,500
3,000
77
3,430
2,751
465,933
351,422
6,577
6,181
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117
Notes to the
Financial Statements
(CONT’D)
22. COST OF SALES
Group
Construction costs
Cost of goods sold
Services rendered
Company
2016
2015
RM'000
RM'000
2016
RM'000
2015
RM'000
260,237
120,987
3,250
178,686
109,556
694
-
-
384,474
288,936
-
-
23. FINANCE COSTS
Group
Interest expense on:
- Finance lease liabilities
- Trade financing
- Term loans
- Bank overdrafts
- Bank commission and charges
- Loan from a subsidiary
Company
2016
2015
RM'000
RM'000
2016
RM'000
2015
RM'000
1,102
2,132
263
505
2,024
-
632
1,534
382
131
758
-
21
89
10
9
6,026
3,437
110
19
24. PROFIT BEFORE TAXATION
Profit before taxation has been arrived at:Group
Company
2016
2015
RM'000
RM'000
2016
RM'000
2015
RM'000
226
76
391
7,300
4,581
306
-
164
2
959
5,072
5,154
248
55
40
13
170
2,154
296
-
31
3
74
3,315
248
-
694
-
240
2,070
-
-
This is stated after charging:Auditors’ remuneration
- current year
- underprovision in prior year
Impairment loss on receivables
Depreciation of property, plant and equipment
Directors’ emoluments
Directors’ fees
Deposit written off
Loss on foreign exchange
- realised
- unrealised
Loss on disposal of a subsidiary
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Notes to the
Financial Statements
(CONT’D)
24. PROFIT BEFORE TAXATION (CONTINUED)
Profit before taxation has been arrived at:- (Continued)
Group
Company
2016
2015
RM'000
RM'000
2016
RM'000
2015
RM'000
51
152
26
12,505
1,018
619
5,900
712
772
42,291
47
359
105
27
5,926
1,262
108
446
530
727
33,780
1,452
846
3,013
22
-
2
39
-
1,826
-
629
259
449
165
76
-
-
2,817
1,732
520
1,914
362
1,030
648
281
-
-
20
160
279
334
-
-
-
37,027
28,959
1,244
711
3,914
293
1,057
3,291
218
1,312
153
9
46
109
7
19
42,291
33,780
1,452
846
This is stated after charging:- (Continued)
Property, plant and equipment written off
Provision for liabilities
Rental of office equipment
Rental of store
Rental of heavy machinery
Rental of premises
Rental of house
Rental of land
Rental of motor vehicles
Net loss on financial asset measured at amortised cost
Staff costs (excluding directors)
And crediting:Gain on disposal of subsidiaries
Net fair value gain on derivatives
Bad debts recovered
Rental income from:
- factory/office
- others
Reversal of impairment loss on receivables
Interest income:
- subsidiary companies
- others
Gain on disposal of property,
plant and equipment
Gain on foreign exchange
- realised
- unrealised
Reversal of provision of liabilities
Staff costs (excluding director)
Salaries and wages
Contributions to defined
contribution plans
Social security contribution
Other benefits
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Notes to the
Financial Statements
(CONT’D)
25. DIRECTORS’ REMUNERATION
The details of remuneration receivable by directors of the Group and of the Company during the year are as follows:Group
Company
2016
2015
RM'000
RM'000
2016
RM'000
2015
RM'000
Executive:
- Salaries and other emoluments
- Defined contribution plans
4,070
479
4,530
552
1,898
224
2,896
347
Total Executive Directors' remuneration
4,549
5,082
2,122
3,243
Non-Executive:
- Fees
- Other emoluments
306
32
248
72
296
32
248
72
Total Non-Executive Directors' remuneration
338
320
328
320
4,887
5,402
2,450
3,563
Total Directors' remuneration
The estimated monetary value of benefits-in-kind received by the Directors otherwise than in cash from the Group and the
Company amounted to RM44,742 (2015: RM28,333) and RM35,200 (2015: RM23,533) respectively.
26. TAXATION
Group
Malaysian income tax expense:
- current year
- under/(over) provision in prior years
Deferred taxation (Note 11):
- current year
- over provision in prior years
Company
2016
2015
RM'000
RM'000
2016
RM'000
2015
RM'000
4,107
298
4,238
523
-
(1)
4,405
4,761
-
(1)
648
(77)
(309)
(351)
(4)
-
-
571
(660)
(4)
-
Income tax expense attributable to continuing operations
Income tax expense attributable to discontinuing operation
4,976
-
4,101
-
(4)
-
(1)
-
Income tax expense recognised in profit or loss
4,976
4,101
(4)
(1)
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Notes to the
Financial Statements
(CONT’D)
26. TAXATION (CONTINUED)
A reconciliation of income tax expense applicable to profit before taxation at the statutory income tax rate to income tax expense
at the effective income tax rate of the Group and of the Company is as follows:Group
2016
RM'000
Profit before taxation
Less : Loss before tax from discontinued operation
Tax at applicable tax rate of 24% (2015: 25%)
Tax effects arising from:- Non-deductible expenses
- Non-taxable income
- Different tax rates in other country
- Share of results in associates
- Effects of tax incentive
- reinvestment allowances
- double deduction
- Deferred tax asset not recognised
- Crystallisation of deferred tax
liabilities arising from revaluation
- Under/(over) provision in prior years
- income tax expense
- deferred tax
- Different tax rate
Tax expense for the financial year
2015
RM'000
Company
2016
2015
RM'000
RM'000
27,996
-
26,734
(2,207)
5,183
-
1,820
-
27,996
24,527
5,183
1,820
6,719
6,132
1,244
455
1,911
(648)
(2,254)
2,538
(1,117)
(69)
(4,634)
832
(2,080)
-
228
(858)
-
(1,077)
(45)
176
(7)
1,085
-
168
(27)
(36)
-
-
298
(77)
-
523
(351)
37
-
(1)
7
(4)
(1)
4,976
4,101
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Notes to the
Financial Statements
(CONT’D)
27. DISCONTINUED OPERATION
As mentioned in Note 8(iii) above, the Company had disposed a subsidiary on 22 May 2015 and hence discontinued its trading
business. The comparative consolidated statement of profit or loss and other comprehensive income has been re-presented to
show the discontinued operation separately from continuing operation.
(i)
The results attributable to the discontinued operation were as follows:Group
2015
RM'000
Revenue
Cost of sales
4,514
(3,379)
Gross profit
Other income
Operations and administrative expenses
1,135
31
(1,285)
Loss from operations of discontinued operation
Finance costs
Loss on disposal of a subsidiary
(119)
(18)
(2,070)
Loss before taxation of discontinued operation
Income tax
(2,207)
-
Loss after taxation of discontinued operation
(2,207)
(ii) The following items had been charged/(credited) in arriving at loss before taxation:Group
2015
RM'000
Auditors’ remuneration
- current year
- underprovision in prior year
Depreciation of property, plant and equipment
Interest expenses
Rental of premises
Staff costs:
- Salaries, bonus and wages
- Contributions to defined contribution plan
- Social security contribution
- Other benefits
Reversal of impairment loss on receivables
Interest income
Rental income
8
1
177
18
495
243
15
2
11
(26)
(4)
(1)
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WZ SATU BERHAD (666098-X)
Notes to the
Financial Statements
(CONT’D)
27. DISCONTINUED OPERATION (CONTINUED)
(iii) Cash flows generated from/(used in) discontinued operation:Group
2015
RM'000
Operating activities
Investing activities
Financing activities
2,313
(37)
(1,514)
Net cash inflows
762
28. EARNINGS/(LOSS) PER SHARE
Basic Earnings/(Loss) Per Share
Basic earnings/(loss) per share is calculated by dividing the net profit/(loss) for the financial year attributable to owners of the
Company by the weighted average number of ordinary shares outstanding during the financial year:Group
2016
RM'000
2015
RM'000
Basic
Profit/(loss) attributable to owners of the Company:- from continuing operations
- from discontinued operation
Weighted average number of ordinary shares for basic earnings per share (units)
Basic earnings/(loss) per ordinary share (sen):- from continuing operations
- from discontinued operation
23,072
-
22,932
(2,207)
23,072
20,725
329,648
298,176*
7.00
-
7.69
(0.74)
7.00
6.95
Diluted Earnings/(Loss) Per Share
Diluted earnings/(loss) per share is calculated by dividing the profit/(loss) for the financial year attributable to owners of the
Company by the weighted average number of shares outstanding during the financial year plus the weighted average number
of ordinary shares that would be issued on conversion of the Warrants into ordinary shares.
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Notes to the
Financial Statements
(CONT’D)
28. EARNINGS/(LOSS) PER SHARE (CONTINUED)
Diluted Earnings/(Loss) Per Share (Continued)
Group
2016
RM'000
Diluted
Profit/(loss) attributable to owners of the Company:- from continuing operations
- from discontinued operation
Weighted average number of ordinary shares for basic earnings per share (units)
Effect from dilution from Warrants
Diluted earning/(loss) per ordinary share (sen):- from continuing operations
- from discontinued operation
*
2015
RM'000
23,072
-
22,932
(2,207)
23,072
20,725
329,648
64,791
298,176*
62,875
394,439
361,051*
5.85
-
6.35
(0.61)
5.85
5.74
Amount adjusted due to bonus issue during the year.
29. DIVIDENDS
A single tier final dividend of 2 sen per ordinary share of RM0.50 each in respect of financial year ended 31 August 2015,
amounting to RM5,564,789 was paid on 29 February 2016.
The directors have yet to recommend the payment of any final dividend in respect of the financial year ended 31 August 2016.
30. RELATED PARTIES
(a) Identification of related parties
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 operational decisions, or vice versa, or where the Group
and the party are subject to common control. Related parties may be individuals or other entities.
Related parties of the Group include:(i)
subsidiaries;
(ii) associates;
(iii) joint operations;
(iv) related companies in which directors have substantial financial interest; and
(v) key management personnel of the Group’s, comprise persons (including directors) having the authority and responsibility
for planning, directing and controlling the activities directly or indirectly.
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Notes to the
Financial Statements
(CONT’D)
30. RELATED PARTIES (CONTINUED)
(b) Significant related party transactions
The significant related party transactions of the Group and of the Company are as follows:Group
2016
RM'000
2015
RM'000
- Sales
- Dividend income
308
-
173
-
Company in which certain directors have substantial interests
- Rental of premises
- Purchases
- Rental income
120
(495)
(11)
30
Company
2016
2015
RM'000
RM'000
Associates
Subsidiaries
- Management fees
- Interest income
- Dividend income
- Interest expenses
-
-
3,000
3,430
-
-
59
520
3,500
(89)
2,751
362
(9)
The management fees were charged based on recovery of costs incurred on behalf of the subsidiaries and associates.
(c) Compensation of key management personnel
Group
Short-term employee benefits
Post-employment employee benefits
Company
2016
2015
RM'000
RM'000
2016
RM'000
2015
RM'000
6,375
701
5,897
662
2,226
224
3,216
347
7,076
6,559
2,450
3,563
31. FINANCIAL INSTRUMENTS
(a) Categories of financial instruments
The following table analyses the financial assets and liabilities in the statements of financial position by the class of financial
instruments to which they are assigned, and therefore by the measurement basis:(i) Loans and receivables (“L&R”)
(ii) Fair value through profit or loss (“FVTPL”)
(iii) Other financial liabilities (“FL”)
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Notes to the
Financial Statements
(CONT’D)
31. FINANCIAL INSTRUMENTS (CONTINUED)
(a) Categories of financial instruments (Continued)
Group
31 August 2016
Financial assets
Trade and other receivables
Amount due from contract customers
Derivative financial assets
Short term deposits, cash and bank balances
Financial liabilities
Trade and other payables
Borrowings
Derivative financial liabilities
31 August 2015
Financial assets
Trade and other receivables
Amount due from contract customers
Short term deposits, cash and bank balances
Financial liabilities
Trade and other payables
Borrowings
Carrying
Amount
RM'000
L&R/
FL
RM'000
FVTPL
RM'000
138,130
51,057
95
128,324
138,130
51,057
128,324
95
-
317,606
317,511
95
84,097
96,213
73
84,097
96,213
-
73
180,383
180,310
73
128,784
61,255
78,538
128,784
61,255
78,538
-
268,577
268,577
-
91,623
72,610
91,623
72,610
-
164,233
164,233
-
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WZ SATU BERHAD (666098-X)
Notes to the
Financial Statements
(CONT’D)
31. FINANCIAL INSTRUMENTS (CONTINUED)
(a) Categories of financial instruments (Continued)
Company
31 August 2016
Financial assets
Trade and other receivables
Short term deposits, cash and bank balances
Financial liabilities
Trade and other payables
Borrowings
31 August 2015
Financial assets
Trade and other receivables
Short term deposits, cash and bank balances
Financial liabilities
Trade and other payables
Borrowings
Carrying
Amount
RM'000
L&R/
FL
RM'000
FVTPL
RM'000
23,871
82,996
23,871
82,996
-
106,867
106,867
-
9,322
486
9,322
486
-
9,808
9,808
-
36,149
36,753
36,149
36,753
-
72,902
72,902
-
1,584
388
1,584
388
-
1,972
1,972
-
(b) Fair value of financial instruments
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 carrying amounts of cash and cash equivalents, receivables, payables and short term borrowings are reasonable
approximation of fair values due to the relatively short term nature of these financial instruments.
There has been no transfer between Level 1 and Level 2 during the financial year (2015: no transfer in either direction).
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Notes to the
Financial Statements
(CONT’D)
31. FINANCIAL INSTRUMENTS (CONTINUED)
(b) Fair value of financial instruments (Continued)
Other than those carrying amounts with reasonable approximation of fair value, the fair value of other financial assets and
liabilities together with the carrying amount shown in the statements of financial position are as follows:2016
Carrying
Amount
2015
Fair Value
Carrying
Amount
Fair Value
RM'000
RM'000
RM'000
RM'000
22
18,684
22
18,640
13,017
12,863
486
460
388
388
Group
Derivative financial asset
Finance lease liabilities
Company
Finance lease liabilities
The fair values of finance lease liabilities are estimated by discounting expected future cash flows at market incremental
lending rate for similar types of lending, borrowing or leasing arrangements at the reporting date.
The Group classifies fair value measurements using a fair value hierarchy that reflects the significance of the inputs used in
making the measurements. The fair value hierarchy has the following levels:•
•
•
Level 1 – quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2 – 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 – inputs for the asset or liability that are not based on observable market data (unobservable inputs).
The fair value of finance lease liabilities of the Group and of the Company are categorised as Level 2.
32. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
The Group’s and the Company’s activities are exposed to a variety of financial risks arising from their operations and the use of
financial instruments. The key financial risks include interest rate risk, foreign currency risk, liquidity risk and credit risk. The
Group’s and the Company's overall financial risk management objective is to optimise value for their shareholders. The Group
and the Company do not trade in financial instruments.
The Board of Directors reviews and agrees to policies and procedures for the management of these risks, which are executed
by the Group’s senior management. The audit committee provides independent oversight to the effectiveness of the risk
management process.
(i) Interest rate risk
Interest rate risk arises on interest-bearing financial instruments recognised in the statement of financial position. It will affect
the Group’s income or the value of its holdings of financial instruments.
The Group’s exposures to interest rate risk for changes in interest rates mainly arise from its short term borrowings and term
loans with floating interest rate. Interest rate risk is managed by the Group on an on-going basis with the primary objective
of limiting the extent to which net interest expense could be affected by an adverse movement in interest rates.
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WZ SATU BERHAD (666098-X)
Notes to the
Financial Statements
(CONT’D)
32. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTINUED)
(i) Interest rate risk (Continued)
Sensitivity analysis for interest rate risk
At the end of the financial year, if interest rates had been 25 basis points lower/ higher, with all other variables held constant,
the Group’s profit after tax would have been RM193,823 (2015: RM148,982) higher/ lower, arising mainly as a result of lower/
higher interest expense on floating rate loans and borrowings.
(ii) Foreign currency 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’s exposure to the risk rates relates primarily to the Group’s operating activities
(when sales and purchases that are denominated in foreign currency).
Based on carrying amounts as at the end of the financial year, the material foreign currency denominated financial assets
and liabilities which expose the Group to currency risk are disclosed below:-
31 August 2016
Trade receivables
Cash and bank balances
Trade payables
Net exposure
United
States
Dollar
RM'000
Singapore
Dollar
RM'000
Euro
RM'000
Total
RM'000
7,077
1,650
(4,831)
(519)
(340)
7,077
1,650
(5,690)
3,896
(519)
(340)
3,037
4,939
2,392
(4,025)
21
(7,600)
(1,135)
4,960
2,392
(12,760)
3,306
(7,579)
(1,135)
(5,408)
31 August 2015
Trade receivables
Cash and bank balances
Trade payables
Net exposure
Sensitivity analysis for foreign currency risk
The following demonstrates the sensitivity of the Group’s profit after tax to a reasonably possible change in the United States
Dollar, Singapore Dollar and Euro against the Ringgit Malaysia, with all other variables held constant.
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Notes to the
Financial Statements
(CONT’D)
32. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTINUED)
(ii) Foreign currency risk (Continued)
2016
RM'000
2015
RM'000
United States Dollar/RM
- strengthened 5%
- weakened 5%
195
(195)
165
(165)
Singapore Dollar/RM
- strengthened 5%
- weakened 5%
(26)
26
(379)
379
Euro/RM
- strengthened 5%
- weakened 5%
(17)
17
(57)
57
(iii) Liquidity risk
Liquidity risk is the risk that the Group or the Company will encounter difficulty in meeting financial obligations when they fall
due. The Group's and the Company’s exposure to liquidity risk arise primarily from mismatches of the maturities between
financial assets and liabilities. The Group’s and the Company’s exposure to liquidity risk arise principally from trade and
other payables, loans and borrowings.
Maturity analysis
The maturity analysis of the Group’s and the Company’s financial liabilities by their relevant maturity at the reporting date
are based on contractual undiscounted repayment obligation as follows:-
Group
At 31 August 2016
Trade and other payables
Derivative financial liabilities
Finance lease liabilities
Floating rate bank loan
Short term borrowings
At 31 August 2015
Trade and other payables
Finance lease liabilities
Floating rate bank loan
Short term borrowings
More than 1
On demand year but not
Carrying Contractual or less than
later than
Amount Cashflows
1 year
5 years
RM'000
RM'000
RM'000
RM'000
More than
5 years
RM'000
84,097
73
18,684
4,416
73,113
84,097
73
20,980
4,659
77,821
84,097
73
6,364
1,920
77,821
14,600
2,739
-
16
-
180,383
187,630
170,275
17,339
16
91,623
13,017
6,566
53,027
91,623
14,375
7,183
57,019
91,623
4,989
2,229
57,019
9,231
2,557
-
155
2,397
-
164,233
170,200
155,860
11,788
2,552
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WZ SATU BERHAD (666098-X)
Notes to the
Financial Statements
(CONT’D)
32. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTINUED)
(iii) Liquidity risk (Continued)
Maturity analysis (Continued)
Company
At 31 August 2016
Trade and other payables
Finance lease liabilities
Financial guarantee
At 31 August 2015
Trade and other payables
Finance lease liabilities
Financial guarantee
More than 1
On demand year but not
Carrying Contractual or less than
later than
Amount Cashflows
1 year
5 years
RM'000
RM'000
RM'000
RM'000
More than
5 years
RM'000
9,322
486
-
9,322
507
84,495
9,322
272
-
235
-
-
9,808
94,324
9,594
235
-
1,584
388
-
1,584
411
93,930
1,584
165
-
246
-
-
1,972
95,925
1,749
246
-
(iv) Credit risk
Trade and other receivables
Credit risk is the risk of financial loss to the Group and the Company that may arise on outstanding financial instruments
should a counterparty default on its obligations. The Group’s and the Company’s exposure to credit risk arises primarily
from trade and other receivables. The Group and the Company have a credit policy in place and the exposure to credit risk
is managed through the application of credit approvals, credit limits and monitoring procedures. For other financial assets,
the Group and the Company minimise credit risk by dealing with high credit rating counterparties.
As at the end of the reporting period, the maximum exposure to credit risk arising from trade and other receivables is
represented by their carrying amounts in the statements of financial position. The carrying amount of trade and other
receivables are not secured by any collateral or supported by any other credit enhancements. In determining the
recoverability of these receivables, the Group and the Company consider any change in the credit quality of the receivables
from the date the credit was initially granted up to the reporting date. The Group and the Company have adopted a policy
of dealing with creditworthy counterparties as a means of mitigating the risk of financial loss from defaults.
The Group and the Company use ageing analysis to monitor the credit quality of the trade receivables. The ageing of trade
receivables as at the end of the financial year is disclosed in Note 10. Trade receivables that are neither past due nor
impaired are creditworthy debtors with good payment records with the Group and the Company. A significant portion of
these trade receivables are regular customers that have been transacting with the Group and the Company. Management
has taken reasonable steps to ensure that trade receivables that are neither past due nor impaired are stated at their
realisable values. Impairment are made on specific receivables when there is objective evidence that the Group and the
Company will not be able to collect all amounts due.
The Group and the Company monitor the results of the subsidiaries and associate companies in determining the
recoverability of these intercompany balances.
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Notes to the
Financial Statements
(CONT’D)
32. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTINUED)
(iv) Credit risk (Continued)
Financial guarantee
The Company is exposed to credit risk in relation to financial guarantees given to banks in respect of loans granted to certain
subsidiaries. The Company monitors the results of the subsidiaries and associates for their repayment on an on-going basis.
The maximum exposure to credit risks amounts to RM84,495,000 (2015: RM93,930,000) representing the maximum amount
the Company could pay if the guarantee is called on as disclosed in Note 36.
The financial guarantee have not been recognized since the fair value on initial recognition was not material.
Credit risk concentration profile
The information on credit risk concentration is disclosed in Note 10 to the financial statements.
33. CAPITAL MANAGEMENT
The primary objective of the Group’s and of the Company’s capital management is to ensure that they maintain a strong credit
rating and healthy capital ratio in order to support their business and maximise shareholder value. The Group and the Company
manage their capital structure and make adjustments to it, in light of changes in economic conditions. To maintain or adjust the
capital structure, the Group and the Company may adjust the dividend payment to shareholders, return capital to shareholders
or issue new shares. No changes were made in the objectives, policies and processes during the financial year ended 31 August
2016 and 31 August 2015.
The debt-to-equity ratios at 31 August 2016 and 31 August 2015 are as follows:Group
Total loans and borrowings
Less : Short term deposits, cash and bank balances
Sub-total
Net debt
Equity attributable to the Owners of the Company,
representing total capital
Debt-to-equity ratio
2016
RM'000
2015
RM'000
96,213
(128,324)
72,610
(78,538)
(32,111)
(5,928)
-
-
297,093
249,340
-
-
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WZ SATU BERHAD (666098-X)
Notes to the
Financial Statements
(CONT’D)
34. SEGMENTAL REPORTING
The Group prepared the following segment information in accordance with MFRS 8 Operating Segments based on the internal
reports of the Group’s strategic business units which are regularly reviewed by the Group’s Chief Executive Officer (“CEO”) for
the purpose of making decisions about resource allocation and performance assessment.
The six reportable operating segments are as follows:Segments:Civil engineering and construction
Oil and gas
Mining
Manufacturing
Trading
Investment
Products and services:Securing and carrying out construction contracts
Contractor, sub- contractor, carry on fabrication & assembly and testing works, trading
and after service of products for oil and gas industries
Mining operations and activities
Manufacturing of steel products
Trading of steel products
Investment holding
Other non-reportable segments comprise mineral resources business and power generation business which are below the
quantitative thresholds for determining operating segments.
The inter-segment transactions have been entered into in the normal course of business and have been established on terms
and conditions that are not materially different from those obtainable in transactions with unrelated parties.
Segment profit
Segment performance is used to measure performance as Group’s Chief Executive Officer believes that such information is the
most relevant in evaluating the results of certain segments relative to other entities that operate within these industries.
Performance is evaluated based on operating profit or loss which is measured differently from operating profit or loss in the
consolidated financial statements.
Segment assets and liabilities
The total of segment assets and liabilities is measured based on all assets and liabilities (excluding investment in associates) of
a segment, as included in the internal reports that are reviewed by the Group’s Chief Executive Officer.
(3)
279
227
(144)
-
(48)
(772)
48
-
136,131
107,723
7,088
8,723
96,515
61,438
8,674
3,285
3,805
(520)
(1,635)
(90)
(2,597)
-
12,315
(3,592)
442
(1,206)
113,943
113,943
-
Oil & gas
RM'000
385
(3,273)
257,643
257,643
-
Civil engineering
and construction
RM'000
69,194
20,857
7,882
640
1,085
(445)
708
-
4
(67)
417
-
-
(1,836)
-
38
(1,166)
54,701
54,478
223
Manufacturing
RM'000
29,039
17,604
311
634
712
(78)
36
-
209
212
-
-
(397)
(301)
34
(351)
36,864
30,143
6,721
Trading
RM'000
236,640
2,360
9,808
366
5,187
5,183
4
-
-
-
-
-
(170)
-
1,914
(21)
6,577
18
6,559
Investment
RM'000
25,689
17,430
9,363
(1,171)
(1,048)
(123)
9,392
46
-
-
-
(665)
-
4
(9)
11,295
9,708
1,587
Others
RM'000
(117,903)
25,716
(28,572)
-
5,722
5,944
(222)
-
-
-
-
-
-
-
(15,090)
(15,090)
Adjustments
and
Elimination
RM'000
475,305
28,076
206,288
33,684
23,020
27,996
(4,976)
648
9,392
259
160
629
(772)
(51)
279
(7,300)
(391)
2,817
(6,026)
465,933
465,933
-
Consolidation
RM'000
Annual Report 2016
E
D
C
Profit for the financial year
Other information
Segment assets
Investment in associates
Segment liabilities
Capital expenditure
C
A
B
Note
Results of segment profit/(loss)
Taxation
Interest income
Interest expense
Depreciation of property,
plant and equipment
Impairment loss on receivables
Property, plant and equipment
written off
Provision for liabilities
Fair value loss on financial
assets and financial liabilities
Unrealised gain/(loss) on foreign
exchange
Rental income
Reversal of impairment loss of
receivables
Gain/(Loss) on disposal of
property, plant and equipment
Share of result of associates
Results
Total
External sales
Inter-segment sales
Revenue
2016
The following table provides an analysis of the Group’s revenue, results, assets, liabilities and other segment information by business segments:-
(a) Operating Segment (Continued)
34. SEGMENTAL REPORTING (CONTINUED)
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133
Notes to the
Financial Statements
(CONT’D)
Segment assets
Investment in associates
Segment liabilities
Capital expenditure (including
acquisition of a subsidiary)
E
D
C
Profit for the financial year
Other information
C
A
B
Note
Results of segment profit/(loss)
Taxation
Interest income
Interest expense
Depreciation of property,
plant and equipment
Impairment loss on receivables
Property, plant and equipment
written off
Deposit written off
Provision for liabilities
Fair value loss on financial
assets and financial liabilities
Unrealised (loss)/gain on foreign
exchange
Rental income
Reversal of impairment loss
of receivables
Gain on disposal of property,
plant and equipment
Share of result of associates
Results
Total
External sales
Inter-segment sales
Revenue
2015
(2)
(55)
(359)
(739)
13
163
-
(9)
727
2
-
85,300
53,509
7,549
9,862
5,012
128,543
108,858
5,236
7,161
(2,149)
(1,072)
-
(1,647)
(219)
7,213
(1,977)
391
(546)
114,018
114,018
-
Oil & gas
RM'000
269
(1,356)
155,046
155,046
-
Civil engineering
and construction
RM'000
12,299
94,694
44,777
(1,574)
(1,488)
(86)
96
-
38
499
475
-
-
(1,869)
(5)
37
(1,183)
49,650
49,105
545
Manufacturing
RM'000
821
28,603
17,802
(1,526)
(1,618)
92
20
-
38
126
-
(36)
-
(354)
(690)
22
(341)
31,495
27,209
4,286
Trading
RM'000
9,640
198,637
1,763
1,976
3,647
3,646
1
-
-
-
-
-
(74)
-
1,012
(10)
6,181
6,181
Investment
RM'000
1,643
6,802
2,872
(1,058)
(1,058)
-
18,537
-
-
-
-
(56)
(45)
1
(1)
6,044
6,044
-
Others
RM'000
37
-
(422)
(422)
-
-
26
1
-
-
(177)
-
4
(18)
4,546
4,514
32
Discontinued
operation
RM'000
(2,182)
(110,524)
19,324
(25,992)
11,111
11,093
18
-
-
-
-
-
-
-
(15,558)
(4,514)
(11,044)
Adjustments
and
Elimination
RM'000
39,669
432,055
21,087
203,802
20,426
24,527
(4,101)
281
18,537
102
(240)
615
727
(47)
(55)
(359)
(5,249)
(959)
1,736
(3,455)
351,422
351,422
-
Consolidation
RM'000
134
The following table provides an analysis of the Group’s revenue, results, assets, liabilities and other segment information by business segments:(Continued)
(a) Operating Segment (Continued)
34. SEGMENTAL REPORTING (CONTINUED)
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WZ SATU BERHAD (666098-X)
Notes to the
Financial Statements
(CONT’D)
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Annual Report 2016
135
Notes to the
Financial Statements
(CONT’D)
34. SEGMENTAL REPORTING (CONTINUED)
(a) Operating Segment (Continued)
Reconciliation of reportable segment revenue, profit or loss, assets and liabilities are as follows:A. Revenue from external customers
Discontinued operation
2016
RM'000
2015
RM'000
-
4,514
2016
RM'000
2015
RM'000
B. Inter-segment revenue
Inter-segment revenues are eliminated on consolidation.
C. Reconciliation of profit or loss
Share of results of associates
Dividend income from an associate
Elimination of inter-segment transactions
Discontinued operation
Add: Taxation
9,392
(3,000)
(448)
-
18,537
(3,430)
(118)
(3,896)
5,944
(222)
11,093
18
5,722
11,111
2016
RM'000
2015
RM'000
(128,692)
41,024
(30,235)
(125,013)
41,024
(26,535)
(117,903)
(110,524)
2016
RM'000
2015
RM'000
(28,572)
(25,992)
D. Reconciliation of assets
Investment in subsidiaries
Goodwill on consolidation
Inter-segment assets
E. Reconciliation of liabilities
Inter-segment liabilities
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136
WZ SATU BERHAD (666098-X)
Notes to the
Financial Statements
(CONT’D)
34. SEGMENTAL REPORTING (CONTINUED)
(b) Geographical Segments
The Group’s business segments are in the followings geographical areas:-
Revenue
Domestic
Overseas
Non-current assets
(excluding DTA & PPE)
2016
2015
RM’000
RM’000
Capital Expenditure
2016
2015
RM’000
RM’000
2016
RM’000
2015
RM’000
461,345
4,588
345,888
5,534
73,721
-
72,053
-
33,370
314
35,576
4,093
465,933
351,422
73,721
72,053
33,684
39,669
In determining the geographical segments of the Group, revenue are based on the country in which the customer is located.
Total assets and capital expenditure are determined based on where the assets are located.
(c) Information about major customer
(i)
For civil engineering and construction segment, revenue from two customers (2015: one customer) represented
approximately RM141,601,000 (2015: RM70,272,000) for the Group’s total revenue.
(ii) During the previous financial year, for oil and gas segment the revenue from one customer represent approximately
RM48,805,000 for the Group’s total revenue.
35. SIGNIFICANT AND SUBSEQUENT EVENTS
(a) On 22 October 2015, the Company proposed to undertake a private placement of up to 25,290,900 new ordinary shares of
RM0.50 each in WZ Satu (“Placement Shares”), representing up to 10% of the existing issued and paid-up share capital of the
Company. The issue price of the Placement Shares was fixed at RM1.21 per share by the Board on 23 October 2015. On 6
November 2015, the Company announced the successful completion of the above private placement exercise and listing of
the Placement Shares on even date raising gross proceeds of RM30,601,989 towards working capital of the Company.
(b) On 22 October 2015, the Company further proposed to undertake a bonus issue of up to 74,575,827 new WZ Satu Shares
(“Bonus Shares”) on the basis of 1 Bonus Share for every 5 existing WZ Satu Shares held; an increase in the authorised
share capital of WZ Satu from RM250,000,000 comprising 500,000,000 to RM375,000,000 comprising 750,000,000 WZ Satu
Shares and amendments to the Memorandum and Articles of Association of WZ Satu to align with Bursa Malaysia Securities
Berhad’s Listing Requirements. The proposals were subsequently approved by the shareholders of the Company at an
Extraordinary General Meeting on 28 January 2016.
(c) On 24 February 2016, the Company and WZS Industries Sdn. Bhd. (a wholly-owned subsidiary of WZ Satu Berhad), entered
into a Share Purchase Agreement with Camellia Metal Co., Ltd. and Hsiao, Liang-Hsien for the proposed disposal of the
entire issued share capital of PT WZ Steel (“PTWZ”) (“Proposed Disposal”) for a disposal consideration of USD500,000.
The Proposed Disposal was completed on 6 April 2016 and accordingly, PTWZ ceased to be a subsidiary of WZ Satu Berhad
on even date.
(d) On 29 February 2016, the Company entered into a Share Sale Agreement with Titanium Triangle Sdn. Bhd. (“TT”) for the
disposal of 2,500,000 ordinary shares of RM1.00 each in WZS Technologies Sdn. Bhd. (a subsidiary company of WZ Satu
Berhad at the time of disposal) (“WZST”) to TT for a cash consideration of RM2,500,000 (“Proposed Disposal”).
The Proposed Disposal was completed on the even date above and accordingly, WZST ceased to be a subsidiary of
WZ Satu Berhad and is now a 20% associate company of WZ Satu Berhad.
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137
Annual Report 2016
Notes to the
Financial Statements
(CONT’D)
36. GUARANTEES
2016
RM'000
2015
RM'000
576,414
339,222
78,950
93,930
Guarantee given to financial institution in respect of credit facilities
granted to associates
6,374
-
Amount of banking facilities utilised by associates as at the financial year
5,545
-
Guarantee given to financial institution in respect of credit facilities
granted to subsidiaries
Amount of banking facilities utilised by subsidiaries as at the financial year
37. CAPITAL AND OTHER COMMITMENTS
(a) Capital commitments
The Group has made commitments for the following capital expenditure:Group
Authorised and contracted for
Authorised and not contracted for
Share of associates capital commitment
2016
RM'000
2015
RM'000
12,366
33,419
8,707
-
45,785
8,707
1,842
777
(b) Operating lease commitment – as lessee
The Group leases a number of site office and equipment under operating leases for average lease term between five to ten
years, with option to renew the lease at the end of the lease term.
Future minimum rental payable under the non-cancellable operating lease at the reporting date is as follows:-
- Not later than one year
- More than one year but not later than five years
- More than five years
2016
RM'000
2015
RM'000
2,180
6,575
577
3,076
6,598
1,565
9,332
11,239
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138
WZ SATU BERHAD (666098-X)
SUPPLEMENTARY INFORMATION ON THE DISCLOSURES
OF REALISED AND UNREALISED PROFITS OR LOSSES
On 25 March 2010, Bursa Malaysia Securities Berhad (Bursa Malaysia) issued a directive to all listed issuers pursuant to Paragraphs
2.06 and 2.23 of the Bursa Malaysia Main Market Listing Requirements. The directive requires all listed issuers to disclose the
breakdown of the unappropriated profits or accumulated losses as at the end of the reporting period, into realised and unrealised
profits or losses.
On 20 December 2010, Bursa Malaysia further issued another directive on the disclosure and the prescribed format of presentation.
The breakdown of the retained earnings of the Group and of the Company as at 31 August 2016, into realised and unrealised profits,
pursuant to the directive, is as follows:Group
2016
RM'000
Total retained earnings of the Company and its subsidiaries
- Realised
- Unrealised
Associates
- Realised
- Unrealised
Less: Consolidation adjustment
2015
RM'000
Company
2016
2015
RM'000
RM'000
76,812
(2,114)
67,588
(1,561)
4,036
-
4,414
-
74,698
66,027
4,036
4,414
29,043
(888)
20,219
(602)
-
-
102,853
(37,395)
85,644
(37,727)
4,036
-
4,414
-
65,458
47,917
4,036
4,414
The determination of realised and unrealised profits or losses is compiled based on the 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, issued by the Malaysian Institute of Accountants on 20 December 2010.
The disclosure of realised and unrealised profits or losses above is solely for complying with the disclosure requirements stipulated
in the directive of Bursa Malaysia and should not be applied for any other purposes.
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Annual Report 2016
139
STATEMENT
BY DIRECTORS
PURSUANT TO SECTION 169 (15) OF THE COMPANIES ACT, 1965
We, YM TENGKU DATO’ SRI UZIR BIN TENGKU DATO’ UBAIDILLAH and DATO’ Ir. WILLIAM TAN CHEE KEONG, being two of
the directors of WZ Satu Berhad, do hereby state that in the opinion of the directors, the accompanying financial statements set out
on pages 52 to 137 are drawn up in accordance with Malaysian Financial Reporting Standards, International Financial Reporting
Standards and the requirements of Companies Act, 1965 in Malaysia so as to give a true and fair view of financial position of the
Group and of the Company as at 31 August 2016 and of their financial performance and cash flows for the financial year then ended.
The supplementary information set out on page 138 have been prepared in accordance with the 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 and presented based on the format as prescribed by
Bursa Malaysia Securities Berhad.
Signed on behalf of the Board of Directors in accordance with a resolution of the directors:-
YM TENGKU DATO’ SRI UZIR BIN TENGKU DATO’ UBAIDILLAH
Executive Chairman/Chief Executive Officer
DATO’ Ir. WILLIAM TAN CHEE KEONG
Senior Executive Director/Chief Operating Officer
Kuala Lumpur
Date: 16 November 2016
STATUTORY
DECLARATION
PURSUANT TO SECTION 169 (16) OF THE COMPANIES ACT, 1965
I, TAN TENG HENG, being the Executive Director cum Chief Financial Officer primarily responsible for the financial management of
WZ SATU BERHAD, do solemnly and sincerely declare that to the best of my knowledge and belief, the financial statements set out
on pages 52 to 137 and supplementary information set out on pages 138 are 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.
TAN TENG HENG
Subscribed and solemnly declared by the abovenamed at Kuala Lumpur in the Federal Territory on 16 November 2016
Before me,
Tan Kim Chooi
License No. W661
Commissioner for Oaths
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140
WZ SATU BERHAD (666098-X)
INDEPENDENT
AUDITORS’ REPORT
TO THE MEMBERS OF WZ SATU BERHAD (Incorporated in Malaysia)
Report on the Financial Statements
We have audited the financial statements of WZ SATU BERHAD, which comprise the statements of financial position as at 31 August
2016 of the Group and of the Company, and the statements of profit or loss and other 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 52 to 137.
Directors’ Responsibility for the Financial Statements
The directors of the Company are responsible for the preparation of financial statements so as to give a true and fair view in
accordance with the Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of
the Companies Act, 1965 in Malaysia. The directors are also responsible for such internal controls 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 judgement, 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 controls relevant to the Company’s
preparation of 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 Company’s internal controls. 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 give a true and fair view of the financial position of the Group and of the Company as at 31
August 2016 and of their financial performance and cash flows for the financial year then ended in accordance with the Malaysian
Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act, 1965 in
Malaysia.
Report on Other Legal and Regulatory Requirements
In accordance with the requirements of the Companies Act, 1965 in Malaysia, we also report the followings:(a) In our opinion, the accounting and other records and the registers required by the Companies Act, 1965 in Malaysia to be kept
by the Company and its subsidiaries have been properly kept in accordance with the provisions of the Companies Act, 1965 in
Malaysia.
(b) We are satisfied that the financial statements of the subsidiaries that have been consolidated with the Company’s financial
statements are in a form and content appropriate and proper for the purposes of the preparation of the financial statements of
the Group and we have received satisfactory information and explanations required by us for those purposes.
(c) The auditors’ reports on the financial statements of the subsidiaries did not contain any qualification or any adverse comment
made under Section 174(3) of the Companies Act, 1965 in Malaysia.
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Annual Report 2016
141
INDEPENDENT
AUDITORS’ REPORT
TO THE MEMBERS OF WZ SATU BERHAD (Incorporated in Malaysia)
Other Reporting Responsibilities
The supplementary information set out on page 138 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 the 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 contents of this report.
Baker Tilly Monteiro Heng
No. AF 0117
Chartered Accountants
Kuala Lumpur
Date: 16 November 2016
Ong Teng Yan
No. 3076/07/17 (J)
Chartered Accountant
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WZ SATU BERHAD (666098-X)
ANALYSIS OF
SHAREHOLDINGS
AS AT 1 DECEMBER 2016
Authorised Share Capital
Issued and Paid-Up Share Capital
Class of Shares
Voting Rights
: RM375,000,000.00
: RM174,413,697.50 comprising 348,827,395 Ordinary Shares of RM0.50 each
: Ordinary Shares of RM0.50 each
: One (1) vote per Ordinary Share
ANALYSIS OF SHAREHOLDINGS
Size of Shareholdings
No. of Shareholders
%
No. of Shares Held
%
33
104
693
485
127
5
2.28
7.19
47.89
33.52
8.77
0.35
850
40,070
3,051,290
15,447,601
190,157,456
140,130,128
0.00
0.01
0.88
4.43
54.51
40.17
1,447
100.00
348,827,395
100.00
1 - 99
100 - 1,000
1,001 - 10,000
10,001 - 100,000
100,001 - 17,441,368 (*)
17,441,369 and above (**)
TOTAL
Remarks: * Less than 5% of Issued Shares
** 5% and above of Issued Shares
SUBSTANTIAL SHAREHOLDERS
The substantial shareholders of WZ Satu Berhad and their respective shareholdings based on the Register of Substantial
Shareholders of WZ Satu Berhad as at 1 December 2016 are as follows:No. of Shares
Substantial Shareholders
YM Tengku Dato’ Sri Uzir Bin Tengku Dato’ Ubaidillah
Tan Ching Kee
Lembaga Tabung Haji
Ong Lee Veng @ Ong Chuan Heng
Note:
(1)
Through direct holding of spouse.
Direct
%
89,919,536
46,059,432
31,516,100
25,211,300
25.78
13.20
9.03
7.23
(1)
Indirect
%
4,202,390
-
1.20
-
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Annual Report 2016
143
ANALYSIS OF
SHAREHOLDINGS
AS AT 1 DECEMBER 2016 (Cont’d)
DIRECTORS’ SHAREHOLDINGS
The Directors’ Shareholdings based on the Register of Directors’ Shareholdings of WZ Satu Berhad as at 1 December 2016 are as
follows:-
Directors/ Alternate Directors
Direct Interest
No. of Shares Held
YM Tengku Dato’ Sri Uzir bin Tengku Dato’ Ubaidillah
Dato’ Ir. William Tan Chee Keong
Tan Teng Heng
Tan Ching Kee
Tan Chong Boon
Dato’ Ir. Mohd Ghazali bin Kamaruzaman
Dato’ Amin Rafie bin Othman
Datuk Idris bin Haji Hashim
Dato’ Syed Kamarulzaman Bin
Syed Zainol Khodki Shahabudin
Dato’ Yeong Kok Hee
Rosli bin Shafiei
Datuk Ahmad Nizam Bin Salleh
Ng Chong Tin
Choi Chee Ken
*
Insignificant
Note:
(1)
Through direct holding of spouse.
%
Indirect Interest
No. of Shares Held
%
89,919,536
13,950,000
6,600,000
46,059,432
6,148,520
2,400
-
25.78
4.00
1.89
13.20
1.76
*
-
265,800
(1)
4,202,390
(1)
124,200
-
0.08
1.20
0.04
-
85,200
2,961,040
13,950,000
0.02
0.85
4.00
-
-
(1)
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144
WZ SATU BERHAD (666098-X)
ANALYSIS OF
SHAREHOLDINGS
AS AT 1 DECEMBER 2016 (Cont’d)
THE 30 LARGEST SECURITIES ACCOUNT HOLDERS
(without aggregating securities from different securities accounts belonging to the same person)
NAME
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
TENGKU UZIR BIN TENGKU UBAIDILLAH
LEMBAGA TABUNG HAJI
MAYBANK NOMINEES (TEMPATAN) SDN BHD
PLEDGED SECURITIES ACCOUNT FOR TENGKU UZIR BIN TENGKU UBAIDILLAH
TAN CHING KEE
ONG LEE VENG @ ONG CHUAN HENG
PACIFIC TRUSTEES BERHAD
TAN CHING KEE
PACIFIC TRUSTEES BERHAD
WILLIAM TAN CHEE KEONG
PACIFIC TRUSTEES BERHAD
CHOI CHEE KEN
KENANGA NOMINEES (TEMPATAN) SDN BHD
PLEDGED SECURITIES ACCOUNT FOR TAN CHING KEE (029)
PERBADANAN NASIONAL BERHAD
KENANGA NOMINEES (TEMPATAN) SDN BHD
PLEDGED SECURITIES ACCOUNT FOR
TENGKU ABDULLAH IBNI SULTAN HJ AHMAD SHAH
KENANGA NOMINEES (TEMPATAN) SDN BHD
PLEDGED SECURITIES ACCOUNT FOR TENGKU UZIR BIN TENGKU UBAIDILLAH
ABB NOMINEE (TEMPATAN) SDN BHD
PLEDGED SECURITIES ACCOUNT FOR TENGKU UZIR BIN TENGKU UBAIDILLAH
KENANGA NOMINEES (TEMPATAN) SDN BHD
PLEDGED SECURITIES ACCOUNT FOR ONG LEE VENG @ ONG CHUAN HENG
PACIFIC TRUSTEES BERHAD
TEOH CHEE YOONG
TAN CHONG BOON
KENANGA NOMINEES (TEMPATAN) SDN BHD
PLEDGED SECURITIES ACCOUNT FOR TAN TENG HENG
MAJLIS AGAMA ISLAM SELANGOR
PACIFIC TRUSTEES BERHAD
CHONG KIM THAM
NG LAY HOON
ONG WEE KUAN
NG CHONG TIN
WONG TUI WAN
KAF NOMINEES (TEMPATAN) SDN.BHD.
PLEDGED SECURITIES ACCOUNT FOR
TENGKU ABDULLAH IBNI SULTAN HJ AHMAD SHAH (TE1113)
MAYBANK NOMINEES (TEMPATAN) SDN BHD
ETIQA INSURANCE BERHAD (GROWTH FUND)
PACIFIC TRUSTEES BERHAD
MOHD ARIS BIN MOHD ARIF
TAN AI CHOO
CHUA CHIN HEAN
ONG WEE KUAN
HLB NOMINEES (TEMPATAN) SDN BHD
PLEDGED SECURITIES ACCOUNT FOR TAN TENG HENG
TOTAL
NO OF HOLDINGS
PERCENTAGE
41,849,676
31,516,100
30,111,620
12.00
9.03
8.63
18,459,432
18,193,300
14,400,000
5.29
5.22
4.13
13,950,000
4.00
13,950,000
4.00
13,200,000
3.78
12,000,000
11,112,920
3.44
3.19
10,758,240
3.08
7,200,000
2.06
7,018,000
2.01
6,549,411
1.88
6,148,520
5,000,000
1.76
1.43
4,800,000
4,197,576
1.38
1.20
4,172,390
3,250,200
2,961,040
2,070,600
2,001,600
1.20
0.93
0.85
0.59
0.57
2,000,000
0.57
1,958,894
0.56
1,957,320
1,815,860
1,619,760
1,600,000
0.56
0.52
0.46
0.46
295,822,459
84.78
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Annual Report 2016
ANALYSIS OF
WARRANT HOLDINGS
AS AT 1 DECEMBER 2016
Number of Outstanding Warrants Issued
: 98,627,554
ANALYSIS OF WARRANT HOLDINGS
Size of Warrant Holdings
No. of Warrant Holders
%
No. of Warrants Held
%
1 - 99
100 - 1,000
1,001 - 10,000
10,001 - 100,000
100,001 - 4,931,376 (*)
4,931,377 and above (**)
40
140
296
235
62
5
5.14
17.99
38.05
30.21
7.97
0.64
1,962
88,566
1,265,671
7,870,742
37,990,146
51,410,467
0.00
0.09
1.28
7.98
38.52
52.13
TOTAL
778
100.00
98,627,554
100.00
Remarks: * Less than 5% of Issued Warrants
** 5% and above of Issued Warrants
DIRECTORS’ WARRANT HOLDINGS
The Directors’ Warrant Holdings based on the Register of Directors’ Shareholdings of WZ Satu Berhad as at 1 December 2016 are
as follows:-
Directors/ Alternate Directors
Direct Interest
No. of Warrants Held
YM Tengku Dato’ Sri Uzir bin Tengku Dato’ Ubaidillah
Dato’ Ir. William Tan Chee Keong
Tan Teng Heng
Tan Ching Kee
Tan Chong Boon
Dato’ Ir. Mohd Ghazali bin Kamaruzaman
Dato’ Amin Rafie bin Othman
Datuk Idris bin Haji Hashim
Dato’ Syed Kamarulzaman Bin
Syed Zainol Khodki Shahabudin
Dato’ Yeong Kok Hee
Rosli bin Shafiei
Datuk Ahmad Nizam Bin Salleh
Ng Chong Tin
Choi Chee Ken
*
Insignificant
Note:
(1)
Through direct holding of spouse.
%
Indirect Interest
No. of Warrants Held
%
36,460,467
6,975,000
2,700,000
9,669,716
3,412,320
1,200
-
36.97
7.07
2.74
9.80
3.46
*
-
60,900
(1)
2,101,195
(1)
62,100
-
0.06
2.13
0.06
-
303,000
1,660,520
6,975,000
0.31
1.68
7.07
-
-
(1)
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146
WZ SATU BERHAD (666098-X)
ANALYSIS OF
WARRANT HOLDINGS
AS AT 1 DECEMBER 2016 (Cont’d)
THE 30 LARGEST SECURITIES ACCOUNT HOLDERS
(without aggregating securities from different securities accounts belonging to the same person)
NAME
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
TENGKU UZIR BIN TENGKU UBAIDILLAH
MAYBANK NOMINEES (TEMPATAN) SDN BHD
PLEDGED SECURITIES ACCOUNT FOR TENGKU UZIR BIN TENGKU UBAIDILLAH
PACIFIC TRUSTEES BERHAD
WILLIAM TAN CHEE KEONG
PACIFIC TRUSTEES BERHAD
CHOI CHEE KEN
KENANGA NOMINEES (TEMPATAN) SDN BHD
PLEDGED SECURITIES ACCOUNT FOR TAN CHING KEE (029)
ABB NOMINEE (TEMPATAN) SDN BHD
PLEDGED SECURITIES ACCOUNT FOR TENGKU UZIR BIN TENGKU UBAIDILLAH
TAN CHONG BOON
TAN CHING KEE
KENANGA NOMINEES (TEMPATAN) SDN BHD
PLEDGED SECURITIES ACCOUNT FOR TAN TENG HENG
NG LAY HOON
KENANGA NOMINEES (TEMPATAN) SDN BHD
PLEDGED SECURITIES ACCOUNT FOR TENGKU UZIR BIN TENGKU UBAIDILLAH
NG CHONG TIN
CHUA CHIN HEAN
WONG TUI WAN
KAF NOMINEES (TEMPATAN) SDN.BHD.
PLEDGED SECURITIES ACCOUNT FOR
TENGKU ABDULLAH IBNI SULTAN HJ AHMAD SHAH (TE1113)
MOHAMED TARMIDZI BIN MAT AKHIR
TAN AI CHOO
RHB CAPITAL NOMINEES (TEMPATAN) SDN BHD
PLEDGED SECURITIES ACCOUNT FOR HAMZAH BIN MOHD SALLEH (BSL)
CHUA SHIA-TSAN
TAN PANG HONG
PACIFIC TRUSTEES BERHAD
HO KEK YEE
ALLIANCEGROUP NOMINEES (TEMPATAN) SDN BHD
PLEDGEC SECURITIES ACCOUNT FOR NG CHEE KEONG (8122706)
HOW CHEE SENG
TAN AI CHOO
YEW HIN CHAI
LIM LEONG HOCK
ALLIANCEGROUP NOMINEES (TEMPATAN) SDN BHD
PLEDGED SECURITIES ACCOUNT FOR NG CHEE KEONG
PHANG CHIN KHIONG
CHONG TZE LING
CHONG POH SAM
TOTAL
NO OF HOLDINGS
PERCENTAGE
20,601,787
10,258,680
20.89
10.40
6,975,000
7.07
6,975,000
7.07
6,600,000
6.69
3,600,000
3.65
3,412,320
3,069,716
2,700,000
3.46
3.11
2.74
2,086,195
2,000,000
2.12
2.03
1,660,520
1,424,840
1,035,300
1,000,800
1.68
1.44
1.05
1.01
979,500
978,660
900,000
0.99
0.99
0.91
882,750
852,940
750,000
0.90
0.86
0.76
560,000
0.57
523,140
401,495
364,320
360,060
360,000
0.53
0.41
0.37
0.37
0.37
359,340
316,600
312,000
0.36
0.32
0.32
82,300,963
83.44
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Annual Report 2016
147
LIST OF
PROPERTIES
AS AT 31 AUGUST 2016
Location
Tenure
Land area/
Built-up
Area (sq ft)
Description
/Existing Use
Net
Book Value
(RM'000)
Age of
Building
Date of
Acquisition
/Revaluation
Lot 1850 Jalan KPB 10
Kawasan Perindustrian Balakong
43300 Seri Kembangan
Selangor Darul Ehsan
Freehold
102,154/
79,759
Manufacturing Plant
cum Warehouse
11,273
16 years
2012
Lot 1882 Jalan KPB 9
Kawasan Perindustrian Balakong
43300 Seri Kembangan
Selangor Darul Ehsan
Leasehold
(Expires
17.8.2065)
81,646/
40,860
Manufacturing Plant
cum Warehouse
7,074
9 years
2012
Lot 1890 Jalan KPB 9
Kawasan Perindustrian Balakong
43300 Seri Kembangan
Selangor Darul Ehsan
Freehold
78,642/
59,992
Corporate office
cum Warehouse
9,873
12 years
2012
B2-1 Block B
Jalan Damai Perdana 2/8
Bandar Damai Perdana
56100 Kuala Lumpur
Freehold
650
Apartment /
Staff Quarters
67
13 years
2012
B2-2 Block B
Jalan Damai Perdana 2/8
Bandar Damai Perdana
56100 Kuala Lumpur
Freehold
650
Apartment /
Staff Quarters
67
13 years
2012
Leasehold
(Expires
17.4.2093)
50,242/
26,648
Manufacturing Plant
cum Office
5,145
9 years
2011
No. 35, Jalan P4/6, Seksyen 4
Bandar Teknologi Kajang
43500 Semenyih
Selangor Darul Ehsan
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148
WZ SATU BERHAD (666098-X)
NOTICE OF ANNUAL
GENERAL MEETING
NOTICE IS HEREBY GIVEN that the Twelfth Annual General Meeting (“12th AGM”) of the Company will be held at Kristal Ballroom
1, Level 1, West Wing, Hilton Petaling Jaya, No. 2 Jalan Barat, 46200 Petaling Jaya, Selangor Darul Ehsan, Tuesday, 24 January
2017 at 10:00 a.m. for the following purposes:-
AGENDA
1.
To receive the Audited Financial Statements for the financial year ended 31 August 2016 together with
the Reports of the Directors and the Auditors thereon.
2.
To declare a Single Tier final dividend of 2 sen per ordinary share of RM0.50 each and a Single Tier special
dividend of 1 sen per ordinary share of RM0.50 each for the financial year ended 31 August 2016.
(Resolution 1)
3.
To approve the payment of Directors’ fees for the financial year ended 31 August 2016.
(Resolution 2)
4.
To re-elect the following Directors who are retiring in accordance with Article 84 of the Company’s Articles
of Association and being eligible, have offered themselves for re-election:(a) Tengku Dato’ Sri Uzir Bin Tengku Dato’ Ubaidillah;
(b) Mr. Tan Teng Heng;
(c) Mr. Tan Ching Kee; and
(d) Dato’ Ir. Mohd Ghazali Bin Kamaruzaman.
(Resolution 3)
(Resolution 4)
(Resolution 5)
(Resolution 6)
5.
To re-elect Datuk Ahmad Nizam Bin Salleh who is retiring in accordance with Article 91 of the Company’s
Articles of Association and being eligible, has offered himself for re-election.
(Resolution 7)
6.
To re-appoint Messrs. Baker Tilly Monteiro Heng as Auditors of the Company until the conclusion of the
next Annual General Meeting and to authorise the Directors to fix their remuneration.
(Resolution 8)
As Special Business
To consider and if thought fit, with or without any modification, to pass the following Ordinary Resolutions:-
7.
ORDINARY RESOLUTION NO. 1
-
AUTHORITY TO ISSUE SHARES PURSUANT TO SECTION 132D OF THE COMPANIES ACT, 1965
“That subject to Section 132D of the Companies Act, 1965 and approvals of the relevant
governmental/regulatory authorities, the Directors be and are hereby empowered to issue and allot
shares in the Company, at any time to such persons and upon such terms and conditions and for
such purposes as the Directors may, in their absolute discretion, deem fit, provided that the aggregate
number of shares to be issued does not exceed ten per centum (10%) of the issued and paid-up
share capital of the Company for the time being and the Directors be and are also empowered to
obtain the approval for the listing of and quotation for the additional shares so issued on Bursa
Malaysia Securities Berhad.
And that such authority shall commence immediately upon the passing of this Resolution and continue
to be in force until conclusion of the next Annual General Meeting of the Company.”
(Resolution 9)
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Annual Report 2016
149
NOTICE OF ANNUAL
GENERAL MEETING
(CONT’D)
ORDINARY RESOLUTION NO. 2
-
PROPOSED RENEWAL OF AUTHORITY FOR THE COMPANY TO PURCHASE UP TO 10% OF ITS
OWN SHARES IN THE ISSUED AND PAID-UP SHARE CAPITAL OF THE COMPANY (“PROPOSED
RENEWAL OF SHARE BUY-BACK AUTHORITY)
(Resolution 10)
“That subject always to the Companies Act, 1965, the provisions of the Memorandum and Articles of
Association of the Company, the Listing Requirements of Bursa Malaysia Securities Berhad (“Bursa
Securities”) and all other applicable laws, guidelines, rules and regulations, if applicable, the
Company be and is hereby authorised to purchase such amount of ordinary shares of RM0.50 each
in the Company as may be determined by the Directors of the Company from time to time through
Bursa Securities as the Directors may deem fit and expedient in the interest of the Company, provided
that:(i)
the aggregate number of shares purchased does not exceed 10% of the total issued and paidup share capital of the Company as quoted on Bursa Securities as at the point of purchase;
(ii) the maximum funds to be allocated by the Company for the purpose of purchasing its own shares
shall not exceed the total retained profits and share premium account of the Company based on
the latest audited financial statements and/or the latest Management account of the Company
(where applicable) available, upon such terms and conditions as set out in the Statement to
Shareholders dated 28 December 2016; and
(iii) the Directors of the Company may decide either to retain the shares purchased as treasury shares
or cancel the shares or retain part of the shares so purchased as treasury shares and cancel the
remainder or to resell the shares or distribute the shares as dividends.
That authority conferred by this Resolution shall commence immediately upon the passing of this
Resolution and will only continue to be in force until:
(i)
the conclusion of the next Annual General Meeting of the Company, unless by ordinary resolution
passed at that meeting, the authority is renewed, either unconditionally or subject to conditions;
or
(ii) the expiration of the period within which the next Annual General Meeting after that date is
required by law to be held; or
(iii) revoked or varied by resolution passed by the shareholders of the Company in general meeting,
whichever occurs first.
And that authority be and is hereby given to the Directors of the Company to act and take all such
steps and do all things as are necessary or expedient to implement, finalise and give full effect to the
aforesaid purchase."
ORDINARY RESOLUTION NO. 3
-
RETENTION OF DATO’ AMIN RAFIE BIN OTHMAN AS AN INDEPENDENT NON-EXECUTIVE
DIRECTOR OF THE COMPANY
“That Dato’ Amin Rafie Bin Othman be and is hereby retained as an Independent Non-Executive
Director of the Company and to hold office until the conclusion of the next Annual General Meeting
pursuant to the Malaysian Code on Corporate Governance 2012.”
(Resolution 11)
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150
WZ SATU BERHAD (666098-X)
NOTICE OF ANNUAL
GENERAL MEETING
(CONT’D)
ORDINARY RESOLUTION NO. 4
-
RETENTION OF DATO’ YEONG KOK HEE AS AN INDEPENDENT NON-EXECUTIVE DIRECTOR
OF THE COMPANY
(Resolution 12)
“That Dato’ Yeong Kok Hee be and is hereby retained as an Independent Non-Executive Director of
the Company and to hold office until the conclusion of the next Annual General Meeting pursuant to
the Malaysian Code on Corporate Governance 2012.”
SPECIAL RESOLUTION
(Resolution 13)
-
PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION OF THE COMPANY
“That the Proposed Amendments to the Company’s Articles of Association as set out in Appendix I
which is circulated to the shareholders of the Company together with the Annual Report in respect of
the financial year ended 31 August 2016 be and are hereby approved and adopted and that the
Directors and Secretaries of the Company be and are hereby authorised to take all steps as are
necessary and expedient in order to implement, finalise and give full effect to the Proposed
Amendments to the Company’s Articles of Association.”
8.
To transact any other ordinary business of which due notice shall have been given.
NOTICE OF BOOK CLOSURE
NOTICE IS ALSO HEREBY GIVEN that a Single Tier final dividend of 2 sen per ordinary share of RM0.50
each and a Single Tier special dividend of 1 sen per ordinary share of RM0.50 each for the financial year
ended 31 August 2016 will be payable on 1 March 2017 to depositors whose names appear in the Record of
Depositors at the close of business on 3 February 2017 if approved by the members at the 12th AGM.
A Depositor shall qualify for entitlement only in respect of:(a) Shares transferred to the Depositor’s Securities Account before 4.00 p.m. on 3 February 2017 in respect
of ordinary transfers; and
(b) Shares bought on the Bursa Malaysia Securities Berhad on a cum entitlement basis according to the Rules
of the Bursa Malaysia Securities Berhad.
By Order of the Board
CHUA SIEW CHUAN (MAICSA 0777689)
PAN SENG WEE (MAICSA 7034299)
Company Secretaries
Kuala Lumpur
Dated : 28 December 2016
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Annual Report 2016
151
NOTICE OF ANNUAL
GENERAL MEETING
(CONT’D)
Explanatory Notes to Special Business: 1.
Authority to Issue Shares Pursuant to Section 132D of the Companies Act, 1965
The Company wishes to renew the mandate on the authority to issue shares pursuant to Section 132D of the Companies Act,
1965 at the 12th AGM of the Company (hereinafter referred to as the “General Mandate”).
The Company had been granted a general mandate by its shareholders at the 11th AGM of the Company held on 28 January
2016 (hereinafter referred to as the “Previous Mandate”).
The Previous Mandate granted by the shareholders had not been utilised and hence no proceed was raised therefrom.
The purpose to seek the General Mandate is to enable the Directors of the Company to issue and allot shares at any time to
such persons in their absolute discretion without convening a general meeting as it would be both time-consuming and costly
to organise a general meeting. This authority unless revoked or varied by the Company in a general meeting, will expire at the
next Annual General Meeting.
The Company is actively exploring opportunities to broaden its earnings potential. The proceeds raised from the General Mandate
will provide flexibility to the Company for any possible fund-raising activities, including but not limited to further placement of
shares for purpose of funding future investment project(s), working capital and/or acquisitions.
2.
Proposed Renewal of Share Buy-back Authority
The proposed Ordinary Resolution 10, if passed, will empower the Directors to buy-back and/or hold up to a maximum of 10%
of the Company’s issued and paid-up share capital at any point of time, by utilising the funds allocated which shall not exceed
the total retained profits and share premium of the Company. This authority, unless revoked or varied by the Company in general
meeting, will expire at the conclusion of the next Annual General Meeting of the Company, or the expiration of period within
which the next Annual General Meeting is required by law to be held, whichever is earlier.
Please refer to the Statement to Shareholders dated 28 December 2016 for more information.
3.
Approval to Continue in Office as Independent Non-Executive Director
(a) Dato’ Amin Rafie Bin Othman
Dato’ Amin Rafie Bin Othman was appointed as Independent Non-Executive Director of the Company on 26 October 2007
and his tenure as an Independent Non-Executive Director of the Company had exceeded a cumulative term of nine (9)
years. In accordance with the MCCG 2012, the Board of Directors of the Company, after having assessed the independence
of Dato’ Amin Rafie Bin Othman, regarded him to be independent, based amongst others, the following justifications and
recommends that Dato’ Amin Rafie Bin Othman be retained as Independent Non-Executive Director of the Company:(i)
He has met the independence guidelines as set out in Chapter 1 of the Bursa Malaysia Securities Berhad Main Market
Listing Requirements;
(ii) He does not have any conflict of interest with the Company and has not been entering/is not expected to enter into
contract(s) especially material contract(s) with the Company and/or its subsidiary companies; and
(iii) The Board of Directors is of the opinion that Dato’ Amin Rafie Bin Othman is an important Independent Non-Executive
Director of the Board in view of his incumbent experience in investment/asset management, familiarity with the Group’s
activities and corporate history. He has been providing invaluable contributions to the Board in his role as an
Independent Non-Executive Director.
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WZ SATU BERHAD (666098-X)
NOTICE OF ANNUAL
GENERAL MEETING
(CONT’D)
(b) Dato’ Yeong Kok Hee
Dato’ Yeong Kok Hee was appointed as Independent Non-Executive Director of the Company on 26 October 2007 and his
tenure as an Independent Non-Executive Director of the Company had exceeded a cumulative term of nine (9) years. In
accordance with the MCCG 2012, the Board of Directors of the Company, after having assessed the independence of Dato’
Yeong Kok Hee, regarded him to be independent, based amongst others, the following justifications and recommends that
Dato’ Yeong Kok Hee be retained as Independent Non-Executive Director of the Company:(i)
He has met the independence guidelines as set out in Chapter 1 of the Bursa Malaysia Securities Berhad Main Market
Listing Requirements;
(ii) He does not have any conflict of interest with the Company and has not been entering/is not expected to enter into
contract(s) especially material contract(s) with the Company and/or its subsidiary companies; and
(iii) The Board of Directors is of the opinion that Dato’ Yeong Kok Hee is an important Independent Non-Executive Director
of the Board in view of his strategic relationships and alliances with the senior management of the financial and
government sectors, familiarity with the Group’s activities and corporate history. He has been providing invaluable
contributions to the Board in his role as an Independent Non-Executive Director.
4.
Proposed Amendments to the Articles of Association of the Company (hereinafter referred to as “the Proposed
Amendments”)
The Proposed Amendments are to streamline the Company’s Articles of Association to be aligned with the amendments to the
Bursa Securities Main Market Listing Requirements, and to incorporate the necessary amendments to ensure clarity and
consistency with the relevant regulatory provisions.
Please refer to Appendix I which is circulated to the shareholders of the Company together with the Annual Report in respect of
the financial year ended 31 August 2016 for more information.
Notes :1.
In respect of deposited securities, only members/shareholders whose names appear in the Record of Depositors on 17 January
2017 shall be eligible to attend the Meeting.
2.
A member of the Company entitled to attend and vote at the Meeting is entitled to appoint up to two (2) proxies to attend and
vote in his stead. There shall be no restriction as to the qualification of the proxy. A proxy appointed to attend and vote at the
Meeting shall have the same rights as the member to speak at the Meeting.
3.
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. Where a member appoints two (2) proxies to attend and vote at the Meeting, he shall specify
the proportion of his shareholdings to be represented by each proxy, failing which, the appointment shall be invalid.
4.
The instrument appointing a proxy shall be in writing under the hand of the appointor or of his attorney duly authorised in writing
or, if the appointor is a corporation, either under its common seal or under the hand of an officer or attorney duly authorised.
5.
Where a member of the Company is an exempt authorised nominee as defined under the Securities Industry (Central
Depositories) Act 1991 (“SICDA”) which holds ordinary shares in the Company for multiple beneficial owners in one securities
account (“omnibus account”), there is no limit to the number of proxies which the exempt authorised nominee may appoint in
respect of each omnibus account it holds. Where a member is an authorised nominee as defined under SICDA, it may appoint
at least one (1) proxy but subject to a maximum of two (2) in respect of each securities account it holds with ordinary shares of
the Company standing to the credit of the said securities account.
6.
The instrument appointing a proxy and the power of attorney or other authority, if any, under which it is signed or a notary certified
copy of that power or authority, shall be deposited at the Registered Office of the Company at Level 7, Menara Milenium, Jalan
Damanlela, Pusat Bandar Damansara, Damansara Heights, 50490 Kuala Lumpur not less than forty-eight (48) hours before the
time appointed for holding the Meeting or any adjournment thereof.
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Annual Report 2016
153
APPENDIX I
Proposed Amendments to the Articles of Association
Article
No.
Existing Articles
Proposed Amendments
7
If at any time the share capital is divided into different
classes of shares, the rights attached to any class (unless
otherwise provided by the terms of issue of the shares of
that class) may, whether or not the Company is being
wound up, be varied with the consent in writing of the
holders of three-fourths of the issued shares of that class,
or with the sanction of a special resolution passed at a
separate general meeting of the holders of the shares of
the class. To every such separate general meeting, the
provisions of these Articles relating to general meetings
shall mutatis mutandis apply, but so that the necessary
quorum shall be two (2) persons at least holding or
representing by proxy, one-third of the issued that any
holder of shares of the class present in person or by proxy
may demand a poll. To every such special resolution, the
provisions of Section 152 of the Act shall with such
adaptations as are necessary, apply.
If at any time the share capital is divided into different
classes of shares, the rights attached to any class (unless
otherwise provided by the terms of issue of the shares of
that class) may, whether or not the Company is being
wound up, be varied with the consent in writing of the
holders of three-fourths of the issued shares of that class,
or with the sanction of a special resolution passed at a
separate general meeting of the holders of the shares of
the class. To every such separate general meeting, the
provisions of these Articles relating to general meetings
shall mutatis mutandis apply, but so that the necessary
quorum shall be two (2) persons at least holding or
representing by proxy, one-third of the issued shares of
the class and that any holder of shares of the class
present in person or by proxy shall, on a may demand a
poll, have one (1) vote in respect of every share of the
class held. To every such special resolution, the
provisions of Section 152 of the Act shall with such
adaptations as are necessary, apply.
63
In every notice calling a meeting of the Company there
shall appear with reasonable prominence, a statement
that a Member entitled to attend and vote may appoint up
to two (2) proxies and vote in his stead, and that a proxy
need not also be a Member. Where a Member appoints
two (2) proxies, he shall specify the proportion of his
holdings to be represented by each proxy in a poll and
the proxy who shall be entitled to vote on a show of hands,
failing which the appointment shall be invalid.
In every notice calling a meeting of the Company there
shall appear with reasonable prominence, a statement
that a Member entitled to attend and vote may appoint up
to two (2) proxies and vote in his stead, and that a proxy
need not also be a Member. Where a Member appoints
two (2) proxies, he shall specify the proportion of his
holdings to be represented by each proxy in a poll and
the proxy who shall be entitled to vote on a show of hands,
failing which the appointment shall be invalid.
69
At any general meeting a resolution put to the vote of the
meeting shall be decided on a show of hands where a
holder of ordinary shares or preference shares who is
personally present and entitled to vote shall be entitled to
one (1) vote, unless a poll is (before or on the declaration
of the result of the show of hands) demanded:
At any general meeting a resolution put to the vote of the
meeting shall be decided on a show of hands where a
holder of ordinary shares or preference shares who is
personally present and entitled to vote shall be entitled to
one (1) vote, unless a poll is (before or on the declaration
of the result of the show of hands) demanded:
(a) by the chairman of the Meeting;
(b) by any Member or Members present in person or by
proxy and representing not less than one-tenth of the
total voting rights of all Members having the right to
vote at the meeting; or
(c) by a Member or Members holding shares in the
Company conferring a right to vote at the meeting
being shares on which an aggregate sum has been
paid up equal to not less than one-tenth of the total
sum paid on all the shares conferring that right.
(d) by the chairman of the Meeting;
(e) by any Member or Members present in person or by
proxy and representing not less than one-tenth of the
total voting rights of all Members having the right to
vote at the meeting; or
(f) by a Member or Members holding shares in the
Company conferring a right to vote at the meeting
being shares on which an aggregate sum has been
paid up equal to not less than one-tenth of the total
sum paid on all the shares conferring that right.
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154
WZ SATU BERHAD (666098-X)
APPENDIX I
(CONT’D)
Article
No.
Existing Articles
Proposed Amendments
Unless a poll is duly demanded in accordance with the
foregoing provisions, a declaration by the chairman that
a resolution has on a show of hands been carried or
carried unanimously, or by a particular majority, or lost,
and an entry to that effect in the book containing the
minutes of the proceedings of the Company, shall be
conclusive evidence of the fact without proof of the
number of proportion of the votes recorded in favour of or
against the resolution. A proxy shall be entitled to vote on
a show of hands on any resolution at any General Meeting.
The demand for a poll may be withdrawn.
Unless a poll is duly demanded in accordance with the
foregoing provisions, a declaration by the chairman that
a resolution has on a show of hands been carried or
carried unanimously, or by a particular majority, or lost,
and an entry to that effect in the book containing the
minutes of the proceedings of the Company, shall be
conclusive evidence of the fact without proof of the
number of proportion of the votes recorded in favour of or
against the resolution. A proxy shall be entitled to vote on
a show of hands on any resolution at any General Meeting.
The demand for a poll may be withdrawn.
At any general meeting, a resolution put to the vote of
the meeting shall be decided by poll. The Company
must appoint at least 1 scrutineer to validate the votes
cast at the general meeting. Such scrutineer must not
be an officer of the Company or its related corporation,
and must be independent of the person undertaking
the polling process. If such scrutineer is interested in
a resolution to be passed at the general meeting, the
scrutineer must refrain from acting as the scrutineer
for that resolution. For this purpose, “officer” and
“related corporation” shall have the meaning assigned
to them in Sections 4 and 6 of the Act respectively. No
poll shall be demanded on the election of a Chairman
of a meeting or on any question of adjournment.
70
If a poll is duly demanded it shall be taken in such manner
and either at once or after an interval or adjournment or
otherwise as the Chairman directs, and the result of the
poll shall be the resolution of the meeting at which the poll
was demanded, but a poll demanded on the election of
Chairman or on a question of adjournment shall be taken
forthwith. The demand for a poll shall not prevent the
continuance of a meeting for the transaction of any
business other than the question on which the poll has
been demanded. The Chairman of the meeting may (and
if so directed by the meeting shall) appoint scrutineers
and may in addition to the powers of adjourning meetings
contained in Article 67 adjourn the meeting to some place
and time fixed for the purpose of declaring the result of
the poll.
If a poll is duly demanded it shall be taken in such manner
and either at once or after an interval or adjournment or
otherwise as the Chairman directs, and the result of the
poll shall be the resolution of the meeting at which the poll
was demanded, but a poll demanded on the election of
Chairman or on a question of adjournment shall be taken
forthwith. The demand for a poll shall not prevent the
continuance of a meeting for the transaction of any
business other than the question on which the poll has
been demanded. The Chairman of the meeting may (and
if so directed by the meeting shall) appoint scrutineers
and may in addition to the powers of adjourning meetings
contained in Article 67 adjourn the meeting to some place
and time fixed for the purpose of declaring the result of
the poll.
The poll shall be taken in such manner and either at
once or after an interval or adjournment or otherwise
as the Chairman of the meeting directs, and the result
of the poll shall be the resolution of the meeting.
71
In the case of an equality of votes, whether on a show of
hands or on a poll, the chairman of the meeting at which
the show of hands takes place or at which the poll is
demanded shall be entitled to a second or casting votes.
In the case of an equality of votes, whether on a show of
hands or on a poll, the chairman of the meeting at which
the show of hands takes place or at which the poll is
demanded shall be entitled to a second or casting vote.
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Annual Report 2016
155
APPENDIX I
(CONT’D)
Article
No.
Existing Articles
Proposed Amendments
72
Subject to any rights or restrictions for the time being
attached to any class of shares at meetings of Members
or classes of Members, each Member entitled to vote may
vote in person or by proxy or by attorney or by duly
authorised representative. On a resolution to be decided
by show of hands, every person who is a Member or proxy
or attorney or representative of a Member and each
Member who is a holder of a preference share or proxy
who has a right to vote shall have one vote. However, only
one vote by show of hand is counted if a member is
represented by more than one proxy. On a poll, every
Member present in person or by proxy or attorney or
representative and each Member who is a holder of a
preference share or proxy who has a right to vote shall
have one vote for each share he holds. There shall be no
restriction as to the qualification of the proxy. A proxy
appointed to attend and vote at a meeting of a Company
shall have the same rights as the member to speak at the
meeting. A proxy shall be entitled to vote on a show of
hands on any question at any general meeting.
Subject to any rights or restrictions for the time being
attached to any class of shares at meetings of Members
or classes of Members, each Member entitled to vote may
vote in person or by proxy or by attorney or by duly
authorised representative. On a resolution to be decided
by show of hands, every person who is a Member or proxy
or attorney or representative of a Member and each
Member who is a holder of a preference share or proxy
who has a right to vote shall have one vote. However, only
one vote by show of hand is counted if a member is
represented by more than one proxy. On a poll, every
Member present in person or by proxy or attorney or
representative and each Member who is a holder of a
preference share or proxy who has a right to vote shall
have one vote for each share he holds. There shall be no
restriction as to the qualification of the proxy. A proxy
appointed to attend and vote at a meeting of a Company
shall have the same rights as the member to speak at the
meeting. A proxy shall be entitled to vote on a show of
hands on any question at any general meeting.
74
A Member who is of unsound mind or whose person or
estate is liable to be dealt with in any way under the law
relating to mental disorder may vote, whether in a show of
hands or on a poll, by his committee or by such other
person as properly has the management of his estate, and
any such committee or other person may vote by proxy or
attorney and any person entitled under the transmission
Article hereof to transfer any shares, may vote at any
general meeting in respect thereof in the same manner as
if he was the registered holder of such shares provided
that forty-eight (48) hours at least before the time of
holding the meeting or adjourned meeting, as the case
may be at which he proposes to vote, he shall satisfy the
Directors of his right to transfer such shares unless the
Directors shall have previously admitted his right to vote
at such meeting in respect thereof.
A Member who is of unsound mind or whose person or
estate is liable to be dealt with in any way under the law
relating to mental disorder may vote, whether in a show of
hands or on a poll, by his committee or by such other
person as properly has the management of his estate, and
any such committee or other person may vote by proxy or
attorney and any person entitled under the transmission
Article hereof to transfer any shares, may vote at any
general meeting in respect thereof in the same manner as
if he was the registered holder of such shares provided
that forty-eight (48) hours at least before the time of
holding the meeting or adjourned meeting, as the case
may be at which he proposes to vote, he shall satisfy the
Directors of his right to transfer such shares unless the
Directors shall have previously admitted his right to vote
at such meeting in respect thereof.
75
No person shall be entitled to be present or to vote on any
resolution either as a Member or otherwise as a proxy or
attorney or representative at any general meeting or
demand a poll or be reckoned in the quorum in respect
of any shares upon which calls are due and unpaid.
No person shall be entitled to be present or to vote on any
resolution either as a Member or otherwise as a proxy or
attorney or representative at any general meeting or
demand a poll or be reckoned in the quorum in respect
of any shares upon which calls are due and unpaid.
77
The instrument appointing a proxy shall be in writing under
the hand of the appointor or of his attorney duly authorised
in writing or, if the appointor is a corporation, either under
the corporation’s common seal or under the hand of an
officer or attorney duly authorised. The Directors may but
shall not be bound to require evidence of the authority of
any such attorney or officer. A proxy may but need not be
a Member of the Company and the provisions of Section
The instrument appointing a proxy shall be in writing under
the hand of the appointor or of his attorney duly authorised
in writing or, if the appointor is a corporation, either under
the corporation’s common seal or under the hand of an
officer or attorney duly authorised. The Directors may but
shall not be bound to require evidence of the authority of
any such attorney or officer. A proxy may but need not be
a Member of the Company and the provisions of Section
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156
WZ SATU BERHAD (666098-X)
APPENDIX I
(CONT’D)
Article
No.
Existing Articles
Proposed Amendments
149(1)(b) of the Act shall not apply to the Company. The
instrument appointing a proxy shall be deemed to confer
authority to demand or join in demanding a poll.
149(1)(b) of the Act shall not apply to the Company. The
instrument appointing a proxy shall be deemed to confer
authority to demand or join in demanding a poll.
79
The instrument appointing a proxy and the power of
attorney or other authority, if any, under which it is signed
or a notary certified copy of that power or authority, shall
be deposited at the Office or at such other place within
Malaysia as is specified for that purpose in the notice
convening the meeting, not less than forty eight (48) hours
before the time appointed for holding the meeting or
adjourned meeting, as the case may be, which the person
named in the instrument proposes to vote, or in the case
of a poll, not less than twenty-four (24) hours before the
time appointed for the taking of the poll, and in default,
the instrument of proxy shall not be treated as valid.
The instrument appointing a proxy and the power of
attorney or other authority, if any, under which it is signed
or a notary certified copy of that power or authority, shall
be deposited at the Office or at such other place within
Malaysia as is specified for that purpose in the notice
convening the meeting, not less than forty eight (48) hours
before the time appointed for holding the meeting or
adjourned meeting, as the case may be, which the person
named in the instrument proposes to vote or in the case
of a poll, not less than twenty-four (24) hours before the
time appointed for the taking of the poll, and in default,
the instrument of proxy shall not be treated as valid.
139
The Directors shall from time to time in accordance with
Section 169 of the Act cause to be prepared and laid
before the Company in general meeting, such profit and
loss accounts, balance sheets and reports as are referred
to in the Section. The interval between the close of a
financial year of the Company and the issue of the annual
audited accounts, Directors' and auditors' reports relating
to it shall not exceed four (4) months. A copy of each such
document shall not less than twenty one (21) days before
the date of the meeting (or such shorter period as may be
agreed in any year of the receipt of notice of the meeting
pursuant to Article 156), be sent to every Member of, and
to every holder of debentures of the Company under the
provisions of the Act or of these Articles. The requisite
number of copies of each such document as may be
required by the Exchange upon which the Company's
shares may be listed, shall at the same time be likewise
sent to the Exchange provided that this Article shall not
require a copy of these documents to be sent to any
person of whose address the Company is not aware but
any Member to whom a copy of these documents has not
been sent shall be entitled to receive a copy, free of
charge on application at the Office.
The Directors shall from time to time in accordance with
Section 169 of the Act cause to be prepared and laid
before the Company in general meeting, such profit and
loss accounts, balance sheets and reports as are referred
to in the Section. The interval between the close of a
financial year of the Company and the issue of the annual
audited accounts, Directors' and auditors' reports relating
to it shall not exceed four (4) months. A copy of each such
document shall be in printed form or in electronic
format or in such other form of electronic media
permitted under the Listing Requirements or any
combination thereof shall be served not less than twenty
one (21) days (or such shorter period as may be agreed
in any year of the receipt of notice of the meeting pursuant
to Article 156) be sent to every Member of, and to every
holder of debentures of the Company under the provisions
of the Act or of these Articles. The requisite number of
copies of each such document as may be required by the
Exchange upon which the Company's shares may be
listed, shall at the same time be likewise sent to the
Exchange PROVIDED THAT This Article shall not require
a copy of these documents to be sent to any person of
whose address the Company is not aware but any
Member to whom a copy of these documents has not
been sent shall be entitled to receive a copy, free of
charge on application at the Office. In the event that
these documents are sent in CD-ROM form or in such
other form of electronic media and a member requires
a printed form of such documents, the Company shall
send such documents to the member within four (4)
Market Days from the date of receipt of the member’s
verbal or written request.
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FORM OF PROXY
WZ SATU BERHAD
(Company No. 666098-X)
(Incorporated in Malaysia)
CDS Account No.
Number of ordinary shares held
*I/We (full name), ______________________________________________________________________________________________________________________
bearing *NRIC No./Passport No./Company No. ___________________________________________________________________________________________
of (full address) _______________________________________________________________________________________________________________________
being a *member/members of WZ Satu Berhad (“the Company”) hereby appoint :First Proxy “A”
Full Name
NRIC/ Passport No.
Proportion of Shareholdings Represented
No. of Shares
%
Full Address
and/or failing *him/her,
Second Proxy “B”
Full Name
NRIC/ Passport No.
Proportion of Shareholdings Represented
No. of Shares
%
Full Address
100%
or failing *him/her, the *Chairman of the Meeting as *my/our proxy to vote for *me/us and on *my/our behalf at the Twelfth Annual General Meeting of
the Company to be held at Kristal Ballroom 1, Level 1, West Wing, Hilton Petaling Jaya, No. 2 Jalan Barat, 46200 Petaling Jaya, Selangor Darul
Ehsan, on Tuesday, 24 January 2017 at 10:00 a.m. and at any adjournment thereof.
Please indicate with an “X” in the spaces provided below as to how you wish your votes to be casted. If no specific direction as to voting is given,
the proxy will vote or abstain from voting at *his/her discretion.
No.
Agenda
1.
To receive the Audited Financial Statements for the financial year ended 31 August 2016 together with the Reports of the Directors and the
Auditors thereon.
No.
Agenda
2
To declare Single Tier final dividend of 2 sen per ordinary share of RM0.50 each and a Single Tier special
dividend of 1 sen per ordinary share of RM0.50 each for the financial year ended 31 August 2016.
1
3
To approve the payment of Directors’ fees for the financial year ended 31 August 2016.
2
4
To re-elect Tengku Dato’ Sri Uzir Bin Tengku Dato’ Ubaidillah who is retiring in accordance with Article
84 of the Company’s Articles of Association and being eligible, has offered himself for re-election.
3
5
To re-elect Mr. Tan Teng Heng who is retiring in accordance with Article 84 of the Company’s Articles
of Association and being eligible, has offered himself for re-election.
4
6
To re-elect Mr. Tan Ching Kee who is retiring in accordance with Article 84 of the Company’s Articles
of Association and being eligible, has offered himself for re-election.
5
7
To re-elect Dato’ Ir. Mohd Ghazali Bin Kamaruzaman who is retiring in accordance with Article 84 of
the Company’s Articles of Association and being eligible, has offered himself for re-election.
6
8
To re-elect Datuk Ahmad Nizam Bin Salleh who is retiring in accordance with Article 91 of the
Company’s Articles of Association and being eligible, has offered himself for re-election.
7
9
To re-appoint Messrs. Baker Tilly Monteiro Heng as Auditors of the Company until the conclusion of
the next Annual General Meeting and to authorise the Directors to fix their remuneration.
8
Resolution
For
Against
Special Business
10
Ordinary Resolution No. 1
Authority to Issue Shares pursuant to Section 132D of the Companies Act, 1965
9
11
Ordinary Resolution No. 2
Proposed Renewal of Share Buy-back Authority
10
12
Ordinary Resolution No. 3
Approval to Continue in Office as Independent Non-Executive Director – Dato’ Amin Rafie Bin Othman
11
13
Ordinary Resolution No. 4
Approval to Continue in Office as Independent Non-Executive Director – Dato’ Yeong Kok Hee
12
14
Special Resolution
Proposed Amendments to the Articles of Association
13
As witness my/our hand(s) this day __________ of ____________________ 2017.
__________________________________
*Signature of Member /Common Seal
*Strike out whichever not applicable
WZsatu inner.qxp_Layout 1 12/28/16 12:25 PM Page 158
Notes :1. In respect of deposited securities, only members/shareholders whose names appear in the Record of Depositors on 17 January 2017 shall be
eligible to attend the Meeting.
2. A member of the Company entitled to attend and vote at the Meeting is entitled to appoint up to two (2) proxies to attend and vote in his stead.
There shall be no restriction as to the qualification of the proxy. A proxy appointed to attend and vote at the Meeting shall have the same rights
as the member to speak at the Meeting.
3. 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. Where a member appoints two (2) proxies to attend and vote at the Meeting, he shall specify the proportion of his shareholdings
to be represented by each proxy, failing which, the appointment shall be invalid.
4. The instrument appointing a proxy shall be in writing under the hand of the appointer or of his attorney duly authorised in writing or, if the
appointer is a corporation, either under its common seal or under the hand of an officer or attorney duly authorised.
5. Where a member of the Company is an exempt authorised nominee as defined under the Securities Industry (Central Depositories) Act 1991
(“SICDA”) which holds ordinary shares in the Company for multiple beneficial owners in one securities account (“omnibus account”), there is no
limit to the number of proxies which the exempt authorised nominee may appoint in respect of each omnibus account it holds. Where a member
is an authorised nominee as defined under SICDA, it may appoint at least one (1) proxy but subject to a maximum of two (2) in respect of each
securities account it holds with ordinary shares of the Company standing to the credit of the said securities account.
6. The instrument appointing a proxy and the power of attorney or other authority, if any, under which it is signed or a notary certified copy of that
power or authority, shall be deposited at the Registered Office of the Company at Level 7, Menara Milenium, Jalan Damanlela, Pusat Bandar
Damansara, Damansara Heights, 50490 Kuala Lumpur, Wilayah Persekutuan not less than forty-eight (48) hours before the time appointed for
holding the Meeting or any adjournment thereof.
1st Fold here
Affix
Stamp
The Company Secretaries
WZ Satu Berhad (666098-X)
Level 7, Menara Milenium,
Jalan Damanlela,
Pusat Bandar Damansara,
Damansara Heights,
50490 Kuala Lumpur.
Then fold here
Fold this flap for sealing