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A n n u a l R e p o r t
Annual R
eport 201
8W
eida (M) B
hd. (504747-W
)2 0 1 8
A B a l a n c e d S u s t a i n a b l e G r o w t hw w w . w e i d a . c o m . m y
MALAYSIA
REPUBLIC OFTHE PHILIPPINES
SARAWAKPENINSULAR MALAYSIA
SABAH
MANILA
MALAYSIA www.weida.com.my
SARAWAKHeadquarter: Offices: Office:Wisma Hock Peng, Ground to 2nd Floor,123, Green Heights,Jalan Lapangan Terbang,93250 Kuching, Sarawak.P. O. Box 2424,93748 Kuching, Sarawak.Tel : +6082 456 456Fax : +6082 459 000Email : [email protected]
Manufacturing plants:Lot 472, Block 8, MTLD,Sejingkat Industrial Park,Jalan Bako, Petra Jaya,93050 Kuching, Sarawak.P. O. Box 1807,93736 Kuching, Sarawak.Tel : +6082 435 435Fax : +6082 433 933Email : [email protected]
Kuala Baram Land DistrictJalan Maigold, Taman Desa Senadin,
Lot 1969, Block 5,
98100 Miri, Sarawak.Tel : +6016 879 3322
PENINSULAR MALAYSIA
B01-A-5-1 Menara 2,No. 3 Jalan Bangsar, KL Eco City,59200 Kuala Lumpur.
Manufacturing plant:Lot 109, Jalan Permata 1,Arab-Malaysian Industrial Park,71800 Nilai,Negeri Sembilan Darul Khusus.Tel : +606 799 0990Fax : +606 799 0949Email : [email protected]
SABAH
2-9-1 & 2-9-2, 8th Floor, Wawasan Plaza,88000 Kota Kinabalu, Sabah.P. O. Box 21276, 88770 Luyang,Kota Kinabalu, Sabah.Tel : +6088 264 555Fax : +6088 262 525Email : [email protected]
Manufacturing plants:Lot 57, SEDCO Light Industrial Estate,Lok Kawi, 88801 Kota Kinabalu, Sabah.Tel : +6088 752 996Fax : +6088 752 998Email : [email protected]
TB12882 & 12883,SEDCO Light Industrial Estate,Mile 3, Jalan Apas, 91000 Tawau, Sabah.Tel : +6089 913 678Fax : +6089 913 679Email : [email protected]
REPUBLIC OF THE PHILIPPINES www.weida.com.ph
Unit C-05-03 & Unit C-05-03A,5th Floor, Sunway Nexis Biz Suites,Jalan PJU 5/1, Kota Damansara,47810 Petaling Jaya, Selangor Darul Ehsan.Tel : +603 6143 0988Fax : +603 6143 0999Email : [email protected]
Tel : +603 2283 9688Fax : +603 2283 9689Email : [email protected]
Corporate ProfileCorporate Information
COVER RATIONALE
Group StructureProfile of DirectorsKey Senior Management PersonnelChairman’s StatementManagement Discussion and Analysis ("MD&A")Business ActivitiesFive Years Group Financial HighlightsStatement on Corporate Social Responsibility
Corporate Governance Overview StatementAdditional Compliance InformationStatement of Directors’ ResponsibilitiesReport of the Audit CommitteeStatement on Risk Management and Internal Control
FINANCIAL STATEMENTS
Directors’ ReportStatement by DirectorsStatutory DeclarationIndependent Auditors’ ReportStatements of Financial PositionStatements of Profit or Loss and Other Comprehensive IncomeConsolidated Statement of Changes in EquityStatement of Changes in EquityStatements of Cash FlowsNotes to the Financial StatementsList of PropertiesAnalysis of ShareholdingsNotice of Nineteenth Annual General Meeting
Form of Proxy
12348
1214192627
Corporate Event Highlight293139404146
51555556616264686972
152154156
TABLE OF CONTENTS
WEIDA continues to thrive through its four (4) main business divisions, driven by the principle of triple bottom line of profit, people and environment to achieve a balanced and sustainable growth.
Office:MANILA
3/F, BT & T Center,20E. Rodriguez Jr. Avenue (C-5)Brgy. Bagumbayan, Libis,Quezon City 1110, Philippines.Tel : +632 706 2002, 656 2002Fax : +632 706 4966Email : [email protected]
Manufacturing plant:Lot 11 & 13, Block 3,Dasmarinas Technopark,Governor’s Drive,Dasmarinas Cavite 4114, Philippines.Tel : +632 584 4858, 584 4859Fax : +632 584 4649
ANNUAL REPORT 2018 I 1
CORPORATE PROFILE
● ●
Founded in 1983, Weida (M) Bhd. (“WEIDA”) has grown over the years to become an established group of companies today. The Group engages approximately 1,000 professionals and support personnel working from more than 10 offices, plants and project sites throughout Malaysia and the Philippines.
Listed on the Bursa Malaysia Securities Berhad since 2001, WEIDA has had its origin from Sarawak, starting as a manufacturing company. From humble beginnings, it has grown beyond the shores of Sarawak and has diversified into other business sectors successfully while maintaining a respectable position in the market place.
WEIDA is involved in four core business sectors as follows:
1. Manufacturing2. Environmental Services3. Works (Utilities Infrastructures)4. Property Development
Through a diversified business base and recurrent income arising from long term contracts, WEIDA pursues a balanced and sustainable growth.
2 I WEIDA (M) BHD. (504747-W)
DIRECTORS
YBhg. Dato’ Lee Choon Chin Group Executive Chairman
Jee Hon Chong Executive Director
Yeoh Chin HoeSenior Independent Director
COMPANY SECRETARIES
Voon Jan Moi (MAICSA 7021367)Wang Tin Ngee (MIA 11670)
AUDITORS
KPMG PLTLevel 2, Lee Onn BuildingJalan Lapangan Terbang93250 Kuching, SarawakTel : +6082 268 305Fax : +6082 268 306
SHARE REGISTRAR
Symphony Share Registrars Sdn. Bhd.Level 6, Symphony HousePusat Dagangan Dana 1Jalan PJU 1A/4647301 Petaling JayaSelangor Darul EhsanTel : +603 7849 0777 Fax : +603 7841 8152 / 7841 8151E-mail : [email protected]
Lee Pet LoiIndependent Director
YBhg. Dato’ Jamelah Binti JamaluddinIndependent Director
Liew Jee Min @ Chong Jee MinIndependent Director
REGISTERED OFFICE
Wisma Hock Peng, Ground Floor to 2nd Floor123, Green Heights, Jalan Lapangan Terbang93250 Kuching, SarawakTel : +6082 456 456Fax : +6082 459 000E-mail : [email protected]
COUNTRY OF INCORPORATION AND DOMICILE
Malaysia
STOCK EXCHANGE LISTING
Main Market of Bursa Malaysia Securities BerhadStock Name : WEIDAStock Code : 7111
CORPORATE INFORMATION
ANNUAL REPORT 2018 I 3
GROUP STRUCTURE
100% Weida Works Sdn. Bhd. (394352-V)
70% Weida Communications Sdn. Bhd.
(603887-T)
81% Vista Cape Sdn. Bhd. (933434-X)
100% Weida Medic Development Sdn. Bhd.
(543463-H)
49% Asaljuru Weida Sdn. Bhd.
(965800-M)
56% Weida Environmental Technology Sdn. Bhd.
(401849-D)
80% LIPP Biogas (Malaysia) Sdn. Bhd.
100% Hydro Solutions Sdn. Bhd.
(905573-U)
ENVIRONMENTALSERVICES &OTHERS
56% Weida Environmental Technology Sdn. Bhd. (401849-D)
58% Sar-Alam Indah Sdn. Bhd.
(590492-H)
51% Blast Power Sdn. Bhd. (752370-K)
PROPERTYDEVELOPMENT
100% Weida Properties Sdn. Bhd. (960779-K)
100% Loyal Paragon Sdn. Bhd. (965363-T)
100% Good Axis Sdn. Bhd. (978775-T)
75% Atlas Arrow Sdn. Bhd. (1096817-A)
MANUFACTURING
100% Weida Integrated Industries Sdn. Bhd. (168925-U)
100% Greenyard Corporation Sdn. Bhd. (408161-H)
100% Premium Fortune Sdn. Bhd. (501254-V)
100% Weida Resources Sdn. Bhd. (242580-H)
100% Weida Marketing Sdn. Bhd. (424868-V)
100% Weida Manufacturing and Marketing Sdn. Bhd. (543459-M)
100% Weida Green Industries Sdn. Bhd. (543794-V)
99.99% Weida (B) Sdn. Bhd. (RC/00006958)
100% Weida International Sdn. Bhd. (815496-W)
99.99% Weida Philippines Inc. (CS200808272)
WORKS
(formerly known as Cahaya Alam Indah Sdn. Bhd.)
(887436-P)
*
* A subsidiary by virtue of Weida Medic Development Sdn. Bhd. having the control of the voting of the board of directors of Asaljuru Weida Sdn. Bhd., pursuant to and in accordance with the Shareholders Agreement dated 30 August 2017.
4 I WEIDA (M) BHD. (504747-W)
PROFILE OF DIRECTORS
YBHG. DATO’ LEE CHOON CHINGroup Executive Chairman
YBhg. Dato’ Lee Choon Chin (Malaysian, aged 64), the Group Executive Chairman, was appointed to the Board as Group Managing Director on 25 October 2000.
YBhg. Dato’ graduated with a Degree of Bachelor of Science with Honours from University of Malaya in 1978. He first started his career as the Sarawak Manager of 3M (Malaysia) Sdn. Bhd., an American multinational company. Upon leaving 3M in 1983, he incorporated WEIDA which became the WEIDA Group of today. As a founding shareholder, YBhg. Dato’ actively continues to lead the Group, and was re-designated as Group Executive Chairman on 11 August 2015. He is also the Chairman of the Risk Management Committee.
JEE HON CHONGExecutive Director
Mr. Jee Hon Chong (Malaysian, aged 59) was appointed to the Board as an Executive Director on 25 October 2000. He graduated from Tunku Abdul Rahman College and subsequently obtained his degree in Mechanical Engineering from the Engineering Council, United Kingdom.
Mr. Jee is one of the pioneers of the Group, being the first factory engineer when WEIDA commenced manufacturing operations in Kuching in 1988. Subsequently, he successfully commissioned another two (2) factories in Kota Kinabalu and Nilai, which marked the entry of WEIDA into Sabah and Peninsular Malaysia, and later in 2009 another factory in Manila, Republic of The Philippines, being WEIDA’s first manufacturing plant abroad.
ANNUAL REPORT 2018 I 5
PROFILE OF DIRECTORS
YEOH CHIN HOESenior Independent Director
Mr. Yeoh Chin Hoe (Malaysian, aged 67) was appointed to the Board as an Independent Director of the Company on 1 January 2008. He is the Chairman of the Audit Committee, Nominating Committee and Remuneration Committee; and a member of the Risk Management Committee. He is also the Senior Independent Director to whom concerns regarding the Company may be conveyed.
Mr. Yeoh is a Fellow of both The Association of Chartered Certified Accountants (UK) and Institute of Chartered Secretaries and Administrators (UK), a member of the Malaysian Institute of Certified Public Accountants and the Malaysian Institute of Accountants. He also obtained a Master degree in Business Administration (General Management) from Universiti Putra Malaysia in 1997.
Mr. Yeoh joined Harrisons Trading (Peninsular) Sdn. Bhd. in 1980, and was appointed as Finance Director in 1990 and subsequently Managing Director in 1997 until he retired in 2006. He then set up a business management consulting firm called BPI Corptall Consulting Sdn. Bhd. in 2006, as a consultant specialising in business process improvements and general business management services.
Mr. Yeoh is also an Independent Director and the Chairman of the Audit Committee of Chin Hin Group Berhad and Halex Holdings Berhad.
LEE PET LOIIndependent Director
Mr. Lee Pet Loi (Malaysian, aged 62) was appointed to the Board as an Independent Director of the Company on 16 December 2013. He is a member of the Audit Committee, Nominating Committee, Remuneration Committee and Risk Management Committee.
Mr. Lee graduated from Brunel University, London with Bachelor of Science (Mathematics) Honours degree. He is also a Chartered Mathematician and a member of The Institute of Mathematics and its Applications (MIMA).
Mr. Lee started his career in HSBC Bank Malaysia Berhad (“HSBC”) as a Resident Officer in 1981. He has vast experience in the banking industry and had held various positions in HSBC for 29 years. He retired as a Senior Vice President, Commercial Banking in 2010.
6 I WEIDA (M) BHD. (504747-W)
YBHG. DATO’ JAMELAH BINTI JAMALUDDINIndependent Director
YBhg. Dato’ Jamelah Binti Jamaluddin (Malaysian, aged 61) was appointed to the Board as an Independent Director of the Company on 9 January 2015. She is a member of the Nominating Committee and Remuneration Committee.
YBhg. Dato’ Jamelah holds a Masters in Business Administration from Central Michigan University, USA and a Bachelor of Business Administration in Finance from Western Michigan University, USA.
YBhg. Dato’ Jamelah was appointed as the Managing Director of Kuwait Finance House (Malaysia) Labuan Berhad from March 2013 to September 2013 and Chief Executive Officer (“CEO”) of Kuwait Finance House (Malaysia) Labuan Berhad from February 2010 to March 2013. She served RHB Islamic Bank Berhad as Managing Director from August 2007 to January 2010. Her previous working experience includes:
(1) Deputy CEO – Kuwait Finance House (Malaysia) Berhad from November 2006 to August 2007.
(2) Chief Operating Officer – RHB Sakura Merchant Bankers Bhd. from January 2004 to November 2006.
(3) Principal Officer and Division Director – Macquarie Malaysia (M) Sdn. Bhd. and Macquarie Bank Limited (Labuan Branch) from August 1999 to November 2003.
Presently, she is the Executive Chairman of 3P Capital Partners Sdn. Bhd. She also sits on the Boards of Scomi Energy Services Berhad, Small Medium Enterprise Development Bank Malaysia Berhad and Dagong Malaysia Rating Services Sdn. Bhd..
PROFILE OF DIRECTORS
ANNUAL REPORT 2018 I 7
LIEW JEE MIN @ CHONG JEE MINIndependent Director
Mr. Liew Jee Min @ Chong Jee Min (Malaysian, aged 59) was appointed to the Board as an Independent Director of the Company on 3 July 2015. He is a member of the Audit Committee and Risk Management Committee.
Mr. Chong is an accomplished lawyer, as well as an experienced director of public listed companies. He graduated from University of Leeds, England, in 1984 with an Honours Degree in Law and obtained his Certificate of Legal Practice, Malayan, in 1985. He established the firm J.M. Chong, Vincent Chee & Co. and has been practicing law, concentrating on banking, property and corporate matters since 1986.
Mr. Chong is the Vice President of the Klang Chinese Chamber of Commerce & Industry, the Chairman of the Legal Affairs Committee of Klang Chinese Chamber of Commerce & Industry and The Associated Chinese Chamber of Commerce & Industry of Coastal Selangor, the Deputy Chairman of the Legal Affairs Committee of Kuala Lumpur, Selangor Chinese Chamber of Commerce & Industry, a member of Legal Affairs Committee of The Associated Chinese Chamber of Commerce & Industry of Malaysia, and a legal advisor of Malaysia Used Vehicle Autoparts Traders’ Association, The Kuala Lumpur & Selangor Furniture Entrepreneurs’ Association and Sekolah Menengah Chung Hua (PSDN) Klang.
Mr. Chong is also an Independent Director of Jaks Resources Berhad, Lion Industries Corporation Berhad, YKGI Holdings Berhad and Halex Holdings Berhad.
PROFILE OF DIRECTORS
Notes:(a) The Directors have no family relationship with each other or the major shareholders of the Company,
except for YBhg. Dato’ Lee Choon Chin, whose spouse is one of the major shareholders of the Company.(b) None of the Directors have convicted any offences for the last five (5) years. There was no public sanction
or penalty imposed by the relevant regulatory bodies during the financial year under review.(c) None of the Directors have any conflict of interests with the Company.(d) None of the Directors have any other directorship of public companies except for YBhg. Dato’ Jamelah
Binti Jamaluddin, Mr. Yeoh Chin Hoe and Mr. Chong Jee Min.(e) The number of board meetings attended by the Directors during the financial year ended 31 March 2018
is set out on page 32 of this Annual Report.
8 I WEIDA (M) BHD. (504747-W)
KEY SENIOR MANAGEMENT PERSONNEL
MANUFACTURING
TAN YAK KHOONChief Executive Officer and Commercial Director
Tan Yak Khoon (Malaysian, aged 56, Male) graduated from the National University of Singapore with Bachelor Degree of Arts in 1985. He joined WEIDA in 2003 as Senior Manager and was re-designated to General Manager (Operations) in 2006. He was then promoted to Head of Manufacturing and Marketing (“M&M”) division in 2010 and was appointed as Chief Executive Officer & Commercial Director of M&M division, positions which he holds until present.
Mr. Tan has more than twenty (20) years of senior marketing leadership and business development experience. He is responsible for identifying new commercial activities and driving business growth to ensure WEIDA M&M division business sustainability.
NG WOOI CHOYFinance DirectorExecutive Director (Weida Philippines Inc)
Ng Wooi Choy (Malaysian, aged 58, Male) joined WEIDA in 2005 as Regional Financial Controller for M&M Division West Malaysia region and was promoted to Executive Director of Weida Marketing Sdn. Bhd. to head the M&M Division West Malaysia region up to 2013 when he was promoted as Finance Director for the M&M Division for whole Malaysia. In 2008, he pioneered the setting up of Weida Philippines Inc. and continued as the Country Head, a position he is still holding presently.
He has in total more than thirty eight (38) years of working experience in the field of finance, auditing, corporate restructuring and senior positions in general management.
He is a Chartered Accountant registered with the Malaysian Institute of Accountants (MIA) after qualifying as a member of Malaysian Institute of Certified Public Accountants (MICPA) through his articleship with PricewaterhouseCoopers (“PWC”). He was with PWC for 16 years and has extensive experience in auditing, investigations, financial consultancy, corporate restructuring and receiverships.
Mr. Ng is responsible for finance and other support functions including Human Resources, Administration and Information Technology matters in the M&M Division of WEIDA. This covers overall finance management and planning to support decision-making on operational and strategic issues of the division. As the Country Head of Weida Philippines Inc., he is also responsible for the financial performance and growth of the investment for enhancement of the shareholders’ value.
SONG CHYNTechnical Director
Song Chyn (Malaysian, aged 44, Male) graduated from University of New South Wales, Australia with Bachelor in Mechanical Engineering (Hons) in 1996. Upon graduation, he joined WEIDA as a Mechanical Engineer. In 1998, he was appointed as Assistant Factory Manager, and was promoted to Factory Manager of East Malaysia region in 2001. In 2005, he was promoted to Assistant Regional Factory Manager. In this capacity, he was responsible for the overall operations of all factories of Weida Integrated Industries Sdn. Bhd. (“WII”) in Peninsular Malaysia, Sarawak and Sabah regions.
Besides manufacturing operations, Mr. Song acted as the Head of the Quality Management Organisation System for WII. Subsequent promotion was entrusted to Mr. Song as Technical Director in 2013, a position he holds until present. He oversees the manufacturing sector in terms of technical aspects for all regions and spearheading development of new products.
ANNUAL REPORT 2018 I 9
WORKS (UTILITIES INFRASTRUCTURES)
KU SIEW FUNG @ KU SIEU FUNGGeneral Manager (Operations & Finance, Tower Division)
Ku Siew Fung (Malaysian, aged 52, Female) joined WEIDA in February 2006 as Regional Financial Controller and was promoted to her current position as General Manager – Operations and Finance on September 2015.
She is a member of Malaysian Institute of Accountants (MIA), a Fellow Member of Association of Chartered Certified Accountants (ACCA), a member of Chartered Tax Institute of Malaysia (CTIM) and a Certified Financial Planner® by Financial Planning Association of Malaysia (FPAM).
She has more than twenty five (25) years of working experience, primarily in business operations, project management, finance, auditing and human resource management.
Prior to joining WEIDA, she worked with a public listed company as General Manager for twelve (12) years and was responsible to oversee the overall business operations for East Malaysia region. In the earlier years of her career, Ms. Ku worked in two (2) of the Big Four accounting firms for a total of five (5) years, gaining extensive experience in auditing, accounting, corporate restructuring, listing exercise and taxation.
Ms. Ku is responsible for identifying new business ventures, development and expansion of the division, project management and implementation, finance and administrative.
GEORGE SIM THENG HUI @ LIM THENG HUIConstruction Director
George Sim (Malaysian, aged 60, Male) graduated from Portsmouth Polytechnic, England with Bachelor of Science in Civil Engineering, majoring in Highway and Traffic Engineering in 1982. He further pursued his education in 1983 and obtained Master of Science in Transportation Studies from Cranfield Institute of Technology, England. He joined WEIDA in 2017.
He has more than thirty (30) years of working experience in the field of construction and projects bidding. Prior to joining WEIDA, he was attached as head of project, head of operations, project manager and resident engineer for various construction companies in Sabah and Sarawak.
For the past thirty (30) years’ working periods, he was responsible for the overall planning, strategically oversees, implementing and monitoring the projects of the companies he worked with.
Mr. Sim is responsible for overall operational and management of major projects assigned to him, oversees all consultants and contractors.
ROBIN LOI FUI SEKGeneral Manager
Robin Loi (Malaysian, aged 54, Male) graduated from Tunku Abdul Rahman College with Certificate in Technology (Quantity Surveying) in 1985. He joined WEIDA in 2009 as Quantity Surveyor. He was promoted to his current position as General Manager in 2014.
He has more than thirty (30) years of experience in overall scope of project implementation, development, management, leadership and completion of various projects such as supermarket building, residential housing projects, national mosque, land reclamation projects, infrastructure projects, bridges, extension of airport and environmental projects.
In Weida, he had successfully completed various projects namely Puncak Borneo Pipeline project, Lubok Antu Treatment Plant project, Tropical Peat Research Lab project, LFA Biogas project and Urbana Residences project in Selangor.
Mr. Loi is currently responsible for handling WEIDA’s major projects costings and projects implementation of WEIDA.
KEY SENIOR MANAGEMENT PERSONNEL
10 I WEIDA (M) BHD. (504747-W)
KEY SENIOR MANAGEMENT PERSONNEL
ENVIRONMENTAL SERVICES
HILTON LAW WANG WEERegional Plant Manager
Hilton Law (Malaysian, aged 48, Male) graduated from University of Bolton, United Kingdom with Bachelor of Science in Computing. He is a Certified Competent Person in Environmental Professional in Sewage Treatment Plant Operation (CePSTPO) and a Certified Environmental Professional in Scheduled Waste Management (CePSWaM) recognised by the Department of Environmental Malaysia. He is also a Certified Business Operation Professional (CBOP) by the International Academy of Business and Financial Management. He joined WEIDA in 2010 as Plant Manager and was promoted to Regional Plant Manager in 2013.
He has more than twenty eight (28) years of working experience in the field of education, oil and gas industry, manufacturing, engineering and general management.
Prior to joining WEIDA, he spent three (3) years in an oil and gas company as an Operation Manager, collaborating closely with the Ministry of Domestic Trade, Co-operatives and Consumerism.
Mr. Law is in charge of overseeing the operations and management of all three (3) septic sludge treatment plants, namely Matang Septic Sludge Treatment Plant, Sibu Septic Sludge Treatment Plant and Miri Sludge Treatment Plant.
PROPERTY DEVELOPMENT
VICTOR WEIDA LEEExecutive Director
Victor Lee (Malaysian, aged 37, Male) graduated from the University of Nottingham with a LLB (Hons) Law and then obtained LL.M. from Monash University. He is a Barrister-at-Law from Lincoln’s Inn. He joined WEIDA in 2011 as the Executive Director of Weida Properties Sdn. Bhd.
Prior to joining WEIDA, he started his career in investment banking with ECM Libra Investment Bank Berhad, and with subsequent stints in Khazanah Nasional Berhad and Newsmith Capital Partners Ltd., an asset management company in Hong Kong. Mr. Lee subsequently joined a reputable property developer, Nadayu Properties Berhad, where he was involved in the conceptualisation, design and execution of property projects.
Mr. Lee is currently responsible for leading and managing the property development division of WEIDA.
GROUP CORPORATE FINANCE
WANG TIN NGEEGroup Financial Controller
Wang Tin Ngee (Malaysian, aged 52, Male) joined WEIDA in 1997 as Finance Manager and was promoted to Regional Financial Controller and later, to his current position as the Group Financial Controller in 2016.
He is a member of Chartered Institute of Management Accountants (CIMA), a Fellow Member of Association of Chartered Certified Accountants (ACCA) and also a member of Malaysian Institute of Accountants (MIA).
He has more than twenty five (25) years of working experience in the field of finance, auditing, corporate restructuring and general management.
Prior to joining WEIDA, he spent seven (7) years in audit and finance management in professional firms such as John Burnett McMahon & Co (UK), Lawrence & Co (UK) and PricewaterhouseCoopers, Malaysia.
Mr. Wang is responsible for finance matters in WEIDA which cover overall finance management and planning to support decision-making on operational and strategic issues of the Group.
ANNUAL REPORT 2018 I 11
KEY SENIOR MANAGEMENT PERSONNEL
GROUP CORPORATE FINANCE (CONTINUED)
TAN MUI PINGGeneral Manager (Group Managing Director’s Office)
Tan Mui Ping (Malaysian, aged 42, Female) joined WEIDA in 2012 as Senior Manager in Corporate Development and was promoted to General Manager in Group Managing Director’s Office in 2014.
She is a member of the Malaysian Institute of Accountants (MIA) and a Fellow Member of the Association of Chartered Certified Accountants (ACCA).
She has nearly twenty (20) years of working experience and holding senior finance roles since 2003. Her areas of expertise covering group reporting, group finance and tax matters, corporate finance, investment feasibility study and business development partnering.
Prior to joining Weida, she spent three (3) years in audit with a reputable accounting firm and twelve (12) years in group reporting, group finance and tax matters, and corporate finance with few public listed companies.
In WEIDA, Ms. Tan supports the Group Executive Chairman and works closely with other team members and strategic partners on Group Executive Chairman related tasks and projects.
JUSTINA TANG MEE SANGeneral Manager (Group Finance)
Justina Tang (Malaysian, aged 47, Female) joined WEIDA in 2002 as Internal Audit Manager and was re- designated to Treasury Manager in 2006. She was promoted to her current position as General Manager for Group Finance in 2014.
She is a member of the Malaysian Institute of Certified Public Accountants (MICPA) and the Malaysian Institute of Accountants (MIA).
She has more than twenty (20) years of working experience in the field of finance, auditing, treasury, corporate restructuring and general management.
Prior to joining WEIDA, she was with PricewaterhouseCoopers for six (6) years and has extensive experience in auditing, business advisory, due diligence audit and corporate restructuring.
Ms. Tang is responsible for treasury and finance functions in WEIDA which she oversees the Group’s cash flows planning, banking and financing matters. She also assumes the leadership role in various projects implemented by the Group.
Notes:
(a) The Key Senior Management Personnel does not hold any directorships in WEIDA (except for Mr. Victor Weida Lee and Mr. Wang Tin Ngee) and other listed issuers and has no family relationship with the directors and major shareholders of WEIDA, except for Mr. Victor Weida Lee who is the son of YBhg. Dato’ Lee Choon Chin, the Group Executive Chairman and major shareholder of WEIDA.
(b) None of the Key Senior Management Personnel has any conflict of interests with the Company.
(c) None of the Key Senior Management Personnel has previous convictions for any offences within the past five (5) years nor any public sanction or penalty imposed by the relevant regulatory bodies during the financial year under review.
12 I WEIDA (M) BHD. (504747-W)
CHAIRMAN’S STATEMENT
FINANCIAL HIGHLIGHTS OF FINANCIAL YEAR ENDED (“FYE”) 31 MARCH 2018
FYE 31 March 2018 was the seventeenth (17th) year of Weida (M) Bhd. (“WEIDA”) as a public listed company. We were listed in February 2001.
The Malaysian economy performed well above expectations in 2017 with gross development product (“GDP”) strong at 5.9 per cent, predominantly driven by private sector spending, reinforced by resilient external sector according to data released by Bank Negara Malaysia.
Despite the slight recovery of economy, the year 2017 has been another challenging year for most businesses in Malaysia as affected by downturn in the oil & gas industry and the soft property market, the volatility of Malaysian Ringgit, the increase in costs of imported raw materials and overall rise in commodity prices. Despite these challenges, the Group has managed to moderate the impacts on the Group’s businesses and is glad to report another year of respectable financial achievements which recorded a turnover of RM234.9 million and profit before tax of RM35.6 million for FYE 31 March 2018.
The Group’s financial position also remains very healthy as at 31 March 2018, with total equity attributable to owners of the Company of RM431.6 million, and cash balance of RM96.7 million. Due to the Group’s relatively low borrowings, it is currently in a net cash position and with net assets per ordinary share of RM3.40 as at 31 March 2018.
On this note, we are pleased to present to you some key financial statistics for FYE 31 March 2018, as follows:
∙ Group revenue retreated from RM301.4 million to RM234.9 million;∙ Profit before tax margin increased with profit before tax increased from RM34.3 million to RM35.6 million;∙ Total equity attributable to owners of the Company rose from RM414.9 million as at 31 March 2017 to
RM431.6 million as at 31 March 2018; and∙ Finally, net assets per ordinary share attributable to ordinary shareholders of the Company went up from
RM3.27 to RM3.40.
OPERATIONS REVIEW OF FYE 31 MARCH 2018
The Group’s overall performance has been improving despite the challenging market and operational conditions. The Group is able to successfully weather the headwinds by optimising operating efficiency and business opportunities. Another factor contributing to the Group’s resilience is our wide and balanced customer base, where revenue streams arising from public and private sectors projects and/or product sales are quite well balanced.
We are pleased to report that the Group’s profit margin before tax improved to 15.2% for FYE 31 March 2018 on the back of a revenue of RM234.9 million, compared to 11.4% for the previous financial year with a corresponding revenue of RM301.4 million.
In terms of human intellectual, the Group will continue providing training and attractive remunerations and benefits for key personnel to ensure talents and expertise are maintained within the Group.
The details of the operations and financial reviews for each business segment are deliberated under Management Discussion and Analysis (“MD & A”) section in the ensuing pages.
In respect of the announcement made to Bursa Malaysia Securities Berhad on 9 March 2018, Weida is undertaking a Selective Capital Reduction and Repayment Exercise (“SCR”). Currently, the SCR is still in progress.
ANNUAL REPORT 2018 I 13
CHAIRMAN’S STATEMENT
PROSPECTS OF FINANCIAL YEAR ENDING 31 MARCH 2019 (“FYE 31 MARCH 2019”)
Malaysian economy is expected to remain resilient in 2018 despite some volatility is seen near term after the 14th General Election environment, given its resilient and robust financial system. Malaysia’s annual economic growth slowed to 5.4% in the first quarter of year 2018. Gross domestic product growth projection is pending details on the new government’s economic policies. Bank Negara Malaysia decided to maintain the Overnight Policy Rate (“OPR”) at 3.25%. However, the ringgit is expected to weaken against the US dollar for temporary.
Moving forward, given the abovementioned prospects and factors which will affect the Group’s businesses, the Directors will ensure continuous efforts to implement measures to improve operating efficiency in achieving sustainable results for the Group for the FYE 31 March 2019 on the strength of the diversified base of the Group which has helped to offset the adverse impacts to the Group. However, in view of the change of Government recently, uncertainty in market sentiment and volatility in the financial markets will take time to unfold in the coming months.
The prospects and business opportunities for WEIDA arising from the various development plans had been highlighted and discussed in some detail in this Statement in the past five (5) years’ Annual Reports, and shall remain valid and be applicable for the foreseeable future.
ACKNOWLEDGEMENTS
On behalf of the Board, we would like to place on record our appreciation to our customers and shareholders for their support, without which our Group would not have been strong and successful.
We would also like to thank our associates, financiers, advisors, suppliers and sub-contractors for their continuing confidence and support to the Group.
Finally, the Board and I wish to thank the management and all employees of the Group for their unwavering commitment, contribution and hard work.
YBhg. Dato’ Lee Choon ChinGroup Executive Chairman
22 June 2018
14 I WEIDA (M) BHD. (504747-W)
SEGMENTAL REVIEW - MANUFACTURING
Principal Activities
The business division is primarily involved in the manufacture and sale of HDPE products and trading of other specialised and technical engineering products.
Business Operation Overview
Manufacturing segment is principally involved in the manufacture and sale of the following products:• Water Storage• Water Distribution• Sewerage Solutions• Traffic Control Equipment• Agricultural Implements• Marine Products• Chemical Storage• Custom Moulded Products• Other Environment Products
WEIDA offers more than 200 types of products by six (6) manufacturing plants across Malaysia and Republic of The Philippines using proprietary technology spearheaded by our research and development unit and a team of engineers from different fields.
WEIDA is the largest septic tank manufacturer in Malaysia, providing septic tank system designed specifically for both domestic and commercial applications.
WEIDA is the leading manufacturer for underground drainage pipe systems for subsoil, storm drains and culverts applications.
Since pioneering the industry of polyethylene–based building materials manufacturing for more than a quarter of a century ago, WEIDA has remained as the undisputed market leader in Malaysia, with a dominant position in East Malaysia. Growing steadily as a manufacturer for water and wastewater engineering, WEIDA is a leading provider of modern environmental engineering products and solutions in the areas of water and wastewater infrastructures, products and services for both urban and rural applications.
The Group has a full presence nationwide with five (5) manufacturing plants strategically located in Nilai, Kuching, Kota Kinabalu, Miri and Tawau; and one (1) in Manila. The barriers of entry into this industry are high: substantial capital investment, intensive research and development programmes, and specialist technological expertise developed in-house over the years. This industry is generally capital intensive for big scale manufacturers. The main industry players have generally remained unchanged during the financial year under review.
Financial Performance Review
Despite the challenging economic situation, WEIDA’s manufacturing segment continues to deliver positive results. Our products are relevant and applicable to the development projects undertaken by the government such as provision of filtered water to the rural population, building of affordable homes, setting up of universities and educational institutions, construction of roads, jetties and landscaped recreational parks, agriculture and aquaculture projects.
The manufacturing segment achieved total revenue of RM162.2 million for FYE 31 March 2018 versus RM161.7 million for the previous financial year. The increase in revenue is due to higher demand in polyethylene engineering products and with more favorable mix of products and customers, a better profit margin was achieved with profit before tax recorded at RM21.7 million as compared to RM20.6 million in the previous financial year.
MANAGEMENT DISCUSSION AND ANALYSIS (“MD&A”)
ANNUAL REPORT 2018 I 15
SEGMENTAL REVIEW - MANUFACTURING (CONTINUED)
Prospect
The Group’s manufacturing segment is expected to benefit particularly in products for public utilities in relation to the above infrastructures and projects, such as water tanks, septic tanks, water pipelines, electrical power conduits, telecom conduits and towers and drainage culverts. The Group’s polyethylene culverts are increasingly being accepted in road construction projects and oil palm plantations for drainage infrastructure. Also with the government’s construction of affordable homes and the continued construction of housing units, these projects will provide the continued demand for our products.
All these projects should augur well for the Group’s manufacturing segment. The Group’s manufacturing segment will continue to serve both the government and private sector.
Strategy
The volatility of Malaysian Ringgit has resulted in the higher prices for our imported raw material. However, we have kept the necessary buffer stocks and this has mitigated the effects of higher raw material prices. At the same time, we will have to revise our prices to pass on some of the increased costs to end users.
The challenges posed by a slow economy will see higher credit risks in the conduct of business. We will continue to exercise prudence in credit evaluation and assessment.
With a shrinking market, the competition to get the market share will certainly be heightened. WEIDA’s well positioned plants will be a leverage for lower costs of transportation and greater accessibility to the customers. In addition, we offer a wider range of complementary products that would serve customers’ demands better and more conveniently. We continue to upgrade and improve the quality of our products and services, such as including innovative features onto our products.
SEGMENTAL REVIEW – WORKS
Principal Activities
The business division is primarily involved in construction of telecommunication infrastructures and share of rental proceeds of telecommunication towers as well as design, construction, and installation of water supply, storage infrastructure and treatment systems, wastewater treatment specialised systems, hydro systems and other infrastructure.
Business Operation Overview
Works segment is principally involved in construction work as a “one-stop engineering solutions provider” for engineering-driven turnkey works in the water supply, sewage and aquaculture sectors. These turnkey projects utilise WEIDA products, providing maximum synergy with the manufacturing arm. Our environmentally friendly engineering solutions are designed to help our clients achieve their objectives in a sustainable manner. The Group’s turnkey total solution services include the following:
• Feasibility Studies• Design• Manufacturing• Installation and Construction• Project Management• Commissioning
MANAGEMENT DISCUSSION AND ANALYSIS (“MD&A”)
16 I WEIDA (M) BHD. (504747-W)
SEGMENTAL REVIEW – WORKS (CONTINUED)
Business Operation Overview (continued)
On 28 April 2017, the Group has secured a 20-year government concession at a construction cost of RM351 million to build new buildings and facilities for the Hospital Umum Sarawak (“SGH”) under a build-lease-maintain-transfer model (“Concession”). Under the Concession, Weida shall undertake:
(i) the planning, design, financing, development, construction, landscaping, supply, installation, completion, testing and commissioning of new buildings and facilities comprising the Day Care Centre, the Medi-Hotel and Multi-Storey Car Park and the Multi-Storey Car Park Complex (hereinafter collectively referred to as “New Buildings and Facilities”).
(ii) the asset management services which comprise the asset replacement programme and maintenance services to the New Buildings and Facilities; and
(iii) the operations and management services of the Medi-Hotel and Multi-Storey Car Park.
The Concession has effectively commenced on 23 February 2018 after fulfilling the conditions precedent to the Concession Agreement and the construction of the New Buildings and Facilities shall be completed within thirty-six (36) months which is by 22 February 2021 and thereafter, be continued with the asset management services until expiry of the 20th anniversary from the commencement date.
Also, under this segment, WEIDA offers a full spectrum of telecommunication infrastructure services from construction, installation and rental of these network facilities.
WEIDA is a leading company in telecommunication infrastructure construction industry in Malaysia particularly in Sabah and Sarawak. We have extensive experience and expertise in providing a full spectrum of services from site acquisition, line of sight mapping, design and build, tower installation, project management, tower audit and site maintenance services.
WEIDA has completed 460 telecommunication towers in Sabah and Sarawak. We have rented 244 telecommunication towers to service providers on a long term basis. WEIDA also provides services to other telecommunication service providers. These services include the construction of rapole, rooftops, Eddy Covariance towers, installation and laying of fibre optic network infrastructure, provision of technical site survey and installation of telecommunication equipment.
Financial Performance Review
Given the nature of the works segment, its revenue and profit contribution typically fluctuates according to the ebb and flow of projects.
In the current financial year, this segment recorded a lower revenue of RM44.0 million (FYE 31 March 2017: RM64.9 million) but with higher segment profit of RM16.3 million (FYE 31 March 2017: RM9.6 million), mainly due to less construction work done but the impact was mitigated by higher profit margin achieved. No recognition of revenue for the SGH concession for the current financial year in view of the construction works is still in the early stage of construction.
Less construction work done was mainly because of the Malaysian Communications and Multimedia Commission’s (“MCMC”) Universal Service Provision (“USP”) phase 1 project was completed in FYE 2017. Also lower revenue derived from share of rental proceeds of telecommunication towers mainly due to reduction in rental rates as per the agreements with the service providers.
Prospect
There is a growing demand for telecommunication infrastructures in line with Sarawak State Government recently launched Digital Economy Strategy 2018-2022 which requires adequate telecommunication infrastructure to support the development. More telecommunication towers are needed to be built, more fibre optic cables to be laid as well as other infrastructural support to achieve this target. Reliable network facility infrastructure is a pre-requisite for the success of the digital economy and seamless connectivity. We continue to work together with service providers and the Ministry of Communications and Multimedia in developing telecommunication infrastructure landscape in Malaysia.
As at the date of this report, the construction works for the SGH Concession is progressing well and will achieve substantial progress for the coming financial year and thus, is expected to contribute positively to the revenue and earnings of the Group for the financial year ending 31 March 2019.
MANAGEMENT DISCUSSION AND ANALYSIS (“MD&A”)
ANNUAL REPORT 2018 I 17
SEGMENTAL REVIEW – WORKS (CONTINUED)
Strategy
In view of the growing demand of telecommunication infrastructures, in the forthcoming year, we will strive to secure projects from the State Government and Ministry of Communications and Multimedia and to work with service providers in constructing the above.
In relation to SGH project, the Group will plan and implement the construction work accordingly to meet the timeline and ensure compliance with rules and regulations that governing the project.
SEGMENTAL REVIEW – ENVIRONMENTAL SERVICES & OTHERS
Principal Activities
The business division is primarily involved in the sewerage services, treatment and disposal of sludge services as well as quarry operation.
Business Operation Overview
Sar-Alam Indah Sdn. Bhd. (“SAI”) manages, operates and maintains three Septic Sludge Treatment Plants (“SSTP”) in Sarawak, more specifically in Kuching, Sibu and Miri. We have secured 25 years concession for Matang SSTP in Kuching commencing year 2002, providing sludge treatment and disposal for Kuching, Padawan and Kota Samarahan municipalities. In year 2011, we secured 20 years concession for Sibu SSTP and Miri SSTP, providing sludge collection, treatment and disposal for Sibu and Miri municipalities. The quarry operation is managed under Blast Power Sdn. Bhd.
Financial Performance Review
This segment recorded revenue of RM24.1 million for FYE 31 March 2018 as compared to last financial year of RM24.6 million due to lower extraction and processing of quarry stone. There is a slight increase in segment profit from RM3.8 million in the last financial year to RM4.0 million in the current financial year mainly attributable to higher profit margin achieved, though slightly lower revenue is recorded.
Prospect
The growing emphasis on environmental sustainability also bodes well for the Group. Over the years, the Group has significantly grown and enhanced its human and engineering capital, via active involvement and collaboration with a network of established international organisations. The Group has been successfully playing, and will continue to play, the role as a provider of environmental engineering solutions; such as in the field of water and wastewater treatment, septic sludge treatment and renewable energy.
We are recognised by various local authorities and government agencies as the specialists in wastewater treatment as we provide expertise and sound solutions to ensure that the quality of our final effluent discharged from our plants are in compliance with the required regulations and standards.
Strategy
The management ensures strict compliance to environmental requirement and regulations from time to time via continuous updates and training in relation to the relevant legislations and regulations. It is important to maintain good rapport and relationship with all stakeholders (people, councils and government agencies) by achieving quality work, product and quality compliance as well as national recognition. As part of our commitment towards preserving our natural resources and promoting sustainable environment, the Group will continue to research into various methods of reusing the treated sludge.
The Group will work towards constructing more septic sludge treatment plants required by the State Government for bigger communities.
SAI is constantly pursuing more operation and maintenance contracts from other/new treatment plants.
MANAGEMENT DISCUSSION AND ANALYSIS (“MD&A”)
18 I WEIDA (M) BHD. (504747-W)
SEGMENTAL REVIEW - PROPERTY DEVELOPMENT
Principal Activities
The business division is primarily involved in the development and construction of residential properties.
Business Operation Overview
The business division is principally involved in property development, namely of niche residential and commercial properties, located in prime and mature neighbourhoods within the Klang Valley.
Our Urbana Residences project (356 units of serviced apartments) at Ara Damansara in Petaling Jaya has been completed and handed over to proud owners. The Urbana Residences won an honour award in Property Developer category at the tenth (10th) Malaysia Landscape Architecture Awards, a validation of the concept and design of Urbana Residences. To date, only limited bumi units remain in hand.
The Group is currently in various planning stages for future developments in Cheras and Mont’ Kiara, both mature neighborhoods in Kuala Lumpur.
Financial Performance Review
This business division recorded revenue of RM4.6 million for current financial year as compared to RM50.1 million in FYE 31 March 2017 as Urbana Residences project was completed in September 2016, i.e. last financial year with segment profit of RM3.0 million.
Segment loss of RM3.3 million incurred during FYE 31 March 2018 is mainly arised from preparation expenses for the Group’s proposed future developments.
Prospect
Following the recently concluded 14th General Election, the country as a whole is still adjusting to the historic transition. The sector is likely to remain neutral in the immediate term, as both developers and purchasers are likely to temporarily put on hold any major investments or purchases. In addition, current curbs on the housing sector, such as stringent requirements on the margin of financing, taxes and stamp duties remain in place.
Strategy
In order to navigate these challenging times, the Group has consciously employed the strategy of focusing on niche residential developments, in mature locations in the Klang Valley where demand and spending power remains resilient. The residential sub-sector accounts for 63% of the overall annual volume and 45% of the overall annual value transacted. Moreover, the country’s relatively young population, high household formation and growing urbanisation augurs well in the long term for the industry.
Moving forward, the Group will exercise great discipline in any launch or land bank acquisition. The management is continuously reviewing our planned launches. This entails revisiting and careful studies on our product design, pricing and even phasing strategies to ensure success for the benefit of the shareholders.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This Annual Report contains forward-looking statements that are based on management’s estimates, assumptions and projections at the time of publication. These statements reflect our current views and expectations with respect to future events and are subject to risks and uncertainties and hence are not guarantees of future performance. Some factors include, but are not limited to, changes in general economic and business conditions, exchange rates and competitive activities that could cause actual results to differ materially from those expressed or forecasted in these forward-looking statements.
MANAGEMENT DISCUSSION AND ANALYSIS (“MD&A”)
ANNUAL REPORT 2018 I 19
BUSINESS ACTIVITIES
MANUFACTURING
OVERVIEWWEIDA is the leading manufacturer of HDPE products in Malaysia. Being a one-stop solutions provider in the water, wastewater and environmental sectors, we provide end-to-end engineering infrastructure products to cater to the growing demands for premium HDPE products.
WEIDA has manufacturing facilities that span over 120,000 square metres. Our products are designed and manufactured in compliance with Malaysia and international standards, satisfying the relevant technical specifications and performance criteria.
Apart from our products being certified by SIRIM and IKRAM, our manufacturing facilities are also ISO 9001 certified. These are assurances that our products are of the highest standards and meet the stringent requirements of the markets we serve.
Having invested intensively in research and development activities, we have developed proprietary technologies in the manufacturing of large tanks and pipes, mould design and fabrications, material formulation and compounding as well as HDPE welding and fabrications. To stay connected with the technological development of the manufacturing industry, WEIDA established and maintains strong partnership with international manufacturing technology affiliates.
Sabah Industry Excellence Award2010/2011 (Category IV)
Winner of 3 Malaysia Good Design Mark 2012 and 2017 Award
Gold Award of Sarawak Chief Minister’s Industry Excellence
Awards 2017
20 I WEIDA (M) BHD. (504747-W)
MANUFACTURING (CONTINUED)
PRODUCT BRAND NAMES
WEIDA offers more than 200 types of HDPE products produced by six (6) manufacturing plants across Malaysia and Republic of The Philippines using proprietary technology spearheaded by our research and development unit and a team of engineers from different fields.
Our proprietary products are flexible in design andeasy to install, therefore reducing labour costs. Thedurability of our products also significantly reducesthe cost of maintenance.
BUSINESS ACTIVITIES
APPLICATIONS OF WEIDA PRODUCTS
WATER INFRASTRUCTURE
Liquid Storage Systems
Utilising advanced rotational moulding processes that produces single-piece and seamless product, WEIDA’s water storage tanks are leak proof, durable and resistant to corrosion. PE tanks such as our POLYSTOR®, RAINSAVER® and AQUASTOR are available in a wide range of sizes and capacities, for use in commercial, industrial and municipal water storage applications and rainwater harvesting.
For industrial applications, our POLYCHEM® tanks are used for liquid chemical storage. PE tanks are chemically resistant against the pH extremes of acids and alkalis making them suitable as liquid storage tanks for factories.
Water Treatment
WEIDA offers specially designed rural water treatment solutions which includes rainwater harvesting system, groundwater supply systems, conventional water treatment systems as well as state-of-the-art ultrafiltration membrane systems can be delivered and implemented as individual systems or fully integrated into one comprehensive solution.
To date, WEIDA has successfully delivered rainwater harvesting systems for rural schools and villages throughout Sabah and Sarawak as well as undertaken and completed several rural water supply projects on design-and-build basis.
ANNUAL REPORT 2018 I 21
MANUFACTURING (CONTINUED)
BUSINESS ACTIVITIES
WATER INFRASTRUCTURE (CONTINUED)
Potable Water Distribution Network
WEIDA provides HDPE piping solutions for the distribution of potable water and supplies a wide range of pipe fittings and accessories. WEIDALINE® HDPE pipe is an ideal choice for applications in water distribution, irrigation and wastewater drainage for municipal, building water supply systems, rural water supply schemes as well as for agricultural applications. We also provide technical assistance in pipeline design, pipe laying as well as installation and welding works.
Stormwater Drainage Systems and Tanks
WEIDA is the leading manufacturer for underground drainage pipe systems for subsoil, storm drains and culverts applications. The FLOLINE 3-W® pipe, manufactured from premium engineering-grade HDPE material, is ideal for underground or aboveground gravity and low-pressure applications for drainage and irrigation. They can also be used as intake and outfall pipes for power plants and water treatment plants. Coupled with prefabricated FLOGATE, these strong yet lightweight systems are the ideal choice as culverts and flood control system in oil palm plantations.
WEIDALINE® single and double wall corrugated HDPE pipes are widely used for subsoil drainage in fields and golf courses, as well as leachate drainage for landfills. WEIDA’s FLOLINE 3-W® pipes can be configured into large underground detention tank systems in urban storm water management to prevent flash floods.
WASTEWATER INFRASTRUCTURE
Wastewater Treatment
WEIDA is the largest septic tank manufacturer in Malaysia, serving both domestic and commercial applications. The ECOSEPT® septic tanks are suitable for domestic sewerage application as it is designed to suit local sewage flows and loading parameters.
WEIDA is also the market leader in the supply of prefabricated modular sewage treatment plants (“STP”), suitable for decentralised treatment systems by employing the EA process. ECOPASS® Small Sewage Treatment Systems are fast to install, durable and reliable, making them suitable for applications into housing estates, schools and government buildings.
With over 20 years of experience in developing and providing a full spectrum of expertise in wastewater treatment solutions through planning, engineering construction, operation and maintenance, to process optimisation of various types of wastewater treatment systems, WEIDA can provide a variety of systems, including conventional activated sludge (“CAS”) process, extended aeration (“EA”) process, biological nutrient removal (“BNR”) process and the membrane bioreactor (“MBR”) process.
22 I WEIDA (M) BHD. (504747-W)
MANUFACTURING (CONTINUED)
APPLICATIONS OF WEIDA PRODUCTS (CONTINUED)
WASTEWATER INFRASTRUCTURE (CONTINUED)
Sewer Network
WEIDA® Double Wall Corrugated HDPE pipes are effective solutions to transfer sewage from residential and commercial premises to wastewater treatment plants. Being highly resistant to the chemical corrosion from soils and sewage effluents, these flexible pipes are easy to install and handle, making them the preferred choice for gravity sewerage works.
AQUACULTURE INFRASTRUCTURE
WEIDA manufactures floating cage systems and hatchery tanks to serve the aquaculture industry. ECOCAGE and WEIDACAGE cage systems, made up of a network of interlocking, modular polyethylene floating modules, are designed especially for freshwater aquaculture in lakes and rivers. A variety of AQUALIFE® polyethylene tanks caters for land-based fish farming, where they are used as breeding, hatchery or filter tanks.
BUSINESS ACTIVITIES
MARINE INFRASTRUCTURE
WEIDA has the engineering capabilities to supply complete floating pontoon systems for marinas and jetties. Using WEIDAFLOAT® HDPE floats as the floatation modules, WEIDA can design and construct floating systems with wooden/concrete decking, complete with mooring accessories, fenders, pile restraints and gangways to meet the customers’ requirements.
ROAD INFRASTRUCTURE
For the road construction and maintenance sector, WEIDA supplies gabions and geotextiles. Geotextiles are widely used for filtration and separation in road constructions, to prevent migration and mingling of materials, yet allowing free movement of water. It is also used to strengthen the sub-grade and erosion control. Gabion walls are used to protect slopes and construct embankments.
WEIDA is also the leading manufacturer of WEIDA TRAFSAFE® road barriers, used for traffic management during roadworks. These lightweight yet durable products eases the temporary realignment of roads to manage traffic flow during construction phase. Being highly visible they are safety barriers to warn road users about roadworks.
The FLOLINE 3-W® HDPE pipes are of the highest ring stiffness class among all the HDPE pipes available in Malaysia, making them suitable to be used as both urban and rural road culverts.
ANNUAL REPORT 2018 I 23
BUSINESS ACTIVITIES
ENVIRONMENTAL SERVICES
With a track record of over 20 years in the waste water sector, WEIDA offers a full spectrum of experience and expertise in centralized and decentralized wastewater treatment solutions optimised in process, design and treatment capabilities.
Weida offers end-to-end solutions in wastewater management covers the whole range of services which include management, operation and maintenance of treatment plants both locally and overseas.
We are recognized by various local authorities and government agencies as the specialists in wastewater treatment as we provide expertise and sound solutions to ensure that the quality of our final effluent discharged from our plants are in compliance with the required regulations and standards.
In Malaysia, we have secured long term contracts for operating and managing the septic sludge treatment plants in Kuching, Sibu and Miri. We have a dedicated team of professionals make up of former senior and experienced engineers in operating and maintaining large scale central sewage treatment plants for Indah Water Konsortium. Also, Weida had received various awards on recognition as the service provider for sludge treatment plants.
Malaysia Book of RecordNational Level Records
being the first Septic Sludge Treatment Plant to receive
ISO 14001 and ISO 9001
Winner of The Sixth (6th) Sarawak
Environmental Award (CMEA) 2014
Merit Award of The Seventh (7th) Sarawak Environmental Award
(CMEA) 2015/2016
24 I WEIDA (M) BHD. (504747-W)
TELECOMMUNICATION INFRASTRUCTURE
For telecommunication towers, WEIDA offers a full spectrum of telecommunication networking services from initial construction and installation to long term maintenance of these network facilities as follows:
• Network construction infrastructure• Fiber optic network infrastructure• Network installation and maintenance services
WORKS (UTILITIES INFRASTRUCTURES)The Group has over the years, built up its engineering capabilities to undertake and deliver quality construction works timely within the completion period. Coupled with our strong financial resources, it provides us the flexibility to undertake infrastructure and building projects based on private funding initiative, build-and-lease or deferred payment basis.
The completed and on-going construction works undertaken by the Group include telecommunication towers, water and sewerage treatment plants, distribution and drainage pipelines, biogas plants, building works, green house for agricultural purpose, building works and others.
BUSINESS ACTIVITIES
At WEIDA, we demonstrated our expertise in rolling out large scale telecommunications projects such as the Malaysian Communications and Multimedia Commission (“MCMC”) Universal Service Provision (“USP”) TIME T2 Program and MCMC USP TIME T3 Program in Sabah and Sarawak which required exceptional skills, expertise and financial resources.
Other than MCMC projects, WEIDA also provides services to other telecommunications service providers. These services include the construction of rapole, rooftops, Eddy Covariance towers, installation and laying of fibre optic network infrastructure, provision of technical site survey and installation of telecommunication equipment.
WATER & WASTEWATER INFRASTRUCTURE
WEIDA is a renowned integrated water and wastewater infrastructure specialist, undertaking turnkey projects on a design and build basis. WEIDA provides integrated solutions to the communities to meet their needs for sustainable and high quality water supplies and also resolving the water shortage issues. WEIDA has been actively participating in contract works for water supply infrastructure at rural areas.
BUILDING CONSTRUCTIONS
On 28 April 2017, Asaljuru Weida Sdn. Bhd., a member of WEIDA, had entered into a 20 years concession agreement with the Minister of Health in relation to the upgrading of Sarawak General Hospital by way of development of new buildings and facilities, on a public private partnership by way of private financing initiatives under the build-lease-maintain-transfer model. The concession is expected to contribute positively to the earnings of the Group in future financial years.
ANNUAL REPORT 2018 I 25
Honour Award of The TenthMalaysia Landscape Architecture Awards
(MLAA) 2017 (Property Development Category)
BUSINESS ACTIVITIES
PROPERTY DEVELOPMENTOVERVIEW
As a boutique property developer, Weida Properties Sdn. Bhd. aims to build for the future – creating niche lifestylecentric developments that cater to the market’s evolving needs. With our strong emphasis on sustainable living, we take pride in our commitment to deliver quality lifestyle homes that will last.
At Weida, we don’t just create homes – our lifestyle-focused homes enable families to live how they like and connect with each other, all within a flexible space that promotes quality time and bonding with loved ones. Following the guiding principle of putting the customer at the heart of everything we do, our priority is to provide the best service and competitive products in the market.
Our strategy involves focusing on prime, mature locations with a large population. We identify market gaps and offer products that fulfil these needs, building a brand DNA that’s synonymous with lasting quality, innovation, and value.
We will continue to strengthen our presence in the property sector through strategic acquisitions or joint ventures to increase our landbank in the Klang Valley and beyond.
26 I WEIDA (M) BHD. (504747-W)
FIVE YEARS GROUPFINANCIAL HIGHLIGHTS
FINANCIAL YEAR ENDED 31 MARCH 2014 2015 2016 2017 2018 OPERATING RESULTS
Revenue RM’000 318,230 333,841 384,312 301,409 234,892 EBITDA RM’000 56,365 50,892 64,598 49,242 47,726 EBIT RM’000 30,724 28,219 44,449 32,650 34,744 Profit before tax RM’000 31,619 29,166 42,482 34,343 35,614 Profit for the financial year RM’000 22,951 20,776 26,115 20,101 22,191 Profit attributable to owners of the Company RM’000 22,143 17,417 26,023 18,135 20,347
KEY FINANCIAL POSITION DATA
Total Assets RM’000 627,225 623,945 597,101 592,671 574,008 Total Borrowings RM’000 155,473 111,490 87,522 71,966 49,954 Equity Attributable to Owners of the Company RM’000 350,486 378,961 400,573 414,881 431,576
FINANCIAL RATIOS Basic Earnings Per Ordinary Share sen 17.45 13.73 20.51 14.29 16.03 Gross Dividend Per Ordinary Share sen 3.00 3.00 3.00 3.00 3.00 Gearing Ratio Times 0.44 0.29 0.22 0.17 0.12 Net Assets Per Ordinary Share RM 2.76 2.99 3.16 3.27 3.40
Denote EBITA : Earnings before interest, taxes, depreciation and amortisation. EBIT : Earnings before interest and taxes.
ANNUAL REPORT 2018 I 27
Besides maximising shareholders’ value, WEIDA believes that we are also responsible for our employees, environment and community. We create long term value by providing our clients with value-added products and services, promoting a corporate culture that adheres to high ethical standards, and by generating superior and sustainable returns for our shareholders. We firmly believe that sustainable growth and investment for any business is also dependent on what it does above and beyond the requirements of laws and regulations. This is why we are committed to creating a working environment based on the values of meritocracy, equal opportunity and diversity. As part of our business, we contribute to the protection of the environment. We also adhere to high social standards and contribute to the communities we are part of. All our activities are underpinned by our governance structure, which complies with the Malaysian Code on Corporate Governance 2017.
ENVIRONMENT AND MARKETPLACE
Protecting the natural environment, sustainable development and living in harmony with the environment is at the heart of WEIDA’s core business in the water and sewerage sectors. As a one-stop centre for water and sewerage solutions, our people strive to protect the environment every day. For instance, we have designed and built many water and sewage treatment plants, thousands of rain water harvesting and gravity feed water supply systems for rural communities, and countless rural sanitation systems. The communities we serve are far and wide, in Malaysia and Republic of The Philippines.
The engineering products that we manufacture for water and sewerage applications are made from polyethylene (“PE”). PE products are corrosion resistant, relatively lightweight, chemically inert and seamless in construction. These superior characteristics make them ideal substitutes for similar products made from other materials such as fibreglass, metals and concrete. The U.S. Food and Drugs Authority Administration (“FDA”), an authority in the United States that certifies the types of materials that are suitable to be in contact with water and food for the purpose of safeguarding customers/public health, has approved polyethylene as safe for use as a medium of storage for drinking water and food. Many countries legislate against the use of alternative materials such as fibreglass, asbestos concrete, and in certain cases, polyvinyl chloride (“PVC”), for pipelines and water storage as they are hazardous to health and/or pollute the environment.
Our commitment to serving our community goes beyond providing environmentally friendly products. We go one step further by working hand in hand with local city councils and provide services and infrastructure that benefit the people we serve. We have taken the initiative to develop projects that will not only enhance the environment, but serve as a platform where WEIDA can make positive contributions to the daily lives of the community.
PEOPLE AND SAFETY
At WEIDA, our people is our main asset. The Group endeavours to attract, develop and retain the best talents the market has to offer by providing a continuous learning and conducive working environment. We believe in recognising, advancing and rewarding top talents in an open and mutually supportive work environment which reflects our core corporate values. We pride ourselves as an equal opportunity employer. These core values shape the root of a sturdy corporate culture that fosters teamwork and unites our people for sustainable growth.
We continuously invest in our people to send them for external professional trainings, seminars and conferences, and also in house training to provide them with relevant skills to thrive in a constantly changing business environment. In addition, various teambuilding activities are organised in order to foster awareness of time management and team spirit as well as to reinforce commitment to our team’s shared goals and objectives.
Safety and health of our employees is our priority and we are continually looking into ways to improve our performance in these areas. WEIDA has implemented its Safety and Health Policy in Malaysia and Republic of The Philippines, which complies with the Occupational Safety and Health Act (“OSHA”) of the respective countries.
STATEMENT ON CORPORATE SOCIAL RESPONSIBILITY
28 I WEIDA (M) BHD. (504747-W)
COMMUNITY
The future of WEIDA is naturally linked to the standard of living of the communities it serves. Through a wide array of initiatives supported by WEIDA, namely community-development programmes, philanthropy, volunteerism and promotion of health, education, cultural, arts and sports, we are making a difference in improving the quality of life in the community.
EVENTS
For the financial year ended 31 March 2018, WEIDA has initiated and/or participated in the following community-based events:
Standard Chartered Kuala Lumpur Marathon (May 2017)WEIDA supported the run by contributing registration fee for participated staff in promoting healthy lifestyle and sustainable keep-fit activity.
Sponsorship for World Psoriasis Day Charity Run 2017 (July 2017)WEIDA donated funds to support the charity run.
UNIMAS Program Menaiktaraf Infrastruktur Bung Jagoi bagi Projek MKMF Pembangunan Pelancongan Bung Jagoi (October 2017) WEIDA contributed four (4) units of polyethylene septic tanks to support the project.
Standard Chartered Kuala Lumpur Marathon (April 2018)WEIDA supported the run by contributing registration fee for participated staff in promoting healthy lifestyle and sustainable keep-fit activity.
STATEMENT ON CORPORATE SOCIAL RESPONSIBILITY
ANNUAL REPORT 2018 I 29
WEIDA EVENT HIGHLIGHT
Weida Integrated Industries Sdn. Bhd. (WIISB) participated in 13th ISP NATIONAL SEMINAR (NASTEM) 2017.
YB Tan Sri Datuk Amar Dr James Jemut Masing, Deputy Chief Minister II of Sarawak and Minister of Infrastructure Development and Transportation Visit to WIISB.
WIISB won Gold Award at the Chief Minister Industry Excellence Awards
17 - 18 July 2017
27 July 2017 8 September 2017
ANNUAL REPORT 2018 I 29
30 I WEIDA (M) BHD. (504747-W)
WEIDA EVENT HIGHLIGHT
WEIDA Badminton Tournament
Asaljuru Weida Sdn. Bhd. hosted Chinese New Year Open House
WIISB participated in Asia Water Expo 2018 Urbana Residences won Honour Award in the Property Developer Category at the 10th Malaysia Landscape Architecture Awards (MLAA)
18 November 2017
1 March 2018
10 - 12 April 2018 21 April 2018
30 I WEIDA (M) BHD. (504747-W)
ANNUAL REPORT 2018 I 31
The Board of Directors of Weida (M) Bhd. (“the Board”) is steadfast and committed in ensuring that the highest standards of corporate governance are embedded and applied throughout Weida (M) Bhd (“WEIDA” or “the Company”) and its Group of Companies (“the Group”) through its support and application of the Malaysian Code on Corporate Governance 2017 (“MCCG 2017”). The Board believes that upholding good corporate governance is fundamental in discharging its fiduciary responsibilities to protect and enhance shareholders’ value and the financial performance of the Group.
This Corporate Governance Overview Statement (“Statement”) sets out how the Company has applied the three (3) principles and practices as outlined in the MCCG 2017 in respect of the financial year ended 31 March 2018, details of which are disclosed in the Corporate Governance Report, which is available in our website at www.weida.com.my.
PRINCIPLE A - BOARD LEADERSHIP AND EFFECTIVENESS
I) Board Responsibilities
The Board recognises the key role it plays in charting the strategic direction of the Company and has assumed the following principal responsibilities in discharging its fiduciary and leadership functions:
(a) reviewing and adopting a strategic plan for the Company, which also addresses the sustainability of the Group’s businesses;
(b) overseeing the conduct of the Group’s businesses and evaluating whether or not its businesses are being properly managed;
(c) identifying principal business risks faced by the Group and ensuring the implementation of appropriate internal controls and mitigating measures to address such risks;
(d) ensuring that all candidates appointed to senior management positions are of sufficient calibre, including having in place a process to provide for the orderly succession of senior management personnel and members of the Board;
(e) overseeing the development and implementation of a shareholder communications policy; and
(f) reviewing the adequacy and integrity of the Group’s risk management and internal control, and management information systems.
To assist in the discharge of its stewardship role, the Board has established Board Committees, namely the Audit Committee, Nominating Committee, Remuneration Committee and Risk Management Committee, to examine specific issues within their respective terms of reference as approved by the Board and report to the Board with their recommendations. The ultimate responsibility for decision making, however, lies with the Board.
The senior management (“Management”) is delegated with certain authority to enable them to effectively discharge their duties and responsibilities, subject to the Company’s authority limits granted to the Management. Management under the stewardship of the Group Executive Chairman will keep the Board informed of material issues that may significantly affect the Group’s policies and performance.
CORPORATE GOVERNANCE OVERVIEw STATEmENT
32 I WEIDA (M) BHD. (504747-W)
PRINCIPLE A - BOARD LEADERSHIP AND EFFECTIVENESS (CONTINUED)
I) Board Responsibilities (continued)
The Group Executive Chairman is responsible for ensuring the adequacy and effectiveness of the Board’s governance process and acts as a facilitator at Board meetings to ensure that contributions from Directors are forthcoming on matters being deliberated and that no Board member dominates discussion. The position of Group Managing Director is currently vacant. The Group Executive Chairman, supported by fellow Executive Director, implements the Group’s strategies, policies and decisions adopted by the Board and oversees the operations and business development of the Group.
(a) Board Charter and Code of Conduct
To enhance accountability, the Board has established clear functions reserved for the Board and those delegated to management. Further details pertaining to the Board Charter, Code of Ethics, Code of Conduct and Whistle-Blowing Policies and Procedures are set out in the Corporate Governance Report. These documents are made available on the Company’s website at www.weida.com.my and will be periodically reviewed and updated to ensure it remains consistent with the Board’s objective and responsibilities.
(b) Access to Information and Advice
The Board has unrestricted access to all information of the Group, whether as a full Board or in their individual capacity. Directors are supplied with relevant information and reports on financial, operational, corporate, regulatory, business development and audit matters for decisions to be made on an informed basis and effective discharge of the Board’s responsibilities. The Board is furnished with meeting materials at least five (5) business days prior to the meeting. Minutes of meetings are circulated in a timely manner.
The details of Directors’ attendances during the financial year under review are set out below:
Number of meetings Attended Independent Directors Yeoh Chin Hoe (Senior Independent Directors) 8 out of 8 Dato’ Jamelah Binti Jamaluddin 7 out of 8 Lee Pet Loi 8 out of 8 Liew Jee Min @ Chong Jee Min 7 out of 8
Number of meetings Attended Executive Directors Dato’ Lee Choon Chin (Group Executive Chairman) 7 out of 8 Jee Hon Chong 8 out of 8
Directors have unrestricted access to the advice and services of the Company Secretaries to enable them to discharge their duties effectively. The Board is regularly updated and advised by the Company Secretaries who are qualified, experienced and competent on statutory and regulatory requirements, and the resultant implications of any changes therein to the Company and Directors in relation to their duties and responsibilities.
(c) Company Secretaries
The Company Secretaries are competent and suitably qualified as required pursuant to the Companies Act 2016. They play supporting and advisory roles to the Board and its Committees. They ensure adherence and compliance to Board policies and procedures as well as regulatory requirements.
CORPORATE GOVERNANCE OVERVIEw STATEmENT
ANNUAL REPORT 2018 I 33
PRINCIPLE A - BOARD LEADERSHIP AND EFFECTIVENESS (CONTINUED)
I) Board Responsibilities (continued)
(d) Directors Training
The Board is mindful of the importance for its members to undergo continuous training to be apprised on changes to regulatory requirements and the impact such regulatory requirements have on the Group, to enable the Directors to sustain their active participation in Board’s deliberations.
During the financial year under review, training attended by Directors includes briefings, seminars and conferences conducted by relevant regulatory authorities and professional bodies, details of which are appended below:
Title of Training mode of Training Number of Day(s) Spent
• Executive Briefing: Malaysian External Seminar ½ day Code on Corporate Governance Update
• Fraud Risk Management Workshop External Seminar ½ day
• Companies Act 2016 – Practical External Seminar 1 day Consideration
• Driving Financial Integrity & Performance External Seminar 1 day – Enhancing Financial Literacy
• Amendments to the Listing Requirements External Seminar ½ day of Bursa Malaysia Securities Berhad enhancing Disclosure and Corporate Governance Practices (“Amendments”) and the new Malaysian Code on Corporate Governance
• Bursa Risk Management Programme External Seminar 1 day – I Am Ready to Manage Risks
• Effective Internal Audit Function for External Seminar ½ day Audit Committee Workshop – A programme for Audit Committee Members
• Advocacy Sessions on Corporate External Seminar ½ day Disclosure for Directors and Principal Officers of Listed Issuers
• Related Party Transaction & Conflict of External Seminar ½ day Interest – their implications to Directors, Audit Committee, Management, Internal Auditors & External Auditors
• Corporate Governance Briefing Sessions: External Seminar ½ day MCCG Reporting & CG Guide
• Audit Committee Institute (ACI) Breakfast External Seminar ½ day Roundtable 2018
• IERP Global Conference – Enterprise Risk External Seminar 1 day Management: Harnessing Disruption
• Director Guide to GRC (Governance, Risk External Seminar ½ day and Compliance)
CORPORATE GOVERNANCE OVERVIEw STATEmENT
34 I WEIDA (M) BHD. (504747-W)
PRINCIPLE A - BOARD LEADERSHIP AND EFFECTIVENESS (CONTINUED)
II) Board Composition
During the financial year under review, the Board consisted of two (2) Executive Directors and four (4) Independent Directors. At all times, during the financial year under review, the composition of the Board fulfills the requirements as set out in the Main Market Listing Requirements (“Listing Requirements”) of Bursa Malaysia Securities Berhad (“Bursa”), which stipulate that at least two (2) Directors or one-third (1/3) of the Board, whichever is higher, must be independent. The Directors, with their diverse backgrounds and specialisations, collectively bring with them a wide range of experience and expertise in areas such as engineering, entrepreneurship, finance, taxation, accounting, audit, economics and legal. The profile of each Director is set out on pages 4 to 7 of this Annual Report.
The Independent Directors bring to bear objective and independent views, advice and judgment on interests, not only of the Group, but also of shareholders, employees, customers, suppliers and the communities in which the Group conducts its business. Independent Directors are essential for protecting the interests of shareholders and can make significant contributions to the Company’s decision making by bringing in the quality of detached impartiality.
The Directors had devoted sufficient time and efforts to carry out their responsibilities. The Board shall obtain this commitment from Directors at the time of their appointment. Each Director is expected to commit time as and when required to discharge the relevant duties and responsibilities, besides attending meetings of the Board and Board Committees.
Thus far, the Board is satisfied with the level of time commitment given by all the Directors in fulfilling their roles and responsibilities as Directors of the Company. This is evidenced by their attendance at the meetings of the Board and the Board Committees. All the Directors hold not more than five (5) directorships in listed issuers.
Checks and balances in corporate decision making at Board level arise from the Board comprising of a majority of Independent Directors and the existence of a Board Charter that formally sets out a schedule of matters reserved solely for the Board’s decision making. While the Group Executive Chairman is not an independent director, the Board comprise a majority of independent directors.
The Independent Directors participated in Board and Board Committees’ meetings actively and constructively by expressing their independent views.
The Board and its Nominating Committee (“NC”) noted that the key tasks of the NC is to ensure that the Company recruits, retains, trains and develops the best available executive and non-executive directors and manages Board renewal and succession effectively.
The NC will recommend candidates for all directorships to be filled for the consideration of the Board. This involves identification and evaluation of candidates for directorships, interviewing or meeting up with candidates by Board members, deliberation by the NC and recommendations by the NC to the Board.
New Directors will undergo a familiarisation programme, which includes visits to the WEIDA Group’s businesses, and meetings with Senior Management, as appropriate, to facilitate the new Directors’ understanding of WEIDA Group. The Company Secretaries will ensure that all appointments of new Director are properly carried out and all legal and regulatory obligations are met.
The Board, through the NC conducted an annual assessment of the performance of the Board, as a whole, Board Committees and individual Directors, based on a peer-assessment approach. From the results of the assessment, including the mix of skills and experience possessed by Directors, the Board considered and approved the recommendations made by the NC on the re-election and re-appointment of Directors at the Company’s forthcoming Annual General Meeting.
All assessments and evaluations carried out by the NC in the discharge of all its functions are properly documented.
CORPORATE GOVERNANCE OVERVIEw STATEmENT
ANNUAL REPORT 2018 I 35
PRINCIPLE A - BOARD LEADERSHIP AND EFFECTIVENESS (CONTINUED)
II) Board Composition (continued)
The Board, through the Nominating Committee, assesses the Independent Directors annually based on the Directors’ Selection, Recruitment, Assessment Policies and Procedures. The MCCG 2017 provides a limit of a consecutive term of nine (9) years on the tenure of an Independent Director. However, an Independent Director may continue to serve on the Board upon reaching the nine (9)-year limit subject to the Independent Director’s re-designation as a Non-Independent Non-Executive Director. In the event the Board intends to retain the Director as Independent Director after the latter has served a consecutive term of nine (9) years, the Board must justify the decision and seek shareholders’ approval at general meeting. In justifying the decision, the Board is required to assess the candidate’s suitability to continue as an Independent Director based on the criteria adopted by the Board.
The Board has stipulated specific terms of reference for the NC, which cover, inter-alia, selecting, assessing and recommending to the Board the candidature of Directors, appointment of Directors to Board Committees and training programmes for the Board.
Insofar as board diversity is concerned, the composition of the Board shall be guided by the Board Diversity Policy, set out in Appendix C of the Charter, to ensure the Board is of appropriate mix so as to optimise the performance of the Board as a whole and align the Board’s capabilities with the strategic direction of the Company.
III) Directors’ Remuneration
The Board has adopted and formalised Remuneration Policies and Procedures for Directors. The Remuneration Committee is responsible for evaluating and setting the remuneration policy framework and recommending to the Board the remuneration package of Directors so as to ensure that the Company is able to attract and retain directors of the necessary calibre to run the Group successfully. The components of Directors’ remuneration are structured so as to link rewards to corporate and individual performance in the case of Executive Directors. In the case of Independent Directors, the level of remuneration reflects the experience and level of responsibilities undertaken by the individual Independent Director concerned. The remuneration for non-executive directors shall be decided by the Board as a whole.
The remuneration of non-executive directors comprises of fees, meeting allowance and other benefits.
The terms of reference of the Remuneration Committee is available on the Company’s website at www.weida.com.my.
Directors’ remuneration for the financial year ended 31 March 2018, categorised into appropriate components, distinguishing between Executive and Independent Directors, is as follows:
Salaries and Performance EPF/ Directors Fees Awards Allowance SOCSO Total (Rm) (Rm) (Rm) (Rm) (Rm)
COmPANY
Executive Directors Dato’ Lee Choon Chin 36,000 1,431,000 60,000 178,920 1,705,920 Jee Hon Chong 36,000 - - - 36,000
Subtotal 72,000 1,431,000 60,000 178,920 1,741,920
CORPORATE GOVERNANCE OVERVIEw STATEmENT
36 I WEIDA (M) BHD. (504747-W)
PRINCIPLE A - BOARD LEADERSHIP AND EFFECTIVENESS (CONTINUED)
III) Directors’ Remuneration (continued)
Salaries and Performance EPF/ Directors Fees Awards Allowance SOCSO Total (Rm) (Rm) (Rm) (Rm) (Rm)
Independent Directors
Yeoh Chin Hoe 72,000 - 21,000 - 93,000 Lee Pet Loi 72,000 - 16,000 - 88,000 Dato’ Jamelah Binti Jamaluddin 72,000 - 6,000 - 78,000 Liew Jee Min @ Chong Jee Min 72,000 - 16,000 - 88,000
Subtotal 288,000 - 59,000 - 347,000
Grand total 360,000 1,431,000 119,000 178,920 2,088,920
SUBSIDIARIES
Jee Hon Chong - 506,500 60,000 68,832 635,332
Grand total - 506,500 60,000 68,832 635,332
TOTAL (GROUP) 360,000 1,937,500 179,000 247,752 2,724,252
The number of Directors of the Company, whose remuneration band falls within the following successive bands of RM50,000, is as follows:
Range of Remuneration Executive Directors Independent Directors Total Rm Number Number number
Less than RM50,000* - - - RM50,001 to RM100,000 - 4 4 RM100,001 to RM650,000* - - - RM650,001 to RM700,000 1 - 1 RM700,001 to RM1,700,000* - - - RM1,700,001 to RM1,750,000 1 - 1
* No Director received any remuneration within this range
The key management remuneration information is available on pages 125 of this Annual Report.
CORPORATE GOVERNANCE OVERVIEw STATEmENT
ANNUAL REPORT 2018 I 37
PRINCIPLE B – EFFECTIVE AUDIT AND RISK mANAGEmENT
I) Audit Committee
It is the Board’s commitment to present a balanced and meaningful assessment of the Group’s financial performance and prospects at the end of each reporting period and financial year, primarily through the quarterly announcement of Group’s results to Bursa, the annual financial statements of the Group and of the Company as well as the Statement from Group Executive Chairman and review of the Group’s operations in the Annual Report, where relevant.
To assist in the discharge of its duties on financial reporting, the Board has established an Audit Committee, comprising exclusively Non-Executive Directors, all of whom are Independent Directors, with Mr. Yeoh Chin Hoe as the Audit Committee Chairman. The composition of the Audit Committee, including its roles and responsibilities, are set out in the Report of the Audit Committee on pages 41 to 45 of this Annual Report.
The Board understands its role in upholding the integrity of financial reporting by the Company. Accordingly, the Audit Committee, which assists the Board in overseeing the financial reporting process of the Company, has adopted Non-audit Services Policies and Procedures (“NAS P&P”) as guidelines for the types of non-audit services permitted to be provided by the external auditors, including the need for the Audit Committee’s approval before such services can be provided by the external auditors.
In assessing the independence of external auditors, the Audit Committee has adopted an External Auditor Performance and Independence Checklist and obtained written assurance from the external auditors, confirming that they and their network firm, engagement partner and audit team’s independence, integrity and objectivity comply with relevant ethical requirements.
During the financial year under review, the Audit Committee met with the external auditors twice (2) without the presence of the other Directors and employees of the Group.
Further information on the Audit Committee is elaborated in the Report of the Audit Committee as set out on pages 41 to 45 of this Annual Report.
II) Risk management and Internal Control Framework
The Board regards risk management and internal controls as an integral part of the overall management processes.
The Board has overall responsibility to maintain a sound system of risk management and internal control that provides reasonable assurance of effective and efficient business operations, compliance with laws as well as internal procedures and guidelines. Accordingly, the Board has formalised this framework as further elaborated in the Statement on Risk Management and Internal Control.
The Risk Management Committee was established on 26 May 2015 to assist the Board to oversee the overall management of principal areas of risk of the Group. The Risk Management Committee, headed by the Group Executive Chairman, carries out its responsibility to identify and communicate to the Board the principal risks faced by the Group, their evolution, and management action plans to manage these risks.
In line with MCCG 2017 and Listing Requirements of Bursa, the Company has established an in-house internal audit function to assess the adequacy and effectiveness of the Group’s governance, risk management and internal control systems. The in-house internal audit function is guided by professional standards promulgated by the Institute of Internal Auditors Inc, a globally recognised professional body for internal auditors. The Internal Audit Manager reports directly to the Audit Committee. The internal audit function is independent of the activities it audits and the scope of work covered by the internal audit during the financial year under review is provided in the Report of the Audit Committee of the Company set out on pages 44 to 45 of this Annual Report.
CORPORATE GOVERNANCE OVERVIEw STATEmENT
38 I WEIDA (M) BHD. (504747-W)
Principle C – INTEGRITY IN CORPORATE REPORTING AND mEANINGFUL RELATIONSHIP wITH STAKEHOLDERS
I) Communication with Stakeholders
The Board is aware of the need to establish corporate disclosure policies and procedures to enable comprehensive, accurate and timely disclosures relating to the Company and its subsidiaries to be made to the regulators, shareholders and stakeholders.
The Board also acknowledge that ongoing engagement and communication with stakeholders building trust and understanding between the Company and its stakeholders.
To augment the process of disclosure, the Board has earmarked a dedicated section for corporate governance on the Company’s website, where information on the Company’s announcements to the regulators, its Charter, rights of shareholders and the Company’s Annual Report may be accessed.
II) Conduct of General meetings
The Annual General Meeting (“AGM”), which is the principal forum for shareholder dialogue, allows shareholders to review the Group’s performance via the Company’s Annual Report and pose questions to the Board for clarification. All Directors attend the AGM. At the AGM, shareholders participate in deliberating resolutions being proposed or on the Group’s operations in general. At the last AGM, a question and answer session was held where the Group Executive Chairman invited shareholders to raise questions with responses from the Board and Senior Management.
The Notice of AGM was circulated more than twenty-eight (28) days before the date of the AGM to enable shareholders to peruse the Annual Report and papers supporting the resolutions proposed. The Company has not adopted leverage technology to facilitate electronic voting and remote shareholders participation at general meetings as the number of shareholders turned up at the general meetings in the past had been relatively small.
COmPLIANCE STATEmENT
The Group is considered complied with the principles and practices of the MCCG 2017, other than the exceptions stated hereinbefore.
With the introduction of the MCCG 2017 which took effect on 26 April 2017, the Board remains committed to inculcating good corporate governance for the Group. The Group will continue to endeavour to comprehend with all the principles and practices of MCCG 2017 where the Board deems appropriate, in its effort to observe high standards of transparency, accountability and integrity to achieve the intended outcomes of building and supporting a strong corporate governance culture throughout the Group.
STATEmENT ON NOmINATING COmmITTEE ACTIVITIES
The Nominating Committee met once during the financial year under review. The meeting was attended by all its members who are Independent Directors.
During the financial year ended 31 March 2018, the Nominating Committee assessed the mix of skill, experience and other qualities required for the Board, effectiveness and performance of the Board and Board Committees, contributions and performance of each individual Director, as well as the Group Financial Controller and the independence of the Independent Directors. In addition, the Nominating Committee also assessed the Directors who are due for retirement and re-appointment pursuant to the Company’s Articles of Association and Companies Act 2016, a candidate for the position of Independent Director, and made the necessary recommendations to the Board for deliberations and decision makings. It also ensures an appropriate framework and plan for Board and management succession. The Nominating Committee also assessed the training needs of Directors.
The Nominating Committee reviews and recommends to the Board the structure, size, balance and composition of the Board and Board Committees. This requires a review of the required mix of skills and experience including core competencies that directors should bring to the Board and other qualities for the Board to function effectively and efficiently.
This Statement is issued in accordance with a resolution of the Board of Directors dated 22 June 2018.
CORPORATE GOVERNANCE OVERVIEw STATEmENT
ANNUAL REPORT 2018 I 39
The following information is presented in compliance with the Main Market Listing Requirements:
Utilisation of Proceeds from Corporate Proposal
There were no proceeds raised from any corporate proposals during the financial year under review.
Audit and Non-Audit Fees
The fees paid/payable to the external auditors and/or its affiliates for the financial year ended 31 March 2018 are set out as below:
Group Company Rm Rm
Statutory Audit Fees: - KPMG PLT Malaysia 313,000 110,000- Overseas affiliates of KPMG PLT Malaysia 51,692 -- Other auditors 47,000 -
411,692 110,000
Non-Audit Fees: - KPMG PLT Malaysia 12,000 12,000- Local affiliates of KPMG PLT Malaysia 173,504* 34,212*- Overseas affiliates of KPMG PLT Malaysia 4,449 -- Local affiliates of other auditors 19,500 -
209,453 46,212
% of Non-Audit Fees 33.72% 29.58%
* Included in this non-audit fees of the Group and the Company was an amount of RM85,600 and RM21,600 respectively paid to KPMG Tax Services Sdn. Bhd. in relation to the consultation on transfer pricing.
material Contracts Involving Directors/major Shareholders’ Interests
There were no material contracts entered by the Group involving Directors’ and major shareholders’ interests subsisting at the end of the financial year under review or entered into since the end of the financial year under review.
Recurrent Related Party Transactions (“RRPT”) of Revenue Nature
During the financial year ended 31 March 2018, the Group did not seek any mandate of its shareholders pertaining to RRPT.
ADDITIONAL COmPLIANCE INFORmATION
40 I WEIDA (M) BHD. (504747-W)
STATEmENT OF DIRECTORS’ RESPONSIBILITIES FOR PREPARING THE ANNUAL FINANCIAL STATEmENTS
The Directors are required under the Main Market Listing Requirements of Bursa Malaysia Securities Berhad, to issue a statement explaining their responsibility for preparing the financial statements.
The Directors are also required by the Companies Act 2016 (“the Act”) to prepare financial statements for each financial year which give a true and fair view of the state of affairs of the Company and of the Group at the end of the financial year and the results and cash flows of the Company and of the Group for the financial year then ended.
As required by the Act, the financial statements have been prepared in accordance with the Financial Reporting Standards and the provisions of the Act. The Directors have considered that in preparing the financial statements for the financial year ended 31 March 2018 as set out on pages 61 to 151 of this Annual Report, appropriate accounting policies have been adopted and are consistently applied and supported by reasonable and prudent judgements and estimates.
The Directors have responsibility to ensure the Company and the Group maintain proper accounting records which disclose with reasonable accuracy, the financial position and performance of the Company and the Group, and to enable them to ensure the financial statements comply with the Act. The Directors have overall responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Company and the Group and to prevent and detect fraud and other irregularities.
This statement is issued in accordance with a resolution of the Board of Directors dated 22 June 2018.
ANNUAL REPORT 2018 I 41
The Audit Committee (“the Committee”) is established by the Board of Directors (“the Board”) of Weida (M) Bhd. (“the Company”) in compliance with Paragraph 15.15 of the Main Market Listing Requirements (“MMLR”) of Bursa Malaysia Securities Berhad (“Bursa”) and Malaysian Code on Corporate Governance 2017 (“MCCG 2017”).
Terms of reference of the Committee is available at the Company’s website at www.weida.com.my.
COmPOSITION OF AUDIT COmmITTEE
The Committee comprises the following Directors:
Chairman: Yeoh Chin Hoe (Senior Independent Director) Members: Lee Pet Loi (Independent Director) Liew Jee Min @ Chong Jee Min (Independent Director) The above composition meets the requirements of Paragraph 15.09(1)(c) of the MMLR and complies with the Malaysian Code on Corporate Governance 2017. Mr. Yeoh Chin Hoe is a member of the Malaysian Institute of Accountants (“MIA”) and two (2) other associations of accountants specified in Part II of the First Schedule of the Accountants Act 1967. All members of the Committee are financially literate.
During the financial year ended 31 March 2018, the training programmes attended by some of the Committee’s members are as follows:
Number ofTitle of Seminar mode of Training Day(s) Spent
• Executive Briefing: Malaysian Code on Corporate External Seminar ½ day Governance Update • Fraud Risk Management Workshop External Seminar ½ day • Companies Act 2016 – Practical Consideration External Seminar 1 day • Driving Financial Integrity & Performance – External Seminar 1 day Enhancing Financial Literacy • Amendments to the Listing Requirements of Bursa Malaysia External Seminar ½ day Securities Berhad enhancing Disclosure and Corporate Governance Practices (“Amendments”) and the new Malaysian Code on Corporate Governance • Bursa Risk Management Programme – I Am Ready to Manage Risks External Seminar 1 day • Effective Internal Audit Function for Audit Committee Workshop External Seminar ½ day – A programme for Audit Committee Members • Advocacy Sessions on Corporate Disclosure for Directors and External Seminar ½ day Principal Officers of Listed Issuers • Related Party Transaction & Conflict of Interest – their External Seminar ½ day implications to Directors, Audit Committee, Management, Internal Auditors & External Auditors • Corporate Governance Briefing Sessions: MCCG Reporting External Seminar ½ day & CG Guide • Audit Committee Institute (ACI) Breakfast Roundtable 2018 External Seminar ½ day
REPORT OF THE AUDIT COmmITTEE
42 I WEIDA (M) BHD. (504747-W)
mEETINGS AND ATTENDANCE
During the financial year ended 31 March 2018, the Committee held five (5) meetings which were attended by the members as follows: Number of meetings Attended
Yeoh Chin Hoe 5 out of 5Lee Pet Loi 5 out of 5Liew Jee Min @ Chong Jee Min 4 out of 5
The Group Executive Chairman, Senior Management, External and Internal Auditors attended some of these meetings upon invitation by the Committee to brief the Committee on specific issues arising from the reports presented at the meetings or any matter of interest.
All proceedings, matters arising and deliberations in terms of the issues discussed, and recommendations of the Committee are recorded in the minutes by the Company Secretaries, confirmed by the Committee and signed by the Chairman of the meeting. Subsequently, the Chairman of the meeting presented the Committee’s deliberations and recommendations to the Board for approval and notation.
All the Committee meetings were attended by both of the Company Secretaries.
SUmmARY OF ACTIVITIES
During the financial year ended 31 March 2018, the Committee, had in line with its terms of reference, carried out the following activities in the discharge of its functions and duties:
1. Financial Reporting
(a) reviewed the quarterly unaudited financial statements and annual audited financial statements of the Group against the preceding year’s results prior to submission to the Board for consideration and approval before releasing to Bursa;
(b) reviewed the quarterly unaudited financial statements and annual audited financial statements, the Committee discussed with Management and the External Auditors on the followings:
i. changes in or implementation of accounting policies and practices;ii. significant adjustments arising from the audit;iii. significant matters highlighted including financial reporting issues, significant judgements made
by Management, significant and unusual events or transactions, and how these matters are addressed;
iv. going concern assumption; andv. compliance with accounting standards and other regulatory requirements.
(c) reviewed the Group’s actual results against budgeted results on a quarterly basis; and to revise the budget, if need to;
(d) reviewed the profit and cash flow projections to determine any indication of impairment in the intangible assets and property, plant and equipment for recommendation to the Board; and
(e) considered inventory written off/back and bad receivable written off and the impact arising therefrom.
REPORT OF THE AUDIT COmmITTEE
ANNUAL REPORT 2018 I 43
SUmmARY OF ACTIVITIES (CONTINUED)
2. External Audit Functions
(a) reviewed the Annual Audit Planning Memorandum presented by the External Auditors covering the audit scope and methodology, timing of audit, audit focus areas, key milestone and reported observation in prior year’s audit. The Committee discussed the potential key audit matters for the financial year under review and a mock copy of the Independent Auditors’ Report was tabled to the Committee;
(b) reviewed and deliberated on the External Auditors’ reports in relation to the statutory audit, major audit findings and the Management’s responses arising from the audit on the financial statements for the financial year ended 31 March 2017;
(c) assessed the independence, performance and suitability of External Auditors to serve the Group in terms of their competency, manpower resources, audit and non-audit fees charged to the Group, non-audit services, independence and objectivity;
(d) considered and recommended to the Board for approval, the re-appointment of External Auditors, as well as their remuneration; and
(e) met up with the External Auditors twice, without the presence of the other Directors and employees of the Group to provide an avenue for the External Auditors to express any concern they might have, including those relating to their ability to perform their work without restraint and interference.
3. Internal Audit Functions
(a) reviewed and approved the Annual Internal Audit Plan and updates thereof prepared by the Internal Audit Department (“IAD”);
(b) reviewed and deliberated on the internal audit reports presented by the IAD on findings, recommendations (incorporating Management’s response), action plans with persons responsible, time frame for implementation of the recommendations, effectiveness, and adequacy of governance, risk management operational and compliance processes;
(c) reviewed the adequacy of the scope, functions, competency and resources of the internal audit function and that it has the necessary authority to carry out its work;
(d) reviewed the Internal Auditor’s performance and their independence and effectiveness of the overall audit process; and
(e) met up with the Internal Auditors without the presence of the other Directors and employees of the Group to discuss issues and/or observations that they may have in the course of audit, the extent of cooperation and assistance provided by the Group and Management and whether they face any restriction to the records and information of the Group.
4. Related Party Transactions
(a) reviewed related party transactions and conflict of interest situation that may arise within the Company and the Group including any transactions, procedures or course of conduct that raises questions of Management integrity prior to submission to the Board for ratification, consideration and approval to ensure that the related party transactions are entered into in accordance with the related party transaction policies and procedures adopted by the Group, and are on terms not more favourable to the related party than those generally available to the public and not the detriment of the minority shareholders;
(b) reviewed the adequacy of the disclosure on related party transactions entered into by the Company and the Group in the notes to the quarterly results and Annual Report of the Company; and
(c) reviewed the revised related party transaction policies and procedures for Board’s approval.
REPORT OF THE AUDIT COmmITTEE
44 I WEIDA (M) BHD. (504747-W)
SUmmARY OF ACTIVITIES (CONTINUED)
5. Company Policies and Procedures
(a) reviewed changes and implementation of policies and procedures in relation to business operations prior to recommendation to the Board for approval.
6. Risk Management and Internal Control
(a) reviewed the Statement on Risk Management and Internal Control duly confirmed by the External Auditors that no exception was noted and it is in accordance with Recommended Practice Guide 5 (revised 2015), for disclosure in Annual Report 2017 prior to recommendation to the Board for approval.
7. Terms of Reference of Committee
(a) reviewed the proposed amendments made to the terms of reference of the Committee, to be in line with the MMLR of Bursa and MCCG 2017, and recommended to the Board for approval.
INTERNAL AUDIT FUNCTION
The Group has an IAD which assists the Committee in discharging its duties and functions as outlined in the Committee’s terms of reference. The Internal Audit Charter sets out the purpose, responsibility, scope, independence and authority of the IAD. The internal audit function adopt a risk-based audit approach in planning and conducting audits by focusing on key risk areas.
The principal responsibility of the IAD is to undertake regular and systematic reviews of the system of internal controls, recommending cost-effective measures to mitigate these risks, enhance operational efficiency and implementation of sound governance processes. It is independent of the activities it audits.
In attaining these objectives, the scope of activities of the IAD include the following:
(a) review and appraise the soundness, adequacy and application of the system of internal controls and recommend improvements thereon;
(b) ascertain the extent of compliance with established policies, procedures and statutory requirements;
(c) appraise the reliability, integrity and usefulness of financial and management information developed;
(d) review the controls for safeguarding assets and as appropriate, verify the existence of assets;
(e) carry out special reviews and investigations requested by the Committee and the Board; and
(f) identify ways and opportunities to improve the effectiveness and efficiency of the operations and processes of the Group.
During the financial year under review, the IAD is headed by the Internal Audit Manager who reports directly to the Committee. IAD is tasked to provide reasonable assurance to the Committee on the effectiveness of the risk management, internal control and governance processes within the Group.
The IAD has, during the financial year ended 31 March 2018, carried out planned audits on the significant operations of the Group based on assessed risks. The internal audit reports on the adequacy of controls and extent of compliance to internal financial policies and operational procedures were deliberated on by the Committee and recommendations were duly acted upon by the Management.
REPORT OF THE AUDIT COmmITTEE
ANNUAL REPORT 2018 I 45
INTERNAL AUDIT FUNCTION (CONTINUED)
The internal audit activities carried out during the financial year under review included, inter alia, the following:
(a) evaluated the system of internal controls and key operating processes based on the approved annual plan;
(b) evaluated the efficiency of processes, functions and current practices, and provided suitable recommendations;
(c) provided assurance on compliance with statutory requirements, laws, Group’s policies and guidelines;
(d) evaluated the risk management framework and recommended improvements on the adequacy and effectiveness of Management’s risk processes; and
(e) recommended appropriate controls to overcome deficiencies and enhance operations.
Follow-up audits on the observations arising from the previous audits were also conducted and the status of implementation on the agreed corrective actions were highlighted to the Committee. Such regular monitoring is essential to ensure the effectiveness of the Group’s system of internal control.
The total costs incurred for the IAD during the financial year ended 31 March 2018 amounted to RM195,789.
This report is issued in accordance with a resolution of the Board of Directors dated 22 June 2018.
REPORT OF THE AUDIT COmmITTEE
46 I WEIDA (M) BHD. (504747-W)
INTRODUCTION
The Board of Directors (the “Board”) of Weida (M) Bhd. (“the Company”) is committed to maintain a sound system of risk management and internal control in the Company and its Group of Companies (“the Group”) and is pleased to provide the following Statement on Risk Management and Internal Control (“Statement”), which outlines the nature and scope of risk management and internal control of the Group during the financial year ended 31 March 2018. For the purpose of disclosure, this Statement takes into account the Guidelines for Directors of Listed Issuers (“Guidelines”) issued by Bursa Malaysia Securities Berhad (“Bursa”) on the issuance of the Statement pursuant to Paragraph 15.26(b) of the Main Market Listing Requirements.
BOARD RESPONSIBILITY
The Board recognises the importance of maintaining a sound system of internal control and the proper management of risks affecting the Group’s operations in order to achieve the Group’s business objectives, safeguard the Group’s assets as well as the interest of shareholders, customers, regulators and employees. Accordingly, the Board affirms its overall responsibility for the Group’s system of internal control and risk management, and for reviewing the operating adequacy and effectiveness of the said system. The system covers not only financial but also operational and compliance risks and the relevant controls designed to manage the said risks.
In view of the limitations inherent in any system of risk management and internal controls, the system is designed to manage, rather than eliminate, the risk of failure to achieve the Group’s business and corporate objectives. The system can therefore only provide reasonable, but not absolute assurance, against material misstatement or loss.
The Board has in place an on-going process for identifying, evaluating and managing the significant risks faced by the Group. The Board, through its Audit Committee, reviews the results of this process, including mitigating measures taken by Management, to address areas of key risks as identified. This process has been in place for the financial year under review and up to the date of approval of this Statement for inclusion in the Annual Report of the Company.
RISK mANAGEmENT FRAmEwORK
The Group has established a risk management framework which provides a structured process to identify, evaluate, control, report and monitor significant risks faced by the Group, in line with the Principles and Guidelines of ISO31000: 2009 Risk Management. It also culminated in the compilation of a Group Risk Profile with specific risk registers for each operating company in the Group as well as action plans for mitigating the identified risks. The framework includes a risk management policy and guidelines document, the risk parameters, i.e. financial and non-financial criteria for evaluating the likelihood of risk and its impact to the Group. The Group Risk Profile and Risk Register include the following risk information:
(a) the principal risks faced by the Group under appropriate risk categories based on the key processes of operations;
(b) the likelihood of risks crystallising and the resulting impact thereof; and
(c) the internal controls deployed by Management to address those risks.
For each of the risk identified, designated personnel of the companies in the Group is assigned to ensure appropriate risk response actions are carried out in a timely manner.
The Risk Management Committee (“RMC”) was established on 26 May 2015 by the Board to assist the Board to oversee the overall management of principal areas of risk of the Group. The RMC, headed by the Group Executive Chairman, carries out its responsibility to identify and communicate to the Board the principal risks faced by the Group, their evolution, and Management’s action plans to manage these risks. Furthermore, a Risk Management Working Group (“RMWG”), comprising Senior Executives and risk owners, was established on 1 December 2015 by RMC. The primary purpose of the RMWG is to assist the RMC in discharging its duties and functions as outlined in RMC’s terms of reference.
During the financial year under review, reports, which included the risk profiles, risk control reports and status updates, had been presented to the RMC and the Board.
STATEmENT ON RISK mANAGEmENT AND INTERNAL CONTROL
ANNUAL REPORT 2018 I 47
INTERNAL AUDIT FUNCTION
The Audit Committee evaluates the in-house internal audit function to assess its effectiveness in the discharge of its responsibilities. The internal audit function provides assurance to the Audit Committee through the execution of internal audit based on a risk-based Internal Audit Plan approved by the Audit Committee before commencement of work. Its scope of works includes review and evaluation of operational and financial controls for operations within the strategic business units of the Group. The in-house internal audit function is independent of the activities it audits.
Observations from internal audit carried out are presented, together with Management’s response and proposed action plans, to the Audit Committee. The internal audit function also follows up and reports to the Audit Committee on the status of implementation of action plans by Management on the recommendations highlighted in the Internal Audit Reports, especially on areas where material internal control deficiencies or lapses have been noted. The Audit Committee considers reports from the internal audit function and comments from Management, before presenting summaries of the report to the Board on a quarterly basis or earlier as appropriate. Further details of the activities of the internal audit function are provided in the Report of the Audit Committee.
INTERNAL CONTROL FRAmEwORK
The key elements of the Group’s internal control system are described below:
(a) Limits of authority and responsibility
Defined and documented lines and limits of authority, responsibility and accountability have been established through the relevant charters/terms of reference, organisational structures and appropriate authority limits. These enhance the Group’s ability to achieve its strategies and operational objectives. The corporate structure further enhances the ability of each subsidiary or division, as the case may be, to focus on its assigned core or support functions within the Group;
(b) Written policies and procedures
Defined internal policies and procedures as set out in the Group’s Policies and Procedures covering various operational aspects are updated periodically to reflect changing risks or to address operational deficiencies. These help to enable internal control principles and mechanisms to be embedded in the operations within the Group;
(c) Planning, monitoring and reporting
• There is an established strategic planning and budgeting process, requiring all functional units to prepare the annual strategic plan, capital and operating expenditure budgets for discussion and approval by the Board;
• Major capital expenditure and asset disposals are appraised and approved by the Board as well as the boards of directors of subsidiaries;
• Internal audits have been conducted by in-house internal audit function to monitor compliance with operating policies and procedures, highlighting significant risks, area of weaknesses and non-compliances for rectification or further enhancement;
• Visits to operating units by members of the Board and senior management;
• Management meetings are held to identify, discuss and resolve strategic, operational, financial and key management issues;
• A reporting system generates monthly performance and variance reports for review by Management and actions to be taken, where necessary;
• Monthly management reports covering all key financial and operational indicators, is provided to Senior Management for the monitoring of performance against strategic plan;
STATEmENT ON RISK mANAGEmENT AND INTERNAL CONTROL
48 I WEIDA (M) BHD. (504747-W)
INTERNAL CONTROL FRAmEwORK (CONTINUED)
(c) Planning, monitoring and reporting (continued)
• The Audit Committee reviews the Group’s quarterly financial performance, together with Management, which is subsequently reported to the Board;
• Written declaration by all employees confirming their agreement to abide by the Group’s code of conduct and ethics as contained in the Employee’s Handbook is in place to support the business objectives;
• Whistle-Blowing Policies and Procedures are in place, with mechanisms to provide avenues for raising concerns related to possible breach of business conduct, non-compliance of laws and regulatory requirements as well as other malpractices;
• Appropriate insurance coverage and physical safeguards over major assets are in place to ensure that the assets of the Group are adequately covered against calamities and/or theft that may result in material losses to the Group;
• Reporting structures are in place to provide documentation and auditable trail of accountability; and
• The Audit Committee members are Independent Non-Executive Directors and they have full access to all staff, Internal Auditors or persons carrying out the internal audit function or activity and External Auditors.
ASSURANCE PROVIDED BY GROUP EXECUTIVE CHAIRmAN AND GROUP FINANCIAL CONTROLLER
The Group Executive Chairman and Group Financial Controller have provided assurance to the Board in writing stating that the Group’s internal control system has operated adequately and effectively, in all material aspects, to meet the Group’s objectives during the financial year under review.
The Board is of the view that the internal control system is satisfactory and has not resulted in any material losses, contingencies or uncertainties that would require disclosure in this Annual Report. The Board continues to take pertinent measures to sustain and, where required, to improve the Group’s risk management activities and internal control system in meeting the Group’s strategic objectives.
REVIEw OF THE STATEmENT BY EXTERNAL AUDITORS
The external auditors have reviewed this Statement on Risk Management and Internal Control pursuant to the scope set out in Audit and Assurance Practice Guide (“AAPG”) 3, Guidance for Auditors on Engagements to Report on the Statement on Risk Management and Internal Control included in the Annual Report issued by the Malaysian Institute of Accountants (“MIA”) for inclusion in the Annual Report of the Group for the financial year ended 31 March 2018, and reported to the Board that nothing has come to their attention that cause them to believe that the statement intended to be included in the annual report of the Group, in all material aspects:
a. has not been prepared in accordance with the disclosures required by paragraphs 41 and 42 of the Statement on Risk Management and Internal Control: Guidelines for Directors of Listed Issuers; or
b. is factually inaccurate.
AAPG 3 does not require the external auditors to consider whether the Directors’ Statement on Risk Management and Internal Control covers all risks and controls, or to form an opinion on the adequacy and effectiveness of the Group’s risk management and internal control system including the assessment and opinion by the Board of Directors and management thereon. The auditors are also not required to consider whether the processes described to deal with material internal control aspects of any significant problems disclosed in the annual report will, in fact, remedy the problems.
This Statement is issued in accordance with a resolution of the Board of Directors dated 22 June 2018.
STATEmENT ON RISK mANAGEmENT AND INTERNAL CONTROL
51 Directors’ Report
55 Statement by Directors
55 Statutory Declaration
56 Independent Auditors’ Report
61 Statements of Financial Position
62 Statements of Profit or Loss and Other Comprehensive Income
64 Consolidated Statement of Changes in Equity
68 Statement of Changes in Equity
69 Statements of Cash Flows
72 Notes to the Financial Statements
FINANCIAL STATEMENTS
ANNUAL REPORT 2018 I 51
DIrECTorS’ rEporT For ThE FINANCIAL yEAr ENDED 31 MArCh 2018
The Directors have pleasure in submitting their report and the audited financial statements of the Group and of the Company for the financial year ended 31 March 2018.
prINCIpAL ACTIvITIES
The Company is principally engaged in investment holding and the provision of management services whilst the principal activities of the subsidiaries are as stated in Note 6 to the financial statements. There has been no significant changes in the nature of these activities during the financial year.
SubSIDIArIES
The details of the Company’s subsidiaries are disclosed in Note 6 to the financial statements.
rESuLTS
Group Company rM rM
Profit for the financial year attributable to: Owners of the Company 20,346,895 25,216,117 Non-controlling interests 1,843,632 -
22,190,527 25,216,117
rESErvES AND provISIoNS
There were no material transfers to or from reserves and provisions during the financial year under review.
DIvIDENDS
Since the end of the previous financial year, the amount of dividends paid by the Company were as follows:
As reported in the Directors’ report for the year ended 31 March 2017, a first and final single-tier exempt dividend of 3.00 sen per ordinary share totalling RM3,806,827 was proposed in respect of the financial year ended 31 March 2017, which was approved at the Annual General Meeting on 22 August 2017 and paid on 27 October 2017.
The Directors do not recommend any dividend to be paid for the financial year under review.
DIrECTorS
The Directors of the Company who served during the financial year until the date of this report are:
Dato’ Lee Choon ChinJee Hon ChongYeoh Chin Hoe Lee Pet Loi Dato’ Jamelah Binti Jamaluddin Liew Jee Min @ Chong Jee Min
The name of directors of the subsidiaries are set out in the respective subsidiaries’ audited financial statements and the said information is deemed incorporated herein by such reference and made a part thereof.
52 I WEIDA (M) BHD. (504747-W)
DIrECTorS’ INTErESTS IN ShArES
The interests and deemed interests in the shares of the Company and of its related corporations of those who were Directors at financial year end (including where applicable the interests of their spouses or children who themselves are not Directors of the Company) as recorded in the Register of Directors’ Shareholdings are as follows: Number of ordinary shares At Allotted/ At 1.4.2017 bought Sold 31.3.2018
Ordinary shares:
Shareholdings in the Company in which Directors have direct interests Dato’ Lee Choon Chin 7,074,242 - - 7,074,242Jee Hon Chong 1,764,776 - - 1,764,776Lee Pet Loi 12,000 - - 12,000
Shareholdings in which Dato’ Lee Choon Chin has deemed interests
The Company * 26,877,974 - - 26,877,974
Subsidiaries
Weida Environmental Technology Sdn. Bhd. ** 56,000 - - 56,000Sar-Alam Indah Sdn. Bhd. ** 580,000 - - 580,000Weida (B) Sdn. Bhd. ** 24,999 - - 24,999Weida Philippines Inc. ** 8,407,277 - - 8,407,277LIPP Biogas (Malaysia) Sdn. Bhd. ** 640,000 - - 640,000Hydro Solutions Sdn. Bhd. ** 2 - - 2Blast Power Sdn. Bhd. ** 255,000 - - 255,000Weida Communications Sdn. Bhd. ** 140,000 - - 140,000Vista Cape Sdn. Bhd. ** 51 30 - 81Atlas Arrow Sdn. Bhd. ** 75 - - 75Weida Integrated Industries Sdn. Bhd. ** 8,700,000 - - 8,700,000Greenyard Corporation Sdn. Bhd. ** 100,000 - - 100,000Premium Fortune Sdn. Bhd. ** 5,000 - - 5,000Weida Resources Sdn. Bhd. ** 2,500,000 - - 2,500,000Weida Marketing Sdn. Bhd. ** 500,000 - - 500,000Weida Manufacturing and Marketing Sdn. Bhd. ** 100,000 - - 100,000Weida Green Industries Sdn. Bhd. ** 100,000 - - 100,000Weida International Sdn. Bhd. ** 1,000,000 - - 1,000,000Weida Works Sdn. Bhd. ** 750,000 - - 750,000Weida Medic Development Sdn. Bhd. ** 460,000 - - 460,000Weida Properties Sdn. Bhd. ** 100,000 - - 100,000Loyal Paragon Sdn. Bhd. ** 2,500,010 - - 2,500,010Good Axis Sdn. Bhd. ** 2,500,010 - - 2,500,010Asaljuru Weida Sdn. Bhd. **# 1,666,000 784,000 - 2,450,000
Number of preference shares At Allotted/ At 1.4.2017 bought Sold 31.3.2018
Redeemable preference shares:
Shareholdings in which Dato’ Lee Choon Chin has deemed interests
Weida Integrated Industries Sdn. Bhd. ** 120,000 - - 120,000Greenyard Corporation Sdn. Bhd. ** 20,000 - - 20,000Premium Fortune Sdn. Bhd. ** 20,000 - - 20,000Good Axis Sdn. Bhd. ** - 64,978,000 - 64,978,000Atlas Arrow Sdn. Bhd. ** - 138,003,548 - 138,003,548
DIrECTorS’ rEporT For ThE FINANCIAL yEAr ENDED 31 MArCh 2018
ANNUAL REPORT 2018 I 53
DIrECTorS’ INTErESTS IN ShArES (continued)
* Deemed interest by virtue of his substantial interest in Weida Management Sdn. Bhd. and the interests of his children in Weida (M) Bhd.
** Deemed interest by virtue of his substantial interest in Weida (M) Bhd.# A subsidiary by virtue of Weida Medic Development Sdn. Bhd. having the control of the voting of the
board of directors of Asaljuru Weida Sdn. Bhd., pursuant to and in accordance with the Shareholders Agreement dated 30 August 2017.
The other Directors holding office at 31 March 2018 did not have any interest in the shares of the Company and of its related corporations during the financial year.
DIrECTorS’ bENEFITS
Since the end of the previous financial year, no Director of the Company has received nor become entitled to receive any benefit (other than those fees and other benefits included in the aggregate amount of remuneration received or due and receivable by Directors as shown in the financial statements or the fixed salary of a full time employee of the Company or of related corporations) by reason of a contract made by the Company or a related corporation with the Director or with a firm of which the Director is a member, or with a company in which the Director has a substantial financial interest, other than certain Directors who have substantial financial interests in companies which traded with certain companies in the Group in the ordinary course of business as disclosed in Note 34 to the financial statements.
There were no arrangements during and at the end of the financial year which had the object of enabling Directors of the Company to acquire benefits by means of the acquisition of shares in or debentures of the Company or any other body corporate.
ISSuE oF ShArES AND DEbENTurES
There were neither changes in the issued and paid-up capitals of the Company, nor issuances of debentures by the Company, during the financial year.
opTIoNS GrANTED ovEr uNISSuED ShArES
No options were granted to any person to take up unissued shares of the Company during the financial year.
INDEMNITy AND INSurANCE CoSTS
During the financial year, the total amount of premium paid and sum insured in respect of indemnity given to and insurance effected for Directors and officers of the Group and of the Company in aggregate amounted to RM12,700 and RM10,000,000 respectively.
oThEr STATuTory INForMATIoN
Before the financial statements of the Group and of the Company were made out, the Directors took reasonable steps to ascertain that:
i. all known bad debts have been written off and adequate provision made for doubtful debts, and
ii. any current assets which were unlikely to be realised in the ordinary course of business have been written down to an amount which they might be expected so to realise.
At the date of this report, the Directors are not aware of any circumstances:
i. that would render the amount written off for bad debts or the amount of the provision for doubtful debts in the Group and in the Company inadequate to any substantial extent, or
DIrECTorS’ rEporT For ThE FINANCIAL yEAr ENDED 31 MArCh 2018
54 I WEIDA (M) BHD. (504747-W)
oThEr STATuTory INForMATIoN (continued)
At the date of this report, the Directors are not aware of any circumstances: (continued)
ii. that would render the value attributed to the current assets in the financial statements of the Group and of the Company misleading, or
iii. which have arisen which render adherence to the existing method of valuation of assets or liabilities of the Group and of the Company misleading or inappropriate, or
iv. not otherwise dealt with in this report or the financial statements that would render any amount stated in the financial statements of the Group and of the Company misleading.
At the date of this report, there does not exist:
i. any charge on the assets of the Group or of the Company that has arisen since the end of the financial year and which secures the liabilities of any other person, or
ii. any contingent liability in respect of the Group or of the Company that has arisen since the end of the financial year.
No contingent liability or other liability of any company in the Group has become enforceable, or is likely to become enforceable within the period of twelve months after the end of the financial year which, in the opinion of the Directors, will or may substantially affect the ability of the Group and of the Company to meet their obligations as and when they fall due.
In the opinion of the Directors, the financial performance of the Group and of the Company for the financial year ended 31 March 2018 have not been substantially affected by any item, transaction or event of a material and unusual nature nor has any such item, transaction or event occurred in the interval between the end of that financial year and the date of this report.
SIGNIFICANT EvENT DurING ThE FINANCIAL yEAr
The details of the significant event that occurred during the financial year are disclosed in Note 36 to the financial statements.
AuDITorS
The auditors, KPMG PLT, have indicated their willingness to accept re-appointment.
The auditors’ remuneration is disclosed in Note 23 to the financial statements.
Signed on behalf of the Board of Directors in accordance with a resolution of the Directors:
.....................…………............….........yeoh Chin hoeDirector
................................……………..........Dato’ Lee Choon ChinDirector
Kuching,Date: 22 June 2018
DIrECTorS’ rEporT For ThE FINANCIAL yEAr ENDED 31 MArCh 2018
ANNUAL REPORT 2018 I 55
In the opinion of the Directors, the financial statements set out on pages 61 to 151 are drawn up in accordance with Financial Reporting Standards and the requirements of the Companies Act 2016 in Malaysia so as to give a true and fair view of the financial position of the Group and of the Company as at 31 March 2018 and of their financial performance and cash flows for the financial year then ended.
Signed on behalf of the Board of Directors in accordance with a resolution of the Directors:
.....................…………............….........yeoh Chin hoe
................................……………..........Dato’ Lee Choon Chin
Kuching,Date: 22 June 2018
STATuTory DECLArATIoN purSuANT To SECTIoN 251(1)(b) oF ThE CoMpANIES ACT 2016
I, Wang Tin Ngee, the officer primarily responsible for the financial management of Weida (M) Bhd., do solemnly and sincerely declare that the financial statements set out on pages 61 to 151 are, to the best of my knowledge and belief, correct and I make this solemn declaration conscientiously believing the declaration to be true, and by virtue of the provisions of the Statutory Declarations Act, 1960.
Subscribed and solemnly declared by the abovenamed Wang Tin Ngee at Kuching in the State of Sarawak on 22 June 2018.
……………………………………………….Wang Tin Ngee (MIA 11670)
Before me:
PHANG DAH NAN(No. Q119)Commissioner For Oaths
STATEMENT by DIrECTorS purSuANT To SECTIoN 251(2) oF ThE CoMpANIES ACT 2016
56 I WEIDA (M) BHD. (504747-W)
INDEpENDENT AuDITorS’ rEporT To ThE MEMbErS oF WEIDA (M) bhD.
rEporT oN ThE AuDIT oF ThE FINANCIAL STATEMENTS
opinion
We have audited the financial statements of Weida (M) Bhd., which comprise the statements of financial position as at 31 March 2018 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 year then ended, and notes to the financial statements, including a summary of significant accounting policies, as set out on pages 61 to 151.
In our opinion, the accompanying financial statements give a true and fair view of the financial position of the Group and of the Company as at 31 March 2018, and of their financial performance and their cash flows for the year then ended in accordance with Financial Reporting Standards and the requirements of the Companies Act 2016 in Malaysia.
basis for opinion
We conducted our audit in accordance with approved standards on auditing in Malaysia and International Standards on Auditing. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Financial Statements section of our auditors’ report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Independence and other Ethical responsibilities
We are independent of the Group and of the Company in accordance with the By-Laws (on Professional Ethics, Conduct and Practice) of the Malaysian Institute of Accountants (“By-Laws”) and the International Ethics Standards Board for Accountants’ Code of Ethics for Professional Accountants (“IESBA Code”), and we have fulfilled our other ethical responsibilities in accordance with the By-Laws and the IESBA Code.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements of the Group and of the Company for the current financial year. These matters were addressed in the context of our audit of the financial statements of the Group and of the Company as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
ANNUAL REPORT 2018 I 57
1. revenue recognition from construction contracts Refer to Note 2(p)(ii) (Construction contract accounting policy) and Note 22 (Revenue)
The key audit matter
The revenue from construction contracts accounted for approximately 10% of the Group’s total revenue.
Revenue arose from the Group’s construction contracts requires significant management judgement in the assessment of the current and future financial performance of the contracts.
The Group recognises contract revenue and contract cost in profit or loss using the stage of completion method, by reference to the completion of a physical proportion of the contract work (for telecommunication towers contracts) and survey of work performed (for installation and construction of wastewater and water treatment contracts).
We identified this area as a key audit matter due to significant judgement involved in estimating revenue recognised over the contract life and determining the achievement of contractual milestones in the stage of completion method .
how the matter was addressed in our audit
Our audit procedures included, amongst others:
We evaluated the design and implementation of controls for the process of determining the revenue recognised in the financial statements.
We compared the stage of completion recognised by the Group against the percentage of completion based on cost method. Our procedures include inspecting certificates verified by surveyors/consultants and comparing actual costs with estimated costs.
We assessed and challenged the estimation of the remaining costs to complete the projects by checking to the sub-contractors contracts and quotations for the remaining costs to be incurred.
We inspected all construction contracts and checked the contract sum of all new contracts secured to letters of award/agreements and for existing projects, to approved variation orders.
We checked to certificate of completion for projects completed during the year and certificate of making good defects for projects that have a lapsed defect liability period.
We considered the adequacy of the Group’s disclosures on the degree of judgement involved in arriving at the contract revenues.
INDEpENDENT AuDITorS’ rEporT To ThE MEMbErS oF WEIDA (M) bhD.
58 I WEIDA (M) BHD. (504747-W)
The key audit matter
The Group has a significant level of trade receivables at approximately 19% of its total assets.
The Group determines allowance for impairment losses on doubtful receivables based on an on-going review and evaluation performed as part of its credit risk evaluation process. The evaluation is however inherently judgemental and requires material estimates, including the amounts and timing of future cash flows expected to be received, which may be susceptible to significant changes.
The Group’s exposure to credit risk arises principally from its receivables. We have identified recoverability of trade receivables as a key audit matter because the recoverability is dependent on the credit worthiness of customers and their ability to settle the amounts due which increases the risk of non-payment and non-recovery. Accordingly, allowance for impairment losses are required when there is indicator of non-payment and non-recovery of debts.
how the matter was addressed in our audit
Our audit procedures included, amongst others:
We evaluated the design and implementation of the Group’s controls over the receivables collection processes, including the Group’s credit control process over aged receivables and customer credit approvals.
We tested the adequacy of the Group’s allowances against trade receivables by assessing the assumptions made by the Group in determining the level of allowances for each category of aged debt, with reference to the profile of aged debts at the reporting date and post year-end payment records.
We also considered the adequacy of the Group’s disclosures about the degree of judgement and estimation involved in arriving at the allowances for the impairment of receivables.
2. valuation of trade receivables Refer to Note 2(m) (Impairment of financial assets accounting policy) and Note 10 (Trade and other
receivables)
We have determined that there is no key audit matter in the audit of the separate financial statements of the Company to communicate in our auditors’ report.
Information other than the Financial Statements and Auditors’ report Thereon
The Directors of the Company are responsible for the other information. The other information comprises the information included in the annual report, but does not include the financial statements of the Group and of the Company and our auditors’ report thereon.
Our opinion on the financial statements of the Group and of the Company does not cover the annual report and we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements of the Group and of the Company, our responsibility is to read the annual report and, in doing so, consider whether the annual report is materially inconsistent with the financial statements of the Group and of the Company or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of the annual report, we are required to report that fact. We have nothing to report in this regard.
INDEpENDENT AuDITorS’ rEporT To ThE MEMbErS oF WEIDA (M) bhD.
ANNUAL REPORT 2018 I 59
responsibilities of the Directors for the Financial Statements
The Directors of the Company are responsible for the preparation of financial statements of the Group and of the Company that give a true and fair view in accordance with Financial Reporting Standards and the requirements of the Companies Act 2016 in Malaysia. The Directors are also responsible for such internal control as the Directors determine is necessary to enable the preparation of financial statements of the Group and of the Company that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements of the Group and of the Company, the Directors are responsible for assessing the ability of the Group and of the Company to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Directors either intend to liquidate the Group or the Company or to cease operations, or have no realistic alternative but to do so.
Auditors’ responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements of the Group and of the Company as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with approved standards on auditing in Malaysia and International Standards on Auditing will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
As part of an audit in accordance with approved standards on auditing in Malaysia and International Standards on Auditing, we exercise professional judgement and maintain professional scepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the financial statements of the Group and of the Company, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit 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 internal control of the Group and of the Company.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Directors.
• Conclude on the appropriateness of the Directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the ability of the Group or of the Company to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the financial statements of the Group and of the Company or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Group or the Company to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the financial statements of the Group and of the Company, including the disclosures, and whether the financial statements of the Group and of the Company represent the underlying transactions and events in a manner that gives a true and fair view.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the financial statements of the Group. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.
INDEpENDENT AuDITorS’ rEporT To ThE MEMbErS oF WEIDA (M) bhD.
60 I WEIDA (M) BHD. (504747-W)
We communicate with the Directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide the Directors with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with the Directors, we determine those matters that were of most significance in the audit of the financial statements of the Group and of the Company for the current year and are therefore the key audit matters. We describe these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our auditors’ report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
rEporT oN oThEr LEGAL AND rEGuLATory rEquIrEMENTS
In accordance with the requirements of the Companies Act 2016 in Malaysia, we report that the subsidiaries of which we have not acted as auditors are disclosed in Note 6 to the financial statements.
oThEr MATTEr
This report is made solely to the members of the Company, as a body, in accordance with Section 266 of the Companies Act 2016 in Malaysia and for no other purpose. We do not assume responsibility to any other person for the content of this report.
KpMG pLT Chin Shoon Chong(LLP0010081-LCA & AF 0758) Approval Number: 02823/04/2019 JChartered Accountants Chartered Accountant
Kuching,
Date: 22 June 2018
INDEpENDENT AuDITorS’ rEporT To ThE MEMbErS oF WEIDA (M) bhD.
ANNUAL REPORT 2018 I 61
Group Company 2018 2017 2018 2017 Note rM rM rM rM
AssetsProperty, plant and equipment 3 101,966,825 109,809,832 266,910 536,528Prepaid lease payments 4 2,812,786 2,931,922 - -Investment properties 5 7,161,658 - - -Investment in subsidiaries 6 - - 249,461,800 58,980,222Investment in an associate 7 - 1,360,518 - -Goodwill 8 341,313 341,313 - -Other intangible assets 9 7,227,062 11,498,472 - -Other receivables 10 2,955,642 - 2,775,227 119,457,228Other investments 11 2,376 3,256 2,376 3,256Deferred tax assets 12 1,266,731 1,559,179 - -
Total non-current assets 123,734,393 127,504,492 252,506,313 178,977,234
Inventories 13 65,795,295 69,061,664 - -Property development costs 14 160,812,284 158,863,458 - -Trade and other receivables 10 118,038,970 105,987,445 24,494,045 109,165,235Deposits and prepayments 15 4,309,659 7,443,550 257,164 256,732Current tax recoverable 3,710,779 3,899,602 526,092 370,443Cash and cash equivalents 17 96,738,877 119,043,350 11,746,576 12,578,166
449,405,864 464,299,069 37,023,877 122,370,576Asset classified as held for sale 18 867,568 867,568 - -
Total current assets 450,273,432 465,166,637 37,023,877 122,370,576
Total assets 574,007,825 592,671,129 289,530,190 301,347,810
Equity Share capital 19.1 66,666,666 66,666,666 66,666,666 66,666,666Reserves 19.2 364,908,849 348,214,163 189,728,462 168,319,409
Total equity attributable to owners of the Company 431,575,515 414,880,829 256,395,128 234,986,075Non-controlling interests 6 10,543,377 11,639,794 - -
Total equity 442,118,892 426,520,623 256,395,128 234,986,075
Liabilities
Loans and borrowings 20 12,513,112 19,226,171 145,724 9,121,398Deferred tax liabilities 12 12,578,340 14,575,817 3,278,000 3,589,000
Total non-current liabilities 25,091,452 33,801,988 3,423,724 12,710,398
Trade and other payables 21 67,161,625 78,909,145 20,735,664 46,405,890Derivative financial liabilities 16 120,508 40,119 - -Loans and borrowings 20 37,441,150 52,739,476 8,975,674 7,245,447Current tax payable 2,074,198 659,778 - -
Total current liabilities 106,797,481 132,348,518 29,711,338 53,651,337
Total liabilities 131,888,933 166,150,506 33,135,062 66,361,735
Total equity and liabilities 574,007,825 592,671,129 289,530,190 301,347,810
STATEMENTS oF FINANCIAL poSITIoN AS AT 31 MArCh 2018
The notes on pages 72 to 151 are an integral part of these financial statements.
62 I WEIDA (M) BHD. (504747-W)
STATEMENTS oF proFIT or LoSS AND oThEr CoMprEhENSIvE INCoME For ThE FINANCIAL yEAr ENDED 31 MArCh 2018
Group Company 2018 2017 2018 2017 Note rM rM rM rM
revenue 22 234,892,440 301,408,988 31,415,615 24,483,487
Other income 8,053,166 8,123,078 1,082,018 3,173,748Contract and property development costs recognised (20,061,066) (72,536,995) - -Raw materials and consumables used (68,031,890) (54,117,661) - -Purchase of finished goods (17,308,190) (29,256,023) - -Changes in inventories 4,608,322 (2,412,613) - -Employee benefits (46,360,376) (48,274,737) (7,539,732) (7,037,479)Depreciation and amortisation expenses (12,981,676) (16,591,841) (300,938) (404,347)Plant and production overheads (19,145,561) (18,256,293) - -Transportation charges (9,851,648) (7,989,762) - -Other expenses (19,069,064) (27,481,506) (3,459,214) (7,744,335)
results from operating activities 23 34,744,457 32,614,635 21,197,749 12,471,074
Gain on disposal/deconsolidation of subsidiaries 32(i) - 35,653 - -
Interest income 24 3,505,021 4,447,274 6,667,657 14,347,309Interest expenses 24 (2,591,626) (2,646,887) (1,749,317) (2,902,564) Net interest income 913,395 1,800,387 4,918,340 11,444,745
Share of results of equity accounted associate 7 (43,877) (107,384) - -
Profit before tax 35,613,975 34,343,291 26,116,089 23,915,819
Tax expense 26 (13,423,448) (14,242,051) (899,972) (2,621,813)
Profit for the financial year 22,190,527 20,101,240 25,216,117 21,294,006
Items that may be reclassified subsequently to profit or loss
Foreign exchange translation differences for foreign operations 164,455 (20,313) - - Fair value changes of available-for-sale financial assets (237) (166) (237) (166) Other comprehensive income/ (expense) for the financial year, net of tax 164,218 (20,479) (237) (166)
Total comprehensive income for the financial year 22,354,745 20,080,761 25,215,880 21,293,840
ANNUAL REPORT 2018 I 63
Group Company 2018 2017 2018 2017 Note rM rM rM rM
Profit for the financial year attributable to: - Owners of the Company 20,346,895 18,135,222 25,216,117 21,294,006 - Non-controlling interests 6 1,843,632 1,966,018 - -
22,190,527 20,101,240 25,216,117 21,294,006
Total comprehensive income attributable to: - Owners of the Company 20,511,113 18,114,743 25,215,880 21,293,840 - Non-controlling interests 1,843,632 1,966,018 - -
22,354,745 20,080,761 25,215,880 21,293,840
Basic earnings per ordinary share (sen) 27 16.03 14.29
STATEMENTS oF proFIT or LoSS AND oThEr CoMprEhENSIvE INCoME
For ThE FINANCIAL yEAr ENDED 31 MArCh 2018
The notes on pages 72 to 151 are an integral part of these financial statements.
64 I WEIDA (M) BHD. (504747-W)
Attributable to owners of the Company Non- distributable Distributable Foreign exchange Non- Share revaluation translation Treasury Fair value retained controlling Total capital reserve reserve shares reserve earnings Total interests equityGroup Note rM rM rM rM rM rM rM rM rM
At 1 April 2016 66,666,666 24,867,211 (1,145,157) (4,600,545) 4,849 314,780,315 400,573,339 9,673,776 410,247,115
Realisation of revaluation reserve - (472,902) - - - 472,902 - - -
Foreign exchange translation differences for foreign operations - - (20,313) - - - (20,313) - (20,313)Fair value changes of available-for-sale financial assets - - - - (166) - (166) - (166)
Total other comprehensive expense for the financial year - - (20,313) - (166) - (20,479) - (20,479)Profit for the financial year - - - - - 18,135,222 18,135,222 1,966,018 20,101,240
Total comprehensive (expense)/income for the - - (20,313) - (166) 18,135,222 18,114,743 1,966,018 20,080,761 financial year
Distributions to owners of the Company - Own shares acquired 19.2 - - - (423) - - (423) - (423) - Dividends 28.2 - - - - - (3,806,830) (3,806,830) - (3,806,830) Total transactions with owners of the Company - - - (423) - (3,806,830) (3,807,253) - (3,807,253)
At 31 March 2017 66,666,666 24,394,309 (1,165,470) (4,600,968) 4,683 329,581,609 414,880,829 11,639,794 426,520,623
(Note 19.1) (Note 19.2) (Note 19.2) (Note 19.2) (Note 19.2) (Note 6)
CoNSoLIDATED STATEMENT oF ChANGES IN EquITy For ThE FINANCIAL yEAr ENDED 31 MArCh 2018
ANNUAL REPORT 2018 I 65
Attributable to owners of the Company Non- distributable Distributable Foreign exchange Non- Share revaluation translation Treasury Fair value retained controlling Total capital reserve reserve shares reserve earnings Total interests equityGroup Note rM rM rM rM rM rM rM rM rM
At 1 April 2016 66,666,666 24,867,211 (1,145,157) (4,600,545) 4,849 314,780,315 400,573,339 9,673,776 410,247,115
Realisation of revaluation reserve - (472,902) - - - 472,902 - - -
Foreign exchange translation differences for foreign operations - - (20,313) - - - (20,313) - (20,313)Fair value changes of available-for-sale financial assets - - - - (166) - (166) - (166)
Total other comprehensive expense for the financial year - - (20,313) - (166) - (20,479) - (20,479)Profit for the financial year - - - - - 18,135,222 18,135,222 1,966,018 20,101,240
Total comprehensive (expense)/income for the - - (20,313) - (166) 18,135,222 18,114,743 1,966,018 20,080,761 financial year
Distributions to owners of the Company - Own shares acquired 19.2 - - - (423) - - (423) - (423) - Dividends 28.2 - - - - - (3,806,830) (3,806,830) - (3,806,830) Total transactions with owners of the Company - - - (423) - (3,806,830) (3,807,253) - (3,807,253)
At 31 March 2017 66,666,666 24,394,309 (1,165,470) (4,600,968) 4,683 329,581,609 414,880,829 11,639,794 426,520,623
(Note 19.1) (Note 19.2) (Note 19.2) (Note 19.2) (Note 19.2) (Note 6)
CoNSoLIDATED STATEMENT oF ChANGES IN EquITy
For ThE FINANCIAL yEAr ENDED 31 MArCh 2018
66 I WEIDA (M) BHD. (504747-W)
Attributable to owners of the Company Non- distributable Distributable Foreign exchange Non- Share revaluation translation Treasury Fair value retained controlling Total capital reserve reserve shares reserve earnings Total interests equityGroup (continued) Note rM rM rM rM rM rM rM rM rM
At 1 April 2017 66,666,666 24,394,309 (1,165,470) (4,600,968) 4,683 329,581,609 414,880,829 11,639,794 426,520,623 Realisation of revaluation reserve - (472,902) - - - 472,902 - - -
Foreign exchange translation differences for foreign operations - - 164,455 - - - 164,455 - 164,455Fair value changes of available-for-sale financial assets - - - - (237) - (237) - (237) Total other comprehensive expense for the financial year - - 164,455 - (237) - 164,218 - 164,218Profit for the financial year - - - - - 20,346,895 20,346,895 1,843,632 22,190,527
Total comprehensive income/(expense) for the financial year - - 164,455 - (237) 20,346,895 20,511,113 1,843,632 22,354,745
Distributions to owners of the Company - Own shares acquired 19.2 - - - - - - - - - - Dividends 28.2 - - - - - (3,806,827) (3,806,827) - (3,806,827) Total transactions with owners of the Company - - - - - (3,806,827) (3,806,827) - (3,806,827)
Distributions to non-controlling interests - Dividends - - - - - - - (5,136,000) (5,136,000)Acquisition of non-controlling interests in an existing subsidiary - - - - - (9,600) (9,600) 9,570 (30)Consolidation of an associate 32(i) - - - - - - - 2,186,381 2,186,381
Total transactions to non-controlling interests - - - - - (9,600) (9,600) (2,940,049) (2,949,649)
At 31 March 2018 66,666,666 23,921,407 (1,001,015) (4,600,968) 4,446 346,584,979 431,575,515 10,543,377 442,118,892
(Note 19.1) (Note 19.2) (Note 19.2) (Note 19.2) (Note 19.2) (Note 6)
CoNSoLIDATED STATEMENT oF ChANGES IN EquITy For ThE FINANCIAL yEAr ENDED 31 MArCh 2018
The notes on pages 72 to 151 are an integral part of these financial statements.
ANNUAL REPORT 2018 I 67
Attributable to owners of the Company Non- distributable Distributable Foreign exchange Non- Share revaluation translation Treasury Fair value retained controlling Total capital reserve reserve shares reserve earnings Total interests equityGroup (continued) Note rM rM rM rM rM rM rM rM rM
At 1 April 2017 66,666,666 24,394,309 (1,165,470) (4,600,968) 4,683 329,581,609 414,880,829 11,639,794 426,520,623 Realisation of revaluation reserve - (472,902) - - - 472,902 - - -
Foreign exchange translation differences for foreign operations - - 164,455 - - - 164,455 - 164,455Fair value changes of available-for-sale financial assets - - - - (237) - (237) - (237) Total other comprehensive expense for the financial year - - 164,455 - (237) - 164,218 - 164,218Profit for the financial year - - - - - 20,346,895 20,346,895 1,843,632 22,190,527
Total comprehensive income/(expense) for the financial year - - 164,455 - (237) 20,346,895 20,511,113 1,843,632 22,354,745
Distributions to owners of the Company - Own shares acquired 19.2 - - - - - - - - - - Dividends 28.2 - - - - - (3,806,827) (3,806,827) - (3,806,827) Total transactions with owners of the Company - - - - - (3,806,827) (3,806,827) - (3,806,827)
Distributions to non-controlling interests - Dividends - - - - - - - (5,136,000) (5,136,000)Acquisition of non-controlling interests in an existing subsidiary - - - - - (9,600) (9,600) 9,570 (30)Consolidation of an associate 32(i) - - - - - - - 2,186,381 2,186,381
Total transactions to non-controlling interests - - - - - (9,600) (9,600) (2,940,049) (2,949,649)
At 31 March 2018 66,666,666 23,921,407 (1,001,015) (4,600,968) 4,446 346,584,979 431,575,515 10,543,377 442,118,892
(Note 19.1) (Note 19.2) (Note 19.2) (Note 19.2) (Note 19.2) (Note 6)
CoNSoLIDATED STATEMENT oF ChANGES IN EquITy
For ThE FINANCIAL yEAr ENDED 31 MArCh 2018
68 I WEIDA (M) BHD. (504747-W)
Non-distributable Distributable Share Treasury Fair value retained capital shares reserve earnings TotalCompany Note rM rM rM rM rM
At 1 April 2016 66,666,666 (4,600,545) 4,849 155,428,518 217,499,488
Total other comprehensive (expense)/income for the financial year - Fair value changes of available-for-sale financial assets - - (166) - (166)Profit for the financial year - - - 21,294,006 21,294,006
Total comprehensive (expense)/income for the financial year - - (166) 21,294,006 21,293,840
Distributions to owners of the Company - Own shares acquired 19.2 - (423) - - (423) - Dividends 28.2 - - - (3,806,830) (3,806,830)
Total distributions to owners of the Company - (423) - (3,806,830) (3,807,253)
At 31 March 2017 66,666,666 (4,600,968) 4,683 172,915,694 234,986,075
(Note 19.1) (Note 19.2) (Note 19.2)
At 1 April 2017 66,666,666 (4,600,968) 4,683 172,915,694 234,986,075
Total other comprehensive (expense)/income for the financial year - Fair value changes of available-for-sale financial assets - - (237) - (237)Profit for the financial year - - - 25,216,117 25,216,117
Total comprehensive (expense)/income for the financial year - - (237) 25,216,117 25,215,880
Distributions to owners of the Company - Own shares acquired 19.2 - - - - - - Dividends 28.2 - - - (3,806,827) (3,806,827) Total distributions to owners of the Company - - - (3,806,827) (3,806,827)
At 31 March 2018 66,666,666 (4,600,968) 4,446 194,324,984 256,395,128
(Note 19.1) (Note 19.2) (Note 19.2)
STATEMENT oF ChANGES IN EquITy For ThE FINANCIAL yEAr ENDED 31 MArCh 2018
The notes on pages 72 to 151 are an integral part of these financial statements.
ANNUAL REPORT 2018 I 69
Group Company 2018 2017 2018 2017 Note rM rM rM rM
Cash flows from operating activities
Profit before tax 35,613,975 34,343,291 26,116,089 23,915,819
Adjustments for: Amortisation of: - other intangible assets 9 4,271,410 7,671,212 - - - prepaid lease payments 4 119,136 119,136 - - - investment properties 5 120,202 - - - Depreciation of property, plant and equipment 3.3 8,470,928 8,801,493 300,938 404,347 Derivative loss/(gain) on forward foreign exchange contracts 80,389 (286,946) - - Dividend income (164) (157) (24,114,164) (16,180,157) (Gain)/Loss on disposal/ deconsolidation of subsidiaries 23 - (35,653) - 3,300,000 Loss/(Gain) on disposal of: - other investments 23 424 ( 1,042,500) 424 - - property, plant and equipment (475,239) (78,765) - (200) Interest expenses 24 2,591,626 2,646,887 1,749,317 2,902,564 Interest income 24 (3,505,021) (4,447,274) (6,667,657) (14,347,309) Allowance/(Reversal) of impairment loss on receivables 23 751,027 (332,037) (11,618) - Bad debt written off 23 848 2,487 - - Property, plant and equipment written off 23 263,886 558,957 482 10,002 Net inventories written off/(back) 23 456,030 (62,261) - - Unrealised foreign exchange loss/(gain) 23 1,076,511 (125,281) 494 (466) Share of results of equity accounted associate 43,877 107,384 - -
Operating profit/(loss) before changes in working capital 49,879,845 47,839,973 ( 2,625,695) 4,600
Changes in working capital: Inventories 2,809,925 (25,991,991) - - Property development costs (1,498,506) 19,024,093 - - Trade and other receivables, deposits and prepayments, including derivatives (6,787,625) 27,534,539 201,364,376 (20,616,104) Trade and other payables, including derivatives (16,160,019) (7,677,632) (25,670,720) 201,887
Cash generated from/(used in) operations 28,243,620 60,728,982 173,067,961 (20,409,617)Interest paid (542,869) (958,993) (11,107) (16,877)Income tax paid (13,525,232) (9,461,226) (1,366,621) (418,281)
Net cash from/(used in) operating activities 14,175,519 50,308,763 171,690,233 (20,844,775)
STATEMENTS oF CASh FLoWS For ThE FINANCIAL yEAr ENDED 31 MArCh 2018
70 I WEIDA (M) BHD. (504747-W)
Group Company 2018 2017 2018 2017 Note rM rM rM rM
Cash flows from investing activities
Acquisition of:- a subsidiary 32(ii) (30) - - -- property, plant and equipment [Note (i)] (8,777,797) (11,583,829) (31,802) (71,863)Net increase in investment in subsidiaries - - (190,481,578) (5,970,000)Subscription of shares in associate (784,000) (1,176,000) - (1,176,000)Proceeds from disposal of associate to a subsidiary - - - 1,666,000Proceeds from disposal of:- other investments 219 1,267,500 219 -- subsidiaries - - - 150,000- property, plant and equipment 1,113,594 100,470 - 200Net cash inflow from: - disposal/deconsolidation of subsidiaries 32(i) - 212,722 - -- consolidation of an associate 32(i) 3,011,270 - - -Increase in cash and cash equivalents pledged with licensed banks (31,000) (44,308) (31,000) (44,308)Dividends received 164 157 24,114,164 16,180,157Interest received 3,248,986 3,598,694 6,667,657 14,347,309
Net cash (used in)/from investing activities (2,218,594) (7,624,594) (159,762,340) 25,081,495
Cash flows from financing activities
Net repayment of other loans and borrowings 20.3 (22,981,385) (8,937,604) (7,245,447) (7,278,309)Net repayment of bankers’ acceptances 20.3 (4,240,000) (2,619,000) - -Proceeds from/(Repayment of) revolving credit 20.3 5,000,000 (4,000,000) - -Purchase of treasury shares 19.2 - (423) - (423)Interest paid (2,182,400) (3,020,275) (1,738,210) (2,885,687)Dividends paid to:- owners of the Company 28.2 (3,806,827) (3,806,830) (3,806,827) (3,806,830)- non-controlling interests (5,136,000) - - -
Net cash used in financing activities (33,346,612) (22,384,132) (12,790,484) (13,971,249)
STATEMENTS oF CASh FLoWS For ThE FINANCIAL yEAr ENDED 31 MArCh 2018
ANNUAL REPORT 2018 I 71
Group Company 2018 2017 2018 2017 Note rM rM rM rM
Net (decrease)/increase in cash and cash equivalents (21,389,687) 20,300,037 (862,591) (9,734,529)Effect of exchange rate fluctuations on cash held (945,787) 155,617 - -Cash and cash equivalents at beginning of financial year 116,989,525 96,533,871 10,524,341 20,258,870
Cash and cash equivalents at end of financial year [Note (ii)] 94,654,051 116,989,525 9,661,750 10,524,341
Notes
(i) Acquisition of property, plant and equipment
During the financial year, the Group and the Company acquired property, plant and equipment in the following manners:
Group Company 2018 2017 2018 2017 Note rM rM rM rM
Paid using internal funds 8,777,797 11,583,829 31,802 71,863 In the form of finance lease 210,000 221,077 - -
Total (see Note 3) 8,987,797 11,804,906 31,802 71,863
(ii) Cash and cash equivalents
Cash and cash equivalents included in the statements of cash flows comprise the following amounts in the statements of financial position:
Group Company 2018 2017 2018 2017 Note rM rM rM rM
Deposits placed with licensed banks with maturities of three months or less 78,476,768 77,747,391 9,572,216 10,100,000 Cash in hand and at banks 16,177,283 39,242,134 89,534 424,341
Total cash and cash equivalents as shown in the statements of cash flows (see Note 17) 94,654,051 116,989,525 9,661,750 10,524,341
The notes on pages 72 to 151 are an integral part of these financial statements.
STATEMENTS oF CASh FLoWS For ThE FINANCIAL yEAr ENDED 31 MArCh 2018
72 I WEIDA (M) BHD. (504747-W)
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Weida (M) Bhd. is a public limited liability company, incorporated and domiciled in Malaysia and is listed on the Main Market of Bursa Malaysia Securities Berhad. The address of its registered office and principal place of business is Wisma Hock Peng, Ground Floor to 2nd Floor, 123, Green Heights, Jalan Lapangan Terbang, 93250 Kuching, Sarawak.
The consolidated financial statements of the Company as at and for the financial year ended 31 March 2018 comprise the Company and its subsidiaries (together referred to as the “Group” and individually referred to as “Group entities”) and the Group’s interest in an associate. The financial statements of the Company as at and for the financial year ended 31 March 2018 do not include other entities.
The Company is principally engaged in investment holding and the provision of management services whilst the principal activities of the subsidiaries are as stated in Note 6 to the financial statements.
These financial statements were authorised for issue by the Board of Directors on 22 June 2018.
1. basis of preparation
(a) Statement of compliance
The financial statements of the Group and the Company have been prepared in accordance with Financial Reporting Standards (“FRSs”) and the requirements of the Companies Act 2016 in Malaysia.
The following are accounting standards, amendments and interpretations of the FRSs that have been issued by Malaysian Accounting Standards Board (“MASB”) but have not been adopted by the Group and the Company:
Standard/Interpretation/Amendment Effective date
FRS 9, Financial Instruments (2014) 1 January 2018 IC Interpretation 22, Foreign Currency Transactions and Advance Consideration 1 January 2018 Amendments to FRS 1, First time Adoption of Financial Reporting Standards (Annual Improvements to FRS Standards 2014-2016 Cycle) 1 January 2018 Amendments to FRS 2, Share-based Payment - Classification and Measurement of Share-based Payment Transactions 1 January 2018 Amendments to FRS 4, Insurance Contracts - Applying FRS 9 Financial Instruments with FRS 4 Insurance Contracts 1 January 2018 Amendments to FRS 128, Investments in Associates and Joint Ventures (Annual Improvements to FRS Standards 2014 – 2016 Cycle) 1 January 2018 Amendments to FRS 140, Investment Property - Transfers of Investment Property 1 January 2018 IC Interpretation 23, Uncertainty over Income Tax Treatments 1 January 2019 Amendments to FRS 10, Consolidated Financial Statements and FRS 128, Investments in Associates and Joint Ventures - Sale or Contribution of Assets between an Investor and its Associate or Joint Venture Yet to be confirmed
Given that certain Group entities are transitioning entities (being entities subject to the application of IC Interpretation 15, Agreements for the Construction of Real Estate and the entity that consolidates or equity accounts or proportionately consolidates the first-mentioned entities), the Group is currently exempted from adopting the Malaysian Financial Reporting Standards (“MFRSs”) Framework until 1 April 2018 as mandated by the MASB.
As a result, the Group and the Company will not be adopting the above FRSs, interpretations and amendments.
(b) basis of measurement
The financial statements have been prepared on the historical cost basis other than as disclosed in Note 2.
(c) Functional and presentation currency
These financial statements are presented in Ringgit Malaysia (“RM”), which is the Company’s functional currency.
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1. basis of preparation (continued)
(d) use of estimates and judgements
The preparation of the financial statements in conformity with FRSs requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an on-going basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected thereby.
There are no significant areas of estimation uncertainty and critical judgements in applying accounting policies that have significant effect on the amounts recognised in the financial statements other than those disclosed in the following notes:
• Note 3.4, impairment assessment of property, plant and equipment;• Note 9.2, impairment testing of rights to share rental proceeds of telecommunication towers;• Note 9.3, impairment testing of rights to provide sewerage services, treatment and disposal of
sludge;• Note 10.4, assessment of impairment loss on receivables; • Note 12, recognition of deferred tax assets;• Note 21.3, estimation of land owners’ entitlement; and• Recognition of profit from construction contracts, installation works and property development
activities, as follows:
(i) Profitrecognitionfrominstallationandconstructionofwastewater,andwatertreatmentsystems
The Group recognises contract revenue and contract costs from the installation and construction of wastewater and water treatment specialised systems in profit or loss in proportion to the stage of completion of the transactions, measured by reference to survey of work performed.
(ii) Profitrecognitionfromconstructionoftelecommunicationtowers
The Group recognises contract revenue and contract costs from the construction of telecommunication towers in profit or loss using the stage of completion method, determined by reference to the physical proportion of the contract work completed.
Significant judgement is required in determining the stage of completion of installation/construction contracts, accrual of costs incurred for which claims/billings have yet to be received, estimated total contract revenue and contract costs as well as the recoverability of the carrying amount of contract work-in-progress. The total contract revenue also includes an estimation of variations that are recoverable from contract customers.
In making such estimations and judgements, the Group relies on, inter alia, past experiences and the assessment of its experienced project teams.
(iii) Profitrecognitionfrompropertydevelopments
The Group recognises property development revenue and costs in profit or loss using the stage of completion method. The stage of completion of properties sold is determined by reference to the proportion that property development costs incurred for work performed to-date bear to the estimated total property development costs.
Significant judgement is required in determining the stage of completion of the development activities, extent of property development costs incurred, estimated total property development revenue and costs as well as recoverability of the development projects.
In making such judgements, the Group relies on, inter alia, on past experiences and the assessment of its experienced project team.
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2. Significant accounting policies The following are the significant accounting policies of the Group and of the Company which have been
consistently applied by the Group entities to the periods presented in these financial statements, unless otherwise stated.
(a) basis of consolidation (i) Subsidiaries
Subsidiaries are entities, including structured entities, controlled by the Company. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases.
The Group controls an entity when it is exposed, or has rights, to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Potential voting rights are considered when assessing control only when such rights are substantive. The Group also considers it has de facto power over an investee when, despite not having the majority of voting rights, it has the current ability to direct the activities of the investee that significantly affect the investee’s return.
Investments in subsidiaries are measured in the Company’s statement of financial position at cost less any impairment losses, unless the investment is classified as held for sale or distribution. The cost of investment includes transaction costs.
(ii) Business combinations
Business combinations are accounted for using the acquisition method from the acquisition date, which is the date on which control is transferred to the Group.
For new acquisitions, the Group measures the cost of goodwill at the acquisition date as:
• the fair value of the consideration transferred; plus• the recognised amount of any non-controlling interests in the acquiree; plus• if the business combination is achieved in stages, the fair value of the existing equity interest
in the acquiree; less• the net recognised amount (generally fair value) of the identifiable assets acquired and
liabilities assumed.
When the excess is negative, a bargain purchase gain is recognised immediately in profit or loss.
For each business combination, the Group elects whether it measures the 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.
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.
(iii) Acquisitions of non-controlling interests
The Group accounts for all changes in its ownership interest in a subsidiary that do not result in a loss of control as equity transactions between the Group and its non-controlling interest holders. Any difference between the Group’s share of net assets before and after the change, and any consideration received or paid, is adjusted to or against Group reserves.
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2. Significant accounting policies (continued)
(a) basis of consolidation (continued)
(iv) Acquisitions from entities under common controls
Business combinations arising from transfers of interests in entities that are under the control of the shareholder that controls the Group are accounted for as if the acquisition had occurred at the beginning of the earliest comparative period presented or, if later, at the date that common control was established; for this purpose, comparatives are restated.
The assets and liabilities acquired are recognised at the carrying amounts recognised previously in the Group controlling shareholder’s consolidated financial statements. The components of equity of the acquired entities are added to the same components within Group equity and any resulting gain/loss is recognised directly in equity.
(v) Loss of control
Upon the loss of control of a 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 equity accounted investee or as an available-for-sale financial asset depending on the level of influence retained.
(vi) Associates
Associates are entities, including unincorporated entities, in which the Group has significant influence, but not control, over the financial and operating policies.
Investments in associates are accounted for in the consolidated financial statements using the equity method less any impairment losses, unless it is classified as held for sale or distribution. The cost of the investment includes transaction costs. The consolidated financial statements include the Group’s share of the profit or loss and other comprehensive income of the associates, after adjustments if any, to align the accounting policies with those of the Group, from the date that significant influence commences until the date that significant influence ceases.
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. The difference between the fair value of any retained interest plus proceeds from the interest disposed of and the carrying amount of the investment at the date when equity method is discontinued 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 re-measured. 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 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.
Investments in associates are measured in the Company’s statement of financial position at cost less any impairment losses, unless the investment is classified as held for sale or distribution. The cost of the investment includes transaction costs.
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2. Significant accounting policies (continued)
(a) basis of consolidation (continued)
(vii) Non-controlling interests
Non-controlling interests at the end of the reporting period, being the equity in a subsidiary not attributable directly or indirectly to the owners of the Company, are presented in the consolidated statement of financial position and statement of changes in equity within equity, separately from equity attributable to the owners of the Company. Non-controlling interests in the results of the Group is presented in the consolidated statement of profit or loss and other comprehensive income as an allocation of the profit or loss and total comprehensive income for the financial year between non-controlling interests and owners of the Company.
Losses applicable to the non-controlling interests in a subsidiary are allocated to the non-controlling interests even if doing so causes the non-controlling interests to have a deficit balance.
(viii) 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.
(b) Foreign currency
(i) Foreign currency transactions
Transactions in foreign currencies are translated to the respective functional currencies of Group entities at the exchange rates at dates of transactions.
Monetary assets and liabilities denominated in foreign currencies at the end of a reporting period (reporting date) are retranslated to the functional currency at the exchange rates at that date.
Non-monetary assets and liabilities denominated in foreign currencies are not retranslated at the end of the reporting period, except for those measured at fair values which are retranslated to the functional currency at the exchange rate at the date that the fair value was determined.
Foreign currency differences arising on retranslation are recognised in profit or loss, except for differences arising on the retranslation of available-for-sale equity instruments or a financial instrument designated as a hedge of currency risk, which are recognised in other comprehensive income.
In the consolidated financial statements, 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, foreign exchange gains and losses arising from such a monetary item are considered to form part of a net investment in a foreign operation and are recognised in other comprehensive income, and are presented in the foreign currency translation reserve (“FCTR”) in equity.
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2. Significant accounting policies (continued)
(b) Foreign currency (continued)
(ii) Operations denominated in functional currencies other than Ringgit Malaysia (“RM”)
The assets and liabilities of operations denominated in functional currencies other than RM, including goodwill and fair value adjustments arising on acquisition, are translated to RM at exchange rates at the end of the reporting period. The income and expenses of foreign operations are translated to RM at exchange rates at the dates of the transactions.
Foreign currency differences are recognised in other comprehensive income and accumulated in the FCTR in equity. However, if the operation is a non-wholly owned subsidiary, then the relevant proportionate share of the translation difference is allocated to the non-controlling interests. When a foreign operation is disposed of such that control, significant influence or joint control is lost, the cumulative amount in the FCTR related to that foreign operation is reclassified to profit or loss as part of the gain or loss on disposal.
When the Group disposes of only part of its interest in a subsidiary that includes a foreign operation, the relevant proportion of the cumulative amount is reattributed to non-controlling interests. When the Group disposes of only part of its investment in an associate that includes a foreign operation while retaining significant influence, the relevant proportion of the cumulative amount is reclassified to profit or loss.
(c) Financial instruments
(i) Initial recognition and measurement
A financial asset or a financial liability is recognised in the statement of financial position when, and only when, the Group or the Company becomes a party to the contractual provisions of the instrument.
A financial instrument is recognised initially, at its fair value plus, in the case of a financial instrument not at fair value through profit or loss, transaction costs that are directly attributable to the acquisition or issue of the financial instrument.
An embedded derivative is recognised separately from the host contract and accounted for as a derivative if, and only if, it is not closely related to the economic characteristics and risks of the host contract and the host contract is not categorised at fair value through profit or loss. The host contract, in the event an embedded derivative is recognised separately, is accounted for in accordance with the policy applicable to the nature of the host contract.
(ii) Financial instruments categories and subsequent measurement
The Group and the Company categorise financial instruments as follows:
Financial assets
(a) Financialassetsatfairvaluethroughprofitorloss
Fair value through profit or loss category comprises financial assets that are held for trading, including derivatives (except for a derivative that is a financial guarantee contract or a designated and effective hedging instrument) or financial assets that are specifically designated into this category upon initial recognition.
Derivatives that are linked to and must be settled by delivery of unquoted equity instruments whose fair values cannot be reliably measured are measured at cost.
Other financial assets categorised as fair value through profit or loss are subsequently measured at their fair values with the gain or loss recognised in profit or loss.
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2. Significant accounting policies (continued)
(c) Financial instruments (continued)
(ii) Financial instruments categories and subsequent measurement (continued)
Financial assets (continued)
(b) Held-to-maturity investments
Held-to-maturity investments category comprises debt instruments that are quoted in an active market and the Group or the Company has the positive intention and ability to hold them to maturity.
Financial assets categorised as held-to-maturity investments are subsequently measured at amortised cost using the effective interest method.
(c) Loans and receivables
Loans and receivables category comprises debt instruments that are not quoted in an active market.
Financial assets categorised as loans and receivables are subsequently measured at amortised cost using the effective interest method.
(d) Available-for-salefinancialassets
Available-for-sale category comprises investment in equity and debt securities instruments that are not held for trading.
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. Other financial assets categorised as available-for-sale are subsequently measured at their fair values with the gain or loss recognised in other comprehensive income, except for impairment losses, foreign exchange gains and losses arising from monetary items and gains and losses of hedged items attributable to hedge risks of fair value hedges which are recognised in profit or loss. On derecognition, the cumulative gain or loss recognised in other comprehensive income is reclassified from equity into profit or loss. Interest calculated for a debt instrument using the effective interest method is recognised in profit or loss.
All financial assets, except for those measured at fair value through profit or loss, are subject to review for impairment [see Note 2(m)(i)].
Financial liabilities
All financial liabilities, are subsequently measured at amortised cost other than those categorised as fair value through profit or loss.
Fair value through profit or loss category comprises financial liabilities that are derivatives (except for a derivative that is a financial guarantee contract or a designated and effective hedging instrument) or financial liabilities that are specifically designated into this category upon initial recognition.
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.
Other financial liabilities categorised as fair value through profit or loss are subsequently measured at their fair values with the gain or loss recognised in profit or loss.
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2. Significant accounting policies (continued)
(c) Financial instruments (continued)
(iii) 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.
Fair values arising from financial guarantee contracts are classified as deferred income and is amortised to profit or loss using a straight-line method over the contractual period or, when there is no specified contractual period, recognised in profit or loss upon discharge of the guarantee. When settlement of a financial guarantee contract becomes probable, an estimate of the obligation is made. If the carrying value of the financial guarantee contract is lower than the obligation, the carrying value is adjusted to the obligation amount and accounted for as a provision.
(iv) Regularwaypurchaseorsaleoffinancialassets
A regular way purchase or sale of financial assets 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. 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) the derecognition of an asset that is sold, the recognition of any gain or loss on disposal and the recognition of a receivable from the buyer for payment on the trade date.
(v) Derecognition
A financial asset or a part thereof is derecognised when, and only when the contractual rights to 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 equity is recognised in profit or loss.
A financial liability or a part thereof 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 of the financial liability extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised in profit or loss.
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2. Significant accounting policies (continued)
(d) property, plant and equipment
(i) Recognition and measurement
Items of property, plant and equipment are measured at cost/valuation less any accumulated depreciation and any accumulated impairment losses.
Cost includes expenditures that are directly attributable to the acquisition of the asset and any other costs directly attributable to bringing the asset to working condition for its intended use, and the costs of dismantling and removing the items and restoring the site on which they are located. The cost of self-constructed assets also includes the cost of materials and direct labour. For qualifying assets, borrowing costs are capitalised in accordance with the accounting policy on borrowing costs.
Purchased software that is integral to the functionality of the related equipment is capitalised as part of that equipment.
The cost of property, plant and equipment recognised as a result of a business combination other than that involving a common control transaction is based on fair value at acquisition date.
When significant parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment.
The gain or loss on disposal of an item of property, plant and equipment is determined by comparing the proceeds from disposal with the carrying amount of the property, plant and equipment and is recognised net within “other income” or “other expenses” respectively in profit or loss.
Property, plant and equipment under the revaluation model
The Group revalues its properties comprising freehold land, leasehold land (other than prepaid lease payments) and buildings using the open market value method every five (5) years and at shorter intervals whenever the fair value of the revalued assets is expected to differ materially from their carrying value. Any additions during the financial year of revaluation are stated at cost.
Surpluses arising from revaluation are dealt with in the revaluation reserve account. Any deficit arising is offset against the revaluation reserve to the extent of a previous increase for the same property. In all other cases, a decrease in carrying amount is recognised in profit or loss. When revalued assets are sold, the amounts included in the revaluation surplus reserve are transferred to retained earnings.
(ii) Subsequent costs
The cost of replacing a component of an item of property, plant and equipment is recognised in the carrying amount of the item if it is probable that the future economic benefits embodied within the component will flow to the Group or the Company, and its cost can be measured reliably. The carrying amount of the replaced component is derecognised to profit or loss. The costs of the day-to-day servicing of property, plant and equipment are recognised in profit or loss as incurred.
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2. Significant accounting policies (continued)
(d) property, plant and equipment (continued)
(iii) Depreciation
Depreciation is based on the cost of an asset less its residual value, if any. Significant components of individual assets are assessed, and if a component has a useful life that is different from the remainder of that asset, then that component is depreciated separately.
Depreciation is recognised in profit or loss on a straight-line basis over the estimated useful life of each component of an item of property, plant and equipment from the date that they are available for use. Leased assets are depreciated over the shorter of the lease term and their useful lives unless it is reasonably certain that the Group will obtain ownership by the end of the lease term. Freehold land is not depreciated. Assets under construction are not depreciated until the assets are ready for their intended use.
The estimated useful lives of the assets for the current and comparative periods are as follows:
Leasehold land over lease terms of 38 years to 98 years Buildings 5, 20 or 50 years Plant, machinery and moulds 3, 5 or 10 years Office equipment, furniture and fittings, equipment and tools 3, 5, 8 or 10 years Motor vehicles 5 years Electrical installation and renovation 5 or 10 years Site equipment 10 years Other infrastructure 20 years
Depreciation methods, useful lives and residual values are reviewed and adjusted as appropriate at the end of the reporting period.
(e) Leased assets
(i) Finance lease
Leases in terms of which the Group or the Company assumes substantially all the risks and rewards of ownership are classified as finance leases. Upon initial recognition, a leased asset is measured at an amount equal to the lower of its fair value and the present value of the minimum lease payments. Subsequent to initial recognition, the asset is accounted for in accordance with the accounting policy applicable to that asset [see Note 2(d)].
Minimum lease payments made under finance leases are apportioned between the finance expense and the reduction of the outstanding liability. The finance expense is allocated to each period during the lease term so as to produce a constant periodic rate of interest on the remaining balance of the liability. Contingent lease payments are accounted for by revising the minimum lease payments over the remaining term of the lease when the lease adjustment is confirmed.
Leasehold land which in substance is a finance lease is classified as property, plant and equipment.
(ii) Operating lease
Leases, where the Group or the Company does not assume substantially all the risks and rewards of ownership are classified as operating leases and the leased assets, other than prepaid lease payments, are not recognised on the statement of financial position.
Payments made under operating leases are recognised in profit or loss on a straight-line basis over the term of the lease. Lease incentives received are recognised in profit or loss as an integral part of the total lease expense, over the term of the lease. Contingent rentals are charged to profit or loss in the reporting period in which they are incurred.
Leasehold land which in substance is an operating lease is classified as prepaid lease payments.
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2. Significant accounting policies (continued)
(f) Intangible assets
(i) Goodwill
Goodwill arises on business combinations is measured at cost less any accumulated impairment losses. In respect of equity-accounted associates and joint ventures, the carrying amount of goodwill is included in the carrying amount of the investment and an impairment loss on such an investment is not allocated to any asset, including goodwill, that forms part of the carrying amount of the equity-accounted associates and joint ventures.
(ii) Other intangible assets
Other intangible assets, all with finite useful lives (see Note 9) are measured at cost less accumulated amortisation and any accumulated impairment losses.
The gain or loss on disposal of an item of intangible assets is determined by comparing the proceeds from disposal with the carrying amount thereof and is recognised net within “other income” or “other expenses” respectively in profit or loss.
(iii) Subsequent expenditure
Subsequent expenditure is capitalised in the carrying amount of intangible assets if it is probable that the future economic benefits embodied within the item will flow to the Group or the Company, and its cost can be measured reliably. All other expenditure is recognised in profit or loss as incurred.
(iv) Amortisation
Goodwill with indefinite useful lives is not amortised but is tested for impairment annually and whenever there is an indication that it may be impaired.
Other intangible assets with finite useful lives are amortised from the date that they are available for use.
Amortisation is based on the cost of an asset less its residual value. Amortisation is recognised in profit or loss on a straight-line basis over the estimated useful lives of the assets, except that in the case of the rights to share rental proceeds of telecommunication towers, it is based on the estimated share of rental proceeds in a reporting period over the total estimated share of rental proceeds over ten years.
The estimated useful lives for the current and comparative periods are as follows:
Other intangible assets: - Rights to share rental proceeds of telecommunication towers 10 years - Rights to provide sewerage services, treatment and disposal of sludge 25 years
Amortisation methods, useful lives and residual values are reviewed at the end of each reporting period and adjusted if appropriate.
(g) Investment properties
Investment properties are properties which are owned or held under a leasehold interest to earn rental income or for capital appreciation or for both, but not for sale in the ordinary course of business, use in the production or supply of goods or services or for administration purposes. This includes freehold land and leasehold land which in substance is a finance lease. Properties that are occupied by the companies in the Group are accounted for as owner-occupied rather than as investment properties.
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2. Significant accounting policies (continued)
(g) Investment properties (continued)
(i) Recognition and measurement
Investment properties, other than those comprising property interests held under an operating lease, are stated at cost less accumulated depreciation and accumulated impairment losses, if any. Investment properties comprising property interests held under an operating lease are stated at fair value.
Cost includes expenditure that is directly attributable to the acquisition of the investment property. The cost of self-constructed investment property includes the cost of materials and direct labour, any other costs directly attributable to bringing the investment property to a working condition for its intended use and capitalised borrowing costs.
An investment property is derecognised on disposal, or when it is permanently withdrawn from use and no future economic benefits are expected from its disposal. The difference between the net disposal proceeds and the carrying amount is recognised in profit or loss in the period in which the item is derecognised.
(ii) Amortisation
Amortisation is recognised in profit or loss on a straight-line basis over the estimated useful life of depreciable investment property. Buildings under construction are not depreciated until the assets are ready for their intended use. The estimated useful lives for the current period are as follows:
Leasehold land Over lease terms of 92 years Buildings 50 years
(iii) Reclassificationto/frominvestmentproperty
When an item of property, plant and equipment or inventories is transferred to investment property or vice versa following a change in its use, the transfer do not change the carrying amount of the property transferred. No remeasurement of cost of property is required, as permitted under paragraph 59 of FRS 140, Investment Property.
(h) Inventories
Inventories are measured at 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.
(i) Developed properties held for sale
Cost of developed properties consists of costs associated with the acquisition of land, direct costs and appropriate proportions of common costs attributable to developing the properties to completion.
(ii) Other inventories
The cost of raw materials, consumables and construction materials are measured on the first-in first-out basis while that of manufactured/trading inventories, the weighted average costs basis.
The cost of inventories includes expenditure incurred in acquiring the inventories, production or conversion costs and other costs incurred in bringing them to their existing location and condition. In the case of work-in-progress and manufactured inventories, cost includes an appropriate share of production overheads based on normal operating capacity.
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2. Significant accounting policies (continued)
(i) property development costs
Property development costs comprise costs associated with the acquisition of land and all costs that are directly attributable to development activities or that can be allocated on a reasonable basis to such activities.
Property development costs not recognised as an expense are recognised as an asset and are stated at the lower of costs and net realisable value.
The excess of revenue recognised in profit or loss over billings to purchasers is shown as accrued billings under trade and other receivables while the excess of billings to purchasers over revenue recognised in profit or loss is shown as progress billings under trade and other payables.
(j) Construction work-in-progress
Construction work-in-progress represents the gross unbilled amount expected to be collected from customers for contract work performed to date. It is measured at cost plus profit recognised to date less progress billings and recognised losses. Cost includes all expenditures related directly to specific projects and an allocation of fixed and variable overheads incurred in the Group’s construction activities based on normal operating capacity.
Construction work-in-progress is presented as part of trade and other receivables as amount due from contract customers in the statement of financial position for all contracts 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 part of trade and other payables as amount due to contract customers in the statements of financial position.
(k) Cash and cash equivalents
Cash and cash equivalents consist of cash on hand, balances and deposits with banks and highly liquid investments which have an insignificant risk of changes in fair value with original maturities of three months or less and are used by the Group and the Company in the management of their short-term commitments. For the purpose of the statements of cash flows, cash and cash equivalents are presented net of bank overdrafts and pledged deposits.
(l) Non-current assets held for sale
Non-current assets, or disposal group comprising assets and liabilities that are expected to be recovered primarily through sale rather than through continuing use, are classified as held for sale.
Immediately before classification as held for sale, the assets, or components of a disposal group, are remeasured in accordance with the Group’s accounting policies. Thereafter generally the assets, or disposal group, are measured at the lower of their carrying amount and fair value less costs of disposal.
Any impairment loss on a disposal group is first allocated to goodwill, and then to remaining assets and liabilities on pro rata basis, except that no loss is allocated to inventories, financial assets, deferred tax assets, employee benefit assets and investment property, which continue to be measured in accordance with the Group’s accounting policies. Impairment losses on initial classification as held for sale and subsequent gains or losses on remeasurement are recognised in profit or loss. Gains are not recognised in excess of any cumulative impairment loss.
Intangible assets and property, plant and equipment once classified as held for sale are not amortised or depreciated.
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2. Significant accounting policies (continued)
(m) Impairment
(i) Financial assets
All financial assets (except for financial assets categorised as fair value through profit or loss, investment in subsidiaries and investment in associate) are assessed at each reporting date 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 asset. Losses expected as a result of future events, no matter how likely, are not recognised. For an investment in an equity instrument, a significant or prolonged decline in the fair value below its cost is an objective evidence of impairment. If any such objective evidence exists, then the financial asset’s recoverable amount is estimated.
An impairment loss in respect of loans and receivables and held-to-maturity investments is recognised in profit or loss and is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at the asset’s original effective interest rate. The carrying amount of the asset is reduced through the use of an allowance account.
An impairment loss in respect of available-for-sale financial assets is recognised in profit or loss and is measured as the difference between the asset’s acquisition cost (net of any principal repayment and amortisation) and the asset’s current fair value, less any impairment losses previously recognised. Where a decline in the fair value of an available-for-sale financial asset has been recognised in the other comprehensive income, the cumulative loss in other comprehensive income is reclassified from equity to profit or loss.
An impairment loss in respect of unquoted equity instrument that is carried at cost is recognised in profit or loss and is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at the current market rate of return for a similar financial asset.
An impairment loss recognised in profit or loss for an investment in an equity instrument classified as available-for-sale is not reversed through profit or loss.
If, in a subsequent period, the fair value of a debt instrument increases and the increase can be objectively related to an event occurring after the impairment loss was recognised in profit or loss, the impairment loss is reversed, to the extent that the asset’s carrying amount does not exceed what the carrying amount would have been had the impairment not been recognised at the date the impairment is reversed. The amount of the reversal is recognised in profit or loss.
(ii) Other assets
The carrying amounts of other assets (except for inventories, amount due from contract customers, deferred tax assets and non-current assets held for sale) are reviewed at the end of each reporting period to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated. For goodwill and intangible assets that have indefinite useful lives or that are not yet available for use, the recoverable amount is estimated each period at the same time.
For the purpose of impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or cash-generating units. Subject to an operating segment ceiling test, for the purpose of goodwill impairment testing, cash-generating units 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 purpose. The goodwill acquired in a business combination, for the purpose of impairment testing, is allocated to a cash-generating unit or a group of cash-generating units that are expected to benefit from the synergies of the combination.
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2. Significant accounting policies (continued)
(m) Impairment (continued)
(ii) Other assets (continued)
The recoverable amount of an asset or cash-generating unit is the greater of its value-in-use and its fair value less costs of disposal. 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 cash-generating unit.
An impairment loss is recognised if the carrying amount of an asset or its related cash-generating unit exceeds its estimated recoverable amount.
Impairment losses are recognised in profit or loss. Impairment losses recognised in respect of cash-generating units are allocated first to reduce the carrying amount of any goodwill allocated to the cash-generating unit (or a group of cash-generating units) and then to reduce the carrying amounts of the other assets in the cash-generating unit (or a group of cash-generating units) on a pro rata basis.
An impairment loss in respect of goodwill is not reversed. In respect of other assets, impairment losses recognised in prior periods are assessed at the end of each reporting period for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount 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. Reversals of impairment losses are credited to profit or loss in the financial year in which the reversals are recognised.
(n) Equity instruments
Instruments classified as equity are measured at cost on initial recognition and are not remeasured subsequently.
(i) Issue expense
Costs directly attributable to the issue of instruments classified as equity are recognised as a deduction from equity.
(ii) Ordinary shares
Ordinary shares are classified as equity.
(iii) Repurchase, disposal and reissue of share capital (treasury shares)
When share capital recognised as equity is repurchased, the amount of the consideration paid, including directly attributable costs, net of any tax effects, is recognised as a deduction from equity. Repurchased shares that are not subsequently cancelled are classified as treasury shares in the statement of changes in equity.
When treasury shares are distributed as share dividends, the cost of the treasury shares is applied in the reduction of the share premium account or distributable reserves, or both.
Where treasury shares are sold or reissued subsequently, the differences between the sales consideration net of directly attributable costs and the carrying amount of the treasury shares is recognised in equity and the resulting surplus or deficit on the transaction is presented in share premium.
ANNUAL REPORT 2018 I 87
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2. Significant accounting policies (continued)
(n) Equity instruments (continued)
(iv) Distributions of assets to owners of the Company
The Group measures a liability to distribute assets as a dividend to the owners of the Company at the fair value of the assets to be distributed. The carrying amount of the dividend is remeasured at each reporting period and at the settlement date, with any changes recognised directly in equity as adjustments to the amount of the distribution. On settlement of the transaction, the Group recognises the difference, if any, between the carrying amount of the assets distributed and the carrying amount of the liability in profit or loss.
(o) Employee benefits
(i) Short-termemployeebenefits
Short-term employee benefit obligations in respect of salaries and annual bonuses are measured on an undiscounted basis and are expensed as the related service is provided.
A liability is recognised for the amount expected to be paid under short-term cash bonus or profit-sharing plans if the Group has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.
(ii) State plans
The Group’s contributions to statutory pension funds are charged to profit or loss in the financial year to which they relate. Prepaid contributions are recognised as an asset to the extent that a cash refund or a reduction in future payments is available.
(p) revenue and other income
(i) Goods sold
Revenue from the sale of goods in the course of ordinary activities is measured at fair value of the consideration received or receivable, net of returns and allowances and trade discounts. Revenue is recognised when persuasive evidence exists, usually in the form of an executed sales agreement, that the significant risks and rewards of ownership have been transferred to the customer, recovery of the consideration is probable, the associated costs and possible return of goods can be estimated reliably, and there is no continuing management involvement with the goods, and the amount of revenue can be measured reliably. If it is probable that discounts will be granted and the amount can be measured reliably, then the discount is recognised as a reduction of revenue as the sales are recognised.
(ii) Construction contract
Contract revenue includes the initial amount agreed in the contract plus any variations in contract work, claims and incentive payments to the extent that it is probable that they will result in revenue and can be measured reliably. As soon as the outcome of a construction contract can be estimated reliably, contract revenue and contract cost are recognised in profit or loss in proportion to the stage of completion of the contract. Contract expenses are recognised as incurred unless they create an asset related to future contract activity.
The stage of completion is assessed by reference to the physical proportion of the contract work completed for telecommunication towers construction contracts and survey of work performed for installation and construction of wastewater and water treatment specialised system contracts.
When the outcome of a construction contract cannot be estimated reliably, contract revenue is recognised only to the extent of contract costs incurred that are likely to be recoverable. An expected loss on a contract is recognised immediately in profit or loss.
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2. Significant accounting policies (continued)
(p) revenue and other income (continued)
(iii) Property development
Revenue from property development activities is recognised based on the stage of completion of properties sold measured by reference to the proportion that property development costs incurred for work performed to-date bear to the estimated total property development costs.
Where the financial outcome of a property development activity cannot be reliably estimated, property development revenue is recognised only to the extent of property development costs incurred that is probable to be recoverable, and property development costs on the development units sold are recognised as an expense in the period in which they are incurred.
Any expected loss on a development project is recognised immediately in profit or loss.
(iv) Services rendered
Revenue from the provision of sludge treatment and disposal service is recognised in profit or loss as it accrues, based on rates agreed with customers.
(v) Stone extraction
Revenue from the provision of stone extraction is recognised in profit or loss based on the quantity of stone extracted at agreed rates.
(vi) Dividend income
Dividend income is recognised in profit or loss on the date that the Group’s or the Company’s right to receive payment is established, which in the case of quoted securities is the ex-dividend date.
(vii) Management fee
Management fee is recognised in profit or loss as it accrues at contracted rates.
(viii) Share of rental proceeds
Share of rental proceeds with a network facility provider licence holder from the leasing of telecommunication towers is recognised in profit or loss based on pre-determined ratios over the term of the lease (see also Note 9.1).
(ix) Rental income
Rental income from letting/hiring of assets is recognised in profit or loss on a straight-line basis over the term of the lease.
(x) Interest income
Interest income is recognised in profit or loss as it accrues using the effective interest method except for interest income arising from temporary investment of borrowings taken specifically for the purpose of financing a qualifying asset which is accounted for in accordance with the accounting policy on borrowing costs.
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2. Significant accounting policies (continued)
(q) borrowing costs
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 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 capitalised as part of the cost of those assets.
The capitalisation of borrowing costs as part of the cost of a qualifying asset commences when expenditure for the asset is being incurred, borrowing costs are being incurred and activities that are necessary to prepare the asset for its intended use or sale are in progress. Capitalisation of borrowing costs is suspended or ceases when substantially all the activities necessary to prepare the qualifying asset for its intended use or sale are interrupted or completed.
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.
(r) Income tax
Income tax expense comprises current and deferred tax. Current tax 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.
Current tax is the expected tax payable or receivable on the taxable income or loss for the financial year, using tax rates enacted or substantively enacted by the end of the reporting period, and any adjustment to tax payable in respect of previous financial years.
Deferred tax is recognised using the liability method, providing for temporary differences between the carrying amounts of assets and liabilities in the statement of financial position and their tax bases. Deferred tax is not recognised for the temporary differences arising from the initial recognition of goodwill, the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit or loss. Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the end of the reporting period.
Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realised simultaneously.
A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be available against which the temporary differences can be utilised. Deferred tax assets are reviewed at the end of each reporting period and are reduced by the extent that it is no longer probable that the related tax benefit will be realised.
(s) Earnings per ordinary share
The Group presents basic and diluted earnings per share (“EPS”) data for its ordinary shares.
Basic EPS is calculated by dividing 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 the weighted average number of ordinary shares outstanding, adjusted for own shares held, for the effects of all dilutive potential ordinary shares.
90 I WEIDA (M) BHD. (504747-W)
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2. Significant accounting policies (continued)
(t) operating segments
An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Group’s other components. Operating segments’ results are reviewed regularly by the chief operating decision maker, which in this case is the Group Executive Chairman, to make decisions about resources to be allocated to the segment and to assess its performance, and for which discrete financial information is available.
(u) Fair value measurements
Fair value of an asset or a liability, except for share-based payment and 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 values are categorised into different levels in a fair value hierarchy based on the inputs used in the valuation technique as follows:
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities that the Group can access at the measurement date.
Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.
Level 3: unobservable inputs for the asset or liability.
The Group recognises transfers between levels of the fair value hierarchy as of the date of the event or change in circumstances that caused the transfers.
ANNUAL REPORT 2018 I 91
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3. property, plant and equipment Plant, Office machinery equipment, and moulds, furniture Under and fittings, Outright finance equipment Land buildings purchase lease and tools Subtotal Group rM rM rM rM rM rM
Cost/Valuation
At 1 April 2016 42,808,191 31,575,726 58,360,958 6,896,154 15,243,897 154,884,926 Additions 3,500,000 2,690,267 1,860,422 - 668,611 8,719,300 Disposals - - (249,238) - (13,276) (262,514) Write-offs - - (1,660,446) - (128,921) (1,789,367) Reclassifications - - 766,667 122,642 (4,700) 884,609 Effect of movements in exchange rates - - 121,085 - 29,362 150,447 Disposal of a subsidiary [Note 32(i)] - - (3,809,147) - (189,349) (3,998,496)
At 31 March 2017/ 1 April 2017 46,308,191 34,265,993 55,390,301 7,018,796 15,605,624 158,588,905 Additions 116,883 4,735,345 688,746 - 1,024,145 6,565,119 Disposals - - (400,000) - (262,575) (662,575) Write-offs - - (131,040) - (165,684) (296,724) Reclassifications - 3,111,973 556,912 - 19,660 3,688,545 Transfer to investment properties (Note 5) (3,653,562) (4,018,918) - - - (7,672,480) Effect of movements in exchange rates - - (542,588) - (136,682) (679,270) Consolidation of an associate [Note 32(i)] - - - - 14,543 14,543
At 31 March 2018 42,771,512 38,094,393 55,562,331 7,018,796 16,099,031 159,546,063
Representing items at:
Cost - 4,577,927 55,562,331 7,018,796 16,099,031 83,258,085 Directors’ valuation 42,771,512 33,516,466 - - - 76,287,978
At 31 March 2018 42,771,512 38,094,393 55,562,331 7,018,796 16,099,031 159,546,063
92 I WEIDA (M) BHD. (504747-W)
NoTES To ThE FINANCIAL STATEMENTS
3. property, plant and equipment (continued) Plant, Office machinery equipment, and moulds furniture Under and fittings, Outright finance equipment Land buildings purchase lease and tools Subtotal Group (continued) rM rM rM rM rM rM
Depreciation and impairment losses
At 1 April 2016 - Accumulated depreciation 722,039 1,502,148 39,084,631 1,475,094 11,043,561 53,827,473 - Accumulated impairment losses - - 2,775,248 - - 2,775,248
722,039 1,502,148 41,859,879 1,475,094 11,043,561 56,602,721
Depreciation for the financial year 479,597 767,240 3,995,806 544,197 1,284,980 7,071,820 Disposals - - (231,422) - (9,387) (240,809) Write-offs - - (1,170,032) - (83,618) (1,253,650) Reclassifications - - - - - - Effect of movements in exchange rates - - 89,339 - 25,246 114,585 Disposal of a subsidiary [Note 32(i)]: - Accumulated depreciation - - (1,033,899) - (98,077) (1,131,976) - Reversal on impairment losses - - (2,775,248) - - (2,775,248)
At 31 March 2017/ 1 April 2017 1,201,636 2,269,388 40,734,423 2,019,291 12,162,705 58,387,443
- Accumulated depreciation 1,201,636 2,269,388 40,734,423 2,019,291 12,162,705 58,387,443 - Accumulated impairment losses - - - - - -
1,201,636 2,269,388 40,734,423 2,019,291 12,162,705 58,387,443 Depreciation for the financial year 486,386 876,171 3,461,917 882,181 1,212,753 6,919,408 Disposals - - (40,000) - (167,507) (207,507) Write-offs - - (129,284) - (126,737) (256,021) Reclassifications - - (293,920) 293,920 - - Reclassified to profit or loss - - (414) - - (414) Transfer to investment properties (Note 5) (129,390) (261,230) - - - (390,620) Effect of movements in exchange rates - - (460,460) - (123,588) (584,048) Consolidation of an associate [Note 32(i)]: - Accumulated depreciation - - - - 3,783 3,783
At 31 March 2018 1,558,632 2,884,329 43,272,262 3,195,392 12,961,409 63,872,024
ANNUAL REPORT 2018 I 93
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3. property, plant and equipment (continued) Plant, Office machinery equipment, and moulds furniture Under and fittings, Outright finance equipment Land buildings purchase lease and tools Subtotal Group (continued) rM rM rM rM rM rM
Depreciation and impairment losses (continued)
At 31 March 2018 - Accumulated depreciation 1,558,632 2,884,329 43,272,262 3,195,392 12,961,409 63,872,024 - Accumulated impairment losses - - - - - -
1,558,632 2,884,329 43,272,262 3,195,392 12,961,409 63,872,024
Carrying amounts
At 31 March 2017/ 1 April 2017 45,106,555 31,996,605 14,655,878 4,999,505 3,442,919 100,201,462
At 31 March 2018 41,212,880 35,210,064 12,290,069 3,823,404 3,137,622 95,674,039
94 I WEIDA (M) BHD. (504747-W)
NoTES To ThE FINANCIAL STATEMENTS
3. property, plant and equipment (continued)
Motor vehicles Electrical under installation other Assets Outright finance and Site infra- under Grand Subtotal purchase lease renovation equipment structure construction total Group (continued) rM rM rM rM rM rM rM rM
Cost/Valuation(continued)
At 1 April 2016 154,884,926 8,006,213 2,205,552 4,875,256 24,488 6,431,466 2,229,583 178,657,484 Additions 8,719,300 499,153 - 384,160 17,454 59,194 2,125,645 11,804,906 Disposals (262,514) (198,069) - - - - - (460,583) Write-offs (1,789,367) - - (33,600) - - - (1,822,967) Reclassifications 884,609 (148,000) 148,000 99,253 4,700 - (1,038,273) (49,711) Effect of movements in exchange rates 150,447 24,306 - 25,153 - - - 199,906 Disposal of a subsidiary [Note 32(i)] (3,998,496) - (25,000) - - - - (4,023,496)
At 31 March 2017/1 April 2017 158,588,905 8,183,603 2,328,552 5,350,222 46,642 6,490,660 3,316,955 184,305,539 Additions 6,565,119 900,952 217,656 332,171 6,566 95,210 870,123 8,987,797 Disposals (662,575) (1,066,948) (164,077) (17,106) - - - (1,910,706) Write-offs (296,724) - - (443,381) - (1,800) - (741,905) Reclassifications 3,688,545 - - (16,234) 4,700 21,100 (3,698,111) - Transfer to investment properties (Note 5) (7,672,480) - - - - - - (7,672,480) Effect of movements in exchange rates (679,270) (71,607) - (118,206) - - - (869,083) Consolidation of an associate [Note 32(i)] 14,543 - - - - - - 14,543
At 31 March 2018 159,546,063 7,946,000 2,382,131 5,087,466 57,908 6,605,170 488,967 182,113,705
Representing items at: (continued)
Cost 83,258,085 7,946,000 2,382,131 5,087,466 57,908 6,605,170 488,967 105,825,727 Directors’ valuation 76,287,978 - - - - - - 76,287,978
At 31 March 2018 159,546,063 7,946,000 2,382,131 5,087,466 57,908 6,605,170 488,967 182,113,705
Depreciation and impairment losses (continued)
At 1 April 2016 - Accumulated depreciation 53,827,473 6,532,423 1,667,543 3,194,939 3,382 3,168,400 - 68,394,160 - Accumulated impairment losses 2,775,248 - - - - - - 2,775,248
56,602,721 6,532,423 1,667,543 3,194,939 3,382 3,168,400 - 71,169,408 Depreciation for the financial year 7,071,820 671,679 339,534 378,333 7,267 332,860 - 8,801,493 Disposals (240,809) (198,069) - - - - - (438,878) Write-offs (1,253,650) - - (10,360) - - - (1,264,010) Reclassifications - - - - - - - - Effect of movements iexchange rates 114,585 24,353 - 18,064 - - - 157,002 Disposal of a subsidiary [Note 32(i)]: - Accumulated depreciation (1,131,976) (22,084) - - - - - (1,154,060) - Reversal of impairment losses (2,775,248) - - - - - - (2,775,248)
At 31 March 2017/1 April 2017 58,387,443 7,008,302 2,007,077 3,580,976 10,649 3,501,260 - 74,495,707
ANNUAL REPORT 2018 I 95
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3. property, plant and equipment (continued)
Motor vehicles Electrical under installation other Assets Outright finance and Site infra- under Grand Subtotal purchase lease renovation equipment structure construction total Group (continued) rM rM rM rM rM rM rM rM
Cost/Valuation(continued)
At 1 April 2016 154,884,926 8,006,213 2,205,552 4,875,256 24,488 6,431,466 2,229,583 178,657,484 Additions 8,719,300 499,153 - 384,160 17,454 59,194 2,125,645 11,804,906 Disposals (262,514) (198,069) - - - - - (460,583) Write-offs (1,789,367) - - (33,600) - - - (1,822,967) Reclassifications 884,609 (148,000) 148,000 99,253 4,700 - (1,038,273) (49,711) Effect of movements in exchange rates 150,447 24,306 - 25,153 - - - 199,906 Disposal of a subsidiary [Note 32(i)] (3,998,496) - (25,000) - - - - (4,023,496)
At 31 March 2017/1 April 2017 158,588,905 8,183,603 2,328,552 5,350,222 46,642 6,490,660 3,316,955 184,305,539 Additions 6,565,119 900,952 217,656 332,171 6,566 95,210 870,123 8,987,797 Disposals (662,575) (1,066,948) (164,077) (17,106) - - - (1,910,706) Write-offs (296,724) - - (443,381) - (1,800) - (741,905) Reclassifications 3,688,545 - - (16,234) 4,700 21,100 (3,698,111) - Transfer to investment properties (Note 5) (7,672,480) - - - - - - (7,672,480) Effect of movements in exchange rates (679,270) (71,607) - (118,206) - - - (869,083) Consolidation of an associate [Note 32(i)] 14,543 - - - - - - 14,543
At 31 March 2018 159,546,063 7,946,000 2,382,131 5,087,466 57,908 6,605,170 488,967 182,113,705
Representing items at: (continued)
Cost 83,258,085 7,946,000 2,382,131 5,087,466 57,908 6,605,170 488,967 105,825,727 Directors’ valuation 76,287,978 - - - - - - 76,287,978
At 31 March 2018 159,546,063 7,946,000 2,382,131 5,087,466 57,908 6,605,170 488,967 182,113,705
Depreciation and impairment losses (continued)
At 1 April 2016 - Accumulated depreciation 53,827,473 6,532,423 1,667,543 3,194,939 3,382 3,168,400 - 68,394,160 - Accumulated impairment losses 2,775,248 - - - - - - 2,775,248
56,602,721 6,532,423 1,667,543 3,194,939 3,382 3,168,400 - 71,169,408 Depreciation for the financial year 7,071,820 671,679 339,534 378,333 7,267 332,860 - 8,801,493 Disposals (240,809) (198,069) - - - - - (438,878) Write-offs (1,253,650) - - (10,360) - - - (1,264,010) Reclassifications - - - - - - - - Effect of movements iexchange rates 114,585 24,353 - 18,064 - - - 157,002 Disposal of a subsidiary [Note 32(i)]: - Accumulated depreciation (1,131,976) (22,084) - - - - - (1,154,060) - Reversal of impairment losses (2,775,248) - - - - - - (2,775,248)
At 31 March 2017/1 April 2017 58,387,443 7,008,302 2,007,077 3,580,976 10,649 3,501,260 - 74,495,707
96 I WEIDA (M) BHD. (504747-W)
NoTES To ThE FINANCIAL STATEMENTS
3. property, plant and equipment (continued)
Motor vehicles Electrical under installation other Assets Outright finance and Site infra- under Grand Subtotal purchase lease renovation equipment structure construction total Group (continued) rM rM rM rM rM rM rM rM
Depreciation and impairment losses (continued)
At 31 March 2017/1 April 2017 (continued) - Accumulated depreciation 58,387,443 7,008,302 2,007,077 3,580,976 10,649 3,501,260 - 74,495,707 - Accumulated impairment losses - - - - - - - -
58,387,443 7,008,302 2,007,077 3,580,976 10,649 3,501,260 - 74,495,707 Depreciation for the financial year 6,919,408 619,479 249,557 399,230 10,054 329,422 - 8,527,150 Disposals (207,507) (892,215) (164,076) (8,553) - - - (1,272,351) Write-offs (256,021) - - (221,690) - (308) - (478,019) Reclassifications - (35,467) 35,467 - - - - - Reclassified to profit or loss (414) - - - - - - (414) Transfer to investment properties (Note 5) (390,620) - - - - - - (390,620) Effect of movements in exchange rates (584,048) (60,287) - (94,021) - - - (738,356) Consolidation of an associate [Note 32(i)]: - Accumulated depreciation 3,783 - - - - - - 3,783
At 31 March 2018 - Accumulated depreciation 63,872,024 6,639,812 2,128,025 3,655,942 20,703 3,830,374 - 80,146,880 - Accumulated impairment losses - - - - - - - -
63,872,024 6,639,812 2,128,025 3,655,942 20,703 3,830,374 - 80,146,880
Carrying amounts (continued)
At 31 March 2017/1 April 2017 100,201,462 1,175,301 321,475 1,769,246 35,993 2,989,400 3,316,955 109,809,832
At 31 March 2018 95,674,039 1,306,188 254,106 1,431,524 37,205 2,774,796 488,967 101,966,825
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3. property, plant and equipment (continued)
Motor vehicles Electrical under installation other Assets Outright finance and Site infra- under Grand Subtotal purchase lease renovation equipment structure construction total Group (continued) rM rM rM rM rM rM rM rM
Depreciation and impairment losses (continued)
At 31 March 2017/1 April 2017 (continued) - Accumulated depreciation 58,387,443 7,008,302 2,007,077 3,580,976 10,649 3,501,260 - 74,495,707 - Accumulated impairment losses - - - - - - - -
58,387,443 7,008,302 2,007,077 3,580,976 10,649 3,501,260 - 74,495,707 Depreciation for the financial year 6,919,408 619,479 249,557 399,230 10,054 329,422 - 8,527,150 Disposals (207,507) (892,215) (164,076) (8,553) - - - (1,272,351) Write-offs (256,021) - - (221,690) - (308) - (478,019) Reclassifications - (35,467) 35,467 - - - - - Reclassified to profit or loss (414) - - - - - - (414) Transfer to investment properties (Note 5) (390,620) - - - - - - (390,620) Effect of movements in exchange rates (584,048) (60,287) - (94,021) - - - (738,356) Consolidation of an associate [Note 32(i)]: - Accumulated depreciation 3,783 - - - - - - 3,783
At 31 March 2018 - Accumulated depreciation 63,872,024 6,639,812 2,128,025 3,655,942 20,703 3,830,374 - 80,146,880 - Accumulated impairment losses - - - - - - - -
63,872,024 6,639,812 2,128,025 3,655,942 20,703 3,830,374 - 80,146,880
Carrying amounts (continued)
At 31 March 2017/1 April 2017 100,201,462 1,175,301 321,475 1,769,246 35,993 2,989,400 3,316,955 109,809,832
At 31 March 2018 95,674,039 1,306,188 254,106 1,431,524 37,205 2,774,796 488,967 101,966,825
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3. property, plant and equipment (continued)
Office Motor vehicles equipment, under furniture Outright finance and fittings purchase lease Renovation Total Company rM rM rM rM rM
Cost
At 1 April 2016 2,575,788 446,834 845,794 1,028,205 4,896,621
Additions 71,863 - - - 71,863 Disposals (3,353) - - - (3,353) Write-offs (27,178) - - - (27,178)
At 31 March 2017/ 1 April 2017 2,617,120 446,834 845,794 1,028,205 4,937,953
Additions 31,802 - - - 31,802 Disposals - - - - - Write-offs (17,475) - - - (17,475)
At 31 March 2018 2,631,447 446,834 845,794 1,028,205 4,952,280
Depreciation
At 1 April 2016 2,288,921 404,561 353,841 970,284 4,017,607
Depreciation for the financial year 159,624 42,273 174,485 27,965 404,347 Disposals (3,353) - - - (3,353) Write-offs (17,176) - - - (17,176)
At 31 March 2017/ 1 April 2017 2,428,016 446,834 528,326 998,249 4,401,425
Depreciation for the financial year 105,807 - 170,304 24,827 300,938 Write-offs (16,993) - - - (16,993)
At 31 March 2018 2,516,830 446,834 698,630 1,023,076 4,685,370
Carrying amounts
At 31 March 2017/ 1 April 2017 189,104 - 317,468 29,956 536,528
At 31 March 2018 114,617 - 147,164 5,129 266,910
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3. property, plant and equipment (continued)
3.1 Property, plant and equipment under the revaluation model
The Group revalued its freehold land, leasehold land and buildings in January 2015. The revaluation was performed by independent professional valuers using the comparison method. Consequently, a revaluation surplus was recognised in other comprehensive income as follows:
Group rM
Gross revaluation reserve 18,502,915 Less: Deferred taxation (2,768,702)
15,734,213
Had the land and buildings been carried under the cost model, their carrying amounts, net of any accumulated depreciation and accumulated impairment losses where applicable, that would have been included in the financial statements at the end of the financial year are as follows:
Group 2018 2017 rM rM
Land 13,334,554 13,405,748 Buildings 23,198,816 20,540,425
36,533,370 33,946,173
3.2 Security
Included in the land and buildings of the Group are carrying amounts of RM3,573,589 and RM6,942,765 respectively (2017: Nil), which the titles have been pledged as securities for banking facilities granted to subsidiaries. In addition, assets under finance lease are charged to secure the finance lease liabilities of the Group and the Company (see Note 20.2).
3.3 Allocation of depreciation
Depreciation for the financial year is allocated as follows:
Group Company 2018 2017 2018 2017 rM rM rM rM
Recognised in profit or loss (Note 23) 8,470,928 8,801,493 300,938 404,347 Capitalised in contract costs (Note 10.2) 56,222 - - -
8,527,150 8,801,493 300,938 404,347
3.4 Impairment assessment of property, plant and equipment
During the financial year under review, the Group has estimated whether the property, plant and equipment are stated in excess of their recoverable amounts. The Group has evaluated the carrying amounts of the property, plant and equipment by estimating their recoverable amounts using the value in use calculation of the cash-generating units.
Following the assessment, no impairment loss was required as the estimated recoverable amounts are higher than their carrying amounts.
100 I WEIDA (M) BHD. (504747-W)
NoTES To ThE FINANCIAL STATEMENTS
4. prepaid lease payments - Group
Leasehold land (Unexpired term of less than 50 years) rM
Cost
At 1 April 2016, 31 March 2017/1 April 2017 and 31 March 2018 4,380,000
Amortisation
At 1 April 2016 1,328,942 Amortisation for the financial year (Note 23) 119,136
At 31 March 2017/1 April 2017 1,448,078 Amortisation for the financial year (Note 23) 119,136
At 31 March 2018 1,567,214
Carrying amounts
At 31 March 2017/1 April 2017 2,931,922
At 31 March 2018 2,812,786
5. Investment properties Land building Total rM rM rM
Cost At 1 April 2016, 31 March 2017/1 April 2017 - - - Transfer from property, plant and equipment (Note 3) 3,653,562 4,018,918 7,672,480
At 31 March 2018 3,653,562 4,018,918 7,672,480
Amortisation At 1 April 2016, 31 March 2017/1 April 2017 - - - Transfer from property, plant and equipment (Note 3) 129,390 261,230 390,620 Amortisation for the year (Note 23) 39,824 80,378 120,202
At 31 March 2018 169,214 341,608 510,822
Carrying amounts At 31 March 2017/1 April 2017 - - -
At 31 March 2018 3,484,348 3,677,310 7,161,658
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5. Investment properties (continued)
5.1 Security
The titles of the land and building have been pledged as securities for banking facilities granted to a subsidiary.
5.2 The following are recognised in profit or loss in respect of investment properties:
Group 2018 2017 rM rM
Rental income 72,000 -
5.3 Fair value information
Fair value of investment properties as at the end of the reporting period are categorised as follows:
2018 2017 Level 3 Level 3 rM rM
Land 4,135,000 - Building 4,365,000 -
8,500,000 -
The following table shows the valuation technique used in the determination of fair values within Level 3, as well as the significant unobservable input used in the valuation model.
Inter-relationship between significant Description of unobservable input valuation technique Significant and fair value and input used unobservable input measurement
Sales comparison approach: Price per square The estimated fair value Sales price of comparable land and foot of RM850 would increase/(drecrease) building in close proximity are if the price per square adjusted for differences in key foot is higher/(lower). attributes such as property size and location. The most significant input into this valuation approach is price per square foot.
ValuationprocessesappliedbytheGroupforLevel3fairvalue
The fair value of investment properties is estimated based on references to indicative asking prices in property websites for properties in close proximity adjusted for differences in key attributes such as property size and location.
Highest and best use
The Group’s investment properties are land and building rented to third party and are regarded as its highest and best use of the properties.
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6. Investment in subsidiaries
Company 2018 2017 rM rM
Unquoted shares, at cost 250,179,669 59,698,091 Less: Impairment losses (717,869) (717,869)
249,461,800 58,980,222
During the year, the Company subscribed for redeemable preference shares of its subsidiaries amounted to RM190 million, which was satisfied by offsetting the outstanding balances owing to the Company.
In the previous financial years, the Company recognised impairment losses of RM717,869 based on the estimated recoverable amounts of the investment in subsidiaries. The recoverable amounts are estimated based on the fair value less costs of disposal with reference to the net tangible assets of the subsidiaries. In the current financial year under review, the Company reassessed on similar bases and concluded no further impairment to the investment in subsidiaries.
Details of the subsidiaries, all of which were incorporated in Malaysia except for Weida Philippines Inc. and Weida (B) Sdn. Bhd., which were incorporated in the Philippines and Brunei Darussalam respectively, and the Company’s interests therein are as follows:
Effective ownership interest and voting interest (%) Subsidiary principal activities 2018 2017
Weida Integrated Manufacture and sale of high density polyethylene 100.00 100.00 Industries Sdn. Bhd. engineering (“HDPE”) products (“WII”)
Weida Resources Trading of HDPE products, fittings and other 100.00 100.00 Sdn. Bhd. engineering products and the provision of specialised installation services for these products as well as design, supply and installation, commissioning and maintenance of sewerage systems
Weida Marketing Trading of HDPE products and the provision of 100.00 100.00 Sdn. Bhd. specialised installation services for these products
Weida Works Sdn. Bhd. Construction of water supply and other specialised 100.00 100.00 systems involving the use of HDPE products, construction of other infrastructure, construction of telecommunication towers and share of rental proceeds from telecommunication towers
Weida Properties Investment holding 100.00 100.00 Sdn. Bhd. (“WPSB”) @
Weida Environmental Provision of sewage treatment services 56.00 56.00 Technology Sdn. Bhd. comprising the design, supply and installation, (“WET”) commissioning and maintenance of sewerage systems
Weida Green Investment holding 100.00 100.00 Industries Sdn. Bhd. (“WGISB”)
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6. Investment in subsidiaries (continued)
Effective ownership interest and voting interest (%) Subsidiary principal activities 2018 2017
Weida International Investment holding 100.00 100.00 Sdn. Bhd. (“WISB”)
Weida Medic Investment holding 100.00 100.00 Development Sdn. Bhd. (“WMDSB”)
Weida (B) Sdn. Bhd. ^ Trading of HDPE products 99.99 99.99
Blast Power Sdn. Bhd. Quarry operator 51.00 51.00 (“BPSB”)
Weida Manufacturing Dormant 100.00 100.00 and Marketing Sdn. Bhd. Weida Communications Dormant 70.00 70.00 Sdn. Bhd.
Vista Cape Sdn. Bhd. Dormant 81.00 51.00
Subsidiaries of WII
Greenyard Corporation Letting of investment property 100.00 100.00 Sdn. Bhd.
Premium Fortune Sdn. Bhd. Letting of investment property 100.00 100.00
Subsidiary of WISB
Weida Philippines Inc. ^ Manufacture and sale of HDPE products 99.99 99.99
Subsidiaries of WPSB
Loyal Paragon Sdn. Bhd. Property development 100.00 100.00 (“LPSB”) @
Good Axis Sdn. Bhd. Property development 100.00 100.00 (“GASB”) @
Atlas Arrow Sdn. Bhd. Property development 75.00 75.00 (“AASB”) @
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6. Investment in subsidiaries (continued)
Effective ownership interest and voting interest (%) Subsidiary principal activities 2018 2017
Subsidiaries of WET
Sar-Alam Indah Sdn. Bhd. Collection, provision of treatment and disposal of 32.48 32.48 sludge services LIPP Biogas (Malaysia) Maintenance of waste treatment and biogas plants 44.80 44.80 Sdn. Bhd. (formerly known as Cahaya Alam Indah Sdn. Bhd.)
Hydro Solutions Sdn. Bhd. Building, construction and installation of hydro systems 56.00 56.00 Subsidiary of WMDSB
Asaljuru Weida To undertake planning, design, financing, 49.00 - Sdn. Bhd. * development and construction for the upgrading of Hospital Umum Sarawak
^ Audited by other member firms of KPMG International. @ Audited by a firm of Chartered Accountants other than KPMG PLT. * Reclassified from investment in an associate, refer to Notes 7 and 32(i).
Non-controlling interests (“NCI”) in subsidiaries
The Group’s subsidiaries that have material NCI are as follows:
other individually immaterial WET bpSb AASb AWSb subsidiaries Total Group rM rM rM rM rM rM
2018
NCI percentage of ownership/voting 44% 49% 25% 51% interest Carrying amount of NCI 10,341,390 (495,260) (1,284,525) 1,944,223 37,549 10,543,377 Profit/(Loss) allocated to NCI 2,408,749 (30,571) (288,530) (242,158) (3,858) 1,843,632
Summarisedfinancial information before intra-group elimination
As at 31 March 2018 Non-current assets 855,602 2,804,296 - 1,479,364 - Current assets 18,578,497 3,455,424 139,361,642 14,102,183 157,240 Non-current liabilities - (559,444) ( 143,523,690) - - Current liabilities (3,543,326) ( 6,711,011) (976,051) (11,769,344) (47,523)
Net assets/(liabilities) 15,890,773 ( 1,010,735) ( 5,138,099) 3,812,203 109,717
ANNUAL REPORT 2018 I 105
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6. Investment in subsidiaries (continued)
Non-controlling interests (“NCI”) in subsidiaries (continued)
other individually immaterial WET bpSb AASb AWSb subsidiaries Group rM rM rM rM rM
2018 (continued)
Financial year ended 31 March 2018 Revenue 23,242,350 3,300,836 - - - Loss for the financial year (4,782,946) (62,390) (1,154,121) (474,819) (16,613) Total comprehensive expense for the financial year (4,782,946) (62,390) (1,154,121) (474,819) (16,613)
Cash flows from/(used in) - Operating activities 6,516,110 346,698 29,742 (813,911) (8,826) - Investing activities 3,413,229 (78,608) 1,361 18,099 3,979 - Financing activities (11,990,999) (374,232) - 1,600,000 -
Net (decrease)/increase in cash and cash equivalents (2,061,660) (106,142) 31,103 804,188 (4,847)
other individually immaterial WET bpSb AASb subsidiaries Total Group rM rM rM rM rM
2017
NCI percentage of ownership/ voting interest 44% 49% 25% Carrying amount of NCI 13,068,639 (464,689) (995,994) 31,838 11,639,794 Profit/(Loss) allocated to NCI 2,540,620 (270,980) (297,942) (5,680) 1,966,018
Summarisedfinancialinformation before intra-group elimination
As at 31 March 2017 Non-current assets 701,161 3,330,667 - - Current assets 24,018,154 2,521,077 129,179,449 162,087 Non-current liabilities (100) (888,990) - - Current liabilities (3,422,741) (5,911,098) (133,163,427) (35,757)
Net assets/(liabilities) 21,296,474 (948,344) (3,983,978) 126,330
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6. Investment in subsidiaries (continued)
Non-controlling interests (“NCI”) in subsidiaries (continued)
other individually immaterial WET bpSb AASb subsidiaries Group (continued) rM rM rM rM
2017 (continued)
Summarisedfinancialinformationbefore intra-group elimination (continued)
Financial year ended 31 March 2017 Revenue 20,070,307 4,567,953 - - Profit/(Loss) for the financial year 3,784,070 (553,021) (1,191,770) (13,693) Total comprehensive income/(expense) for the financial year 3,784,070 (553,021) (1,191,770) (13,693)
Cash flows from/(used in) - Operating activities 978,727 (32,099) (75,374) (11,922) - Investing activities 708,663 (366,775) 2,916 4,795 - Financing activities - (374,232) - -
Net increase/(decrease) in cash and cash equivalents 1,687,390 (773,106) (72,458) (7,127)
7. Investment in an associate - Group
2018 2017 rM rM
Unquoted shares, at cost - 1,666,000 Share of post acquisition reserves - (305,482)
- 1,360,518
Details of the associate, which was incorporated in Malaysia, are as follows:
Effective ownership interest and voting interest (%) Name of entity Nature of relationship 2018 2017
Asaljuru Weida To undertake planning, - 49.00 Sdn. Bhd. design, financing, development, construction of facilities and infrastructure
On 28 April 2017, Asaljuru Weida Sdn. Bhd. (“AWSB”), a 49% owned associate of Weida Medic Development Sdn. Bhd. (“WMDSB”), which in turn is a wholly-owned subsidiary of Weida (M) Bhd. (“Weida” or “the Company”) entered into the Concession Agreement with the Government of Malaysia as represented by the Ministry of Health in relation to the upgrading of Hospital Umum Sarawak by way of development of new buildings and facilities, on a public private partnership by way of private financing initiative under the build, lease, maintain and transfer model.
On 30 August 2017, WMDSB had entered into a Shareholders’ Agreement with other shareholders of AWSB, for the purpose of regulating the responsibilities and obligations of shareholders in AWSB. Subsequently, WMDSB will control the board composition of AWSB and govern the financial and operating policies of AWSB. Arising thereto, AWSB will be treated as a subsidiary of WMDSB.
The effect of reclassifying AWSB from associate to a subsidiary is disclosed in Note 32(i).
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7. Investment in an associate – Group (continued)
Asaljuru Weida Sdn. bhd. Group rM
2018
For the period from 1 April 2017 to 30 August 2017 Loss/Total comprehensive expense for the financial period (89,545)
Group’s share of loss/total comprehensive expense for the financial period (43,877)
2017
As at 31 March 2017 Non-current assets 11,972 Current assets 4,873,482 Current liabilities (2,108,886)
Net assets 2,776,568
For the financial year ended 31 March 2017 Loss/Total comprehensive expense for the financial year (219,150)
Reconciliation of net assets to carrying amount
As at 31 March 2017 Group’s share of net assets 1,360,518
Carrying amount in the statement of financial position 1,360,518
For the financial year ended 31 March 2017 Group’s share of loss/total comprehensive expense for the financial year (107,384)
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8. Goodwill - Group
With With indefinite finite useful useful lives lives Total rM rM rM
Cost
At 1 April 2016 791,496 341,313 1,132,809
Reclassified to other intangible assets (Note 9) (791,496) - (791,496)
At 31 March 2017/1 April 2017/31 March 2018 - 341,313 341,313
Amortisation
At 1 April 2016 333,264 - 333,264 Reclassified to other intangible assets (Note 9) (333,264) - (333,264)
At 31 March 2017/1 April 2017/31 March 2018 - - -
Carrying amounts
At 31 March 2017/1 April 2017 - 341,313 341,313
At 31 March 2018 - 341,313 341,313
Impairment testing for cash-generating units containing goodwill
For the purpose of impairment testing, goodwill is allocated to the cash-generating units (“CGUs”) acquired at which the goodwill is monitored for internal management purposes.
The aggregate carrying amounts of goodwill allocated to the CGUs are as follows:
2018 2017 rM rM
Withfiniteusefullives
CGU 1* - Rights to provide sewerage services, treatment and disposal of sludge - -
Withindefiniteusefullives
CGU 2 267,485 267,485 Other CGU 73,828 73,828
341,313 341,313
Total 341,313 341,313
*CGU 1 has been reclassified to other intangible assets
No impairment testing is performed on goodwill as the Directors are of the opinion that the carrying amount is immaterial to the Group financial statements.
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9. other intangible assets - Group
rights to provide rights to sewerage share rental services, proceeds of treatment and telecommunication disposal of towers sludge Total rM rM rM
Cost At 1 April 2016 161,822,195 - 161,822,195 Reclassified from goodwill (Note 8) - 791,496 791,496 Deconsolidation of a subsidiary [Note 32(i)] (106,827,131) - (106,827,131)
At 31 March 2017/1 April 2017/31 March 2018 54,995,064 791,496 55,786,560
Amortisation At 1 April 2016 143,110,743 - 143,110,743 Reclassified from goodwill (Note 8) - 333,264 333,264 Deconsolidation of a subsidiary [Note 32(i)] (106,827,131) - (106,827,131) Amortisation for the financial year (Note 23) 7,629,554 41,658 7,671,212
At 31 March 2017/1 April 2017 43,913,166 374,922 44,288,088 Amortisation for the financial year (Note 23) 4,229,752 41,658 4,271,410
At 31 March 2018 48,142,918 416,580 48,559,498
Carrying amounts At 31 March 2017/1 April 2017 11,081,898 416,574 11,498,472
At 31 March 2018 6,852,146 374,916 7,227,062
9.1 Other intangible assets comprise:
• Rights to share rental proceeds of telecommunication towers
This arose from the construction of telecommunication towers for a network facility provider licence holder (“NFPLH”) in prior years. As payment consideration for the construction works carried out, the NFPLH and the Group share the rental proceeds from the leasing of the telecommunication towers based on a pre-determined ratios for a period of ten years commencing from the month when the rental proceeds were first received.
• Rights to provide sewerage services, treatment and disposal of the sludge
This arose from the concession granted to a subsidiary of the Group, which is engaged in the treatment and disposal of sludge from septic tanks on a 25 years contract.
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9. other intangible assets - Group (continued)
9.2 Impairment testing of rights to share rental proceeds of telecommunication towers
The recoverable amount of the rights to share rental proceeds of telecommunication towers is estimated using value-in-use calculations. These calculations use pre-tax cash flow projections based on the cash flows expected from the continuing use of the intangible asset. The value-in-use calculations were based on the following key assumptions:
a) Cash flows are projected based on the existing rental of towers payable by telecommunication service providers based on available information.
b) The projections are for the ten-year tenure of the License Agreement entered into with the licensed telecommunication service providers.
c) Pre-tax discount rate used to discount the projected cash flows is 10.00% (2017: 10.00%) per annum, determined by reference to the weighted average cost of capital of the Group.
The values assigned to the key assumptions represent management’s assessment of future trends in the industry and are based on historical data from both external sources and internal sources.
9.3 Impairment testing of rights to provide sewerage services, treatment and disposal of sludge
The recoverable amounts of the rights to provide sewerage services, treatment and disposal of sludge was estimated using value-in-use calculations. These calculations use pre-tax cash flow projections based on the financial budgets approved by management and cash flows expected from the continuing use of the intangible asset. The value-in-use calculations were based on the following key assumptions:
a) Services rendered are projected to remain at the same level as 2018. The rate of service charges will be revised upwards by 10.00% once every five years in accordance with the service contracts.
b) Expenses are projected to increase at 3.00% (2017: 3.00%) per annum.
c) The projections are for five financial years from 2019 to 2023 (2017: 2018 to 2022).
d) Pre-tax discount rate used to discount the projected cash flows is 10.00% (2017: 10.00%) per annum, determined by reference to the weighted average cost of capital of the Group.
e) Collections from trade receivables and settlement of trade payables will be made in accordance with the current credit arrangements and policies.
The values assigned to the key assumptions represent management’s assessment of future trends in
the industry and are based on historical data from both external sources and internal sources.
Sensitivity to changes in assumptions
The above estimates are particularly sensitive to fluctuations in the rate of service charges and operational costs. With a 5% and 10% variations in the projected service charges and operational costs respectively, the projections show that the recoverable amount of intangible asset would still exceed the carrying amount.
ANNUAL REPORT 2018 I 111
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10. Trade and other receivables
Group Company 2018 2017 2018 2017 rM rM rM rM
Non-current
Non-trade Other receivables (Note 10.1) 2,955,642 - - - Subsidiaries (Note 10.3) - - 5,385,227 122,067,228 Less: Allowance for impairment losses - - (2,610,000) (2,610,000)
- - 2,775,227 119,457,228
Non-current total 2,955,642 - 2,775,227 119,457,228
Current
Trade Trade receivables 86,618,363 85,174,143 3,180 - Less: Allowance for impairment losses (3,360,743) (2,811,344) - -
83,257,620 82,362,799 3,180 -
Amount due from contract customers (Note 10.2) 24,340,121 950,096 - -
Subtotal 107,597,741 83,312,895 3,180 -
Non-trade Other receivables (Note 10.1) 11,179,937 23,592,122 3,520 16,371,235 Less: Allowance for impairment losses (1,373,332) (1,373,332) - -
9,806,605 22,218,790 3,520 16,371,235
GST receivables 634,624 455,760 - -
Subsidiaries (Note 10.3) - - 24,574,207 92,892,480 Less: Allowance for impairment losses - - (86,862) (98,480)
- - 24,487,345 92,794,000
Subtotal 10,441,229 22,674,550 24,490,865 109,165,235
Current total 118,038,970 105,987,445 24,494,045 109,165,235
Total 120,994,612 105,987,445 27,269,272 228,622,463
10.1 Included in the non-current balance and current balance of other receivables is an amount of RM1,485,342 and RM1,500,000 respectively (2017: current balance of RM3,659,917) due from a former associate of the Group. The amount is secured by a first fixed and floating charge over the former associate’s assets and bears fixed interest at 6.00% (2017: 6.00%) per annum. The amount is expected to be repayable in full by December 2019.
Also, there is a stakeholder sum on property development amounting to RM5,195,630 (2017: RM15,586,890) held by the Group’s solicitors included in the other receivables.
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10. Trade and other receivables (continued)
10.2 Amount due from/(to) contract customers
2018 2017 Group rM rM
Value of works performed to-date 168,267,747 137,126,008 Progress billings (149,590,211) (143,717,048)
18,677,536 (6,591,040)
Represented by: Amount due from contract customers 24,340,121 950,096 Amount due to contract customers reclassified to trade and other payables (Note 21) (5,662,585) (7,541,136)
18,677,536 (6,591,040)
Additions to the value of works performed to-date include:
2018 2017 Group rM rM
Depreciation of property, plant and equipment (Note 3.3) 56,222 - Personnel expenses - contributions to state plans 215,403 57,039 - wages, salaries and others 1,858,096 534,499
10.3 Amount due from subsidiaries of RM24,574,207 (2017: RM92,892,480) is unsecured, bears interest at 5.30% - 5.60% (2017: 5.60%) per annum and is repayable on demand. The non-current balance due from subsidiaries of RM116,682,000 subsisting in 31 March 2017, was unsecured and bore interest at 8.00% per annum and the remaining balance is unsecured, interest free and is not expected to be repayable over the next 12 months.
10.4 The main collectability risk of trade receivables is insolvencies of the counterparties. Management determines allowance for impairment loss on doubtful receivables based on an on-going review and evaluation performed as part of its credit risk evaluation process. These include assessment of customers’ past payment records, financial standing and the age of receivables. The evaluation is however inherently judgemental and requires material estimates, including the amounts and timing of future cash flows expected to be received, which may be susceptible to significant changes.
11. other investments
Group Company 2018 2017 2018 2017 rM rM rM rM
Non-current Available-for-sale financial assets - quoted shares in Malaysia 2,376 3,256 2,376 3,256
ANNUAL REPORT 2018 I 113
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12. Deferred tax
Recognised deferred tax
Deferred tax assets and liabilities are attributable to the following:
Assets Liabilities Net 2018 2017 2018 2017 2018 2017 rM rM rM rM rM rM
Group
Property, plant and equipment 5,000 8,000 ( 11,088,340) (11,369,435) ( 11,083,340) (11,361,435) Intangible assets - 276,179 - - - 276,179 Capital allowances carried forward 229,000 360,000 - - 229,000 360,000 Tax losses carried forward 38,000 38,000 - - 38,000 38,000 Other items 1,172,731 1,663,000 (1,668,000) (3,992,382) (495,269) (2,329,382)
Tax assets/(liabilities) 1,444,731 2,345,179 (12,756,340) (15,361,817) (11,311,609) (13,016,638) Set off of tax (178,000) (786,000) 178,000 786,000 - -
Net tax assets/(liabilities) 1,266,731 1,559,179 ( 12,578,340) (14,575,817) ( 11,311,609) (13,016,638)
Company
Other items - - (3,278,000) (3,589,000) (3,278,000) (3,589,000)
Movements in deferred tax during the financial year are as follows:
recognised Foreign At recognised At in profit translation 31.3.2017/ in profit At 1.4.2016 or loss difference 1.4.2017 or loss 31.3.2018 rM rM rM rM rM rM
Group
Property, plant and equipment (10,340,629) (1,020,806) - (11,361,435) 278,095 (11,083,340) Intangible assets 1,387,573 (1,111,394) - 276,179 (276,179) - Capital allowances carried forward 174,000 186,000 - 360,000 (131,000) 229,000 Tax losses carried forward 41,000 (3,000) - 38,000 - 38,000 Other items (855,000) (1,401,141) (73,241) (2,329,382) 1,834,113 (495,269)
(9,593,056) (3,350,341) (73,241) (13,016,638) 1,705,029 (11,311,609)
(Note 26) (Note 26)
Company
Other items (1,739,000) (1,850,000) - (3,589,000) 311,000 (3,278,000)
(Note 26) (Note 26)
The recognition of deferred tax assets of the Group is based on profit projections for the financial years from 2019 to 2028 of the affected entities. The profit projections represent management’s assessment of future trends in the industry and are based on historical data from both external sources and internal sources.
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12. Deferred tax (continued)
Unrecognised deferred tax assets
Deferred tax assets of RM8,184,000 (2017: RM6,925,000) and RM2,078,000 (2017: RM2,038,000) of the Group and of the Company respectively have not been recognised in respect of the following temporary differences because it is not certain if future taxable profits of sufficient quantum will be available against which the affected group entities can utilise the benefits therefrom:
Group Company 2018 2017 2018 2017 rM rM rM rM
Capital allowances carried forward 2,856,000 2,763,000 2,385,000 2,218,000 Tax losses carried forward 23,550,000 19,171,000 6,273,000 6,273,000 Other provisions 7,693,000 6,919,000 - -
34,099,000 28,853,000 8,658,000 8,491,000
Unabsorbed capital allowances carried forward and unutilised tax losses carried forward of group entities incorporated in Malaysia amounting to RM26,406,000 (2017: RM21,934,000) do not expire under the current Malaysian tax legislation except that in the case of a dormant company, such allowances and losses will not be available to the company if there is a substantial change of 50% or more in the shareholdings thereof.
13. Inventories - Group
2018 2017 rM rM
At cost: Raw materials and consumables 26,095,158 24,957,956 Manufactured and trading inventories 18,638,383 19,735,321 Developed properties held for sale 21,055,466 24,368,387
65,789,007 69,061,664
At net realisable value: Manufactured and trading inventories 6,288 -
Total 65,795,295 69,061,664
ANNUAL REPORT 2018 I 115
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14. property development costs - Group
rM
At 1 April 2016
Property development costs Land use rights 176,489,394 Development costs 115,286,236
291,775,630 Accumulated costs charged to profit or loss (115,126,727)
176,648,903
Additions
Land costs incurred during the financial year 3,794,720 Development costs incurred during the financial year 38,883,041
42,677,761
Recognisedincostofsales/Transfer
Costs charged to profit or loss (38,779,569) Transfer of completed properties to inventories (21,683,637)
(60,463,206)
At31March2017/1April2017
Property development costs Land use rights 180,284,114 Development costs 154,169,277
334,453,391 Accumulated costs charged to profit or loss (153,906,296) Accumulated transfer of completed properties to inventories (21,683,637)
158,863,458
Additions
Land costs incurred during the financial year 82,529 Development costs incurred during the financial year 1,866,297
1,948,826
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14. property development costs - Group (continued)
rM
At 31 March 2018
Property development costs Land use rights 180,366,643 Development costs 156,035,574
336,402,217 Accumulated costs charged to profit or loss (153,906,296) Accumulated transfer of completed properties to inventories (21,683,637)
160,812,284
Security
In the last financial year, the land use rights related to third party land were pledged as security for the banking facilities granted to the Group.
Property development costs incurred during the financial year include:
2018 2017 rM rM
Interest expense capitalised (Note 24) 450,320 1,238,648
15. Deposits and prepayments
Group Company 2018 2017 2018 2017 rM rM rM rM
Deposits 2,775,716 6,438,312 168,285 166,381 Prepayments 1,533,943 1,005,238 88,879 90,351
4,309,659 7,443,550 257,164 256,732
Included in deposits of the Group is an amount of RM30,817 (2017: RM387,673) paid for the purchases of machinery and equipment and deposits paid for the purchase of property, plant and equipment amounted to RM4,234,152 in last financial year.
ANNUAL REPORT 2018 I 117
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16. Derivative financial liabilities - Group
2018 2017 Assets Liabilities Assets Liabilities rM rM rM rM
Derivatives held for trading at fair value through profit or loss - Forward foreign exchange contracts - (120,508) - (40,119)
Nominal value of the outstanding forward foreign exchange contracts as at 31 March 2018 is RM9,726,955 (2017: RM5,211,065).
Forward foreign exchange contracts are used to manage the foreign currency exposures arising from the Group’s receivables and payables denominated in currencies other than the functional currencies of group entities. Most of the forward foreign exchange contracts have maturities of less than one year after the end of the reporting period. Where necessary, the forward foreign exchange contracts are rolled over at maturity.
17. Cash and cash equivalents
Group Company 2018 2017 2018 2017 rM rM rM rM
Deposits placed with licensed banks with maturities of three months or less 78,476,768 77,747,391 9,572,216 10,100,000 Cash in hand and at banks 16,177,283 39,242,134 89,534 424,341
Total cash and cash equivalents 94,654,051 116,989,525 9,661,750 10,524,341 Deposits pledged with licensed banks 2,084,826 2,053,825 2,084,826 2,053,825
96,738,877 119,043,350 11,746,576 12,578,166
Deposits of RM2,084,826 (2017: RM2,053,825) are charged to licensed banks as security for banking facilities granted to certain subsidiaries (see Note 20.2).
Included in cash in hand and at banks of the Group is an amount of RM3,064,872 (2017: RM28,550,315) held under a housing development account in pursuant to Section 7A of the Housing Development (Control and Licensing) Act 1966, comprises monies received from purchasers for the payment of property development expenditure incurred and are restricted from use in other operations. The surplus monies, if any, will be released to the Group upon the completion of the property development projects and after all property development expenditure have been fully settled.
18. Asset classified as held for sale - Group
A subsidiary of the Group previously entered into a settlement agreement with two (2) of its customers. Pursuant to the settlement agreement, the debts owing to the subsidiary by the two (2) customers was settled by way of set-off against a residential property, which the customers are joint beneficial owners. The Group is committed to a plan to sell the said property and had appointed an estate agent to secure a purchaser.
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19. Capital and reserves
19.1 Share capital
Group and Company 2018 2017 Amount Number of Amount Number of rM shares rM shares
Ordinary shares
Issued and fully paid: Opening and closing balances 66,666,666 133,333,332 66,666,666 133,333,332
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.
19.2 Reserves
Group Company 2018 2017 2018 2017 rM rM rM rM
Revaluation reserve 23,921,407 24,394,309 - - Foreign exchange translation reserve (1,001,015) (1,165,470) - - Treasury shares (4,600,968) (4,600,968) (4,600,968) (4,600,968) Fair value reserve 4,446 4,683 4,446 4,683 Retained earnings 346,584,979 329,581,609 194,324,984 172,915,694
364,908,849 348,214,163 189,728,462 168,319,409
Movements in each category of reserves are disclosed in the statements of changes in equity.
Foreign exchange translation reserve - Group
The translation reserve comprises all foreign currency differences arising from the translation of the financial statements of the group entities with functional currencies other than RM.
Treasury shares
In the last financial year, the Company purchased 200 units of its issued share capital from the open market using internal generated funds. The average price paid for the shares was RM1.68 per ordinary share. The total consideration paid was RM423 including transaction costs of RM87.
There was no repurchase of shares in the current financial year.
The total number of shares repurchased subsisting at 31 March 2017 and 31 March 2018 was 6,439,100.
Fair value reserve
The fair value reserve comprises the cumulative net change in the fair value of financial assets categorised as available-for-sale until the assets are derecognised or impaired.
Revaluation reserve
Revaluation reserve (net of deferred tax liability recognised) represents non-distributable surplus arising from the revaluation of freehold and leasehold land and buildings (see Note 3.1).
ANNUAL REPORT 2018 I 119
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20. Loans and borrowings
Group Company 2018 2017 2018 2017 rM rM rM rM
Non-current Finance lease liabilities 1,058,130 1,899,856 145,724 192,827 Term loans - Unsecured - 8,928,571 - 8,928,571 - Secured 11,454,982 8,397,744 - -
Non-current total 12,513,112 19,226,171 145,724 9,121,398
Current Finance lease liabilities 1,024,332 1,057,171 47,103 102,590 Unsecured bankers’ acceptances 20,529,000 24,769,000 - - Term loans - Unsecured 8,928,571 7,142,857 8,928,571 7,142,857 - Secured 959,247 18,770,448 - - Revolving credit 6,000,000 1,000,000 - -
Current total 37,441,150 52,739,476 8,975,674 7,245,447
Total 49,954,262 71,965,647 9,121,398 16,366,845
20.1 Finance lease liabilities
Finance lease liabilities are payable as follows:
2018 2017 present present Future value of Future value of minimum minimum minimum minimum lease lease lease lease payments Interest payments payments Interest payments Group rM rM rM rM rM rM
Less than one year 1,109,199 84,867 1,024,332 1,189,726 132,555 1,057,171 Between one and five years More than five years 1,113,632 55,502 1,058,130 2,024,690 124,834 1,899,856
2,222,831 140,369 2,082,462 3,214,416 257,389 2,957,027
Company
Less than one year 54,768 7,665 47,103 113,525 10,935 102,590 Between one and five years More than five years 155,109 9,385 145,724 209,877 17,050 192,827
209,877 17,050 192,827 323,402 27,985 295,417
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20. Loans and borrowings (continued)
20.2 Security
Company Unsecured term loan
The unsecured term loan of the Company is covered by way of:
a) corporate guarantees from three subsidiaries up to RM50,000,000;b) negative pledges from the Company and the three subsidiaries;c) assignment of dividend proceeds from all subsidiaries to its escrow account;d) placement in General Investment Account; ande) charge over the escrow accounts of the Company and a subsidiary.
The Group and the Company are required to maintain the gearing ratio of not exceeding 1.50 times throughout the tenure of the unsecured term loan.
Subsidiaries Secured term loan No. 1
A secured term loan of a subsidiary, which is part of the credit facilities obtained thereby, is covered by way of:
a) corporate guarantee from the Company; andb) first party charge over the subject property (see Note 5.1).
Secured term loan No. 2
A secured term loan of a subsidiary, which is part of the credit facilities obtained thereby, is covered by way of:
a) Deed of Assignment assigning all the rights and title. Instructs and benefits under the Sale and Purchase Agreement in respect of the Property (see Note 3.2);
b) private caveat on the Master Title pending issuance of the individual subdivided/strata title;c) registered open all monies first party charge over the subject property upon issuance of
individual/strata title; and d) corporate guarantee from the Company.
Secured term loan No. 3
A secured term loan of a subsidiary, which is part of the credit facilities obtained thereby, is covered by way of:
a) first party legal charge over the property (see Note 3.2); andb) corporate guarantee from the Company.
Other banking facilities
The banking facilities comprising multi-trade facilities, revolving credit, contract financing lines, general working capital facilities and term financing granted to a subsidiary are secured by way of:
a) corporate guarantee from the Company;b) Deed of Assignment of contract proceeds; andc) negative pledge over its present and future assets.
Other banking facilities granted to other subsidiaries are principally guaranteed by the Company and negative pledge over their present and future assets.
ANNUAL REPORT 2018 I 121
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20. Loans and borrowings (continued)
20.2 Security (continued)
Subsidiaries (continued)
Finance lease liabilities
The finance lease liabilities are secured on the respective finance lease assets of the Group and of the Company. Outstanding finance lease liabilities of RM1,601,500 (2017: RM2,471,648) granted to certain subsidiaries are guaranteed by the Company.
20.3Reconciliationofmovementofliabilitiestocashflowsarisingfromfinancingactivities
At Net changes Acquisition 31.3.2017/ from financing of new At 1.4.2017 cash flows lease 31.3.2018 Group rM rM rM rM
Term loans 43,239,620 (21,896,820) - 21,342,800 Revolving credits 1,000,000 5,000,000 - 6,000,000 Bankers’ acceptances 24,769,000 (4,240,000) - 20,529,000 Finance lease liabilities 2,957,027 (1,084,565) 210,000 2,082,462
Total liabilities from financing activities 71,965,647 (22,221,385) 210,000 49,954,262
Company Term loans 16,071,428 (7,142,857) - 8,928,571 Finance lease Liabilities 295,417 (102,590) - 192,827
Total liabilities from financing activities 16,366,845 (7,245,447) - 9,121,398
21. Trade and other payables
Group Company 2018 2017 2018 2017 rM rM rM rM
Trade Trade payables (Note 21.1) 27,705,604 26,904,157 - - Amount due to contract customers (Note 10.2) 5,662,585 7,541,136 - - Accrued expenses 7,312,573 13,794,422 - -
40,680,762 48,239,715 - -
Non trade Subsidiaries (Note 21.2) - - 16,879,950 43,912,047 Accrued expenses 20,426,954 21,061,443 2,965,134 2,406,713 Other payables 4,873,989 3,768,596 871,629 43,799 GST payables 461,580 1,201,297 18,951 43,331 Land owners’ entitlement (Note 21.3) 718,340 4,638,094 - -
26,480,863 30,669,430 20,735,664 46,405,890
Total 67,161,625 78,909,145 20,735,664 46,405,890
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21. Trade and other payables (continued)
21.1 Trade payables of the Group include retention sums of RM1,771,339 (2017: RM710,462).
21.2 Amount due to subsidiaries is unsecured, bears interest at 5.30% - 5.60% (2017: 5.60%) per annum and repayable on demand.
21.3 (a) The Group through its subsidiary, AASB had entered into a joint development agreement (“JDA A”) with a third party (“the Land Owner A”) on 3 October 2015 to develop two parcels of leasehold land (the project is hereinafter referred to as “the Proposed Development A” and the land, as “the Project Land A”).
Through the JDA A, Land Owner A shall contribute the Project Land A for the Proposed Development A and AASB shall undertake the Proposed Development A pursuant to and in accordance with the provisions of the JDA A. AASB shall be responsible for the entire costs and expenses of the Proposed Development A and shall make available all the necessary finances in respect thereof.
Pursuant to the JDA A, Land Owner A shall be entitled to 9% of the gross development value (“GDV”) of the Proposed Development A or a minimum entitlement of RM107,000,000, whichever is higher.
21.3 (b) The Group through its subsidiary, LPSB, had entered into a joint venture agreement (“JDA B”) with Land Owner B on 20 December 2011 to develop the Project Land B (the project is hereinafter referred to as “the Development B”).
Through the JDA B, Land Owner B shall contribute the Project Land B for the Development B and LPSB shall undertake the Development B pursuant to and in accordance with the provisions of the JDA B. LPSB shall be responsible for the entire costs and expenses of the Development B and shall make available all the necessary finances in respect thereof.
Pursuant to JDA B, Land Owner B shall be entitled to a fixed amount of RM32,989,394. A portion of the Land Owner B’s entitlement had been deducted against the payments on behalf made by LPSB.
21.3 (c) The Group through another subsidiary, GASB, had also entered into a joint venture agreement (“JDA C”) with Land Owner C on 30 January 2015 to develop the Project Land C (the project is hereinafter referred to as “the Proposed Development C”).
Through the JDA C, Land Owner C shall contribute the Project Land C for the Proposed Development C and GASB shall undertake the Proposed Development C pursuant to and in accordance with the provisions of the JDA C. GASB shall be responsible for the entire costs and expenses of the Proposed Development C and shall make available all the necessary finances in respect thereof.
Pursuant to the JDA C, Land Owner C shall be entitled to 15% of the GDV of the Proposed Development C or a minimum entitlement of RM32,000,000, whichever is higher. A portion of the Land Owner C’s entitlement had been deducted against the payments on behalf made by GASB. The entitlement payable recognised is an estimate and is subject to the finalisation of the GDV of the Proposed Development C. As at the reporting date, the entitlement is estimated based on the market value of the land determined by an independent professional valuer.
ANNUAL REPORT 2018 I 123
NoTES To ThE FINANCIAL STATEMENTS
22. revenue
Group Company 2018 2017 2018 2017 rM rM rM rM
Contract revenue 23,459,436 43,076,411 - - Sale of goods 162,232,284 161,709,566 - - Services rendered 24,084,322 24,654,666 - - Share of rental proceeds of telecommunication towers 20,493,454 21,820,748 - - Sale of development properties 4,622,944 50,147,597 - - Dividend income from: - subsidiaries (unquoted in Malaysia) - - 24,114,000 16,180,000 - quoted investments - - 164 157 Management fee income - - 7,301,451 8,303,330
234,892,440 301,408,988 31,415,615 24,483,487
23. results from operating activities
Group Company 2018 2017 2018 2017 rM rM rM rM
results from operating activities are arrived at after charging: Auditors’ remuneration: - audit fees - KPMG PLT Malaysia 313,000 306,000 110,000 110,000 - overseas affiliates of KPMG PLT Malaysia 51,692 47,061 - - - other auditors 47,000 50,000 - - - non-audit fees - KPMG PLT Malaysia 12,000 17,000 12,000 17,000 - local affiliates of KPMG PLT Malaysia 173,504 201,090 34,212 64,000 - overseas affiliates of KPMG PLT Malaysia 4,449 3,192 - - - local affiliates of other auditors 19,500 15,000 - - Impairment loss on receivables 840,508 80,687 - - Amortisation of: - other intangible assets (Note 9) 4,271,410 7,671,212 - - - prepaid lease payments (Note 4) 119,136 119,136 - - Bad debts written off 848 2,487 - - Depreciation of property, plant and equipment (Note 3.3) 8,470,928 8,801,493 300,938 404,347 Amortisation of investment properties (Note 5) 120,202 - - - Loss on disposal of: - other investments 424 - 424 - - a subsidiary - - - 3,300,000 Property, plant and equipment written off 263,886 558,957 482 10,002 Inventories written off 722,694 403 - - Rental of premises and equipment 1,683,986 2,055,785 587,600 577,200 Rental of land 1,293,863 1,026,121 - - Foreign exchange loss : - realised 73,144 26,393 234 - - unrealised 1,076,511 104,267 494 - Derivative loss on forward foreign currency contracts 80,389 - - -
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23. results from operating activities (continued)
Group Company 2018 2017 2018 2017 rM rM rM rM
and after crediting:
Bad debts recovered 32,723 78,765 - 200 Dividend income from: - subsidiaries (unquoted in Malaysia) - - 24,114,000 16,180,000 - quoted investments 164 157 164 157 Gain on disposal/deconsolidation of subsidiaries - 35,653 - - Gain on disposal of: - property, plant and equipment 475,239 78,765 - 200 - other investments - 1,042,500 - - Derivative gain on forward foreign currency contracts - 286,946 - - Foreign exchange gain: - realised - 12,529 - 57 - unrealised - 229,548 - 466 Hire of equipment 1,672 7,106 - - Income from rental of furnished premises 198,000 120,000 1,070,400 1,034,700 Reversal of allowance for: - impairment loss on receivables 89,481 412,724 11,618 - - impairment loss on property, plant and equipment - 2,775,248 - - - slow moving inventories 407,616 260,958 - - Inventories written back 266,664 62,664 - -
Employee benefits disclosed in profit or loss include:
Group Company 2018 2017 2018 2017 rM rM rM rM
Contributions to state plans 4,440,750 4,626,583 718,269 928,660
24. Interest income and interest expenses
Group Company 2018 2017 2018 2017 rM rM rM rM
Interest income of financial assets that are not at fair value through profit or loss - term deposits 3,005,926 3,383,269 230,678 333,124 - debentures 243,061 215,425 - - - other finance income 256,034 848,580 - - - subsidiaries - - 6,436,979 14,014,185
3,505,021 4,447,274 6,667,657 14,347,309
ANNUAL REPORT 2018 I 125
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24. Interest income and interest expenses (continued)
Group Company 2018 2017 2018 2017 rM rM rM rM
Recognised in profit or loss 3,505,021 4,447,274 6,667,657 14,347,309
Interest expenses of financial liabilities that are not at fair value through profit or loss - loans and borrowings 2,725,269 3,758,191 709,066 1,101,489 - other finance costs 316,677 127,344 - - - subsidiaries - - 1,040,251 1,801,075
3,041,946 3,885,535 1,749,317 2,902,564
Recognised in profit or loss 2,591,626 2,646,887 1,749,317 2,902,564 Capitalised in qualifying assets: - property development costs (Note 14) 450,320 1,238,648 - -
Total 3,041,946 3,885,535 1,749,317 2,902,564
25. Compensations to key management personnel Compensations paid/payable to key management personnel are as follows:
Group Company 2018 2017 2018 2017 rM rM rM rM
Directors of the Company
- Fees 360,000 372,000 360,000 372,000 - Other short-term employee benefits 2,364,252 5,531,460 1,728,920 3,261,546
2,724,252 5,903,460 2,088,920 3,633,546
Other key management personnel
- Fees 227,432 161,371 - - - Other short-term employee benefits 4,497,237 7,285,602 1,220,189 1,439,731
4,724,669 7,446,973 1,220,189 1,439,731
Total 7,448,921 13,350,433 3,309,109 5,073,277
Other key management personnel comprise persons, other than the Directors, having authority and responsibility for planning, directing and controlling the activities of the Group either directly or indirectly.
126 I WEIDA (M) BHD. (504747-W)
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26. Tax expense Recognisedinprofitorloss
Group Company 2018 2017 2018 2017 rM rM rM rM
Current taxation
Malaysian - current year 14,555,900 9,953,400 1,210,000 765,000 - prior year (218,406) 302,624 972 6,813 Foreign - current year 758,277 635,686 - - - prior year 32,706 - - -
15,128,477 10,891,710 1,210,972 771,813
Deferred taxation (Note 12) Malaysian - current year (1,120,095) 3,029,199 (136,000) 1,850,000 - prior year (88,820) (4,000) (175,000) - Foreign - current year (433,525) - - - - prior year (62,589) 325,142 - - (1,705,029) 3,350,341 (311,000) 1,850,000
Total tax expense 13,423,448 14,242,051 899,972 2,621,813
Reconciliation of tax expense Profit for the financial year 22,190,527 20,101,240 25,216,117 21,294,006 Total tax expense 13,423,448 14,242,051 899,972 2,621,813
Profit excluding tax 35,613,975 34,343,291 26,116,089 23,915,819
Income tax calculated using Malaysian tax rate of 24% 8,547,000 8,242,000 6,268,000 5,740,000 Effect of different tax rates in foreign jurisdictions 107,000 96,686 - - Non-taxable income (757,000) (258,757) (5,787,000) (3,139,000) Non-deductible expenses 4,604,557 6,567,498 553,000 - Movements in unrecognised deferred tax assets 1,259,000 (704,000) 40,000 14,000
13,760,557 13,943,427 1,074,000 2,615,000 Under/(Over)-provision in prior years (337,109) 298,624 (174,028) 6,813
Total tax expense 13,423,448 14,242,051 899,972 2,621,813
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27. Earnings per ordinary share - Group
Basic earnings per ordinary share
The calculation of basic earnings per ordinary share was based on the profit attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding calculated as follows:
Profit attributable to ordinary shareholders
2018 2017 rM rM
Profit for the financial year attributable to owners of the Company 20,346,895 18,135,222
Weighted average number of ordinary shares
2018 2017
Issued ordinary shares at beginning of financial year (Note 19) 133,333,332 133,333,332 Less: Cumulative effect of treasury shares bought back in previous financial years (6,439,100) (6,438,900) Less: Effect of ordinary shares repurchased during the financial year - (133)
Weighted average number of ordinary shares outstanding at the end of the financial year 126,894,232 126,894,299
Basic earnings per ordinary share (sen) 16.03 14.29
Diluted earnings per ordinary share
The calculation of diluted earnings per ordinary share was based on the profit attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding after adjustment for the effects of all dilutive potential ordinary shares.
No diluted earnings per ordinary share is disclosed as there are no dilutive potential ordinary shares.
28. Dividends
28.1 Dividends per ordinary share
Dividends per ordinary share as disclosed below relates to the total dividends declared or proposed for the financial year.
Company 2018 2017
Gross dividend per share (sen) 3.00 3.00
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28. Dividends (continued)
28.2 Dividends recognised
Total dividends recognised in the statements of changes in equity comprise:
Total Sen amount Date of per share rM payment
2018
First and final single-tier exempt 2017 ordinary 3.00 3,806,827 27 October 2017
2017
First and final single-tier exempt 2016 ordinary 3.00 3,806,830 27 October 2016
The Directors do not recommend any dividend to be paid for the financial year under review.
29. Capital expenditure commitments
Group Company 2018 2017 2018 2017 rM rM rM rM
Property, plant and equipment
- Contracted but not provided for 273,331 275,000 - -
30. operating segments
The Group has four reporting segments, which are the Group’s strategic business units. For each of the strategic business units, the Group Executive Chairman, being the Chief Operating Decision Maker, reviews internal management reports for resource allocation and decision making at least on a quarterly basis.
The following summary describes the operations in each of the Group’s existing reporting segments:
(a) Manufacturing- Manufacture and sale of HDPE products and trading of other specialised and technical
engineering products
(b) Works- Construction of telecommunication towers and share of rental proceeds of telecommunication
towers as well as design, construction and installation of water supply, storage infrastructure and treatment systems, wastewater treatment specialised systems, hydro systems and other infrastructure which include undertake infrastructure and building projects based on private financing initiative under the build, lease, maintain and transfer model
(c) Property development- Development and construction of residential properties
(d) Others- Sewerage treatment services, treatment and disposal of sludge services as well as quarry
operation
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30. operating segments (continued)
There are varying levels of integration between the reportable segments. Inter-segment pricing is determined on negotiated terms.
Performance is measured based on segment profit before tax as included in the internal management
reports. Segment profit is used to measure performance as management believes that such information is the most relevant in evaluating the results of certain segments relative to other entities that operate within these industries.
Segment assets and liabilities
The Group Executive Chairman reviews the statements of financial position of subsidiaries for decision making and resources allocation, instead of a summary of total consolidated assets and liabilities by segments. As such, information on segment assets and segment liabilities is not presented.
Geographical segments and major customers
Group sales were mostly to customers in Malaysia and there were very limited export sales.
property Manufacturing Works development others Consolidated 2018 rM rM rM rM rM
Segment results
Revenue from external customers 162,232,285 43,952,889 4,622,944 24,084,322 234,892,440
Segment profit before tax 21,666,735 16,306,257 (3,255,230) 4,049,724 38,767,486
Unallocated corporate expenses (3,109,634) Share of results of equity accounted associate (43,877)
Profit before tax 35,613,975 Tax expense (13,423,448)
Profit for the financial year 22,190,527 Other comprehensive expense 164,218
Total comprehensive income for the financial year 22,354,745 Non-controlling interests (1,843,632)
Total comprehensive income for the financial year attributable to owners of the Company 20,511,113
Included in the measure of segment profit are: Depreciation and amortisation 7,483,383 4,380,759 407,029 710,505 12,981,676 Interest expense 2,220,204 304,438 1,120 65,864 2,591,626 Interest income (1,247,674) (1,995,167) (207,912) (54,268) (3,505,021) Net allowance for impairment loss on receivables 151,027 - - 600,000 751,027
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30. operating segments (continued)
property Manufacturing Works development others Consolidated 2017 rM rM rM rM rM
Segment results
Revenue from external customers 161,709,568 64,913,564 50,147,598 24,638,258 301,408,988
Segment profit before tax 20,571,734 9,553,177 3,010,304 3,843,477 36,978,692
Unallocated corporate expenses (2,528,017) Share of results of equity accounted associate (107,384)
Profit before tax 34,343,291 Tax expense (14,242,051)
Profit for the financial year 20,101,240 Other comprehensive expense (20,479)
Total comprehensive income for the financial year 20,080,761 Non-controlling interests (1,966,018)
Total comprehensive income for the financial year attributable to owners of the Company 18,114,743
Included in the measure of segment profit are: Depreciation and amortisation 7,663,984 7,799,632 386,722 741,503 16,591,841 Interest expense 2,299,398 114,216 146,231 87,042 2,646,887 Interest income (2,206,336) (1,647,898) (535,915) (57,125) (4,447,274) Net reversal for impairment loss on receivables (325,937) (6,100) - - (332,037)
Geographical segments
In presenting information on the basis of geographical segments, segment revenue is based on the geographical location of customers.
Malaysia other countries Consolidated 2018 2017 2018 2017 2018 2017 rM rM rM rM rM rM
Revenue from external customers (see Note 22) 226,337,920 293,585,551 8,554,520 7,823,437 234,892,440 301,408,988
Major customers
No counterparties individually contributed to 10% or more of the Group revenue.
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31. Financial instruments
31.1 Categoriesoffinancialinstruments
The table below provides an analysis of financial instruments categorised as follows:
(i) Loans and receivables (“L&R”);(ii) Fair value through profit or loss (“FVTPL”) - designated upon initial recognition (“DUIR”); (iii) Available-for-sale financial assets (“AFS”); and(iv) Financial liabilities measured at amortised cost (“FL”).
Carrying L&r/ amount (FL) AFS FvTpL-DuIr 2018 rM rM rM rM
Financial assets
Group Other investments 2,376 - 2,376 - Trade and other receivables* 96,019,867 96,019,867 - - Cash and cash equivalents 96,738,877 96,738,877 - -
Company Other investments 2,376 - 2,376 - Trade and other receivables* 27,269,272 27,269,272 - - Cash and cash equivalents 11,746,576 11,746,576 - -
Financial liabilities
Group Loans and borrowings (49,954,262) (49,954,262) - - Trade and other payables* (61,037,460) (61,037,460) - - Derivative financial liabilities (120,508) - - (120,508)
Company Loans and borrowings 9,121,398 9,121,398 - - Trade and other payables* 20,716,713 20,716,713 - -
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31. Financial instruments (continued)
31.1 Categoriesoffinancialinstruments(continued)
Carrying amount L&r/(FL) AFS FvTpL-DuIr 2017 rM rM rM rM
Financial assets
Group Other investments 3,256 - 3,256 - Trade and other receivables* 104,581,589 104,581,589 - - Cash and cash equivalents 119,043,350 119,043,350 - -
Company Other investments 3,256 - 3,256 - Trade and other receivables* 228,622,463 228,622,463 - - Cash and cash equivalents 12,578,166 12,578,166 - -
Financial liabilities
Group Loans and borrowings (71,965,647) (71,965,647) - - Trade and other payables* (70,166,712) (70,166,712) - - Derivative financial liabilities (40,119) - - (40,119)
Company Loans and borrowings (16,366,845) 16,366,845) - - Trade and other payables* (46,362,559) (46,362,559) - -
* Excluding amount due from/to contract customers and amount receivable from/payable to Royal Malaysian Customs Department.
31.2 Netgainsandlossesarisingfromfinancialinstruments
The table below summarises the net gains and losses arising from financial instruments:
Group Company 2018 2017 2018 2017 rM rM rM rM
Net (losses)/gains on: Financial instruments at FVTPL-DUIR (80,389) 286,946 - - AFS financial assets 237 157 (237) (166) Loans and receivables 1,709,358 4,890,785 6,667,164 14,347,775 Financial liabilities measured at amortised cost (3,041,946) (3,885,535) (1,749,317) (2,902,564)
(1,412,740) 1,292,353 4,917,610 11,445,045
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31. Financial instruments (continued)
31.3 Financial risk management
The Group is exposed to credit risk, liquidity risk and market risk from its use of financial instruments.
(a) Credit risk
Credit risk is the risk of a financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations.
The Group’s exposure to credit risk arises principally from its receivables from customers. A significant portion of these receivables are regular customers of the Group. In addition, the Company is also exposed to credit risk arising from loans and advances to subsidiaries and financial guarantees given to banks for credit facilities granted to subsidiaries.
receivables
Risk management objectives, policies and processes for managing the risk
• Receivablesfromexternalparties
The Group has a formal credit policy in place mandating the credit worthiness of customers requiring credit on sales of goods and services rendered to be reviewed to ensure the exposure to credit risk is controlled and monitored on an on-going basis by setting appropriate credit limits and terms. For construction projects, credit evaluation on potential customers or clients is carried out prior to tendering. These include assessment of customers’ past payment records, sales level and financial standing.
Credit risks from certain customers are further mitigated by issuance of irrevocable letters of instruction/mandate by the customers to the banks to authorise the banks to remit payments directly to the Group.
• Inter-companybalances
The Company sometimes provides unsecured loans and advances to its subsidiaries. The Company monitors the performance of the subsidiaries regularly.
Exposure to credit risk, credit quality and collateral
As at the end of the reporting period, the maximum exposure to credit risk arising from receivables is represented by their carrying amounts in the statements of financial position. Cash and cash equivalents are only placed with licensed banks.
Management has taken reasonable steps to ensure that receivables that are neither past due nor impaired are stated at their realisable values. The Group monitors individually, using ageing analysis, all receivables having significant balances past due for more than 120 days, which are deemed to have higher credit risk.
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31. Financial instruments (continued)
31.3 Financial risk management (continued)
(a) Credit risk (continued)
receivables (continued)
Exposure to credit risk, credit quality and collateral (continued)
At the end of the reporting period, significant concentrations of credit risk are as follows:
Group Company 2018 2017 2018 2017 rM rM rM rM
Current Amount due from four (2017: three) subsidiaries - - 28,947,853 193,842,766 Trade receivable from one contract customer in Malaysia 33,061,377 36,032,022 - -
33,061,377 36,032,022 28,947,853 193,842,766
The trade receivable due from a contract customer is secured by an irrevocable letter of instruction/mandate issued by the contract customer given to the bank to authorise the bank to remit payments directly to the Group.
The exposure of credit risk for receivables as at the end of the reporting period by geographic
region was:
Group Company 2018 2017 2018 2017 rM rM rM rM
Malaysia 119,611,017 104,794,782 27,269,272 228,622,463 The Philippines 1,383,595 1,192,663 - -
120,994,612 105,987,445 27,269,272 228,622,463
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31. Financial instruments (continued)
31.3 Financial risk management (continued)
(a) Credit risk (continued)
receivables (continued)
Impairment losses
The ageing of receivables (excluding inter-company non-trade balances, amount due from contract customers and GST receivables) as at the end of the reporting period was:
Group Company 2018 2017 2018 2017 Age of debts rM rM rM rM
Not past due 31,515,746 56,353,958 6,700 17,318 Past due 1-30 days 8,969,089 7,983,209 - - Past due 31-60 days 5,347,710 3,867,973 - - Past due 61-90 days 4,578,619 1,547,281 - - Past due 91-120 days 1,536,590 1,639,275 - - Past due more than 120 days 48,806,188 37,374,569 - -
100,753,942 108,766,265 6,700 17,318 Less: Allowance for impairment losses (4,734,075) (4,184,676) - -
Total 96,019,867 104,581,589 6,700 17,318
There is no impairment loss recognised for trade receivables other than an amount of RM4,734,075 (2017: RM4,184,676) as at the end of the reporting period as management does not expect any external counterparties to fail to meet their obligations due to the strong credit standings of the counterparties.
The movements in the allowance for impairment loss of receivables during the financial year were:
Group rM
At 1 April 2016 4,606,958
Recognised 80,687 Reversals (412,724) Write-offs (90,245)
At 31 March 2017/1 April 2017 4,184,676
Recognised 840,508 Reversals (89,481) Write-offs (201,628)
At 31 March 2018 4,734,075
An allowance account in respect of receivables is used to record impairment losses. Unless the Group is satisfied that recovery is possible, the amount considered irrecoverable is written off against the allowance directly.
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31. Financial instruments (continued)
31.3 Financial risk management (continued)
(a) Credit risk (continued)
receivables (continued)
Impairment losses (continued)
There was no indication that the loans and advances due from its subsidiaries are not recoverable as at the end of the reporting period other than that against which an allowance for impairment loss of RM2,696,862 (2017: RM2,708,480) has been made (see Note 10).
Financial guarantees
Risk management objectives, policies and processes for managing the risk
The Company provides unsecured financial guarantees to banks in respect of certain banking facilities granted to some of its subsidiaries. The Company monitors on an on-going basis the results of the subsidiaries and repayments made thereby to ensure that they are able to meet their obligations when fall due.
Exposure to credit risk, credit quality and collateral
The bank guarantees utilised by third parties for performance of projects as at the end of the reporting period are summarised as follows:
Group 2018 2017 rM rM
Bank guarantees utilised by third parties for performance of projects 13,769,837 4,851,967
The financial guarantees utilised by the subsidiaries as at the end of the reporting period are summarised as follows:
Company 2018 2017 rM rM
Loans and borrowings outstanding and recognised in financial statements 40,544,000 55,409,000 Other banking facilities not recognised in financial statements 21,573,000 11,627,000
Total 62,117,000 67,036,000
As at the end of the reporting period, there is no indication that any subsidiary and third parties would default on repayments of its loans and borrowings and performance of projects. The financial guarantees have not been recognised as their fair value on initial recognition was not material and probability of the subsidiaries and third parties defaulting on the credit lines is remote.
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31. Financial instruments (continued)
31.3 Financial risk management (continued)
(b) Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group’s exposure to liquidity risk arises principally from its various payables, loans and borrowings.
Risk management objectives, policies and processes for managing the risk
The Group maintains a level of cash and cash equivalents and banking facilities deemed adequate by the management to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when fall due.
It is not expected that the cash flows included in the maturity analysis in the ensuing pages could occur significantly earlier, or at significantly different amounts.
Maturity analysis
The table below summarises the maturity profile of the Group’s and the Company’s financial liabilities (which are non-derivatives) as at the end of the reporting period based on undiscounted contractual payments:
More Carrying Contractual Contractual under 1-2 2-5 than amount interest rate cash flows 1 year years years 5 years Group rM % rM rM rM rM rM
2018
Trade and other payables 61,037,460 - 61,037,460 61,037,460 - - - Loans and borrowings - Finance lease liabilities 2,082,462 4.46 - 5.37 2,222,831 1,109,199 687,867 425,765 - - Term loans - Unsecured 8,928,571 5.35 - 5.45 9,252,976 9,252,976 - - - - Secured 12,414,229 4.77 - 5.94 17,109,484 1,542,362 1,579,038 5,947,980 8,040,104 - Unsecured bankers’ acceptances 20,529,000 3.95 - 4.41 20,529,000 20,529,000 - - - - Revolving credit 6,000,000 5.70 6,029,110 6,029,110 - - - Bank guarantees - - 13,769,837 13,769,837 - - -
110,991,722 129,950,698 113,269,944 2,266,905 6,373,745 8,040,104
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31. Financial instruments (continued)
31.3 Financial risk management (continued)
(b) Liquidity risk (continued)
Maturity analysis (continued)
More Carrying Contractual Contractual under 1-2 2-5 than amount interest rate cash flows 1 year years years 5 years Group (continued) rM % rM rM rM rM rM
2017
Trade and other payables 70,166,712 - 70,301,038 70,077,947 222,759 332 - Loans and borrowings - Finance lease liabilities 2,957,027 4.46 - 5.20 3,214,416 1,189,726 1,047,999 976,691 - - Term loans - Unsecured 16,071,428 5.35 - 5.45 17,093,303 7,840,327 7,451,042 1,801,934 - - Secured 27,168,192 4.50 34,638,800 22,054,716 668,676 2,006,028 9,909,380 - Unsecured bankers’ acceptances 24,769,000 3.89 - 4.10 24,769,000 24,769,000 - - - - Revolving credit 1,000,000 5.20 1,004,100 1,004,100 - - - Bank guarantees - - 4,851,967 4,851,967 - - -
142,132,359 155,872,624 131,787,783 9,390,476 4,784,985 9,909,380
More Carrying Contractual Contractual under 1-2 2-5 than amount interest rate cash flows 1 year years years 5 years Company rM % rM rM rM rM rM
2018
Other payables 3,836,763 - 3,836,763 3,836,763 - - - Subsidiaries 16,879,950 5.30 16,879,950 16,879,950 - - - Loans and borrowings - Finance lease liabilities 192,827 5.37 209,877 54,768 54,768 100,341 - - Unsecured term loan 8,928,571 5.35 - 5.45 9,252,976 9,252,976 - - - Financial guarantees - 62,117,000 62,117,000 - - -
29,838,111 92,296,566 92,141,457 54,768 100,341 -
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31. Financial instruments (continued)
31.3 Financial risk management (continued)
(b) Liquidity risk (continued)
Maturity analysis (continued)
More Carrying Contractual Contractual under 1-2 2-5 than amount interest rate cash flows 1 year years years 5 years Company (continued) rM % rM rM rM rM rM
2017
Other payables 2,450,512 - 2,450,512 2,450,512 - - - Subsidiaries 43,912,047 5.60 43,912,047 43,912,047 - - - Loans and borrowings - Finance lease liabilities 295,417 4.46 - 4.62 323,402 113,525 54,768 155,109 - - Unsecured term loan 16,071,428 5.35 - 5.45 17,093,303 7,840,327 7,451,042 1,801,934 - Financial guarantees - - 67,036,000 67,036,000 - - -
62,729,404 130,815,264 121,352,411 7,505,810 1,957,043 -
(c) Market risk
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and other price risks that will affect the Group’s financial position or cash flows.
(i) Currency risk
The Group is exposed to foreign currency risk arising mainly from sales and purchases denominated in currencies other than the respective functional currencies of group entities. The major currencies giving rise to this risk are mostly United States Dollar (USD), Euro (EURO) and Australian Dollar (AUD).
Risk management objectives, policies and processes for managing the risk
As it is not possible to predict with any certainty the movements of foreign exchange rates, this risk is managed on an on-going and case by case basis and the Group occasionally uses forward foreign exchange contracts to hedge its foreign currency risk. Most of the forward foreign exchange contracts have maturities of less than one year after the end of the reporting period. Where necessary, the forward foreign exchange contracts (see Note 16) are rolled over at maturity.
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31. Financial instruments (continued)
31.3 Financial risk management (continued)
(c) Market risk (continued)
(i) Currency risk (continued)
Exposure to foreign currency risk
The Group’s exposure to foreign currency risk attributable to currencies which are other than the functional currencies of group entities, based on the carrying amounts as at the end of the reporting period was:
2018 2017 Denominated Denominated Group in uSD in uSD
In RM: Cash and cash equivalents 97,376 851,959 Trade and other payables (4,874,345) (4,049,141) Derivative financial liabilities (120,508) (40,119)
Net exposure in statements of financial position (4,897,477) (3,237,301)
The Company does not have significant outstanding assets and liabilities denominated in a currency other than its functional currency, RM.
Currency risk sensitivity analysis
The functional currencies of the foreign operations of the Group are Brunei Dollar and Philippines Peso. The exposure to currency risk of group entities which have Brunei Dollar and Philippines Peso as functional currencies is not material and hence, sensitivity analysis is not presented.
A 10% (2017: 10%) strengthening of the RM against the following currencies at the end of the reporting period would have increased/(decreased) pre-tax profit or loss by the amounts shown below. This analysis is based on foreign currency exchange rate variances that the Group considered to be reasonably possible at the end of the reporting period. This analysis assumes that all other variables, in particular interest rates, remain constant.
Profit or loss 2018 2017 Group rM rM
USD 489,748 323,730
A 10% (2017: 10%) weakening of RM against the above currencies at the end of the reporting period would have had equal but opposite effect on the above currencies to the amounts shown above, on the basis that all other variables remained constant.
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31. Financial instruments (continued)
31.3 Financial risk management (continued)
(c) Market risk (continued)
(ii) Interest rate risk
The Group’s investments in fixed rate debt securities and its fixed rate loans and borrowings are exposed to a risk of change in their fair value due to changes in interest rates. The Group’s variable rate loans and borrowings are exposed to a risk of change in cash flows due to changes in interest rates. Investments in equity securities and short-term receivables and payables are not significantly exposed to interest rate risk.
Risk management objectives, policies and processes for managing the risk
The Group finances its daily operations through a mixture of internally generated funds and bank borrowings. Loans and borrowings with floating interest rates expose the Group to certain elements of risk when there are unexpected adverse interest rate movements. The Group’s policy is to manage its interest rate risk, working within an agreed framework, to ensure that there are no undue exposures thereto. Management monitors this on an on-going basis and exercises a certain element of discretion on whether to borrow at fixed or floating interest rates, depending on the market situation and the outlook of the financial market prevailing then.
The investments in interest-earning assets are mainly short-term in nature and they are not held for speculative purpose but have been mostly placed as term deposits and cash funds.
Exposure to interest rate risk
The interest rate profile of the Group and of the Company’s significant interest-bearing financial instruments, based on the carrying amounts at the end of the reporting period was:
Group Company 2018 2017 2018 2017 rM rM rM rM
Fixed rate instruments Financial assets 85,017,236 83,461,133 11,657,042 12,153,825 Financial liabilities (28,611,462) (28,726,026) (192,827) (295,417)
Floating rate instruments Financial assets - - 24,445,746 209,458,034 Financial liabilities (21,342,800) (43,239,620) (25,808,521) (27,840,619)
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31. Financial instruments (continued)
31.3 Financial risk management (continued)
(c) Market risk (continued)
(ii) Interest rate risk (continued)
Interest rate risk sensitivity analysis
(a) Fairvaluesensitivityanalysisforfixedrateinstruments
The Group does not account for any fixed rate financial assets and liabilities at fair value through profit or loss, and the Group does not designate derivatives as hedging instruments under a fair value hedge accounting model. Therefore, a change in interest rates at the end of the reporting period would not affect profit or loss.
(b) Cashflowsensitivityanalysisforvariablerateinstruments
A change of 100 basis points (“bps”) in interest rates at the end of the reporting period would have increased/ (decreased) pre-tax profit by the amounts shown below. This analysis assumes that all other variables, in particular foreign currency rates, remain constant.
Profit or loss 100 bp 100 bp increase decrease rM rM
Group Floating rate instruments - 2018 (213,000) 213,000 - 2017 (432,000) 432,000
Company Floating rate instruments - 2018 (13,600) 13,600 - 2017 1,816,000 (1,816,000)
(iii) Other price risk
Equity price risk arises from the Group’s investments in equity securities.
Risk management objectives, policies and processes for managing the risk
Management of the Group monitors the equity investments on a portfolio basis. Material investments within the portfolio are managed on individual basis and all buy and sell decisions are approved by management.
Equity price risk sensitivity analysis
The exposure to equity price risk is not material and hence, sensitivity analysis is not presented.
31.4 Fair value information
The carrying amounts of cash and cash equivalents, short-term receivables and payables and short-term loans and borrowings approximate fair values due to the relatively short-term nature of these financial instruments.
The carrying amounts of non-current receivables as well as non-current loans and borrowings, which bear interest at rates approximating the prevailing market rates, also approximate fair value as disclosed in the ensuing pages.
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31. Financial instruments (continued)
31.4 Fair value information (continued)
The fair values of other financial assets and financial liabilities, together with the carrying amounts shown in the statements of financial position, are as follows:
Fair value of Fair value of financial instrument financial instrument carried at not carried fair value at fair value Total Carrying Level 1 Level 2 Total Level 3 Total fair value amount Group rM rM rM rM rM rM rM
2018
Financial assets Quoted shares 2,376 - 2,376 - - 2,376 2,376 Other receivables - - - 2,955,642 2,955,642 2,955,642 2,955,642
2,376 - 2,376 2,955,642 2,955,642 2,958,018 2,958,018
Financial liabilities Forward exchange contracts - (120,508) (120,508) - - (120,508) (120,508) Finance lease liabilities - - - (2,149,481) (2,149,481) (2,149,481) (2,082,462) Term loans - Unsecured - - - (8,928,571) (8,928,571) (8,928,571) (8,928,571) - Secured - - - (12,414,229) (12,414,229) (12,414,229) (12,414,229) Revolving credit - - - (6,000,000) (6,000,000) (6,000,000) (6,000,000)
- (120,508) (120,508) (29,492,281) (29,492,281) (29,612,789) (29,545,770)
Fair value of Fair value of financial instrument financial instrument carried at not carried fair value at fair value Total Carrying Level 1 Total Level 3 Total fair value amount Company rM rM rM rM rM rM
2018
Financial assets Quoted shares 2,376 2,376 - - 2,376 2,376
Financial liabilities Unsecured term loan - - 8,928,571 8,928,571 8,928,571 8,928,571 Finance lease liabilities - - 194,103 194,103 194,103 192,827
- - 9,122,674 9,122,674 9,122,674 9,121,398
144 I WEIDA (M) BHD. (504747-W)
NoTES To ThE FINANCIAL STATEMENTS
31. Financial instruments (continued)
31.4 Fair value information (continued)
Fair value of Fair value of financial instrument financial instrument carried at not carried fair value at fair value Total Carrying Level 1 Level 2 Total Level 3 Total fair value amount Group rM rM rM rM rM rM rM
2017
Financial assets Quoted shares 3,256 - 3,256 - - 3,256 3,256
Financial liabilities Forward exchange contracts - (40,119) (40,119) - - (40,119) (40,119) Finance lease liabilities - - - (2,955,914) (2,955,914) (2,955,914) (2,957,027) Term loans - Unsecured - - - (16,071,428) (16,071,428) (16,071,428) (16,071,428) - Secured - - - (27,168,192) (27,168,192) (27,168,192) (27,168,192) Revolving credit - - - (1,000,000) (1,000,000) (1,000,000) (1,000,000)
- (40,119) (40,119) (47,195,534) (47,195,534) (47,235,653) (47,236,766)
Fair value of Fair value of financial instrument financial instrument carried at not carried fair value at fair value Total Carrying Level 1 Total Level 3 Total fair value amount Company rM rM rM rM rM rM
2017
Financial assets Quoted shares 3,256 3,256 - - 3,256 3,256
Financial liabilities Unsecured term loan - - 16,071,428 16,071,428 16,071,428 16,071,428 Finance lease liabilities - - 295,417 295,417 295,417 295,417 - - 16,366,845 16,366,845 16,366,845 16,366,845
ANNUAL REPORT 2018 I 145
NoTES To ThE FINANCIAL STATEMENTS
31. Financial instruments (continued)
31.4 Fair value information (continued)
policy on transfer between levels
The fair value of an asset to be transferred between levels is determined as of the date of the event or change in circumstances that caused the transfer.
Level 1 fair value
Level 1 fair value is derived from quoted price (unadjusted) in active markets for identical financial assets or liabilities that the entity can access at the measurement date.
Level 2 fair value
Level 2 fair value is estimated using inputs other than quoted prices included within Level 1 that are observable for the financial assets or liabilities, either directly or indirectly.
Derivatives
The fair value of forward foreign exchange contracts is estimated by discounting the difference between the contractual forward price and the current forward price for the residual maturity of the contract using a risk-free interest rate (based on government bonds).
Non-derivative financial liabilities
Fair value, which is determined for disclosure purposes, is calculated based on the present value of future principal and interest cash flows, discounted at the market rate of interest at the end of the reporting period.
Transfers between Level 1 and Level 2 fair values
There has been no transfer between Level 1 and Level 2 fair values during the financial year (2017: No transfers in either directions).
Level 3 fair value Level 3 fair value is estimated using unobservable inputs for the financial assets and financial liabilities.
Fair values of financial instruments not carried at fair value Inter-relationship between significant Significant unobservable inputs valuation unobservable and fair value Type technique inputs measurement
Group Other receivables Discounted Interest rate The estimated fair value cash flows of 6.00% would increase/(decrease) (2017: 6.00%) if the interest rate were (lower)/higher.
Unsecured term Discounted Interest rate at The estimated fair value loans cash flows 5.35% - 5.45% would increase/(decrease) (2017: 5.35% - 5.45%) if the interest rate were (lower)/higher.
Secured term Discounted Interest rate at The estimated fair value loans cash flows 4.77% - 5.94% would increase/(decrease) (2017: 4.50%) if the interest rate were (lower)/higher.
146 I WEIDA (M) BHD. (504747-W)
NoTES To ThE FINANCIAL STATEMENTS
31. Financial instruments (continued)
31.4 Fair value information (continued)
Level 3 fair value (continued) Level 3 fair value is estimated using unobservable inputs for the financial assets and financial liabilities.
Fair values of financial instruments not carried at fair value Inter-relationship between significant Significant unobservable inputs valuation unobservable and fair value Type technique inputs measurement
Group (continued) Finance lease Discounted Interest rate at The estimated fair value liabilities cash flows 4.46% - 5.20% would increase/(decrease) (2017: 5.04% - 5.85%) if the interest rate were (lower)/higher.
Company Unsecured term Discounted Interest rate at The estimated fair value loans cash flows 5.35% - 5.45% would increase/(decrease) (2017: 5.35% - 5.45%) if the interest rate were (lower)/higher. Finance lease Discounted Interest rate at The estimated fair value liabilities cash flows 5.20% would increase/(decrease) (2017: 5.29% - 5.44%) if the interest rate were (lower)/higher.
32. Disposal and acquisition of business operation, subsidiaries and non-controlling interests
(i) Disposal and acquisition of subsidiaries
Financial year ended 31 March 2018
Consolidation of an associate
On 28 April 2017, Asaljuru Weida Sdn. Bhd. (“AWSB”), a 49% owned associate of Weida Medic Development Sdn. Bhd. (“WMDSB”), which in turn is a wholly-owned subsidiary of Weida (M) Bhd. (“Weida” or “the Company”) entered into the Concession Agreement with the Government of Malaysia as represented by the Ministry of Health in relation to the upgrading of Hospital Umum Sarawak by way of development of new buildings and facilities, on a public private partnership by way of private financing initiative under the build, lease, maintain and transfer model.
On 30 August 2017, WMDSB had entered into a Shareholders’ Agreement with other shareholders of AWSB, for the purpose of regulating the responsibilities and obligations of shareholders in AWSB. Subsequently, WMDSB will control the board composition of AWSB and govern the financial and operating policies of AWSB. Arising thereto, AWSB will be treated as a subsidiary of WMDSB.
ANNUAL REPORT 2018 I 147
NoTES To ThE FINANCIAL STATEMENTS
32. Disposal and acquisition of business operation, subsidiaries and non-controlling interests (continued)
(i) Disposal and acquisition of subsidiaries (continued)
Financial year ended 31 March 2018 (continued)
Consolidation of an associate (continued)
The effect of the consolidation of AWSB on the Group’s assets and liabilities on the date of the control existed is as follows:
2018 rM
Property, plant and equipment 10,760 Trade and other receivables 5,360,814 Cash and cash equivalents 3,011,270 Trade and other payables (4,095,822)
Total identifiable net assets 4,287,022 Less : Non-controlling interests (2,186,381) Less : Investment in an associate (2,100,641)
- Less : Cash and cash equivalents acquired (3,011,270)
Net cash inflow (3,011,270)
Financial year ended 31 March 2017
On 22 March 2017, Weida Green Industries Sdn. Bhd. (“WGISB”), a wholly-owned subsidiary of the Company had disposed of its entire equity interest in Media Infra Sdn. Bhd. (formerly known as Weida Eco Rubber Sdn. Bhd.) comprising 100,000 ordinary shares.
Serrisa Sinar Sdn. Bhd. (“Serrisa”) is a structured entity established to issue Islamic Bonds to finance the acquisition of rights to share rental proceeds of telecommunication towers. Following the adoption of FRS 10, the Group considers control exists in Serrisa as the Group is exposed and has right to variable returns from its involvement in Serrisa. In financial year ended 2017, the Islamic Bonds were fully settled and Serrisa was deconsolidated from the Group.
Effect of disposal/deconsolidation on the financial position of the Group
2017 rM
Property, plant and equipment 94,188 Inventories 119,410 Trade and other receivables 19,891 Deposit and prepayments 6,560 Cash and cash equivalents 37,278 Trade and other payables (46,404) Accruals (1,000) Provision for tax (15,576)
Net assets 214,347 Gain on sale of disposal/deconsolidation of subsidiaries 35,653
Consideration received, satisfied in cash 250,000 Cash and cash equivalents disposed of (37,278)
Net cash inflow 212,722
148 I WEIDA (M) BHD. (504747-W)
NoTES To ThE FINANCIAL STATEMENTS
32. Disposal and acquisition of business operation, subsidiaries and non-controlling interests (continued)
(ii) Change in investment in existing subsidiaries
Financial year ended 31 March 2018
On 13 October 2017, the Group acquired additional 30 ordinary shares of RM1.00 each in the share capital of Vista Cape Sdn. Bhd. (“VCSB”), for a cash consideration of RM30. As a result, VCSB became a 81% owned subsidiary of the Company.
During the year, the Company subscribed for redeemable preference shares of Good Axis Sdn. Bhd. and Atlas Arrow Sdn. Bhd. amounted to RM52 million and RM138 million respectively, which was satisfied by offsetting the outstanding balances owing to the Company.
33. Capital management
As in the previous financial year, the Group’s objectives when managing capital is to maintain a strong capital base and safeguard the Group’s ability to continue as a going concern, so as to maintain the confidence of investors, creditors and other stakeholders in the Group and to sustain the future development of its business. The Directors determine, monitor and maintain an optimal debt-to-equity ratio for the Group that complies with debt covenants and regulatory requirements.
One of its capital management strategies is to maintain a maximum debt-to-equity ratio of 1.5 times to comply with the covenants of its unsecured term loans, failing which the affected facilities and borrowings are subject to recall (see Note 20.2).
Under the requirement of Bursa Malaysia Practice Note No. 17/2005, the Company is required to maintain a consolidated shareholders’ equity equal to or not less than 25% of the issued and paid-up capitals (excluding treasury shares) and such shareholders’ equity is not less than RM40,000,000. The Company has complied with this requirement.
34. related parties
Identity of related parties
For the purposes of the financial statements, parties are considered to be related to the Group or the Company if the Group or the Company has the ability, directly or indirectly, to control or jointly control the parties or exercise significant influence over the parties in making financial and operating decisions, or vice versa, or where the Group or the Company and the parties are subject to common control. Related party may be individuals or other entities.
Related parties also include key management personnel defined as those persons having authority and responsibility for planning, directing and controlling the activities of the Group and the Company either directly or indirectly. Key management personnel include all the Directors of the Group and the Company, and certain members of senior management of the Group and the Company.
ANNUAL REPORT 2018 I 149
NoTES To ThE FINANCIAL STATEMENTS
34. related parties (continued)
Significantrelatedpartytransactions
Significant related party transactions, other than compensations paid to key management personnel (see Note 25) and those disclosed elsewhere in the financial statements, are as follows:
Transactions with subsidiaries
Company 2018 2017 rM rM
Nature of transaction Dividends received (24,114,000) (16,180,000) Management fees received (7,159,418) (8,269,574) Rental income for furnished premises, inclusive of maintenance (1,070,400) (1,034,700) Interest income (6,436,979) (14,014,185) Interest expense 1,040,251 1,801,075
Transactions with companies in which certain directors of the Company have interests
Group 2018 2017 rM rM
Nature of transaction Rental of premises 276,243 249,000 Service charge paid 130,978 - Management fee and technical fee received (203,410) - Technical fee paid 4,100 - Purchase of trading good 11,040 -
Transaction with companies in which certain shareholders of the subsidiaries of the Group have interest
Group 2018 2017 rM rM
Nature of transaction Dividend paid 4,101,000 -
Transactions with certain Directors and key management personnel of the Group
Group 2018 2017 rM rM
Nature of transaction Progressive billings for properties under development - (2,887,215) Rental of motor vehicle - 21,600 Rental of premises 80,850 - Dividend paid 1,035,000 -
150 I WEIDA (M) BHD. (504747-W)
NoTES To ThE FINANCIAL STATEMENTS
34. related parties (continued)
Significantrelatedpartytransactions (continued)
Transactions with a company in which a director of a subsidiary has interests
Group 2018 2017 rM rM
Nature of transaction Sale of finished goods - (2,601) Service charge - (13,005) Consultancy fee paid 11,889 3,200
Transaction with persons or a director who are substantial shareholders of the Group or of a corporate shareholder of the Group
Group 2018 2017 rM rM
Nature of transaction Progressive billings for properties under development - (1,134,562)
The amounts due from/to subsidiaries are disclosed in Notes 10 and 21 to the financial statements.
The above transactions are based on negotiated terms. All the amounts outstanding are unsecured and expected to be settled in cash.
35. Material litigation
On 23 May 2017, Weida Works Sdn. Bhd. (“Weida Works”), a wholly owned subsidiary of Weida (M) Bhd. (“the Company”), had issued a Notice of Arbitration against Common Tower Technology Sdn. Bhd. (“CTT”) and filed with the Kuala Lumpur Regional Centre for Arbitration (KLRCA) and commenced arbitration proceedings against CTT for inter alia:
a) breach of the joint venture agreement (“JVA”) entered into between the parties dated 22 June 2005 by CTT in not paying Weida Works its entitled share of all license income from the new operators amounting to RM23,435,000 which represents Weida Works’ share of the same;
b) an account of all undeclared license income received from the new operators; and
c) breach of CTT’s fiduciary duty to Weida Works under the JVA entered into between the parties dated 22 June 2005 and the first supplementary JVA dated 23 March 2006 (“Telco JVA”) causing inter alia loss of business opportunities pursuant to a license agreement entered into between CTT and the original operators as well as damages (including aggravated and exemplary damages), interest, and costs.
Weida Works and CTT had executed the Telco JVA to undertake the telecommunication infrastructure projects in Sabah (“Projects”). Under the Telco JVA, Weida Works was to fund and build telecommunication towers in Sabah while CTT would secure the tower sites and to license these towers to mobile telecommunication operators for licence fees, to which CTT shall then share such licence fees income received from both the original operators and new operators with Weida Works at an agreed ratio.
ANNUAL REPORT 2018 I 151
NoTES To ThE FINANCIAL STATEMENTS
35. Material litigation (continued)
Weida Works had filed its points of claim on 3 January 2018 and CTT had filed its reply to the points of claim and counterclaim (“Counterclaim”) on 5 March 2018. The Counterclaim seeks declaratory orders that the Telco JVA is not binding and/or void in law and/or seeks a refund of all monies received from CTT save for telecommunication towers construction costs as well as to pay RM131,842,529 being wrongful interest imposed by Weida Works, with pre-award and post- arbitration award interest and costs. This is despite CTT obtaining the full benefits of the Telco JVA since its inception in 2005 to date. Weida Works’s response is that CTT’s alleged “wrongful interest” is in fact Weida Works’s share of licence fees pursuant to the Telco JVA and was treated as “interest” in accordance with the Financial Reporting Standards at that material time. The same manner has been practiced since 2006 without any objection.
On 30 April 2018, Weida Works had filed and serviced its reply to CTT’s defence and defence to Counterclaim as well as change of hearing dates. The arbitration has been fixed for hearing between 3 October 2018 to 9 November 2018. On 18 June 2018, CTT had filed and serviced its reply to the defence and to Counterclaim.
As advised by Weida Works’s solicitors, the Company is of the view that the Counterclaim is not supported with valid grounds and has no legal basis for its allegations in its reply and counterclaim. On the contrary, the Company is of the view that Weida Works has a legal basis for this arbitration of which Weida Works is inter alia claiming against CTT for losses suffered by Weida Works in consequence of CTT’s breach of terms of Telco JVA in not paying Weida Works its entitled share of all license fees from new operators using Weida Works’s built towers for RM23,435,000 which represents Weida Works approximate share of the same and/or in breach of CTT’s fiduciary duty towards Weida Works under the Telco JVA.
The counter claim and the arbitration proceedings are not expected to have any material financial and operational impact to the Company. The Company does not expect any losses to arise by reason of the commencement of the said arbitration proceeding other than legal cost and time in defending Weida Works’s claim and CTT’s Counterclaim.
36. Significant event during the financial year
On 29 January 2018, the Board of Directors (“the Board”) had announced that it has received a letter from Weida Management Sdn. Bhd (“WMSB”)., a major shareholder of the Company, requesting the Company to undertake the Proposed Selective Capital Reduction and Repayment Exercise pursuant to Section 116 of the Companies Act 2016 (“Proposed SCR”).
The Proposed SCR involves the Company undertaking a selective capital reduction and a corresponding capital repayment pursuant to Section 116 of the Companies Act 2016 in respect of the ordinary shares of the Company (“Weida Shares”) held by all shareholders of the Company (save for Dato’ Lee Choon Chin (“Ultimate Offeror”), WMSB (“Offeror”) and persons acting in concert with Ultimate Offeror and Offeror in relation to the Proposed SCR, collectively as “Non-Entitled Shareholders”) whose names appear in the Record of Depositors of Weida as at the close of business on an entitlement date to be determined at a later date (“Entitlement Date”).
Under the Proposed SCR, the entitled shareholders are shareholders of the Company (other than Non-Entitled Shareholders), collectively holding 84,653,340 ordinary shares of the Company (“Weida Shares”), representing approximately 66.71% of the issued share capital of the Company (excluding 6,439,100 treasury shares held by the Company) and will receive a total of RM203,168,016 or RM2.40 cash for each Weida Share.
On 9 March 2018, RHB Investment Bank Berhad on behalf of the Board, announced that the Board, save for the Interested Directors, had deliberated on the contents of the SCR Offer Letter and had resolved to table the Proposed SCR to the shareholders of the Company for their consideration and approval.
On 13 March 2018, RHB Investment Bank Berhad on behalf of the Board, announced that the application in relation to the Proposed SCR had been submitted to the Securities Commission Malaysia (“SC”) pursuant to Paragraph 2(a) of Schedule 3 of the Rules on Take-overs, Mergers and Compulsory Acquisitions.
On 12 April 2018, RHB Investment Bank Berhad on behalf of the Board, announced that the SC had vide its letter, dated 12 April 2018, approved the extension of time to despatch the circular of the Proposed SCR by 30 April 2018 or until such time that the SC has notified that it has no further comments on the circular of the Proposed SCR.
152 I WEIDA (M) BHD. (504747-W)
Location
Lot 472, Block 8, Muara Tebas Land District, Jalan Bako, 93050 Kuching, Sarawak
Lot 109, Jalan Permata 1, Arab-Malaysian Industrial Park, 71800 Nilai, Seremban, Negeri Sembilan Darul Khusus
No.3, Lorong Teknologi 3/4B, Nouvelle Industrial Park Lot 10, Taman Sains Selangor 1, Kota Damansara, 47810 Petaling Jaya, Selangor Darul Ehsan
Lot 108, Jalan Permata 1, Arab-Malaysian Industrial Park, 71800 Nilai, Seremban, Negeri Sembilan Darul Khusus
Lot 35, Block 4, Muara Tebas Land District, Jalan Bako, 93050 Kuching, Sarawak
Lot 8, Industrial Zone 13, Kota Kinabalu Industrial Park, 88801 Kota Kinabalu, Sabah
Lot 8309, Jalan Permata 1, Arab-Malaysian Industrial Park, 71800 Nilai, Seremban, Negeri Sembilan Darul Khusus
BO1-A-5-1, Menara 2, No. 3, Jalan Bangsar, KL Eco City, 59200 Kuala Lumpur
Lot 57, SEDCO-Lok Kawi Industrial Estate, Papar, 88801 Kota Kinabalu, Sabah
Lot 1969, Block 5, Kuala Baram Land District, Taman Senadin, 98100 Miri, Sarawak
usage
Office and manufacturing
buildings and storage yard
Office and manufacturing
building and storage yard
Office building
Storage yard
Workers’ quarters
Manufacturing building andstorage yard
Storage yard
Office building
Office and manufacturing
building
Office and manufacturing
building and storage yard
Tenure
Leasehold
Freehold
Leasehold
Freehold
Leasehold
Leasehold
Freehold
Leasehold
Leasehold
Leasehold
Date of Expiry
7/7/2058
N/A
18/10/2106
N/A
31/12/2037
31/12/2098
N/A
05/12/2113
31/12/2042
14/8/2056
Land Area
(Acres)
17.39
3.04
0.23
3.68
9.92
2.11
1.00
0.09
2.15
0.64
ApproximateAge of
building (year)
20
21
5
8
19
9
N/A
1
22
13
Carrying Amount
as at 31.03.2018
(rM)
27,567,586
10,272,736
7,161,658
7,152,815
6,603,906
6,106,380
5,682,272
4,409,973
3,846,195
3,486,694
Date of Acquisition/
Last revaluation
02/01/2015
02/01/2015
01/12/2013
02/01/2015
05/01/2016
08/12/2016
02/01/2015
29/05/2017
02/01/2015
02/01/2015
LIST oF propErTIES AS AT 31 MArCh 2018
ANNUAL REPORT 2018 I 153
Location
Lot 58, SEDCO-Lok Kawi Industrial Estate, Papar, 88801 Kota Kinabalu, Sabah
Lot 1972, Block 5, Kuala Baram Land District, Taman Senadin, 98100 Miri, Sarawak
Lot 1970, Block 5, Kuala Baram Land District, Taman Senadin, 98100 Miri, Sarawak
Lot 56, SEDCO-Lok Kawi Industrial Estate, Papar, 88801 Kota Kinabalu, Sabah
Lot 59, SEDCO-Lok Kawi Industrial Estate, Papar, 88801 Kota Kinabalu, Sabah
Lot 48, SEDCO-Lok Kawi Industrial Estate, Papar, 88801 Kota Kinabalu, Sabah
usage
Manufacturing building andstorage yard
Storage yard
Storage yard
Manufacturing building and storage yard
Storage yard
Storage yard
Tenure
Leasehold
Leasehold
Leasehold
Leasehold
Leasehold
Leasehold
Date of Expiry
31/12/2042
14/8/2056
14/8/2056
31/12/2042
31/12/2042
31/12/2042
Land Area
(Acres)
1.03
0.64
0.64
0.93
1.03
0.82
ApproximateAge of
building (year)
16
N/A
N/A
N/A
8
N/A
Carrying Amount
as at 31.03.2018
(rM)
2,209,056
1,314,961
1,161,720
741,035
700,312
422,627
Date of Acquisition/
Last revaluation
02/01/2015
18/06/2014
02/01/2015
02/01/2015
03/11/2009
03/11/2009
LIST oF propErTIES AS AT 31 MArCh 2018
154 I WEIDA (M) BHD. (504747-W)
ANALySIS oF ShArEhoLDINGS AS AT 2 JuLy 2018
Total Number of Issued Shares : 133,333,332Share Capital : RM66,666,666.00Class of Shares : Ordinary SharesVoting Rights : One (1) vote per ordinary share
DISTrIbuTIoN SChEDuLE oF orDINAry ShArES
No. of holders holdings Total holdings %*
Less than 100 shares 119 4,052 0.00#
100 to 1,000 shares 380 178,812 0.141,001 to 10,000 shares 824 4,136,620 3.2610,001 to 100,000 shares 327 11,022,516 8.69100,001 to less than 5% of issued shares 84 77,930,016 61.415% and above of issued shares 2 33,622,216 26.50
ToTAL 1,736 126,894,232 100.00
# Less than 0.01%* Excluding 6,439,100 ordinary shares bought back and retained as treasury shares based on the Record of
Depositors as at 2 July 2018.
LIST oF ThIrTy LArGEST SECurITIES ACCouNTS hoLDErS
No. Name No. of Shares held %*
1. Weida Management Sdn. Bhd. 26,547,974 20.922. Dato’ Lee Choon Chin 7,074,242 5.573. Tiara Wealth Sdn. Bhd. 5,785,600 4.564. Bong Sen Kui 4,972,000 3.925. Lembaga Tabung Haji 4,536,800 3.586. Sim Hong Swee 4,201,000 3.317. CIMSEC Nominees (Tempatan) Sdn. Bhd. 4,200,000 3.31 - CIMB Bank for Tan Kim Heung (MY1989) 8. Lim Wei Wui 3,641,200 2.879. Liew Tien How 3,544,000 2.7910. Public Nominees (Tempatan) Sdn. Bhd. 3,223,000 2.54 - Pledged Securities Account for Alpha Dynamic Ventures Sdn. Bhd. (E-PDG) 11. Lim Khuan Eng 3,174,500 2.5012. Maybank Nominees (Tempatan) Sdn. Bhd. 3,044,300 2.40 - Pledged Securities Account for Too Boon Siong 13. Liew Tien How 2,544,000 2.0014. CIMSEC Nominess (Tempatan) Sdn. Bhd. 2,335,400 1.84 - CIMB Bank for Siew Mun Wai (MY2388) 15. TA Nominees (Tempatan) Sdn. Bhd. 2,188,766 1.72 - Pledged Securities Account for Teh Mun Ting16. Siaw Teck Siong 2,000,000 1.5817. Alliancegroup Nominees (Tempatan) Sdn. Bhd. 1,800,000 1.42 - Pledged Securities Account for Loh Chai Keong (8125084) 18. Jee Hon Chong 1,749,550 1.3819. CIMSEC Nominees (Tempatan) Sdn. Bhd. 1,300,000 1.02 - CIMB Bank for Loh Chai Keong (MY1638) 20. Chew Chin Choong 1,237,800 0.9821. CIMSEC Nominees (Tempatan) Sdn. Bhd. 1,220,000 0.96 - CIMB Bank for Ng Lee Ling (PBCL-OG0594) 22. Kenanga Nominees (Tempatan) Sdn. Bhd. 1,183,900 0.93 - Pledged Securities Account for Too Boon Siong 23. Yew Soon Keong 1,154,200 0.91
ANNUAL REPORT 2018 I 155
LIST oF ThIrTy LArGEST SECurITIES ACCouNTS hoLDErS (CONTINUED)
No. Name No. of Shares held %*
24. Singam A/L Kumarasamy 920,000 0.7325. Teng Swee Lan @ Fong Swee Lan 918,100 0.7226. Maybank Nominees (Tempatan) Sdn. Bhd. 850,100 0.67 - Pledged Securities Account for Chuah Wan Hui 27. Maybank Nominees (Tempatan) Sdn. Bhd. 845,400 0.67 - Pledged Securities Account for Jimmy Lee Shing Choi 28. Jimmy Lee Shing Choi 733,400 0.5829. Ang Tee Keat 700,000 0.5530. CIMB Group Nominees (Asing) Sdn. Bhd. 693,800 0.55 Exempt An For DBS Bank Ltd. (SFS)
* Excluding 6,439,100 ordinary shares bought back and retained as treasury shares based on the Record of Depositors as at 2 July 2018.
LIST oF SubSTANTIAL ShArEhoLDErS
No. Name Direct %(a) Indirect %(a)
1. Dato’ Lee Choon Chin 7,074,242 5.57 26,547,974 (b) 20.922. Datin Liew Kee Moi - - 26,547,974 (c) 20.923. Weida Management Sdn. Bhd. 26,547,974 20.92 - -
Notes:
(a) Excluding 6,439,100 ordinary shares bought back and retained as treasury shares based on the Record of Depositors as at 2 July 2018.
(b) Deemed interested by virtue of his substantial shareholding in Weida Management Sdn. Bhd. pursuant to Section 8 of the Companies Act 2016 (“Act”).
(c) Deemed interested by virtue of her spouse’s, Dato’ Lee Choon Chin and her substantial shareholdings in Weida Management Sdn. Bhd. pursuant to Section 8 of the Act.
DIrECTorS’ INTErESTS
No. of Shares heldNo. Name Direct %(a) Indirect %(a)
1. Dato’ Lee Choon Chin 7,074,242 5.57 26,877,974(b) 21.182. Jee Hon Chong 1,764,776 1.39 - -3. Yeoh Chin Hoe - - - -4. Lee Pet Loi 12,000 0.01 - -5. Dato’ Jamelah Binti Jamaluddin - - - -6. Liew Jee Min @ Chong Jee Min - - - -
The Director, Dato’ Lee Choon Chin by virtue of his interests in shares in the Company is also deemed to have interests in shares in all of its related corporations to the extent the Company has an interest, pursuant to Section 8 of the Act. The other Directors have no interests in the shares of the related corporations of the Company.
Notes:
(a) Excluding 6,439,100 ordinary shares bought back and retained as treasury shares based on the Record of Depositors as at 2 July 2018.
(b) Deemed interested by virtue of his substantial shareholding in Weida Management Sdn. Bhd. pursuant to Section 8 of the Act and his children in the Company.
ANALySIS oF ShArEhoLDINGS AS AT 2 JuLy 2018
156 I WEIDA (M) BHD. (504747-W)
NOTICE IS HEREBY GIVEN that the Nineteenth Annual General Meeting of Weida (M) Bhd. (“WEIDA” or “the Company”) will be held at Imperial Hotel, Jalan Datuk Tawi Sli, 93250 Kuching, Sarawak on Wednesday, 29 August 2018 at 9.30 a.m. to transact the following businesses:
A G E N D A
ordinary business
1. To receive the Audited Financial Statements for the financial year ended 31 March 2018 together with the Reports of the Directors and Auditors thereon.
2. To approve the payment of directors’ fees amounting to RM550,000 for the financial year ending 31 March 2019 (2018: RM550,000).
3. To approve the payment of other benefits (excluding directors’ fees) to Directors up to an amount of RM120,000 for the financial year ending 31 March 2019 until the conclusion of the next Annual General Meeting of the Company.
4. To re-elect the Director, YBhg. Dato’ Jamelah Binti Jamaluddin who retires in accordance with Article 81 of the Company’s Articles of Association.
5. To re-elect the Director, Mr. Liew Jee Min @ Chong Jee Min who retires in accordance with Article 81 of the Company’s Articles of Association.
6. To re-appoint KPMG PLT as the Company’s auditors until the conclusion of the next Annual General Meeting of the Company and to authorise the Directors to fix their remuneration.
Special business
7. To consider and, if thought fit, pass the following ordinary resolution: Continuation in office as Independent Director pursuant to Practice 4.2 of the Malaysian
Code on Corporate Governance 2017 “THAT approval be and is hereby given to Mr. Yeoh Chin Hoe who has served as an
Independent Director of the Company for a consecutive term of more than nine (9) years, to continue in office as an Independent Director of the Company.”
8. To consider and, if thought fit, pass the following ordinary resolution: Authority to issue shares pursuant to Section 76 of the Companies Act 2016 “THAT pursuant to Section 76 of the Companies Act 2016 and subject always to the
approval of the relevant authorities, the Directors be and are hereby empowered to issue shares in the Company from time to time and upon such terms and conditions and for such purposes as the Directors may deem fit provided that the aggregate number of shares issued pursuant to this resolution does not exceed 10% of the total number of issued shares of the Company for the time being and that the Directors be and are also empowered to obtain the approval for the listing of and quotation for the additional shares so issued on the Bursa Malaysia Securities Berhad and that such authority shall continue in force until the conclusion of the next annual general meeting of the Company.”
[Please refer to Explanatory
Note (a)]resolution 1
resolution 2
resolution 3
resolution 4
resolution 5
resolution 6
resolution 7
NoTICE oF NINETEENTh ANNuAL GENErAL MEETING
ANNUAL REPORT 2018 I 157
NoTICE oF NINETEENTh ANNuAL GENErAL MEETING
9. To consider and, if thought fit, pass the following ordinary resolution: proposed renewal of authority for purchase of own shares by the Company “THAT, subject always to the Companies Act 2016 (as may be amended, modified or re-
enacted from time to time) (“the Act”), rules, regulations and orders made pursuant to the Act, provisions of the Company’s Memorandum and Articles of Association and the Main Market Listing Requirements of Bursa Malaysia Securities Berhad (“Bursa Securities”) and any other relevant authorities, where applicable, the Company be hereby unconditionally and generally authorised to purchase and/or hold such an amount of ordinary shares (“Shares”) in the Company (“Proposed Share Buy-Back”) as may be determined by the Directors from time to time through Bursa Securities upon such terms and conditions as the Directors may deem fit, necessary and expedient in the interest of the Company provided that the total aggregate number of shares purchased and/or held or to be purchased and/or held pursuant to this resolution shall not exceed ten percent (10%) of the total number of issued shares of the Company for the time being and an amount of funds not exceeding the Company’s total retained earnings at the time of purchase be allocated by the Company for the Proposed Share Buy-Back AND THAT such shares purchased are to be retained as treasury shares and distributed as dividends and/or resold on the market of Bursa Securities, or subsequently may be cancelled;
AND THAT the Directors be and are hereby authorised and empowered to do all acts and things and to take all such steps and to enter into and execute all commitments, transactions, deeds, agreements, arrangements, undertakings, indemnities, transfers, assignments and/ or guarantees as they may deem fit, necessary, expedient and/or appropriate in order to implement, finalise and give full effect to the Proposed Share Buy-Back with full powers to assent to any conditions, modifications, revaluations, variations and/or amendments, as may be required or imposed by any relevant authorities;
AND FURTHER THAT the authority hereby given will commence immediately upon the passing of this resolution and will continue to be in force until:
(a) the conclusion of the next annual general meeting of the Company, at which time
it will lapse, unless by ordinary resolution passed at that meeting, the authority is renewed, either unconditionally or subject to conditions;
(b) the expiration of the period within which the next annual general meeting after that date is required by law to be held; or
(c) revoked or varied by ordinary resolution passed by the shareholders in general meeting.
whichever occurs first, in accordance with the provisions of the guidelines issued by Bursa
Securities or any other relevant authorities.” 10. To transact any other business which may properly be transacted at an annual general
meeting, due notice of which shall have previously given in accordance with the Companies Act 2016 and the Company’s Articles of Association.
by order of the board of Directors
voon Jan Moi (MAICSA 7021367)Wang Tin Ngee (MIA 11670)
Joint Company Secretaries
Dated : 31 July 2018Kuching, Sarawak
resolution 8
158 I WEIDA (M) BHD. (504747-W)
Explanatory notes
(a) This agenda item is meant for discussion only and therefore, it will not be put forward for voting.
(b) Ordinary resolutions in relation to the re-election of independent directors (proposed resolutions no. 3 and 4)
The Nominating Committee and the Board of Directors have assessed the independence of YBhg. Dato’ Jamelah binti Jamaluddin and Mr. Liew Jee Min @ Chong Jee Min and recommended them to be re-elected as the Directors of the Company.
(c) OrdinaryresolutioninrelationtocontinuationinofficeasIndependentDirectorpursuanttoPractice4.2oftheMalaysian Code on Corporate Governance 2017
The proposed Resolution No. 6 is to seek shareholders’ approval to retain Mr. Yeoh Chin Hoe, whose tenure as Independent Director of the Company has exceeded tenure limit of nine (9) years. The Board of Directors (“Board”) and the Nominating Committee have assessed him and thereby recommended that he continues in office as an Independent Director of the Company based on the following justifications:
i) his experience, networking, understanding of business and objectivity in approach enables him to provide the Board and Board Committees with pertinent expertise, skills and competence and his independence judgement will continue to add credence to the Company;
ii) he remains professionally independent and vocal, actively participated in deliberations and exercised independent judgement at Board and Board Committee meetings without being influenced by operational consideration; and
iii) he acts in the best interests of all shareholders and his continuation in office as Independent Director will provide a check and balance to operational management.
(d) Ordinary resolution on authority to issue shares pursuant to Section 76 of the Companies Act 2016
The proposed Resolution No. 7 will give powers to the Directors to issue up to a maximum ten per centum (10%) of the total number of issued shares of the Company for the time being for such purposes as the Directors would consider in the best interest of the Company. This authority, unless revoked or varied by the Company at a general meeting, will expire at the next annual general meeting of the Company.
The general mandate sought for issue of shares is a renewal of the mandate that was approved by the shareholders at the Company’s annual general meeting held on 22 August 2017 (“AGM 2017”). The Company did not utilise the mandate that was approved at the AGM 2017.
The general mandate is to provide flexibility to the Company to issue new shares without the need to convene separate general meeting to obtain its shareholders’ approval so as to avoid incurring additional cost and time.
The purpose of this general mandate is for possible fund raising exercises including but not limited to further placement of shares for purpose of funding current and/or future investment projects, working capital and/or acquisitions.
(e) Ordinary resolution in relation to proposed renewal of authority for purchase of own shares by the Company
The proposed Resolution No. 8, if passed, will renew the authority for the Company to purchase and/or hold up to ten per cent (10%) of the total number of issued shares of the Company through Bursa Malaysia Securities Berhad. This authority will expire at the conclusion of the next annual general meeting, unless revoked or varied by ordinary resolution passed by shareholders at general meeting.
Please refer to the Statement to Shareholders dated 31 July 2018 for further information.
NoTICE oF NINETEENTh ANNuAL GENErAL MEETING
ANNUAL REPORT 2018 I 159
Notes:1. A member entitled to attend, speak and vote at the meeting is entitled to appoint a proxy or proxies to attend,
speak and vote in his stead. A proxy may but need not be a member of the Company and there shall be no restriction as to the qualification of the proxy. A proxy appointed to attend, speak and vote at a meeting of a Company shall have the same rights as the member to speak at the meeting.
2. A member entitled to attend, speak and vote at this Annual General Meeting shall not be entitled to appoint more than two (2) proxies to attend, speak and vote at the same meeting. Where a member appoints more than one (1) proxy, the appointment shall be invalid unless he specifies the proportions of his shareholdings to be represented by each proxy.
3. If the appointor is a corporation, the Form of Proxy must be executed under its Common Seal or under the hand of an officer or attorney duly authorised.
4. Where a member of the Company is an exempt authorised nominee which holds ordinary shares in the Company for multiple beneficial owners in one (1) 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. An exempt authorised nominee refers to an authorised nominee defined under the Securities Industry (Central Depositories) Act 1991 (“SICDA”) which is exempted from compliance with the provisions of subsection 25A(1) of SICDA.
5. The Form of Proxy must be deposited at the registered office of the Company at Wisma Hock Peng, Ground Floor to 2nd Floor, 123, Green Heights, Jalan Lapangan Terbang, 93250 Kuching, Sarawak not less than 48 hours before the time set for holding the meeting or any adjournment hereof.
6. A depositor whose name appears in the Record of Depositors as at 23 August 2018 shall be regarded as a member of the Company entitled to attend this Annual General Meeting or appoint a proxy to attend, speak and vote on his behalf.
NoTICE oF NINETEENTh ANNuAL GENErAL MEETING
I/We (Name in full) (IC/Passport/Company No.) of
(Address)being a member/members of the abovenamed Company hereby appoint
(Name in full) (IC/Passport No.) of
(Address)
No. Resolutions For Against
Proxy 1
Proxy 2
Total 100%
Dated this day of 2018 Signature of shareholder(s)/common seal
Form of Proxy
Notes :
1.
2.
3.4.5.
6.
7.
8.
WEIDA (M) BHD.(Company No.: 504747-W)(Incorporated in Malaysia)
CDS Account no.
Number of shares held
%
%
The proportions of *my/our holdings to be presented by my *proxy/our proxies are as follows:
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 Nineteenth Annual General Meeting of the Company to be held at Imperial Hotel, Jalan Datuk Tawi Sli, 93250 Kuching, Sarawak on Wednesday, 29 August 2018 at 9.30 a.m. and any adjournment thereof.
Please indicate with an “X” in the appropriate box against each resolution how you wish your vote to be cast. If you do not indicate how you wish your proxy to vote on any resolution, the proxy shall vote as he thinks fit, or at his discretion, abstain from voting.
My/our proxy is to vote as indicated below:
To approve the payment of directors’ fees for the financial year ending 31 March 2019.
To re-appoint KPMG PLT as auditors and authorise the Directors to fix their remuneration.
To renew the authority to issue shares pursuant to Section 76 of the Companies Act 2016.
To re-elect YBhg. Dato’ Jamelah Binti Jamaluddin as director.To re-elect Mr. Liew Jee Min @ Chong Jee Min as director.
To retain Mr. Yeoh Chin Hoe as an Independent Director.
To renew the authority for purchase of own shares by the Company.
To approve the payment of other benefits (excluding directors’ fees) to Directors for the financial year ending 31 March 2019 until the conclusion of the next Annual General Meeting of the Company.
A member entitled to attend, speak and vote at the meeting is entitled to appoint a proxy or proxies to attend, speak and vote in his stead. A proxy may but need not be a member of the Company and there shall be no restriction as to the qualification of the proxy. A proxy appointed to attend, speak and vote at a meeting of a Company shall have the same rights as the member to speak at the meeting.A member entitled to attend, speak and vote at this Annual General Meeting shall not be entitled to appoint more than two (2) proxies to attend, speak and vote at the same meeting. Where a member appoints more than one (1) proxy, the appointment shall be invalid unless he specifies the proportions of his shareholdings to be represented by each proxy.If the appointor is a corporation, the Form of Proxy must be executed under its Common Seal or under the hand of an officer or attorney duly authorised.Where a member of the Company is an exempt authorised nominee which holds ordinary shares in the Company for multiple beneficial owners in one (1) 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. An exempt authorised nominee refers to an authorised nominee defined under the Securities Industry (Central Depositories) Act 1991 (“SICDA”) which is exempted from compliance with the provisions of subsection 25A(1) of SICDA.The Form of Proxy must be deposited at the registered office of the Company at Wisma Hock Peng, Ground Floor to 2nd Floor, 123, Green Heights, Jalan Lapangan Terbang, 93250 Kuching, Sarawak not less than 48 hours before the time set for holding the meeting or any adjournment hereof.A depositor whose name appears in the Record of Depositors as at 23 August 2018 shall be regarded as a member of the Company entitled to attend this Annual General Meeting or appoint a proxy to attend, speak and vote on his behalf.
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This page is intentionally left blank.
I/We (Name in full) (IC/Passport/Company No.) of
(Address)being a member/members of the abovenamed Company hereby appoint
(Name in full) (IC/Passport No.) of
(Address)
No. Resolutions For Against
Proxy 1
Proxy 2
Total 100%
Dated this day of 2018 Signature of shareholder(s)/common seal
Form of Proxy
Notes :
1.
2.
3.4.5.
6.
7.
8.
WEIDA (M) BHD.(Company No.: 504747-W)(Incorporated in Malaysia)
CDS Account no.
Number of shares held
%
%
The proportions of *my/our holdings to be presented by my *proxy/our proxies are as follows:
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 Nineteenth Annual General Meeting of the Company to be held at Imperial Hotel, Jalan Datuk Tawi Sli, 93250 Kuching, Sarawak on Wednesday, 29 August 2018 at 9.30 a.m. and any adjournment thereof.
Please indicate with an “X” in the appropriate box against each resolution how you wish your vote to be cast. If you do not indicate how you wish your proxy to vote on any resolution, the proxy shall vote as he thinks fit, or at his discretion, abstain from voting.
My/our proxy is to vote as indicated below:
To approve the payment of directors’ fees for the financial year ending 31 March 2019.
To re-appoint KPMG PLT as auditors and authorise the Directors to fix their remuneration.
To renew the authority to issue shares pursuant to Section 76 of the Companies Act 2016.
To re-elect YBhg. Dato’ Jamelah Binti Jamaluddin as director.To re-elect Mr. Liew Jee Min @ Chong Jee Min as director.
To retain Mr. Yeoh Chin Hoe as an Independent Director.
To renew the authority for purchase of own shares by the Company.
To approve the payment of other benefits (excluding directors’ fees) to Directors for the financial year ending 31 March 2019 until the conclusion of the next Annual General Meeting of the Company.
A member entitled to attend, speak and vote at the meeting is entitled to appoint a proxy or proxies to attend, speak and vote in his stead. A proxy may but need not be a member of the Company and there shall be no restriction as to the qualification of the proxy. A proxy appointed to attend, speak and vote at a meeting of a Company shall have the same rights as the member to speak at the meeting.A member entitled to attend, speak and vote at this Annual General Meeting shall not be entitled to appoint more than two (2) proxies to attend, speak and vote at the same meeting. Where a member appoints more than one (1) proxy, the appointment shall be invalid unless he specifies the proportions of his shareholdings to be represented by each proxy.If the appointor is a corporation, the Form of Proxy must be executed under its Common Seal or under the hand of an officer or attorney duly authorised.Where a member of the Company is an exempt authorised nominee which holds ordinary shares in the Company for multiple beneficial owners in one (1) 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. An exempt authorised nominee refers to an authorised nominee defined under the Securities Industry (Central Depositories) Act 1991 (“SICDA”) which is exempted from compliance with the provisions of subsection 25A(1) of SICDA.The Form of Proxy must be deposited at the registered office of the Company at Wisma Hock Peng, Ground Floor to 2nd Floor, 123, Green Heights, Jalan Lapangan Terbang, 93250 Kuching, Sarawak not less than 48 hours before the time set for holding the meeting or any adjournment hereof.A depositor whose name appears in the Record of Depositors as at 23 August 2018 shall be regarded as a member of the Company entitled to attend this Annual General Meeting or appoint a proxy to attend, speak and vote on his behalf.
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AFFIX STAMP
The Company Secretary
WEIDA ( M) BHD.
Wisma Hock PengGround Floor to 2nd Floor123, Green HeightsJalan Lapangan TerbangP.o, Box 242493748 KuchingSarawak
.
MALAYSIA
REPUBLIC OFTHE PHILIPPINES
SARAWAKPENINSULAR MALAYSIA
SABAH
MANILA
MALAYSIA www.weida.com.my
SARAWAKHeadquarter: Offices: Office:Wisma Hock Peng, Ground to 2nd Floor,123, Green Heights,Jalan Lapangan Terbang,93250 Kuching, Sarawak.P. O. Box 2424,93748 Kuching, Sarawak.Tel : +6082 456 456Fax : +6082 459 000Email : [email protected]
Manufacturing plants:Lot 472, Block 8, MTLD,Sejingkat Industrial Park,Jalan Bako, Petra Jaya,93050 Kuching, Sarawak.P. O. Box 1807,93736 Kuching, Sarawak.Tel : +6082 435 435Fax : +6082 433 933Email : [email protected]
Kuala Baram Land DistrictJalan Maigold, Taman Desa Senadin,
Lot 1969, Block 5,
98100 Miri, Sarawak.Tel : +6016 879 3322
PENINSULAR MALAYSIA
B01-A-5-1 Menara 2,No. 3 Jalan Bangsar, KL Eco City,59200 Kuala Lumpur.
Manufacturing plant:Lot 109, Jalan Permata 1,Arab-Malaysian Industrial Park,71800 Nilai,Negeri Sembilan Darul Khusus.Tel : +606 799 0990Fax : +606 799 0949Email : [email protected]
SABAH
2-9-1 & 2-9-2, 8th Floor, Wawasan Plaza,88000 Kota Kinabalu, Sabah.P. O. Box 21276, 88770 Luyang,Kota Kinabalu, Sabah.Tel : +6088 264 555Fax : +6088 262 525Email : [email protected]
Manufacturing plants:Lot 57, SEDCO Light Industrial Estate,Lok Kawi, 88801 Kota Kinabalu, Sabah.Tel : +6088 752 996Fax : +6088 752 998Email : [email protected]
TB12882 & 12883,SEDCO Light Industrial Estate,Mile 3, Jalan Apas, 91000 Tawau, Sabah.Tel : +6089 913 678Fax : +6089 913 679Email : [email protected]
REPUBLIC OF THE PHILIPPINES www.weida.com.ph
Unit C-05-03 & Unit C-05-03A,5th Floor, Sunway Nexis Biz Suites,Jalan PJU 5/1, Kota Damansara,47810 Petaling Jaya, Selangor Darul Ehsan.Tel : +603 6143 0988Fax : +603 6143 0999Email : [email protected]
Tel : +603 2283 9688Fax : +603 2283 9689Email : [email protected]
Corporate ProfileCorporate Information
COVER RATIONALE
Group StructureProfile of DirectorsKey Senior Management PersonnelChairman’s StatementManagement Discussion and Analysis ("MD&A")Business ActivitiesFive Years Group Financial HighlightsStatement on Corporate Social Responsibility
Corporate Governance Overview StatementAdditional Compliance InformationStatement of Directors’ ResponsibilitiesReport of the Audit CommitteeStatement on Risk Management and Internal Control
FINANCIAL STATEMENTS
Directors’ ReportStatement by DirectorsStatutory DeclarationIndependent Auditors’ ReportStatements of Financial PositionStatements of Profit or Loss and Other Comprehensive IncomeConsolidated Statement of Changes in EquityStatement of Changes in EquityStatements of Cash FlowsNotes to the Financial StatementsList of PropertiesAnalysis of ShareholdingsNotice of Nineteenth Annual General Meeting
Form of Proxy
12348
1214192627
Corporate Event Highlight293139404146
51555556616264686972
152154156
TABLE OF CONTENTS
WEIDA continues to thrive through its four (4) main business divisions, driven by the principle of triple bottom line of profit, people and environment to achieve a balanced and sustainable growth.
Office:MANILA
3/F, BT & T Center,20E. Rodriguez Jr. Avenue (C-5)Brgy. Bagumbayan, Libis,Quezon City 1110, Philippines.Tel : +632 706 2002, 656 2002Fax : +632 706 4966Email : [email protected]
Manufacturing plant:Lot 11 & 13, Block 3,Dasmarinas Technopark,Governor’s Drive,Dasmarinas Cavite 4114, Philippines.Tel : +632 584 4858, 584 4859Fax : +632 584 4649