TIDMIKK
RNS Number : 7889D
Inch Kenneth Kajang Rubber
29 April 2017
INCH KENNETH KAJANG RUBBER PUBLIC LIMITED COMPANY
GROUP ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEARED 31 DECEMBER 2016
CONTENTS
Corporate Information 1
Board of Directors' Profiles 3
Chairman's Statement 5
Strategic Report 7
Corporate Social Responsibilities 10
Corporate Sustainability Statement 11
Corporate Governance 12
Audit Committee Report 20
Statement on Internal Control 23
Group Financial Highlights 25
Directors' Report 26
Statement of Responsibilities
of Those Charged With Governance 30
Statutory Declaration 31
Independent Auditors' Report 32
Group and Company Statement
of Profit or Loss 34
Group and Company Statement
of Profit or Loss and Other
Comprehensive Income 35
Group and Company Statement
of Financial Position 36
Group Statement of Changes
in Equity 38
Company Statement of Changes
in Equity 40
Group and Company Statement
of Cash Flows 41
Notes to the Financial Statements 42
Analysis of Shareholdings
List of Properties Registered
Under the Group of Companies 74
Notice of Annual General Meeting 76
Form of Proxy
Corporate Information
BOARD OF DIRECTORS
Dato' Adnan bin Maaruf Independent Non-Executive
Director/Chairman
Datuk Kamaruddin Independent Non-Executive
bin Awang Director
Dato' Haji Muda bin Independent Non-Executive
Mohamed Director
Dato' Tik bin Mustaffa Independent Non-Executive
Director
Dr. Radzuan bin A. Independent Non-Executive
Rahman Director
AUDIT COMMITTEE
Datuk Kamaruddin Chairman
bin Awang
Dato' Haji Muda bin Member
Mohamed
Dato' Tik bin Mustaffa Member
SENIOR INDEPENT
NON-EXECUTIVE DIRECTOR
Dato' Tik bin Mustaffa Independent Non-Executive
Director
UK COMPANY NUMBER SC007574
MALAYSIA COMPANY
NUMBER 990261M
COMPANY SECRETARY Lee Thai Thye (LS 0000737)
REGISTERED OFFICE No. 2 Lochrin Square,
IN 96 Fountainbridge
UNITED KINGDOM Edinburgh EH3 9QA, Midlothian,
United Kingdom
Tel: 44 0131 226 5541
Fax: 44 0131 226 2278
PRINCIPAL OFFICE 22nd Floor Menara Promet
IN MALAYSIA (KH)
Jalan Sultan Ismail
50250 Kuala Lumpur, Malaysia
Tel: 603-2144 4446 Fax:
603-2141 8463
PRINCIPAL REGISTRAR Computershare Investor
IN Services plc
UNITED KINGDOM PO Box 82, The Pavillions,
Bridgwater Road
Bristol BS99 7NH, United
Kingdom
Tel: 44 0870 702 0003
Fax: 44 0870 703 6101
REGISTRAR IN MALAYSIA Mestika Projek (M) Sdn
Bhd (225545V)
22(nd) Floor Menara Promet
(KH)
Jalan Sultan Ismail
50250 Kuala Lumpur, Malaysia
Tel: 603-2144 4446 Fax:
603-2141 9650
AUDITORS UHY Hacker Young LLP
Quadrant House
4 Thomas More Square
London E1W 1YW, United
Kingdom
BUSINESS OFFICE 26th Floor Menara Promet
(KH)
Jalan Sultan Ismail
50250 Kuala Lumpur, Malaysia
Tel: 603-2144 4446 Fax:
603-21418463
WEBSITE www.ikkr.com.my
PRINCIPAL BANKERS Bank Islam Malaysia Berhad
AmFunds Management Berhad
Agrobank Berhad
CIMB Bank Berhad
Affin Hwang Asset Management
Berhad
STOCK EXCHANGE LISTINGS Bursa Malaysia Securities
Berhad - Main Board
London Stock Exchange
plc
Singapore Exchange Securities
Trading Limited
Board of Directors' Profiles
DATO' ADNAN BIN MAARUF
Independent Non-Executive Director
Chairman
Malaysian, aged 73
Dato' Adnan bin Maaruf was appointed to the Board on 22 April
2000.
He graduated from University of Malaya with a Bachelor of Arts
(Honours) Degree and a Masters in Management from AIM Philippines.
He started his career in the Government sector and after eighteen
(18) years, became the Deputy Secretary General in the Ministry of
National and Rural Development. He then became the Managing
Director of Mara Holdings Sdn Bhd for five (5) years and
subsequently, the Chairman of Malaysia Cooperative Insurance
Society for ten (10) years.
He does not have any family relationship with any Director
and/or major shareholder of the Company and there is no business
arrangement with the Company in which he has a personal interest.
He attended all the Board Meetings held in the financial year ended
31 December 2016.
He has had no convictions for any offences within the past five
(5) years.
DATUK KAMARUDDIN BIN AWANG
Independent Non-Executive Director
Chairman of the Audit Committee
Malaysian, aged 68
Datuk Kamaruddin bin Awang was appointed to the Board on 17 July
2009. He is the Chairman of the Audit Committee.
He obtained his Bachelor of Commerce and Administration from
Victoria University of Wellington, New Zealand, in 1973. He is a
member of the Institute of the Chartered Accountants of New Zealand
and Institute of Chartered Secretaries & Administrators, United
Kingdom, since 1977. He was the Executive Chairman of Metacorp
Berhad and had previously held directorships in a number of listed
companies.
He does not have any family relationship with any Director
and/or major shareholder of the Company and there is no business
arrangement with the Company in which he has a personal interest.
He attended four (4) of the Board Meetings held in the financial
year ended 31 December 2016.
He has had no convictions for any offences within the past five
(5) years.
DATO' HAJI MUDA BIN MOHAMED
Independent Non-Executive Director
Member of the Audit Committee
Malaysian, aged 72
Dato' Haji Muda bin Mohamed was appointed to the Board on 15
February 2000. He is also a member of the Audit Committee.
He graduated with a Diploma in Civil Engineering and
subsequently a Bachelor of Science, Civil Engineering Degree from
University of Westminster, United Kingdom. A Fellow in the
Institution of Engineers Malaysia, he started his career as an
engineer in two Government agencies and an international oil
company. After thirteen (13) years, he joined Sime UEP Properties
Bhd and left ten (10) years later after becoming its Operation
Director. He then went on to TTDI Development Sdn Bhd, and left
seven (7) years later after serving as its Group Chief Executive
Officer. He is now an Executive Chairman of a company dealing in
civil engineering contracting jobs. He does not sit on the board of
any other listed company.
He does not have any family relationship with any Director
and/or major shareholder of the Company and there is no business
arrangement with the Company in which he has a personal interest.
He attended all the Board Meetings held in the financial year ended
31 December 2016.
He has had no convictions for any offences within the past five
(5) years.
DATO' TIK BIN MUSTAFFA
Independent Non-Executive Director
Member of the Audit Committee
Malaysian, aged 71
Dato' Tik bin Mustaffa was appointed to the Board on 6 July
2012. He is also a member of the Audit Committee.
He holds a Bachelor's Degree in Economics from University of
Malaya and a Master's Degree in Business Administration from
University of Oregon, United States of America.
He started his career in the Malaysian Government Service where
he served the Public Service Department, University Teknologi
Malaysia, Ministry of Finance and Kuantan Port Authority. He also
served the State Administrations of Pahang and Selangor as the
State Finance Officer and State Secretary respectively.
In 1996, he joined Hicom Holdings Bhd as its Senior Vice
President and was later appointed as its Senior Group Director for
Operations in the merged entity of DRB-Hicom Bhd. He left in 2005,
and in 2010, he became the Chairman for Eastern Pacific Industrial
Corporation Berhad for a year. He is currently the
Chairman/Director of Trumer International Sdn Bhd.
He does not have any family relationship with any of the
Company's Directors and/or major shareholders and has no conflict
of interest with the Company. He attended all the Board Meetings
held in the financial year ended 31 December 2016.
He has had no convictions for any offences within the past five
(5) years.
DR. RADZUAN BIN A. RAHMAN
Independent Non-Executive Director
Malaysian, aged 73
Dr. Radzuan bin A. Rahman was appointed to the Board on 24 March
2005.
He graduated with a Bachelor's Degree in Agricultural Science
from University of Malaya, and later pursued his Masters in Science
and Doctorate in Resource Economics at Cornell University, New
York. He was a lecturer and Dean at the faculty of Resource
Economics and Agribusiness, Universiti Pertanian Malaysia (now
known as Universiti Putra Malaysia), until March 1980. He then went
to Sime Darby Plantations Berhad and in 1984, joined Golden Hope
Plantations Berhad as a Director of Corporate Planning and worked
his way up to be Group Director of the plantation division. He was
later appointed as the Managing Director of Island & Peninsular
Berhad and Austral Enterprises Berhad and retired in 2004. He was a
Director of Fraser & Neave Holdings Berhad and Kuwait Finance
House (Malaysia) Berhad. He currently sits on the boards of Idaman
Unggul Berhad, Kulim (Malaysia) Berhad and several private
companies.
He does not have any family relationship with any Director
and/or major shareholder of the Company and there is no business
arrangement with the Company in which he has a personal interest.
He attended all the Board Meetings held in the financial year ended
31 December 2016.
He has had no convictions for any offences within the past five
(5) years.
Chairman's Statement
On behalf of the Board of Inch Kenneth Kajang Rubber Public
Limited Company, I present herewith the One Hundred and Seventh
Annual Report and Financial Statements of the Company and the Group
for the financial year ended 31 December 2016.
DIVIDS
The Board has proposed an interim dividend payout of 2% (0.2
pence) as part of our commitment to deliver shareholders value,
with the total dividends under the single tier system.
PERFORMANCE REVIEW
During the financial year under review, the Group recorded a
revenue of RM10.834 million and a loss after tax of RM3.741 million
compared to a revenue of RM10.289 million and a post-tax loss of
RM1.941 million for the previous year. The increase in Group's
turnover by RM0.545 million is mainly due to the higher bookings
received from the travel agents and online travel agents by the
tourism division during the financial year under review.
The plantation division recorded a lower revenue at RM0.266
million (2015: RM0.376 million) due to the decline in production of
fresh fruit bunches ("FFB") by 44% to 481 tonnes (2015: 868
tonnes). Revenue from the Group's tourism division also increased
by 24.5% to RM8.395 million from RM6.744 million in 2015 due to
higher bookings received.
Included in the above results for the financial year under
review was a share of loss after taxation of RM0.17 million versus
share of profit after taxation of RM4.598 million in 2015 from the
Group's associate - Concrete Engineering Products Berhad ("Cepco"),
a manufacturer and distributor of prestressed spun concrete piles
and poles. The decreased sales volume is attributable to the slower
offtake in the overseas projects.
Overall, the total performance of the Group was mainly affected
by the lower profit from Cepco.
CORPORATE DEVELOPMENT
The shareholders of the Company had approved an ordinary
resolution at the One Hundred and Sixth AGM held on 24 May 2016 for
the Company to purchase its own shares up to a maximum of 10% of
the issued and paid-up capital of the Company. The Directors of the
Company are committed to enhancing the value of the Company and
believe that the purchase plan is being implemented in the best
interest of the Company and its shareholders.
As at 31 December 2016, the Company has 17,540,800 ordinary
shares held as treasury shares and the issued and paid-up share
capital of the Company remained at 420,750,000 ordinary shares of
GBP0.10 each.
FUTURE OUTLOOK
The Master Plan to develop the land bank in Kajang, totalling
approximately 140 hectares is completed and has been submitted to
Jabatan Alam Sekitar ("JAS"), Lembaga Lebuhraya Malaysia ("LLM")
and Jabatan Kerja Raya ("JKR") for their approval.
We are certain that this township will impact positively to the
socio-economic condition of the South Greater Klang Valley
region.
On the tourism division, as was expected, revenue increased in
2016. Based on the marketing efforts put in place, we anticipate
that 2017 will see even more tourists coming to the resort.
APPRECIATION
On behalf of the Board, I wish to express my appreciation to all
our customers, shareholders, business partners, bankers and
government authorities for their continued support and
encouragement during the year.
Special thanks also go to the management and staff. Your
invaluable efforts and firm dedication to the Group are truly
appreciated. We are confident that success is in the pipeline.
I would also like to take this opportunity to offer my personal
gratitude to my fellow Board members for their commitment and
guidance.
DATO' ADNAN BIN MAARUF
Chairman
28 April 2017
Strategic Report
REVIEW AND PERFORMANCE OF THE BUSINESS
The Group's principle activities remain unchanged throughout the
year 2016. The plantations in Kajang and Bangi are still providing
revenue through the sale of the FFB they produce, albeit at a lower
volume.
ESTATES
The total area of the Group's estates as at 31 December 2016 is
as follows:
Hectares
2016 2015
Oil Palm (Mature) 177 177
Roads, buildings, gardens, nurseries
and wasteland 12 12
------------ -----------
Total 189 189
============ ===========
The yields from the plantation activity for the year ended 31
December 2016 are as follows:
Harvested crops Fresh fruit
bunches
------------------- -------------
2016 (tonnes) 481
2015 (tonnes) 868
TOURISM
In Terengganu, the hotels within the Group recorded higher
revenue due to more bookings received during the year, as reflected
by the marketing efforts done during the year.
MANUFACTURING
During the year, the sales from our rubber manufacturing
subsidiary in Thailand were much lower at RM2.049 million (2015:
RM3.016 million). This was mainly due to the drop in production as
the rainy season was longer as compared to previous years.
OVERALL
Overall, the Group's revenue was RM10.834 million for the year
ended 31 December 2016 as compared to RM10.289 million in the
preceding year, increase of 5.3%, mainly due to the higher bookings
received by the tourism division during the financial year under
review.
The Group's results after tax increased from a loss of RM1.941
million to a loss of RM3.741 million, or a loss per share of
RM0.0093 (2015: loss per share of RM0.0048). The higher loss was
due principally to the lower share of loss of our associate, Cepco,
of RM0.17 million.
With this result, the Group's Net Tangible Assets is now
RM636.441 million (2015: RM638.309 million) or RM1.58 (2015:
RM1.58) per share, which is calculated after deducting the shares
that were bought back. During the financial year ended 31 December
2016, there was no share buyback and no resale or cancellation of
treasury shares. A total of 17,540,800 shares were bought back and
retained as treasury shares as at 31 December 2016.
Despite the business activities of the Group remaining at
approximately the same level as last year, the cash position
available for use at the end of the 2016 financial year was
RM27.130 million (2015: RM26.755 million) and short term
investments of RM93.875 million (2015: RM110.422 million). The
movement is mainly due to the payments made to finalise a land
transaction, assets under construction and the dividend paid in May
2016.
At 31 December 2016, the Group had total assets of RM725.474
million compared to RM719.934 million in 2015. The Group's total
liabilities stood higher at RM89.033 million compared to RM81.625
million at the prior year end. The resulting net assets were
RM636.441 million at 31 December 2016 (2015: RM638.309 million).
The current ratio is now at 17.30 (2015: 41.66).
RESULTS AND DIVIDS
The Group's results for the year are set out on page 34. The
Group's loss attributable to shareholders of the Company for the
financial year ended 31 December 2016 amounted to RM3.741 million
(2015: loss of RM1.941 million).
On 28 April 2016, the Directors approved and declared a 2%
interim dividend for the financial year ended 31 December 2015. The
total amount of RM4.685 million was paid on 30 May 2016. The
interim dividend was under the single tier system of RM0.0116 per
share, on 403,209,200 ordinary shares. A dividend of 2% is proposed
for the financial year ended 31 December 2016.
In the opinion of the Directors, the results of the operations
of the Group and of the Company during the financial year were not
substantially affected by any item, transaction or event of a
material and unusual nature.
FUTURE DEVELOPMENTS AND PROJECTS
The Master Plan to develop the land bank in Kajang, totalling
approximately 140 hectares is completed and has been submitted to
Jabatan Alam Sekitar ("JAS"), Lembaga Lebuhraya Malaysia ("LLM")
and Jabatan Kerja Raya ("JKR") for their approval. We are certain
that this township will impact positively to the socio-economic
condition of the South Greater Klang Valley region.
On the tourism division, as was expected, revenue increased in
2016. Based on the marketing efforts put in place, we anticipate
that 2017 will see even more tourists coming to the resort.
The statements above comply with Principle 1.4 of the Malaysian
Code on Corporate Governance 2012.
No other events have occurred since the reporting date which
significantly affects the Company or the Group.
PRINCIPAL RISKS AND UNCERTAINTIES FACING THE BUSINESSES
The principal risks and uncertainties facing the Group are:
i) Exposure to the risks inherent to the oil palm and rubber industries
The Group is susceptible to certain business risks inherent to
the oil palm and rubber industries as well as general business
risks, which include but are not limited to:
(i) constraints and rising costs of labour supply and raw materials;
(ii) poor weather;
(iii) price fluctuations of commodity;
(iv) threat of substitute products; and
(v) change in regulatory, economic and business conditions.
ii) Exposure to the risks inherent in the property development industry
The Group is considering entering into property development. It
will be exposed to the cyclical performance caused by the changes
in the domestic and global economic conditions, which give rise to
intense competition among the local players and new entrants in the
property market. In addition, its profitability may also be
affected by the changes in the economic and political environment
such as changes in taxation, inflation, foreign exchange rates,
government policies, population growth and accounting policies.
iii) Exposure to the risks inherent to the tourism industry
The Group is subject to risks inherent to the hotel and tourism
sector. These may include general global and regional economic
downturns, uncertainties from terrorism activities and war,
socio-political instability, a decrease in demand or an oversupply
of hotel and resort rooms, an increase in the operating costs due
to inflation and other factors such as energy and labour costs,
labour supply shortages, changes in credit conditions, changes in
customers' preferences and the collectability of debts.
INFORMATION TO SHAREHOLDERS
The Group has its own website (http://www.ikkr.com.my) for the
purposes of improving information flow to shareholders and
potential investors.
On behalf of the Board
DATO ADNAN BIN MAARUF
Director
DATUK KAMARUDDIN BIN AWANG
Director
Kuala Lumpur, Malaysia
28 April 2017
Corporate Social Responsibilities
The Group recognises that its performances are also measured by
being a good corporate citizen and making more contribution to
people and environment. We would therefore integrate our business
activities so that our actions would benefit our employees as well
as the surrounding society.
At Perhentian Island Resort ("PIR"), we place high importance in
maintaining the natural environment in order to preserve the
natural beauty of the corals existing just off our beach while
protecting other marine life as well. Efforts have been made to
ensure that the rainforest, being the ideal backdrop for our
resort, is retained at its best. Development that may compromise
the surrounding nature would not be undertaken. The cleanliness of
the pristine water and white sandy beaches has always been of
serious concern. Employees, customers and hotel guests are
encouraged to share the same vision in protecting and sustaining
good environmental care aspects. We also support the various events
held at Pulau Perhentian Kecil where tourism activities are being
carried out and the local community is taken care off.
At Motel Desa, the team spirit has always been instilled among
the employees. We maintain the natural environment through various
programs of recycling and gardening. We always strive to provide
meaningful contributions towards the society, such as holding the
buka puasa event for the needy every year. We also employ
handicapped employees who have been specially trained to conduct
their duties at the hotel.
At Supara Company Limited ("Supara"), we have been consistently
participating in the To Be Number One antidrug campaign since 2003.
It is a program that aims to prevent drug trafficking from
spreading at workplaces in the country. We take serious concern in
having a drug-free working environment by conducting urine test in
every three (3) months and holding biannual medical check-up by
Ministry of Health for all workers. We prohibit smoking at the
factory premises and discourage workers from doing so at other
time.
Other initiatives include planting trees and vegetables in the
factory compound and participating in other government's moves to
improve the environment. We take steps to reduce wastage and
pollution during production by switching from diesoline to gas for
drying of rubber. We ensure that no contamination occurs from our
production by discharging it into our ponds before the water is
released to the main drainage system.
At the Group level, employees are viewed as the key assets for
its growth and also the main drivers of strength to each respective
company. In this regard, employees are provided with a safe and
conducive environment for both work and social advantages.
Accommodations and other necessary facilities are provided to staff
and workers at the rubber factory, plantation estates as well as
the resort and hotel. They are also given adequate medical and
health insurance benefits in the event of any untoward incident
occurring.
The Group also makes an effort to create a workplace that is
free from any form of discrimination and harassment where all
employees have equal opportunities to realise their full potential.
More interactions among the employees are encouraged by having
sports events and annual dinners during the year.
Corporate Sustainability Statement
Environmental sustainability is an ethical responsibility and a
moral issue. The Group is committed in exercising its best efforts
to conserve the environment through the following programs:
-- Reduces greenhouse gas emissions by increasing energy
efficiency and lowering its consumption. We actively try to find
ways to reduce our carbon footprint while expanding our energy
supply to meet the needs of our businesses. We invest in renewable
energy by changing from diesel to gas at Supara and using solar
heaters at PIR.
-- Maintains water resource effectively by encouraging all of
our business units to ensure sustainable consumption of water in
their operations. We also make an effort to develop efficient ways
to recycle water from our usage, and to explore alternative ways to
generate clean water from the surrounding sources. At PIR, we use
underground water supply to nurture plants and clean the
surroundings.
-- Encourages paperless operations within the Group. All staffs
are advised to use electronic mails and keeping documents in
softcopies.
-- Uses more energy saving LED lights.
-- Develops our resort based on the original environment and
enhances the landscape by planting lush tropical vegetation where
appropriate.
-- Takes part in cleaning activities at the base of the ocean
together with other environmental organisations to preserve the
natural habitat of the marine park.
-- Ensures that all water discharged from the business
activities are properly filtered before it goes to the main
drainage system.
Corporate Governance
THE MALAYSIAN CODE ON CORPORATE GOVERNANCE
It is the policy of the Company to manage the affairs of the
Group in accordance with the appropriate standards for good
corporate governance. Set out below is a statement on how the
Company has applied the principles and complied with the
recommendations as set out in the Malaysian Code on Corporate
Governance 2012 ("MCCG 2012") except where stated otherwise.
THE UNITED KINGDOM CORPORATE GOVERNANCE REQUIREMENTS
The Financial Conduct Authority in the United Kingdom ("the
FCA") requires the Company to comply with the FCA's Listing Rules
14.3.24 and 18.4.3(2) and Disclosure and Transparency Rule 7.2. The
Annual Report contains below and in the Statement of Internal
Control the information required by these rules.
BOARD OF DIRECTORS
Board Charter
The Board Charter was established in year 2002 to set out
strategic intent and outline the Board's structure and procedures,
code of conduct, roles and responsibilities and relationship of the
Board to the management in accordance with Principle 1.3 and 1.7 of
the MCCG 2012. The following paragraphs detail out the charter. The
Board recognises the importance of the Board Charter and will
adhere to it and will take steps to enhance the Board Charter from
time to time.
Board Composition and Board Balance
The Board has five (5) members, comprising of all Independent
Non-Executive Directors. This composition fulfils the requirements
mandated by the Main Market Listing Requirements ("Main LR") of
Bursa Malaysia Securities Berhad ("Bursa Securities") which
stipulates that at least two (2) Directors or one-third of the
Board, whichever is higher, must be independent. The Directors have
wide ranging experience and all had occupied senior positions in
the public and/or private sectors. Four of them have experiences
related to the plantation, tourism and property sectors which are
the main business drivers of the Group. A brief profile of each
Director is presented on pages 3 to 4 of this Annual Report.
The balance between Independent Non-Executive Directors together
with the support from management is to ensure that there is an
effective representation for the shareholders. It further ensures
that issues of strategy, performance and resources are fully
addressed and investigated to take into account long-term interests
of shareholders, relevant stakeholders and the community in which
the Group conducts its business. The Independent Non-Executive
Directors also bring independent judgement and challenge standards
of conduct and fulfil a pivotal role in corporate
accountability.
The Directors, with their different backgrounds and
specialisations, collectively bring considerable knowledge,
judgement and experience to the Board that has been vital to the
direction of the Group.
No individual or a group of individuals dominates the Board's
decision making and the number of Directors reflects fairly the
investment of the shareholders. The Board of Directors must select
among them a Chairman, who, in accordance with Principle 3.4 of the
MCCG 2012, must be a Non-Executive Director. In accordance with
Principle 3.5 of the MCCG 2012, the Board must comprise a majority
of Independent Directors. The Chairman of the Board is Dato' Adnan
bin Maaruf.
The Board has not set a gender diversity target as of the
reporting period. It is of the view that the Board membership
should be determined based on a candidate's skills, experience and
other qualities regardless of gender. Thus the Board is still
looking for a female director that will be able to complement the
current representation.
A statement by the Directors and their responsibilities for
preparing the financial statements is included on page 31.
Board Responsibilities
The Board plays a primary role in the conduct and control of the
Group's business affairs. The Board is primarily responsible for
the Group's overall strategic plans for business performance,
succession planning, risk management, investor relations
programmes, internal control, management information and statutory
matters. The Board is required to commit their time in order to
have an effective working partnership with the management in
establishing the strategic direction and goals and in monitoring
its achievement. This complies with Principle 1.1 of the MCCG
2012.
The presence of Independent Non-Executive Directors shall
provide unbiased and independent views and judgement in the
decision making process at the Board level and to ensure that no
significant decisions and policies are made by any individual and
that the interest of the minority shareholders are safeguarded.
This complies with Principle 1.2 of the MCCG 2012.
The Board delegate specific powers and responsibilities to three
(3) Board Committees namely, Audit, Nomination and Remuneration
Committees, and the day to day operation matters to the management
headed by the Group Chief Operating Officer.
Appointments to the Board
Appointment to the Board is based on the recommendations of the
Nomination Committee established by the Board. This includes
subsidiary companies. The Nomination Committee considers the
required mix of skills and experience that the Directors should
bring to the Board in making these recommendations. The Nomination
Committee is responsible, inter alia, for making recommendations to
the Board on new nominees for the Board including Board Committees
and for assessing Directors on an ongoing basis. The Nomination
Committee also reviews the Board's required mix of skills and
experience and other qualities, including core competencies which
Non-Executive Directors should bring to the Board.
The Board must show their commitment in terms of time and
contribution. As such, before accepting any other appointment, it
is courteous to inform the other Board members of their intention,
in accordance with Principle 4.1 of the MCCG 2012.
Re-election
All Directors appointment to the Board are subject to the rules
and regulations of the Malaysian Companies Act 2016 ("the Act") and
the Company's Articles of Association ("the Articles").
In accordance with the Articles, all Directors shall retire from
office at least once in each three (3) years and a retiring
Director is eligible for re-election.
An election of the Directors shall take place each year. At each
AGM, one-third of the Directors for the time being (or if their
number is not a multiple of three (3), the number nearest to but no
greater than one-third) shall retire from office provided that all
Directors shall retire from office at least once every three (3)
years but shall be eligible for re-election.
The Articles further provide that all newly appointed Directors
shall retire from office but shall be eligible for re-election in
the next AGM subsequent to their appointment.
The names of the Directors of the Company who are seeking
re-election or re-appointment at the 107(th) AGM of the Company to
be held on 23 May 2017 as per set out in the Notice of AGM are as
follows:
DIRECTORS STANDING FOR RE-ELECTION AT THE ONE HUNDRED AND
SEVENTH ANNUAL GENERAL MEETING ("AGM")
Pursuant to Article 86:
-- Datuk Kamaruddin bin Awang
-- Dato' Adnan bin Maaruf
-- Dato' Haji Muda bin Mohamed
Special Business
Pursuant to Recommendations 3.2 and 3.3 of the Malaysian Code on
Corporate Governance 2012:
-- Dato' Adnan bin Maaruf
-- Dato' Haji Muda bin Mohamed
-- Dr. Radzuan bin A. Rahman
Tenure of Independent Directors
In accordance with Principle 3.2 and 3.3 of the MCCG 2012,
Directors will remain independent for a period of up to 9 years. As
such, the Board will recommend to retain those Directors who have
exceeded nine (9) years and shall seek shareholders' approval at
the forthcoming AGM. The recommendation for the extension is
detailed out in the Notice of AGM on page 80.
Supply of Information
The Board meets on a quarterly basis with additional meetings
held whenever necessary. There were five (5) Board of Directors
meetings held during the financial year ended 31 December 2016 and
the details of attendance are set out as follows:
Name of Directors No. of
Meetings
Attended
------------------------------ -----------
Dato' Adnan bin Maaruf 5/5
Datuk Kamaruddin bin Awang 4/5
Dato' Haji Muda bin Mohamed 5/5
Dato' Tik bin Mustaffa 5/5
Dr. Radzuan bin A. Rahman 5/5
All meetings were held at 22(nd)
Floor Menara Promet (KH), Jalan
Sultan Ismail, 50250 Kuala Lumpur.
The Company Secretary was present at all Board of Directors
meetings held during the financial year ended 31 December 2016, in
accordance with Principle 1.6 of the MCCG 2012.
Prior to the Board meetings, the agenda together with the
relevant documents and information are distributed to all Directors
to ensure that Directors have sufficient time to review and be
prepared for discussion. The Group Chief Operating Officer and/or
other relevant key management personnel will provide information on
the Group's performance and clarification on relevant issues and
management's recommendations for deliberation and discussion by the
Board prior to decision-making. Proceedings of Board meetings are
recorded and signed by the Chairman of the meeting.
Apart from the above, the Board members are updated on the
Company's activities and its operations on a regular basis.
Management's review and analysis on the Group's performance will be
tabled to the Board every quarter for review. All Directors whether
as a full board or in their individual capacity have access to all
information of the Company on a timely basis in an appropriate form
and quality necessary to enable them to discharge their duties and
responsibilities.
All Directors have access to the advice and services of the
Company Secretary and are entitled to seek independent professional
advice, whenever necessary, at the expense of the Group. The
appointment and removal of the Company Secretary are matters for
the Board as a whole.
Directors' Training
The Board acknowledges the fact that continuous education is
vital for the Board members to gain insight into the state of
economy, manufacturing, technological advances in the core business
and keep abreast of latest regulatory developments and management
strategies. This complies with Principle 4.2 of the MCCG 2012.
The Board receives regular briefings and updates on the Group's
businesses, operations, risk management, internal controls,
corporate governance, finance and any new or changes to the
relevant legislation, rules and regulations.
All the Directors have attended the Mandatory Accreditation
Programme prescribed by Bursa Securities. During the year, the
Senior Management are encouraged to attend courses whether in-house
or external to help them in the discharge of their duties. The
Directors have also attended the following seminars to broaden
their perspective, skills, knowledge and to keep abreast of the
relevant changes in law, regulations and the business
environment:
Directors Seminar Title Date
Dato' Adnan bin The Bell of Gender Equality 11 March
Maaruf 2016
Datuk Kamaruddin The New Auditor's Report 13 January
bin Awang 2016
- Sharing the UK Experience
Valuation on Mergers and 8 March
Acquisitions 2016
Dato' Haji Muda CG Breakfast Series for 26 February
bin Mohamed Directors 2016
Improving Board Risk Oversight
Effectiveness
Audit Committee Conference 29 March
2016 2016
Dato' Tik bin Mustaffa Audit Committee Conference 29 March
2016 2016
Dr. Radzuan bin Sustainability Symposium: 8 October
A. Rahman Responsible Business, 2015
Responsible Investing
The Directors will continue to undergo other relevant training
programmes and seminars from time to time as they consider
necessary to equip themselves with the relevant knowledge and ideas
to discharge their duties effectively.
BOARD COMMITTEES
The Board has set up Committees to delegate specific powers and
responsibilities, all of which have their own written constitutions
and terms of reference. The Chairman of the respective Committees
reports to the Board the outcomes and recommendations thereon and
minutes of such Committee meetings will be tabled for the Board's
notation. The ultimate responsibility for the final decision on all
matters of Board Committees lies with the entire Board. The
Committees are as follows:
Audit Committee
The Audit Committee's terms of reference, which outline the
Committee's functions, responsibilities and duties, are contained
in the Audit Committee Report.
During the year, the Audit Committee has, inter alia, performed
the following functions:
-- Reviewed the Group's quarterly and annual financial
statements before announcing to Bursa Securities, Singapore Stock
Exchange Securities Trading Limited ("SGX-ST") and London Stock
Exchange plc ("LSE");
-- Reviewed with the external auditors, Messrs UHY Hacker Young
LLP, the scope of their engagement, fees, as well as the accounting
and reporting matters emanating from their examination of the
annual financial statements;
-- Appraised on significant risk, control, regulatory and
financial matters that have come to the attention of the external
auditors in the course of their audit; and
-- Deliberated on the implications and effects of the relevant
International Financial Reporting Standards which came into effect
during the year.
The Committee is aware of the risk management, control and
governance processes relating to critical corporate and operational
areas. It also closely monitors the recommendations made in order
to obtain assurance that all key risk and control concerns have
been duly addressed and properly managed. This complies with
Principle 6.1 of the MCCG 2012.
More information on the Audit Committee is given in the Audit
Committee Report on pages 20 to 22.
Nomination Committee
In accordance with Principle 2.1 of the MCCG 2012, the
Nomination Committee was established on 20 February 2003 and the
members of the Nomination Committee comprises of:
(a) Dato' Tik bin Mustaffa Chairman, Independent Non-Executive
Director
(b) Dato' Adnan bin Maaruf Member, Independent Non-Executive
Director
(c) Dr. Radzuan bin A. Rahman Member, Independent Non-Executive
Director
The functions of the Nomination Committee as per Principle 2.2
of the MCCG 2012 include:
-- Assesses the effectiveness of the Board and the contribution of each individual Director;
-- Assesses the size of the Board and reviews the mix of skills
and experience and other qualities required by the Board to
function completely and efficiently;
-- Assesses and recommends new nominees for appointment to the
Board and to the Boards of the Group's subsidiary companies;
-- Assesses the independence of Independent Directors for
recommendation to the shareholders for approval at the Company's
general meeting in line with Principle 3.1 of the MCCG 2012.
The Company Secretary will ensure that all appointments are
properly made and that all necessary information is obtained from
the Directors.
The Nomination Committee has met four (4) times during the
financial year ended 31 December 2016 to review all the Directors
who are due for re-election and re-appointment at the Company's
AGM, and to deliberate and nominate Directors to attend
seminars.
Remuneration Committee
The Remuneration Committee was established on 20 February
2003.
The members of the Remuneration Committee are:
(a) Dato' Haji Muda bin Mohamed Chairman, Independent
Non-Executive Director
(b) Datuk Kamaruddin bin Awang Member, Independent Non-Executive
Director
(c) Dr. Radzuan bin A. Rahman Member, Independent Non-Executive
Director
The Remuneration Committee has met once (1) during the financial
year ended 31 December 2016.
DIRECTORS' REMUNERATION REPORT
The Level and Make-up of Remuneration
The Remuneration Committee endeavours to ensure that the
remuneration package offered is competitive to attract, retain and
motivate senior executives of high calibre who will strive to
achieve the Group's objectives. This complies with Principle 2.3 of
the MCCG 2012.
The package may include basic salary, benefits and annual
bonuses that will be based on the individual performance and
dependent upon the achievement of predetermined targets. The
Directors' fees and meeting allowances paid to all Directors,
individually and per meeting respectively, are disclosed in note 11
to the financial statements.
There were no performance-related bonuses or other benefits
given to any of the Directors during the 2016 financial year.
The fees for the Non-Executive Directors are determined by the
Board and approved by the shareholders. The only other remuneration
of the Non-Executive Directors is meeting allowances, which are set
by the Board having taken advice on appropriate levels. During the
106(th) AGM, except for one (1) person, all other shareholders
unanimously voted "FOR" and approved the payment for Director's
fees in respect of the year ended 31 December 2015.
The Committee has not set any policy on the Directors'
Remuneration until the Group's Business Plan has been fully
implemented.
The Company does not have any pension scheme for its employees
and Directors. The Company does, however, make the statutory
contribution for its employees to the relevant regulatory body, the
Employees Provident Fund in Malaysia. The fund operates as a
defined contribution scheme. The Company does not have any long
term incentive plans or share option schemes for its employees and
Directors.
Procedure
The Remuneration Committee is responsible for making
recommendations to the Board, within agreed terms of reference, on
an overall remuneration package for the senior executives. The
Committee has not engaged any person to advise and assist on any
matters relating to the Directors' remuneration during 2016.
DISCLOSURE - INFORMATION SUBJECT TO AUDIT
During the year ended 31 December 2016, none of the Directors
had any interests in the shares of the Company or Group
undertakings.
The Directors' total remuneration comprises the following:
Basic Meeting Total Total
Salary Allowances 2016 2015
&
Fees (RM) (RM) (RM)
(RM)
------------------- --------- -------------- ------------- ----------
Non-Executive
Directors
------------------- --------- -------------- ------------- ----------
Dato' Adnan bin
Maaruf 40,000 6,000 46,000 46,000
------------------- --------- -------------- ------------- ----------
Datuk Kamaruddin
bin Awang 30,000 6,750 36,750 38,250
------------------- --------- -------------- ------------- ----------
Dato' Haji Muda
bin Mohamed 30,000 7,000 37,000 37,000
------------------- --------- -------------- ------------- ----------
Dato' Tik bin
Mustaffa 30,000 7,000 37,000 35,750
------------------- --------- -------------- ------------- ----------
Dr. Radzuan bin
A. Rahman 30,000 4,500 34,500 33,000
------------------- --------- -------------- ------------- ----------
160,000 31,250 191,250 190,000
------------------- --------- -------------- ------------- ----------
Staff cost (Note 6.8
10) 6.1 million million
------------------- --------- -------------- ------------- ----------
Directors' fee
(%) 3.1% 2.8%
------------------- --------- -------------- ------------- ----------
Dividend paid 4.4
(page 5) 4.7 million million
------------------- --------- -------------- ------------- ----------
Directors' fee
(%) 4.1% 4.3%
------------------- --------- -------------- ------------- ----------
Pension Entitlements
The Company does not have a pension scheme in place.
Long-Term Incentive Plans
The Company does not have a long-term incentive plan in
place.
Interest in Share Options
The Company does not have a share option scheme in place.
Excess Retirement Benefits of Directors and Past Directors
The Company does not have a retirement benefit scheme in
place.
Compensation for Past Directors
There was no compensation made to the past Directors in respect
of loss of office and pensions.
PERFORMANCE GRAPH
The Company's performance graphs required to be included in the
Directors' Remuneration Report are shown on page 25.
SHAREHOLDERS
Dialogue between the Company and its Investors
The Group believes in clear communications with its
shareholders. The Annual Report and the quarterly announcements are
the primary methods of communication to report the Group's business
activities and financial performance to all shareholders. All such
reporting information can be obtained from the website of Bursa
Securities or the Group's website www.ikkr.com.my. This complies
with Principle 7.2 of the MCCG 2012. Shareholders also have the
opportunity to put questions at the AGM where the Directors are
available to discuss aspects of the Group's business activities and
performance. The shareholders may also forward their questions to
the Company via e-mail at ir@ikkr.com.my or contact the Principal
Office in Malaysia. This complies with Principle 8.3 of the MCCG
2012.
The Annual General Meeting
The AGM remains the principal forum for dialogue with
shareholders, wherein, the Board presents the operations and
performance of the Group. During the meeting, shareholders are
given every opportunity to enquire and comment on matters relating
to the Group's business. The Chairman, members of the Board and
senior management personnel are available to respond to
shareholders' queries during this meeting. This complies with
Principle 8.1 of the MCCG 2012. On any matter that requires the
members present to decide, as per Principle 8.2 of the MCCG 2012,
the Board will encourage poll voting if it is deemed necessary.
ACCOUNTABILITY AND AUDIT
Financial Reporting
The Board aims to provide and present a balanced and meaningful
assessment of the Group's financial performance and prospects at
the end of every quarter and the financial year, primarily through
the annual financial statements and quarterly announcements of
results to shareholders as well as the Chairman's Statement in the
Annual Report. The Audit Committee assists the Board by reviewing
the disclosure of information to ensure completeness, accuracy and
validity. This complies with Principle 7.1 of the MCCG 2012.
Internal Control and Risk Management System
The Directors acknowledge their responsibility for the Group's
system of internal controls covering not only financial controls
but also operational and compliance controls, as well as risk
management. The internal control system involves each subsidiary
business and is designed to meet the needs of each subsidiary, to
ensure that the risks faced by the business in pursuit of its
objectives are identified and managed at known acceptable levels.
The Group Chief Operating Officer has given his assurance that the
Group's exposure to risk is limited to those mentioned in note
26.3. The Group will be continuously reviewing the adequacy and
integrity of its system of internal control. A full Statement on
Internal Control is included on pages 23 and 24.
The Board also acknowledges the internal audit function as an
integral part of an effective system of corporate governance. In
this regard, the Board has taken steps to outsource the internal
audit function.
Relationship with Auditors
The Board, via the establishment of the Audit Committee,
maintains a formal and transparent relationship with the Company's
auditors. The roles of the Audit Committee in relation to the
auditors are detailed in the Audit Committee Report on page 20.
COMPLIANCE STATEMENT
The Board is satisfied that the Company had in 2016 complied
with the best practices of MCCG 2012.
ADDITIONAL COMPLIANCE INFORMATION
Share Buy-Backs
During the financial year, there were no share buy-backs by the
Company.
Options, Warrants or Convertible Securities
There was no grant or exercise of options, warrants or
convertible securities during the financial year.
American Depository Receipt ("ADR") or Global Depository Receipt
("GDR") Programme
The Company did not sponsor any ADR or GDR programme during the
financial year.
Imposition of Sanctions and/or Penalties
There were no sanctions and/or penalties imposed on the Company
and its subsidiaries, Directors or management by the relevant
regulatory bodies for the financial year under review.
Non-Audit Fees
The non-audit fees paid to the Company's external auditors
amounted to RM2,202 for the financial year under review.
Profit Estimate, Forecast, Projections and Variation in
Results
The Company did not make any release on profit estimates,
forecasts or projections for the financial year.
There was a variation of 10% or more between the audited results
for the financial year ended 31 December 2016 and the unaudited
results previously announced. The loss after tax is now stated at
RM3.741 million as compared to RM3.056 million reported earlier,
mainly due to the revenue, related cost of sale and related
unrealized foreign exchange loss not taken up due to the different
cut off period between subsidiaries.
Profit Guarantee
The Company did not give any profit guarantees during the
financial year.
Material Contracts
There were no material contracts entered into by the Company and
its subsidiaries involving Directors and major shareholders'
interests.
Revaluation Policy on Freehold Land
The Group revalues its freehold lands whenever the market value
of the assets has changed materially from the prior year and/or in
at least every five (5) years.
Employee Share Option Scheme ("ESOS")
There were no ESOS offered during the financial year ended 31
December 2016.
Corporate Social Responsibility ("CSR")
The Group is aware of its responsibility to its shareholders,
human capital, environment and the community. Details of CSR are
disclosed on page 10.
Recurrent Related Party Transactions
There were no transactions with related parties undertaken by
the Group during the period under review except as disclosed in
note 27 to the financial statements.
RESPONSIBILITY STATEMENT FOR PREPARING THE ANNUAL AUDITED
FINANCIAL STATEMENTS
The Board has seen and approved the Annual Report and Audited
Financial Statements for the year ended 31 December 2016 and
collectively and individually accept full responsibility for the
accuracy of the information given and confirm that after making
reasonable enquiries to the best of their knowledge and belief,
there are no other facts, the omission of which would make any
statement or information therein misleading.
This Corporate Governance Statement, including the information
on Directors' Remuneration, is made in accordance with the
resolution of the Board of Directors dated 28 April 2017.
DATUK KAMARUDDIN BIN AWANG
Director
Audit Committee Report
The Directors are pleased to present the Audit Committee Report
of the Company in respect of the financial year ended 31 December
2016.
COMPOSITION
The composition of the Audit Committee and designation of the
Directors are as follows:
Members of the Committee
Datuk Kamaruddin bin Awang
Chairman (Independent Non-Executive Director)
Dato' Haji Muda bin Mohamed
Member (Independent Non-Executive Director)
Dato' Tik bin Mustaffa
Member (Independent Non-Executive Director)
Secretary to the Committee
Lee Thai Thye (LS 0000737)
TERMS OF REFERENCE
The terms of reference of the Audit Committee comprise mainly
the constitution, membership, authority, duties and
responsibilities of the Audit Committee.
1. Constitution
The Board of Directors has established a Committee of the Board
known as the Audit Committee.
2. Membership and Meetings
The Committee is appointed by the Directors and shall at all
times comprise not less than three (3) members of whom all are
Independent Non-Executive Directors. All members of the Audit
Committee shall also be financially literate, and at least one of
the members must fulfil the requirements of Rule 15.09 (c) of the
Main LR. The Chairman of the Committee must be an Independent
Non-Executive Director and shall be appointed by the Committee
members. The Company Secretary shall act as the secretary to the
Committee. There shall be at least four (4) meetings per year.
3. Attendance at Audit Committee Meetings
Attendance at Audit Committee Meetings during 2016 was as
follows:
Name of Directors No. of
Meetings
Attended
------------------------------- -----------
Datuk Kamaruddin bin Awang 4/5
Dato' Haji Muda bin Mohamed 5/5
Dato' Tik bin Mustaffa 5/5
All meetings were held at 22(nd)
Floor Menara Promet (KH), Jalan Sultan
Ismail, 50250 Kuala Lumpur.
4. Authority
The Audit Committee has the authority to investigate any
activity within its terms of reference, and shall obtain the
cooperation of the other Board members, employees and external
auditors, and any other external professional bodies which it
considers necessary.
5. Duties and Responsibilities
The Audit Committee's main duties and responsibilities are as
follows:
a) Reviews the audit plan with the external auditors.
b) Reviews with the external auditors, the adequacy and
effectiveness of the accounting and internal control systems.
c) Acts upon problems and reservations arising from interim and final audits.
d) Reviews the financial statements prior to the Directors'
approval to ensure a fair and full presentation of the financial
affairs of the Company and the Group, and that they comply with
applicable financial reporting standards, as required by Principle
5.1 of the MCCG 2012.
e) Assists in establishing an internal audit function and other
appropriate control procedures, as required by Principle 6.2 of the
MCCG 2012.
f) Reviews internal audit reports and highlights to the Board on
any significant issues.
g) Assists in conducting of management audits or other sensitive matters.
h) Assesses the suitability and independence of the external
auditors, in accordance with Principle 5.2 of the MCCG 2012.
i) Makes recommendations to retain or replace the firm of
external auditors and the agreement of the audit fee for the
ensuing year.
j) To make available at least one (1) member to attend the Head
Office at least once in two (2) weeks.
6. Summary of Activities
The Committee met five (5) times during the year for the
following purposes:
a) Reviewed the Group's quarterly and annual financial
statements before recommending to the Board to approve for
announcement to Bursa Securities, SGX-ST and LSE.
b) Reviewed with the external auditors, Messrs UHY Hacker Young
LLP, the scope of their engagement, fees as well as the accounting
and reporting matters emanating from their examination of the
annual financial statements.
c) Appraised on significant risk, control, regulatory and
financial matters that have come to the attention of the external
auditors in the course of their audit, and counter check to see if
Internal Audit report also indicated these findings.
d) Deliberated on the implications and effects of the relevant
International Financial Reporting Standards which came into effect
during the year.
e) Met with the external consultants on ongoing projects to get
updates on the status and any issues faced by them due to external
parties or management related.
f) Met with the Heads of Business Units to enquire about the
overall business operations.
g) Attended all sub-committee meetings on new business ventures.
7. Internal Audit Function
The Group's internal control systems are reviewed by the
outsourced internal auditor, together with external consultants.
Their principal responsibility is to assist the Audit Committee in
providing independent assessments for the adequacy, efficiency and
effectiveness of the internal control systems to ensure compliance
with the systems and standard operating procedures in the Group.
The Group Internal Audit is independent from the activities or
operations of other operating units.
A summary of the Internal Audit activities during the financial
year under review is as follows:
a) Performed operational audits on business units of the Group
to ascertain the adequacy and integrity of their system of internal
controls and made recommendations for improvement where weaknesses
were found.
b) Conducted follow-up review to determine the adequacy,
effectiveness and timeliness of actions taken by the management on
audit recommendations.
c) The tourism and plantation units are the main business units
being subjected for the internal audit scope as they include some
subjective variables. As for the manufacturing unit, it is audited
yearly under the ISO 9001 audit.
After each audit, the findings and recommendations for
improvement were communicated to the respective management for
their response and corrective actions. Any findings would be looked
into and responded accordingly to avoid any financial impact. All
reports would also be checked later against the external audit
progress report. In this respect, the Internal Audit has added
value by improving the control processes within the Group.
The total costs incurred for the Internal Audit in discharging
its functions and responsibilities in 2016 amounted to RM50,202
compared to RM36,673 in 2015.
Statement on Internal Control
The Board is pleased to make the following disclosures pursuant
to Paragraph 15.26(b) of the Main LR of Bursa Securities, which
requires the Board of Directors of public listed companies to
include in its annual report "A statement about the state of
internal control of the listed issuer as a group". The Board
confirms that there is an ongoing process of identifying,
evaluating and managing the significant risks faced by the Group,
and that the process will be regularly reviewed by the Board and
accords with 'The Statement on Internal Control - Guidance For
Directors of Public Listed Companies'.
BOARD'S RESPONSIBILITY
In accordance with Principle 6 of the MCCG 2012, the Board is
committed to maintaining a sound system of internal control to
safeguard shareholders' investments and the Group's assets.
Accordingly, the Board acknowledges its responsibility for the
Group's overall system of internal control which includes the
establishment of an appropriate control environment and framework
as well as reviewing its adequacy and integrity. However, it should
be noted that due to the limitations that are inherent in any
system of internal control, such a system is designed to manage
rather than eliminate the risk of failure to achieve the Group's
business objectives. Accordingly, it can only provide reasonable
and not absolute assurance against material misstatement or
loss.
REVIEW PROCESS FOR INTERNAL CONTROL SYSTEM
In view of the size and nature of the Group's operations, the
Group has an in-house function for the review of its internal
control system, which forms part of the internal audit function.
Currently the functions are focused on the most active
subsidiaries. An external consultant has also been contracted to
conduct certain system checks on the operational activities at
Perhentian Island Resort Sdn Bhd and for the new property
division.
The reports are presented to the Audit Committee. Being an
independent function, the reports must be presented with
impartiality, proficiency and due professional care.
The internal audit function facilitates the Board, through the
Audit Committee, in carrying out its responsibility to review and
evaluate the adequacy and integrity of the Group's internal control
system. The Board reviews matters pertaining to internal control
which among others, includes the adequacy and integrity of the
internal control systems of the Group. Reviews are carried out
annually to provide independent assessments on the adequacy,
efficiency and effectiveness of the Group's internal control
systems in anticipating potential risk exposures over key business
systems and processes and in controlling the proper conduct of
businesses within the Group.
The internal audit function adopts a risk-based approach whereby
the strategies and plans are prepared based on the risk profile of
the Group. The plans will be presented to the Audit Committee for
approval annually. The resulting reports will be reviewed by the
Audit Committee and forwarded to the management for attention and
necessary corrective actions. The management is responsible for
ensuring any corrective actions on reported weaknesses are taken
within the required time frame.
OTHER CONTROL PROCEDURES
Apart from internal audit, there is an organisational structure
with formally defined lines of responsibility and delegation of
authority. This will provide a process of hierarchical reporting
for an auditable trail of accountability.
The monitoring and management of the Group is delegated to the
Exco Committee comprising of a few Board members and senior
operational management. The committee, through their involvement in
the business operations and attendance at senior management level
meetings, manages and monitors the Group's financial performance,
key performance indicators, operational effectiveness and
efficiency, discusses and resolves significant business issues and
ensures compliance with applicable laws, regulations, rules,
directives and guidelines. These meetings serve as a two-way
platform for the Board to communicate and address significant
matters in relation to the Group's business and financial affairs
and provide updates on significant changes in the businesses and
the external environment that may result in any significant risks
to the Group.
Internal control procedures are set out in standard operating
practice and business process manuals and internal memos to serve
as internal control guidance for proper measures to be undertaken
and are subject to regular review, enhancement and improvement by
the Internal Auditor.
REVIEW OF THIS STATEMENT
Pursuant to Paragraph 15.23 of the Main LR, the external
auditors have reviewed this Statement and the Risk Management
Statement for inclusion in the 2015 Annual Report, and reported to
the Board that nothing has come to their attention that causes them
to believe that the Statements are inconsistent with their
understanding of the process adopted by the Board in reviewing the
adequacy and integrity of the system of internal control.
This Statement on Internal Control is made in accordance with
the resolution of the Board of Directors dated 28 April 2017.
DATUK KAMARUDDIN BIN AWANG
Director
Group Financial Highlights
2016 2015 2014 2013 2012 2011 2010 2009 2008 2007
------------------------ --------- --------- ---------- --------- --------- --------- --------- --------- ---------
Financial Performance
Revenue RM'000 10,834 10,289 23,639 14,073 16,408 20,173 28,165 17,582 17,550 19,736
(Loss)/Profit
Before
Taxation RM'000 (3,389) (1,898) (6,988) (28,189) 4,757 (3,973) (4,223) 1,483 (1,459) 874
(Loss)/Profit
for the
Year RM'000 (3,741) (1,941) (7,127) (28,497) 4,430 (4,164) (4,918) 982 (1,540) 697
(Loss)/Earnings
Per Share Sen (0.93) (0.48) (1.77) (7.05) 1.06 (0.99) (1.17) 0.23 (0.37) 0.17
Dividend
Per Share
(proposed/paid) Sen 1.116 1.118 1.090 1.099 1.455 - - - - -
Total Assets RM'000 725,474 719,934 706,621 718,832 742,308 726,207 701,696 516,412 513,774 571,152
Share Capital Shares'000 420,750 420,750 420,750 420,750 420,750 420,750 420,750 420,750 420,750 420,750
Treasury
Shares Shares'000 17,541 17,541 17,541 17,541 3,265 - - - - -
Shareholders'
Equity RM'000 636,441 638,309 630,951 713,807 737,855 719,023 653,182 486,826 486,017 540,263
Total
Liabilities RM'000 89,033 81,625 75,670 5,025 4,453 7,184 48,514 29,586 27,757 30,889
Borrowings RM'000 - - - - 24 94 15,455 22,727 20,030 23,840
Current
Ratios Times 17.30 41.66 64.15 44.65 55.90 36.77 8.24 3.36 0.60 0.54
Quick Ratios Times 17.21 41.38 63.26 41.06 51.51 34.75 8.15 3.11 0.60 0.54
Debt-Equity
Ratios Times 0.00 0.00 0.00 0.00 0.00 0.00 0.02 0.05 0.04 0.04
Net Assets
Per Share RM 1.58 1.58 1.56 1.78 1.77 1.71 1.55 1.16 1.15 1.28
--------- --------- --------- ---------- --------- --------- --------- --------- --------- ---------
All figures are in RM thousands unless otherwise stated.
SHARE PRICE PERFORMANCE GRAPH
The graph below shows the movement of the Company's share price
on Bursa Securities against the corresponding change in the Kuala
Lumpur Composite Index ("KLCI") and the Group's Net Tangible Assets
per share ("NTA per share"). The KLCI was selected as it represents
a broad equity market index in which the Company is a constituent
member.
http://www.rns-pdf.londonstockexchange.com/rns/7889D_1-2017-4-29.pdf
DIRECTORS' REPORT
FOR THE YEARED 31 DECEMBER 2016
_______________________________________________________________________________________________
The Directors have pleasure in presenting their report, together
with the audited financial statements of Inch Kenneth Kajang Rubber
Public Limited Company ("the Company" or "the Parent") and its
subsidiaries (together "the Group") for the financial year ended 31
December 2016.
Principal activities
The Company was incorporated in Scotland with company number
SC007574, as a public company limited by shares.
The Company is involved in investment holding and carries on the
business of an oil palm grower in Selangor, Malaysia.
The subsidiary undertakings are engaged in the operations of a
block rubber manufacturer, tourist resort, retailing building
supplies, property development and leasing of properties in
Malaysia.
A more detailed review of the Group's operations is set out in
the Chairman's Statement.
Group structure
The Group operates through its Parent and subsidiary companies,
details of which are set out in note 15 to these financial
statements.
Results and dividends
The Group's results for the year are set out on page 34. The
Group's loss attributable to shareholders of the Company for the
financial year ended 31 December 2016 amounted to RM3.741 million
(2015: loss of RM1.941 million).
On 28 April 2016, the Directors approved and declared a 2%
interim dividend for the financial year ended 31 December 2015. The
total amount of RM4.685 million was paid on 30 May 2016. The
interim dividend was under the single tier system of 1.116 sen per
share, on 403,209,200 ordinary shares. A dividend of 2% is proposed
for the financial year ended 31 December 2016.
In the opinion of the Directors, the results of the operations
of the Group and of the Company during the financial year were not
substantially affected by any item, transaction or event of a
material and unusual nature.
The Board plays an active role in the development of the
Company's strategy. It has in place a strategy planning process,
whereby the management presents to the Board its recommended
strategy annually, together with its proposed business and
regulatory plans for the ensuing year at a dedicated session, for
the Board's review and approval. At this session, the Board
deliberates both the management's and its own perspectives, and
challenges the management's views and assumptions, to ensure the
best outcome. In conjunction with this, the Board also reviews and
approves the annual budget for the ensuing year, and sets the Key
Performance Indicators (KPIs) under the Corporate Balanced
Scorecard (CBS), ensuring that the targets correspond to the
Company's strategy and business plan, reflect competitive industry
trends and internal capabilities as well as provide sufficient
stretch for the management.
DIRECTORS' REPORT
FOR THE YEARED 31 DECEMBER 2016
_______________________________________________________________________________________________
The following table indicates the areas that may be looked at
for improvement:
Department Areas
------------------- ---------------------------------------
Finance Return on Investment
Cash Flow
Return on Capital Employed
Financial Results (Quarterly/Yearly)
------------------- ---------------------------------------
Internal Business Number of activities per
Processes function
Duplicate activities across
functions
Process alignment (is the
right process in the right
department)
Process bottlenecks
Process automation
------------------- ---------------------------------------
Learning & Growth Is there the correct level
of expertise for the job
Employee turnover
Job satisfaction
Training/Learning opportunities
------------------- ---------------------------------------
Customer Delivery performance to
customer
Quality performance for
customer
Customer satisfaction rate
Customer percentage of market
Customer retention rate
------------------- ---------------------------------------
Post balance sheet events
No other events have occurred since the reporting period end
which significantly affects the Company or the Group.
Directors
The Directors of the Company who held office during the year and
at the date of this report are:
Dato' Adnan bin Maaruf
Datuk Kamaruddin bin Awang
Dato' Haji Muda bin Mohamed
Dato' Tik bin Mustaffa
Dr. Radzuan bin A. Rahman
Directors' interests
Neither at the end of the financial year ended 31 December 2016,
nor at any time during that year, was there any arrangement to
which the Company was a party, whereby the Directors could acquire
benefits by means of the acquisition of shares in or debentures of,
the Company or Group undertakings.
Since the end of the previous financial year, no Director has
received or become entitled to receive any benefits (other than
benefits included in the aggregate amount of emoluments received by
the Directors as shown in the financial statements) by reason of a
contract made by the Company or Group undertakings with any
Director or with a firm of which he is a member, or with a company
in which he has a substantial financial interest.
None of the Directors who held office during the financial year
and to the date of this report, together with their immediate
families, had any interests in the shares of the Company or Group
undertakings.
Substantial shareholders
The Company has been notified, in accordance with Rule 5 of the
United Kingdom's FCA's Disclosure and Transparency Rules, of the
following interests in its ordinary shares as at 10 April 2017 by
shareholders holding 3% or more of the share capital:
Number of % of
shares of Issued
Name 10p each Capital
---------------------------------------- ------------- ---------
Concrete Engineering Products Berhad 58,088,000 14.41
Ng Ah Chai 50,283,200 12.47
Hamptons Property Sdn Bhd 49,327,700 12.23
FA Securities Sdn Bhd 28,972,500 7.19
Euston Technologies Sdn Bhd 22,662,066 5.62
No other person has notified an interest in the ordinary shares
of the Company required to be disclosed to the Company in
accordance with the United Kingdom's Companies Act 2006 ("UK
Companies Act 2006").
No shareholders have any special rights or restrictions on
voting rights attached to their shares.
Creditor payment policy and practice
It is the Group's policy that payments to suppliers are made in
accordance with those terms and conditions agreed between the Group
and its suppliers, provided that all trading terms and conditions
have been complied with.
At 31 December 2016, the Group had an average of 17 days (2015:
15 days) purchase outstanding in trade payables.
Health and Safety
All aspects of health and safety at the Group's plantations are
handled by our agent, Akem Links Sdn Bhd, and reviewed by the
Board. The Company also places a high level of importance on health
and safety aspects at its principal trading subsidiaries,
Perhentian Island Resort Sdn Bhd, Motel Desa Sdn Bhd and Supara
Company Limited. Any health and safety issues at these subsidiaries
may be detrimental to its image and hence may affect revenues
achieved.
Employees
The number of staff employed by the Group at the year end was
172 (2015: 180). At the resort, factory and estates, we provide
employees with full quarters and required facilities, to provide a
conductive environment, both for work and entertainment.
Political and charitable donations
There were no political or charitable donations made by the
Group during the year ended 31 December 2016 except for community
support by the subsidiary, Perhentian Island Resort Sdn Bhd, to the
village committee, as and when the need arose.
Environment
The Group's business is situated within areas that are subject
to environmental conditions imposed by the local government
authorities. All conditions have been fulfilled throughout the
year. There have been no issues raised by the authorities
pertaining to the day to day operation in relation to these
conditions.
Financial instruments
Details of the Group financial instruments and risks management
are disclosed in note 26.
Information to shareholders
The Group has its own website (http://www.ikkr.com.my) for the
purposes of improving information flow to shareholders and
potential investors.
Going concern
After making appropriate enquiries and examining those areas
which could give rise to financial exposure, the Directors are
satisfied that no material or significant exposures exist and that
the Group has adequate resources to continue its operations for the
foreseeable future. For this reason, and as further discussed in
note 2.1, the Directors continue to adopt the going concern basis
in preparing the Company's and Group's financial statements.
Auditors
In accordance with Section 489 of the UK's Companies Act 2006, a
resolution proposing that UHY Hacker Young be re-appointed as
auditors of the Company and that the Directors be authorised to fix
their remuneration will be put to the next AGM.
On behalf of the Board
DATO' ADNAN BIN MAARUF
Director
DATUK KAMARUDDIN BIN AWANG
Director
Kuala Lumpur, Malaysia
28 April 2017
STATEMENT OF RESPONSIBILITIES OF THOSE CHARGED WITH
GOVERNANCE
FOR THE YEARED 31 DECEMBER 2016
_______________________________________________________________________________________________
The Directors are responsible for preparing the Annual Report
and the financial statements in accordance with applicable United
Kingdom company law and International Financial Reporting Standards
as adopted by the European Union ("IFRS").
The Directors are required to prepare financial statements for
each financial year which give a true and fair view of the state of
affairs of the Group and of the Company and of the profit or loss
and cash flows of the Group and of the Company for that period. In
preparing those financial statements, the Directors are required
to:
-- select suitable accounting policies and then apply them consistently;
-- make judgments and estimates that are reasonable and prudent;
-- present information, including accounting policies, in a
manner that provides relevant, reliable, comparable and
understandable information;
-- prepare the financial statements on a going concern basis
unless it is inappropriate to presume that the Group will continue
in business;
-- provide additional disclosures when compliance with the
specific requirements in IFRS is insufficient to enable users to
understand the impact of particular transactions, other events and
conditions on the entity's financial position and financial
performance; and
-- state that the Group and the Company has complied with IFRS,
subject to any material departures disclosed and explained in the
financial statements.
The Directors confirm that the financial statements comply with
the above requirements.
The Directors are responsible for keeping proper accounting
records which disclose with reasonable accuracy at any time the
financial position of the Group and of the Company and to enable
them to ensure that the financial statements comply with the UK's
Companies Act 2006 and Article 4 of the International Accounting
Standards (IAS) Regulation. The Directors are also responsible for
safeguarding the assets of the Group and of the Company and hence
for taking reasonable steps for the prevention and detection of
fraud and other irregularities.
The Directors are responsible for the maintenance and integrity
of the corporate and financial information included on the Group's
website. Legislation in the United Kingdom governing the
preparation and dissemination of financial statements may differ
from legislation in other jurisdictions.
Statement of disclosure to auditors
The Directors who were members of the Board at the time of
approving this report are listed on page 1. Having made enquiries
of fellow Directors and of the Company's auditors, each of these
Directors confirms that:
- to the best of each Director's knowledge and belief, there is
no relevant audit information of which the Company's auditors are
unaware; and
- each Director has taken all the steps a Director might
reasonably be expected to have taken to make themselves aware of
any relevant audit information and to establish that the auditors
are aware of that information.
The United Kingdom Corporate Governance Statement
The Financial Conduct Authority in the United Kingdom ("the
FCA") requires the Company to comply with the FCA's Listing Rules
14.3.24 and 18.4.3(2) and Disclosure and Transparency Rule 7.2. The
Annual Report contains in the Statements of Corporate Governance
and Internal Control the information required by these rules.
Disclosures in respect of the Malaysian Code on Corporate
Governance 2012
As required by the Main LR of Bursa Securities, the Annual
Report contains a Corporate Governance Statement pursuant to the
MCCG 2012.
STATUTORY DECLARATION
PURSUANT TO SECTION 251 (1) (b) OF THE MALAYSIAN COMPANIES ACT,
2016
_______________________________________________________________________________________________
I, HUSSAIN AHMAD BIN ABDUL KADER, being the officer primarily
responsible for the financial management of Inch Kenneth Kajang
Rubber Public Limited Company, do solemnly and sincerely declare
that the accompanying financial statements set out on pages 34 to
73 are in my opinion correct and make this solemn declaration
conscientiously believing the same to be true and by virtue of the
provisions of the Statutory Declarations Act, 1960.
Subscribed and solemnly declared by the above named
HUSSAIN AHMAD BIN ABDUL KADER
at Kuala Lumpur in the Federal Territory
on 28 April 2017
Before me
KAPT. (B) JASNI BIN YUSOFF (W465)
Commissioner for Oaths
Kuala Lumpur, Malaysia
28 April 2017
INDEPENT AUDITORS' REPORT
TO THE SHAREHOLDERS OF INCH KENNETH KAJANG RUBBER PUBLIC LIMITED
COMPANY
FOR THE YEARED 31 DECEMBER 2016
We have audited the financial statements of Inch Kenneth Kajang
Rubber Public Limited Company for the year ended 31 December 2016
which comprise of the Group and Company Statement of Profit or
Loss, Group and Company Statement of Profit or Loss and Other
Comprehensive Income, Group and Company Statement of Financial
Position, Group and Company Statement of Changes in Equity, Group
and Company Statement of Cash Flows and the related notes. The
financial reporting framework that has been applied in their
preparation is applicable law and International Financial Reporting
Standards (IFRS) as adopted by the European Union.
This report is made solely to the Company's members, as a body,
in accordance with Chapter 3 of Part 16 of the UK Companies Act
2006. Our audit work has been undertaken so that we might state to
the Company's members those matters we are required to state to
them in an auditors' report and for no other purpose. To the
fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the company and the company's
members as a body, for our audit work, for this report, or for the
opinions we have formed.
Respective responsibilities of Directors and Auditors
As explained more fully in the Statement of Responsibilities of
those Charged with Governance set out on page 30, the Directors are
responsible for the preparation of the financial statements and for
being satisfied that they give a true and fair view.
Our responsibility is to audit the financial statements in
accordance with applicable law and International Standards on
Auditing (UK and Ireland). Those standards require us to comply
with the Auditing Practices Board's (APB's) Ethical Standards for
Auditors.
Scope of the audit of the financial statements
A description of the scope of an audit of financial statements
is provided on the APB's website at
www.frc.org.uk/apb/scope/private.cfm.
Opinion on financial statements
In our opinion:
-- the financial statements give a true and fair view of the
state of the Group's and of the Parent Company's affairs as at 31
December 2016 and of the Group's and the Parent Company's loss for
the year then ended;
-- the financial statements have been properly prepared in
accordance with IFRSs as adopted by the European Union; and
-- the financial statements have been prepared in accordance
with the requirements of the UK Companies Act 2006; and, as regards
the Group financial statements, Article 4 of the IAS
Regulation.
Opinion on other matters prescribed by the UK Companies Act
2006
In our opinion:
-- the part of the Directors' Remuneration Report included
within the Corporate Governance Statement relating to Directors'
remuneration to be audited has been properly prepared in accordance
with the UK Companies Act 2006;
-- the information given in the Directors' Report and the
Strategic Report for the financial year for which the financial
statements are prepared is consistent with the financial
statements; and
-- the information given in the Corporate Governance Statement
set out on pages 12 to 19 with respect to internal control and risk
management systems in relation to financial reporting processes and
the information about share capital structures in the Directors'
Report is consistent with the financial statements.
INDEPENT AUDITORS' REPORT
TO THE SHAREHOLDERS OF INCH KENNETH KAJANG RUBBER PUBLIC LIMITED
COMPANY
FOR THE YEARED 31 DECEMBER 2016
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters
where the UK Companies Act 2006 requires us to report to you if, in
our opinion:
-- adequate accounting records have not been kept by the Parent
Company, or returns adequate for our audit have not been received
from branches not visited by us; or
-- the Parent Company's financial statements and the part of the
Directors' Remuneration Report included within the Corporate
Governance Statement relating to Directors' remuneration to be
audited are not in agreement with the accounting records and
returns; or
-- certain disclosures of Directors' remuneration specified by law are not made; or
-- we have not received all the information and explanations we require for our audit.
Julie Zhuge Wilson (Partner)
Senior Statutory Auditor
for and on behalf of UHY Hacker Young
Chartered Accountants and Statutory Auditors
Quadrant House
4 Thomas More Square
London E1W 1YW
28 April 2017
The maintenance and integrity of the Inch Kenneth Kajang Rubber
Public Limited Company website is the responsibility of the
Directors. The work carried out by the auditors does not involve
consideration of these matters and, accordingly, the auditors
accept no responsibility for any changes that may have occurred to
the financial statements since they were initially presented on the
website; and legislation governing the preparation and
dissemination of financial statements may differ from one
jurisdiction to another.
GROUP AND COMPANY STATEMENT OF PROFIT OR LOSS
FOR THE YEARED 31 DECEMBER 2016
________________________________________________________________________________________________
GROUP COMPANY
Notes 2016 2015 2016 2015
RM'000 RM'000 RM'000 RM'000
Revenue 4 10,834 10,289 266 376
Cost of sales (3,829) (4,968) (255) (305)
---------- ---------- --------- ---------
Gross profit 7,005 5,321 11 71
Other income 5 1,410 618 670 699
Administrative expenses (16,009) (16,801) (8,799) (8,215)
Selling and marketing
expenses (383) (330) - -
Operating loss 6 (7,977) (11,192) (8,118) (7,445)
Finance income 7 4,761 4,554 4,676 4,462
Other gains and
losses 5 68 142 36 80
Share of results
of associate 16 (170) 4,598 - -
Impairment of goodwill 18 (71) - - -
Loss before taxation (3,389) (1,898) (3,406) (2,903)
Taxation 8 (352) (43) - -
Loss for the year (3,741) (1,941) (3,406) (2,903)
========== ========== ========= =========
Attributable to:
Equity holders
of the Company (3,741) (1,941) (3,406) (2,903)
========== ========== ========= =========
Loss per share (Sen): 9
Basic (0.93) (0.48)
Diluted (0.93) (0.48)
Net dividend per
share (Sen) 1.116 1.118
========== ==========
The results for 2016 and 2015 entirely relate to continuing
operations.
GROUP AND COMPANY STATEMENT OF PROFIT OR LOSS
AND OTHER COMPREHENSIVE INCOME
FOR THE YEARED 31 DECEMBER 2016
________________________________________________________________________________________________
GROUP COMPANY
2016 2015 2016 2015
RM'000 RM'000 RM'000 RM'000
Loss for the year (3,741) (1,941) (3,406) (2,903)
========= ========= ========== =========
Other comprehensive income:
Items that will not be reclassified
subsequently
to profit or loss
Revaluation of properties, net of tax 5,700 12,557 - 3,750
Items that may be reclassified subsequently
to profit or loss
Revaluation of available-for-sale investments
and short term investments 712 214 844 (37)
Reclassification adjustments on short
term
investments (9) (189) (28) -
Exchange differences on translating
foreign operations (161) 1,113 - -
--------- --------- ---------- ---------
Other comprehensive income, net of tax 6,242 13,695 816 3,713
--------- --------- ---------- ---------
Total comprehensive income/(loss) for
the year 2,501 11,754 (2,590) 810
========= ========= ========== =========
GROUP AND COMPANY STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2016
GROUP COMPANY
Notes 2016 2015 2016 2015
RM'000 RM'000 RM'000 RM'000
ASSETS
Non-current assets
Property, plant
and equipment 12 502,728 462,381 122,951 119,774
Investment property 13 69 71 - -
Intangible assets 14 121 35 29 32
Investments in
subsidiaries 15 - - 241,570 237,075
Investment in associate 16 24,570 24,740 18,146 18,146
Available-for-sale
investments 17 66 84 12 13
Goodwill 18 - 71 - -
---------- ---------- ---------- ----------
527,554 487,382 382,708 375,040
---------- ---------- ---------- ----------
Current assets
Inventories 19 1,036 1,555 - -
Trade and other
receivables 20 75,879 93,820 1,850 1,299
Short term investments 21 93,875 110,422 91,819 107,940
Cash and cash equivalents 22 27,130 26,755 25,182 24,275
---------- ---------- ---------- ----------
197,920 232,552 118,851 133,514
---------- ---------- ---------- ----------
TOTAL ASSETS 725,474 719,934 501,559 508,554
========== ========== ========== ==========
EQUITY AND LIABILITIES
Equity attributable to shareholders
of the Company
Share capital 23 287,343 287,343 287,343 287,343
Share premium 8 8 8 8
Property revaluation
reserve 234,034 228,085 68,700 68,700
Investment revaluation
reserve 15,992 15,222 400 (417)
Foreign currency
translation reserve (351) (190) - -
Retained earnings 115,395 123,821 136,657 144,747
---------- ---------- ---------- ----------
652,421 654,289 493,108 500,381
Less : Treasury
shares 24 (15,980) (15,980) (15,980) (15,980)
---------- ---------- ---------- ----------
Total Equity 636,441 638,309 477,128 484,401
---------- ---------- ---------- ----------
Current liabilities
Trade and other
payables 25 11,365 5,507 1,516 1,238
Taxation payable 75 75 - -
---------- ---------- ---------- ----------
11,440 5,582 1,516 1,238
---------- ---------- ---------- ----------
Non-current liabilities
Employee entitlements 25 15 15 15 15
Deferred tax liabilities 8 77,578 76,028 22,900 22,900
77,593 76,043 22,915 22,915
---------- ---------- ---------- ----------
Total Liabilities 89,033 81,625 24,431 24,153
---------- ---------- ---------- ----------
TOTAL EQUITY AND
LIABILITIES 725,474 719,934 501,559 508,554
========== ========== ========== ==========
The financial statements of Inch Kenneth Kajang Rubber Public
Limited Company [registered numbers: SC007574 (Scotland) and
990261M (Malaysia)] were approved by the Board of Directors on 28
April 2017 and signed on its behalf by:
DATO ADNAN BIN MAARUF DATUK KAMARUDDIN BIN AWANG
Director Director
GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE YEARED 31 DECEMBER 2016
_________________________________________________________________________________________________
Share Share Property Investment Foreign Retained Treasury Total
Capital Premium Revaluation Revaluation Currency Earnings Shares Equity
Reserve Reserve Translation
RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000
Year ended
31 December
2016
At 1 January
2016 287,343 8 228,085 15,222 (190) 123,821 (15,980) 638,309
Total
comprehensive
income for
year - - 5,949 770 (161) (3,741) - 2,817
Dividends
paid - - - - - (4,685) - (4,685)
At 31 December
2016 287,343 8 234,034 15,992 (351) 115,395 (15,980) 636,441
========= ========= ============= ============= ============= =========== ============ ==========
Year ended
31 December
2015
At 1 January
2015 287,343 8 215,528 15,197 (1,303) 130,158 (15,980) 630,951
Total
comprehensive
loss for
year - - 12,557 25 1,113 (1,941) - 11,754
Dividends
paid - - - - - (4,396) - (4,396)
At 31 December
2015 287,343 8 228,085 15,222 (190) 123,821 (15,980) 638,309
========= ========= ============= ============= ============= =========== ============ ==========
GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE YEARED 31 DECEMBER 2016
_________________________________________________________________________________________________
Share capital represents the nominal value of ordinary shares
issued to shareholders of the company. The amount of share capital
a company reports on its statement of financial position only
accounts for the initial amount for which the original shareholders
purchased the shares from the issuing company. Any price
differences arising from price appreciation/depreciation as a
result of transactions in the secondary market are not
included.
Share premium is a contribution made by a shareholder when
shares are issued and paid-in above the par value of such
shares.
Property revaluation reserve is the capital reserve where
changes in the value of the properties are recognised when they are
revalued.
Investment revaluation reserve is the change in the value of
investments recognised when they are revalued.
Foreign currency translation reserve represents the exchange
differences resulting from the retranslation of net investments in
subsidiary undertakings.
Retained earnings are net earnings not paid out as dividends,
but retained by the company to be reinvested in its core
business.
Treasury shares are those issued but re-purchased by the
company. They are considered as issued but not outstanding and are
not therefore included when calculating earnings per share and are
not entitled to receive dividends. Treasury shares are treated as a
reduction from equity.
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEARED 31 DECEMBER 2016
_________________________________________________________________________________________________
Share Share Property Investment Retained Treasury Total
Capital Premium Revaluation Revaluation Earnings Shares Equity
Reserve Reserve
RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000
Year ended
31 December
2016
At 1 January
2016 287,343 8 68,700 (417) 144,747 (15,980) 484,401
Total comprehensive
income for
year - - - 817 (3,405) - (2,588)
Dividends
paid - - - - (4,685) - (4,685)
At 31 December
2016 287,343 8 68,700 400 136,657 (15,980) 477,128
========= ========= ============= ============= ========== =========== =========
Year ended
31 December
2015
At 1 January
2015 287,343 8 64,950 (380) 152,046 (15,980) 487,987
Total comprehensive
loss for
year - - 3,750 (37) (2,903) - 810
Dividends
paid - - - - (4,396) - (4,396)
At 31 December
2015 287,343 8 68,700 (417) 144,747 (15,980) 484,401
========= ========= ============= ============= ========== =========== =========
GROUP AND COMPANY STATEMENT OF CASH FLOWS
FOR THE YEARED 31 DECEMBER 2016
____________________________________________________________________________________________
GROUP COMPANY
2016 2015 2016 2015
RM'000 RM'000 RM'000 RM'000
Cash flows from operating
activities
Operating loss (7,977) (11,192) (8,118) (7,445)
Adjustments for items not
requiring an outflow of
funds:
Provision for diminution - 81 - -
in value of stocks
Depreciation and amortisation 1,517 1,777 45 30
---------- ---------- --------- -----------
Operating loss before changes
in working capital (6,460) (9,334) (8,073) (7,415)
Changes in working capital:
Decrease/(increase) in
inventories 519 1,774 - -
(Increase)/decrease in
trade and other receivables 17,941 (19,075) (551) (151)
Increase/(decrease) in
trade and other payables 5,858 1,997 278 256
Taxation refunded - - - -
Taxation paid (270) (270) - -
---------- ---------- --------- -----------
Net cash used in operating
activities 17,588 (24,908) (8,346) (7,310)
---------- ---------- --------- -----------
Investing activities
Proceeds from disposal - 58 - -
of property, plant and
equipment
Proceeds from disposal
of investments 22,725 36,450 20,725 34,350
Interest and dividends
received 4,761 4,554 4,676 4,462
Loans granted to subsidiaries - - (4,495) (5,959)
Payments to acquire investments (6,000) (23,064) (3,749) (22,977)
Payments to acquire intangible
assets (55) (31) (9) (28)
Payments to acquire property,
plant and equipment (33,959) (5,646) (3,210) (3,710)
---------- ---------
Net cash generated from
investing activities (12,528) 12,321 13,938 6,138
---------- ---------- --------- -----------
Financing activities
Dividends paid (4,685) (4,396) (4,685) (4,396)
Net cash used in financing
activities (4,685) (4,396) (4,685) (4,396)
---------- ---------- --------- -----------
(Decrease)/increase in
cash and cash equivalents 375 (16,983) 907 (5,568)
Cash and cash equivalents
at 1 January 26,755 43,738 24,275 29,843
---------- ---------- --------- -----------
Cash and cash equivalents
at 31 December 27,130 26,755 25,182 24,275
========== ========== ========= ===========
Cash and cash equivalents
comprise of:
Short term deposits 23,407 23,926 23,362 23,716
Cash and bank balances 3,723 2,829 1,820 559
27,130 26,755 25,182 24,275
========== ========== ========= ===========
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARED 31 DECEMBER 2016
______________________________________________________________________________________________
1. Corporate information
The consolidated financial statements of Inch Kenneth Kajang
Rubber Public Limited Company ("the Company") and its subsidiaries
(together "the Group") for the year ended 31 December 2015 were
authorised for issue by the Directors on 25 April 2017. Inch
Kenneth Kajang Rubber Public Limited Company is a public limited
company incorporated in Scotland. Its shares are publicly traded on
Bursa Securities, SGX-ST and LSE. The principal activities of the
Group are oil palm plantation owners, tourism resort operators,
manufacturers of constant viscosity (CV) block rubber and property
development. Further information on the Company's subsidiaries is
in note 15.
2. Accounting policies
The principal accounting policies applied in the preparation of
these financial statements are set out below. These policies have
been consistently applied to all the years presented, unless
otherwise stated below.
2.1 Basis of preparation and going concern
The Group's financial statements are prepared on a going concern
basis and in accordance with International Financial Reporting
Standards, as adopted by the European Union ("IFRS") and in
accordance with those parts of the UK's Companies Act 2006
applicable to companies preparing their accounts in accordance with
IFRS.
The Company's financial statements have also been prepared in
accordance with IFRS and the UK Companies Act 2006.
The financial statements of the Group and Company are prepared
on an historical cost basis as modified by the revaluation of
freehold lands and available-for-sale investments.
The Group's financial statements are presented in Ringgit
Malaysia and all values are rounded to the nearest thousand
(RM'000) except when otherwise indicated. The exchange rate of
Ringgit Malaysia to Pounds Sterling at 31 December 2015 was GBP1:
RM5.5108 (RM1: GBP0.1815) and 31 December 2015 was GBP1: RM6.3607
(RM1: GBP0.1572).
Going concern
During the year ended 31 December 2016 the Group made a loss of
RM3.741 million (2015: loss of RM1.941 million) and at the year end
date the Group had net current assets of RM186.48 million (2015:
RM226.97 million) and net assets of RM636.44 million (2015:
RM638.31 million). The operations of the Group are currently being
financed by funds raised from the Group's operations and proceeds
from disposal of land in year 2011. The Group has adequate
resources to continue its operations for the foreseeable future as
there are assets available that could be converted to cash or cash
equivalents, should the need arise. The financial statements have,
therefore, been prepared on the going concern basis.
2.2 New IFRS Standards and Interpretations
The Group has adopted all relevant standards effective for
accounting periods beginning on or after 1 January 2016 from the
beginning of the reporting period.
As at end of the reporting period, the Group has not adopted the
following standards as it is either not effective or not applicable
to the Group's business.
Standards, amendments and interpretations
The Group has adopted all relevant standards effective for
accounting periods beginning on or after 1 January 2016 from the
beginning of the reporting period.
As at end of the reporting period, the Group has not adopted the
following standards as it is either not effective or not applicable
to the Group's business.
Standards, amendments and interpretations (not yet endorsed by
EU at 6 April 2017)
- IFRS 9 Financial Instruments (July 2014) - EU effective date 1 January 2018;
- IFRS 15 Revenue from Contracts with Customers (May 2014)
including amendments to IFRS 15 - EU effective date 1 January
2018;
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARED 31 DECEMBER 2016
______________________________________________________________________________________________
2.2 New IFRS Standards and Interpretations (continued)
Standards, amendments and interpretations (not yet endorsed by
EU at 6 April 2017) (continued)
- IFRS 14 Regulatory Deferral Accounts (January 2014);
- IFRS 16 Leases (January 2016);
- Amendments to IFRS 10 and IAS 28: Sale or Contribution of
Assets between an Investor and its Associate or Joint Venture
(September 2014);
- Amendments to IAS 12: Recognition of Deferred Tax assets for
Unrealised Losses (January 2016);
- Amendments to IAS 7: Disclosure Initiative (January 2016);
- Classifications to IFRS 15: Revenue from Contracts with Customers (April 2016);
- Amendments to IFRS 2: Classification and Measurement of
Share-based Payment Transactions (June 2016);
- Amendments to IFRS 4: Applying IFRS 9 Financial Instruments
with IFRS 4 Insurance Contracts (September 2016);
- Annual Improvements to IFRS Standards 2014-2016 Cycle (December 2016);
- IFRIC Interpretation 22 Foreign Currency Transactions and
Advance Consideration (December 2016);
- Amendments to IAS 40: Transfers of Investment Property (December 2016).
Except for those in issue but not yet adopted above that the
Directors anticipate will have material effect on the reported
income or net assets of the Group.
2.3 Basis of consolidation and goodwill
The Group financial statements incorporate the financial
statements of the Company and entities controlled by the Company
and its subsidiaries. Control is achieved where the Company: has
power over the investee; is exposed, or has rights, to variable
returns from its involvement with the investee; and has the ability
to use its power to affect its return.
The Company reassesses whether or not it controls an investee if
facts and circumstances indicate that there are changes to one or
more of the three elements of control listed above.
Consolidation of a subsidiary begins when the Company obtains
control over the subsidiary and ceases when the Company loses
control of the subsidiary. Specifically, income and expenses of a
subsidiary acquired or disposed of during the period are included
in the consolidated statement of profit or loss and other
comprehensive income from the date the Company gains control until
the date when the Company ceases to control the subsidiary.
Where necessary, adjustments are made to the financial
statements of the subsidiaries to bring their accounting policies
into line with the Group's accounting policies.
The consolidated financial statements have been prepared by
using the principles of acquisition accounting ("the purchase
method") which includes the results of the subsidiaries from their
date of acquisition.
All intra-group balances, transactions, income and expenses and
profits and losses resulting from intra-group transactions are
eliminated fully on consolidation.
Goodwill is the difference between the amount paid on the
acquisition of a subsidiary company or a business and the aggregate
fair value of the identifiable assets and liabilities acquired.
Goodwill is capitalised as an intangible asset. In accordance with
IFRS 3 'Business Combinations', goodwill is not amortised but
tested for impairment annually or when there are any other
indications that its carrying value is not recoverable.
Goodwill is therefore stated at cost less any provision for
impairment in value. If a subsidiary undertaking is subsequently
sold, goodwill arising on acquisition is taken into account in
determining the profit and loss on sale. Goodwill is allocated to
cash generating units for the purpose of impairment testing. The
allocation is made to those cash generating units or groups of cash
generating units that are expected to benefit from the business
combination in which the goodwill arose.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARED 31 DECEMBER 2016
_____________________________________________________________________________________________
2.4 Investment in associated undertaking
Companies, other than subsidiary undertakings, in which the
Group has an investment and over which it exerts significant
influence but does not control, are treated as associated
undertakings.
Investments in associated undertakings are equity accounted and
carried in the Group statement of financial position at cost plus
post acquisition changes in the Group's share of net assets of the
associate, less any impairment in value.
Any goodwill arising on the acquisition of an associate,
representing the excess of the cost of the investment compared to
the Group's share of the net fair value of the associate's
identifiable assets and liabilities, is included in the carrying
amount of the associate. Goodwill on the acquisition of associates
is not amortised.
The Group statement of profit or loss includes the Group's share
of the associate's profit after tax. To the extent that losses of
an associate exceed the carrying amount of the investment, the
Group discontinues including its share of further losses and the
investment is reported at nil value. Additional losses are only
provided if the Group has an obligation to a third party.
After application of the equity method, the Group determines
whether it is necessary to recognise an additional impairment loss
of the Group's investment in its associate at each period end date.
The Group calculates the amount of impairment as being the
difference between the fair value of the associate and the carrying
value and recognises the amount in the profit or loss.
Unrealised gains on transactions between the Group and its
associate are eliminated to the extent of the Group's interest in
the associate. Unrealised losses are also eliminated unless the
transaction provides evidence of an impairment of the asset
transferred. Accounting policies of the associate are changed where
necessary to ensure consistency with the accounting policies of the
Group.
The Parent Company's investment in its associate is included in
the Company statement of financial position at cost, less any
provision for impairment.
2.5 Intangible assets
Intangible assets of the Group consist of computer software and
are capitalised at their cost and are amortised through
administrative expenses on a straight-line basis over their
expected useful lives of 5 years.
The carrying value of intangible assets is tested for impairment
whenever events or changes in circumstances indicate the carrying
value may not be recoverable.
2.6 Property, plant and equipment
Freehold lands are stated at their revalued amounts, being the
fair value at the date of revaluation, less any subsequent
accumulated impairment losses. Revaluations are performed with
sufficient regularity such that the carrying amounts do not differ
materially from those that would be determined using fair values at
the end of the reporting period. Fair value is based on periodic
valuations made at least once in every five years and an interim
valuation every three years based on management decision.
Valuations are carried out by an independent external licensed
valuer on an open market value basis. Any surplus or deficit
arising on valuation is transferred directly to equity as a
revaluation surplus in the property revaluation reserve, except for
those deficits expected to be permanent, which are charged to
profit or loss. Freehold lands are not depreciated.
Other property, plant and equipment are stated at cost less
accumulated depreciation and any impairment losses.
Depreciation is calculated on a straight-line basis to write off
the costs, less estimated residual values of each asset over its
estimated useful lives, as follows:
Buildings 10 - 50 years
Land improvements 5 - 20 years
Other assets 5 - 10 years
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARED 31 DECEMBER 2016
_____________________________________________________________________________________________
2.6 Property, plant and equipment (continued)
The carrying values of property, plant and equipment are tested
for impairment if events or changes in circumstances indicate the
carrying values may not be recoverable. Any impairment losses are
recognised in the profit or loss.
The assets' residual values and useful lives are reviewed, and
adjusted if appropriate, at each period end date. Gains and losses
on disposals are determined by comparing the proceeds with the
carrying amount and are recognised within the statement of profit
or loss.
When revalued assets are sold, the amounts included in property
revaluation reserves are transferred to retained earnings.
2.7 Biological assets
The Group's biological assets consist of oil palm tree
plantations. According to IAS 41 'Agriculture', biological assets
should be valued annually at their fair values. The gain or loss in
fair value of biological assets is to be included in the profit or
loss.
The Group has used IAS 41's cost model to value the biological
assets because the Directors believe that fair values cannot be
measured reliably as the trees on the plantations are mature
(greater than 25 years old). At 31 December 2016 the costs of the
biological assets have been fully depreciated. Even though the
plantations are still producing income the Directors believe that
any attempt to revalue the plantations to their fair values would
not be reliable as market-determined prices or values are not
readily available and alternative estimates of fair value are
unreliable. The biological assets (i.e. the oil palm trees) are
therefore carried in the Company's and Group's financial statements
at a nil net book value.
The freehold estate land is carried at its fair value as
discussed in note 2.6 above.
The harvested produce (fresh fruit bunches) are sold immediately
after being harvested. Therefore the requirement under IAS 41 to
value agricultural produce at market value as inventories does not
apply.
2.8 Investment property
Investment property consists of investment in building that is
held for long-term rental yield and/or for capital appreciation and
is not occupied by the Group.
Investment property is stated at cost less accumulated
depreciation and impairment losses. Depreciation for investment
property is calculated using the straight-line method to allocate
their cost over their estimated economic lives as follows:
Leasehold building remaining lease period
Where an indication of impairment exists, the carrying amount of
the asset is assessed and written down immediately to its
recoverable amount.
Gains and losses on disposal are determined by comparing the net
disposal proceeds with the carrying amount and are included in the
profit or loss.
2.9 Non-current asset held for sale
Non-current assets are classified as held for sale if their
carrying amount will be recovered principally through sale
transaction rather than through continuing use. This condition is
regarded as met only when the sale is highly probable and the asset
is available for immediate sale in its present condition subject
only to terms that are usual and customary for sale of such asset
and its sale is highly probable. Management must be committed to
sale, which should be expected to qualify for recognition as a
completed sale within a year from date of classification.
Non-current assets classified as held for sale are measured at
the lower of their previous carrying amount and fair value less
costs to sell.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARED 31 DECEMBER 2016
______________________________________________________________________________________________
2.10 Financial assets
The Group classifies its financial assets in the following
categories: fair value through profit or loss, held-to-maturity,
short term investments, loans and receivables, and
available-for-sale. The classification depends on the purpose for
which the financial assets were acquired. Management determines the
classification of its financial assets at initial recognition. At
the end of the reporting period, the Group had all of the above
except for assets with fair value through profit or loss and
held-to-maturity.
Held-to-maturity investments
Non-derivative financial assets with fixed or determinable
payments and fixed maturity are classified as held-to-maturity when
the Group has the positive intent and ability to hold the assets to
maturity. Investments intended to be held for an undefined period
are not included in this classification. Other long-term
investments that are intended to be held-to-maturity, such as
bonds, are subsequently measured at amortised cost using the
effective interest method less any impairment.
Short term investments
Short term investments are investments in unquoted unit trust
with licensed investment banks. After initial recognition, short
term investments are measured at fair value with gains or losses
being recognised in other comprehensive income and accumulated
under investment revaluation reserve until the investment is
derecognised or until the investment is determined to be impaired
at which time the accumulate gain or loss previously reported in
equity is included in the profit or loss. The fair value of the
investments is measured at mark to market based on the net asset
value at each reporting date.
Loans and receivables
Loans and receivables are non-derivative financial assets with
fixed or determinable payments that are not quoted in an active
market. They are measured at amortised cost using the effective
interest method less any impairment and are included in current
assets, except for maturities greater than twelve months after the
reporting period date. These are classified as non-current assets.
The Group's loans and receivables comprise "trade and other
receivables" and "cash and cash equivalents" in the statement of
financial position.
Interest income is recognised by applying the effective interest
rate except for short-term receivables when the recognition of
interest would be immaterial.
Available-for-sale financial assets
Available-for-sale financial assets are non-derivatives that are
either designated in this category or not classified in any of the
other categories. They are included in non-current assets unless
management intends to dispose of the investment within twelve
months after the period end date.
Purchases and sales of financial assets are recognised on the
trade-date; the date on which the Group commits to purchase or sell
the assets. Investments are initially recognised at fair value plus
transaction costs. Available-for-sale financial assets are
subsequently carried at fair value with gains or losses being
recognised in other comprehensive income and accumulated under
investment revaluation reserve until the investment is derecognised
or until the investment is determined to be impaired at which time
the accumulate gain or loss previously reported in equity is
included in the profit or loss. The fair value of investments that
are traded in active market at the end of each reporting period is
determined by reference to the relevant stock exchange's quoted
market bid prices at the close of business on the reporting period
date. For investments where there is no active market, fair value
is determined using valuation techniques. Such techniques include
using recent arm's length market transactions; reference to the
current market value of another instrument, which is substantially
the same; discounted cash flow analysis and option pricing
models.
2.11 Parent Company investments in subsidiaries and associates
The Parent Company's investments in subsidiaries and associated
undertakings are included in the Company statement of financial
position at cost less any provisions for impairments.
2.12 Inventories
Inventories are being held at the lower of cost and net
realisable value.
No harvested fresh fruit bunches are held at year end,
therefore, the requirement under IAS 41 'Agriculture' to value
agricultural produce at market value does not apply.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARED 31 DECEMBER 2016
_____________________________________________________________________________________________
2.13 Cash and cash equivalents
Cash and cash equivalents are held for the purpose of meeting
short-term cash commitments rather than for investment or other
purposes. For an investment to qualify as a cash equivalent it must
be readily convertible to a known amount of cash and be subject an
insignificant risk of changes in value. The amount in the statement
of financial position is stated at cost, which is approximately
equal to the fair value, and comprises cash in hand, cash at bank,
short term deposits and short term investments.
2.14 Impairment of non-current assets
The Group assesses at each reporting date whether there is an
indication that an asset may be impaired. If any such indication
exists, or when annual impairment testing for an asset is required,
the Group makes an estimate of the asset's recoverable amount. An
asset's recoverable amount is the higher of an asset's or
cash-generating unit's fair value less costs to sell and its value
in use and is determined for an individual asset, unless the asset
does not generate cash inflows that are largely independent of
those from other assets or groups of assets. Where the carrying
amount of an asset exceeds its recoverable amount, the asset is
considered impaired and is written down to its recoverable amount.
In assessing value in use, the estimated future cash flows are
discounted to their present value of money and the risks specific
to the asset. Impairment losses of continuing operations are
recognised in the profit or loss in those expense categories
consistent with the function of the impaired asset.
2.15 Financial liabilities and equity
Financial liabilities and equity instruments are classified
according to the substance of the contractual arrangements entered
into. Financial liabilities include trade and other payables and
bank borrowings.
Trade and other payables are carried at cost which is the fair
value of the consideration to be paid in the future for goods and
services received, whether or not billed to the company.
All borrowings and overdrafts are recorded at the amount of the
proceeds received, net of direct issue costs. Finance charges are
charged to the statement of profit or loss on an accruals basis
using the effective interest rate method.
Equity instruments are recorded at the fair value of the
consideration received, net of direct issue costs
2.16 Revenue
Revenue is recognised to the extent that it is probable that the
economic benefits will flow to the Group and the revenue can be
reliably measured. Revenue is measured at the fair value of
consideration received or receivable net of value added tax,
returns, rebates or discounts and after eliminating sales with the
Group.
Revenue derived from plantation activities represents the sale
of oil palm fresh fruit bunches and is recognised on the accruals
basis.
Revenue derived at manufacturing activities is recognised from
sales when the goods are delivered, and the risks and rewards of
ownership of the goods are transferred to buyers.
Revenue derived from resort activities represents room rentals,
net of hotel room tax, and the sale of food and beverages.
Accommodation revenue is recognised on the arrival of customers.
Payments received in advance of the arrival of guests are included
in current liabilities as accommodation rental received in
advance.
Dividend income is recognised when the right to receive payments
is established.
Interest income from a financial asset is recognised when it is
probable that the economic benefits will flow to the Group and the
amount of income can be measured reliably. Interest income is
accrued on a time basis, by reference to the principal outstanding
and at the effective interest rate applicable, which is the rate
that exactly discounts estimated future cash receipts through the
expected life of the financial asset to that asset's net carrying
amount on initial recognition.
The Group's policy for recognition of revenue from operating
leases is described in note 2.17 below.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARED 31 DECEMBER 2016
_____________________________________________________________________________________________
2.17 Leases
Leases where the lessor retains substantially all the risks and
benefits of ownership of the asset are classified as operating
leases.
The Group as lessor
Rental income from operating leases is recognised on a
straight-line basis over the term of the relevant lease. Initial
direct costs incurred in negotiating and arranging as operating
lease are added to the carrying amount of the leased asset and
recognised on a straight-line basis over the lease term.
The Group as lessee
Operating lease payments are recognised as an expense on a
straight line basis over the lease term, except where another
systematic basis is more representative of the time pattern in
which economic benefits from the leased asset are consumed.
Contingent rentals arising under operating leases are recognised as
an expense in the period in which they are incurred.
2.18 Employee entitlements
The liability for employees' compensation for unutilised leave
is accrued in relation to services rendered by employees and
relates to rights which have been vested. These amounts are not
discounted.
The Group's contribution to a defined contribution plan is
charged to the profit or loss in the period to which the
contribution relates.
2.19 Provisions
Provisions are recognised when the Group has a legal or
constructive obligation as a result of a past event and it is
probable that an outflow of economic benefits will be required to
settle the obligation. If the effect is material, expected future
cash flows are discounted using a current pre-tax rate that
reflects, where appropriate, the risks specific to the
liability.
Where the Group expects some or all of a provision to be
reimbursed, for example under an insurance policy, the
reimbursement is recognised as a separate asset but only when
recovery is virtually certain. The expense relating to any
provision is presented in the income statement net of any
reimbursement. Where discounting is used, the increase in the
provision due to unwinding of discount is recognised as a finance
cost.
2.20 Dividend distributions
Dividend distributions proposed by the Board of Directors and
unpaid at the year end are not recognised in the financial
statements as a liability until they have been approved by the
Company's shareholders at the AGM.
2.21 Related parties
Parties are considered to be related if one party has the
ability, directly or indirectly, to control the other party, or
exercise significant influence over the other party in making
financial and operating decisions. Parties are also considered to
be related if they are subject to common control or common
significant influence. Related parties may be individuals or
corporate entities.
2.22 Current and deferred income tax
The current income tax charge is calculated on the basis of the
tax laws enacted or substantively enacted at the period end date
and any adjustments to tax payable in respect of previous
years.
Deferred income tax is provided in full, using the liability
method, on temporary differences arising between the tax bases of
assets and liabilities and their carrying amounts in the
consolidated financial statements. Deferred income tax is
determined using tax rates (and laws) that have been enacted or
substantially enacted by the period end date and are expected to
apply when the related deferred income tax asset is realised or the
deferred income tax liability is settled. Deferred tax liabilities
are recognised for the temporary timing differences associated with
subsidiaries, joint ventures and associates, but only where the
Group is able to control the timing of the reversal of the
temporary difference.
Deferred income tax assets are recognised to the extent that it
is probable that future taxable profits will be available against
which the assets can be utilised.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARED 31 DECEMBER 2016
______________________________________________________________________________________________
2.22 Current and deferred income tax (continued)
The measurement of deferred tax reflects the tax consequences
that would follow from the manner in which the Group expects, at
the reporting date, to recover or settle the carrying amount of its
assets and liabilities. For this purpose, the carrying amount of
freehold lands measured at fair value is presumed to be recovered
through sale after implementation of the Group business plan.
2.23 Foreign currency translation
Functional and presentational currency
Items included in the financial statements of each of the
Group's entities are measured using the currency of the primary
economic environment in which the entity operates ('the functional
currency'). The consolidated financial statements are presented in
'Ringgit Malaysia' ('RM'), which is the Company's and the Group's
functional and presentation currency.
Transactions and balances
Foreign currency transactions are translated into the functional
currency using the exchange rates prevailing at the dates of the
transactions. Foreign exchange gains and losses resulting from the
settlement of such transactions and from the translation at year
end exchange rates of monetary assets and liabilities denominated
in foreign currencies are recognised in the profit or loss.
The assets, liabilities and the results of the foreign
subsidiary undertakings are translated into Ringgit Malaysia at the
rates of exchange ruling at the year end. Exchange differences
resulting from the retranslation of net investments in subsidiary
undertakings are treated as movements on reserves.
3. Significant accounting judgements and estimates
In the process of applying the Group's accounting policies,
which are described in note 2 above, the Directors have made the
following judgments and assumptions concerning the future. The
resulting accounting estimates will, by definition, seldom exactly
equal the related actual results. The estimates and assumptions
that have a risk of causing material adjustment to the carrying
amounts of assets and liabilities within the next financial year
are discussed below:
Carrying value of associate
The directors assess the fair value of the Group's investment in
its associated undertaking, Concrete Engineering Products Berhad
("Cepco") is more than the carrying value. No impairment or
reversal of impairment was recommended. The assessment was made by
reference to the value-in-use of the associate to the Group.
The value-in-use calculation includes a discounted cash flow
assessment model; the primary assumptions underlying the model
were:
o Sales growth rate 3.80%
o Terminal value equal to Price Earnings ratio 15
Additional assumptions utilised include:
o Duration of assessment period 5 years
o Discount rate of 6%
Depreciation, useful lives and residual values of property,
plant & equipment
The Directors estimate the useful lives and residual values of
property, plant & equipment in order to calculate the
depreciation charges. Changes in these estimates could result in
changes being required to the annual depreciation charges in the
statement of profit or loss and the carrying values of the
property, plant and equipment in the statement of financial
position.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARED 31 DECEMBER 2016
______________________________________________________________________________________________
3. Significant accounting judgements and estimates (continued)
Fair value measurements
A number of the group's accounting policies and disclosures
require the measurement of fair values, for both financial and
non-financial assets and liabilities.
The group has an established control framework with respect to
the measurement of fair values. When measuring the fair value of an
asset or a liability, the management uses market observable data as
far possible. Where Level 1 inputs are not available, the Group
engages third party qualified valuers to perform the valuation.
Information about the valuation techniques and inputs used in
determining the fair value of various assets and liabilities are
included in the relevant notes.
Deferred tax asset
Deferred tax assets are recognised for all unutilised tax losses
to the extent that it is probable that taxable profit will be
available against which the losses can be utilised. Significant
judgment and measurement is required to determine the amount of
deferred tax asset that can be recognised, based on the likely
timing of future taxable profit together with future tax planning
strategies. The carrying value of deferred tax assets recognised as
at 31 December 2016 is RM Nil (2015: RM Nil) and the unrecognised
tax losses as at 31 December 2016 is approximate RM7.0 million
(2015: RM7.0 million) in respect of which the future economic
benefit is uncertain. Further details are shown in note 8.
4. Segmental information
The Group applies IFRS 8 'Operating Segments'. The accounting
policy for identifying segments is based on internal management
reporting information that is regularly reviewed by the chief
operating decision maker. In identifying its operating segments,
management generally follows the Group's service lines, which
represent the main products and services provided by the Group.
The Group's operating businesses are organised and managed
separately according to the nature of products produced and
services provided, with each segment representing a strategic
business unit that offers different products and serves different
markets.
At 31 December 2016, the Group was organised into four operating
segments as follows:
-- Plantations - sale of fresh fruit bunches;
-- Manufacturing - producing constant viscosity (CV) rubber blocks;
-- Tourism - operation of two tourist resorts, sale of rooms and sale of food and beverages;
-- Others being:
i) Property development and leasing - development and sale of
land and properties and leasing of buildings;
ii) Trading - trading of building materials; and
iii) Investment - holding of equity interests in quoted shares.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARED 31 DECEMBER 2016
______________________________________________________________________________________________
4. Segmental information (continued)
The segment results for the year ended 31 December 2016 are as
follows:
Plantation Tourism Manufacturing Others Total
RM'000 RM'000 RM'000 RM'000 RM'000
------------ ---------- --------------- ---------- -----------
Revenue
From external
customers 266 8,395 2,049 124 10,834
Segment revenues 266 8,395 2,049 124 10,834
Finance income - 81 4 4,676 4,761
Other gains and
losses 28 32 - 8 68
Share of profit
/ (loss) of Cepco - - - (170) (170)
Depreciation
and amortisation (45) (959) (453) (60) (1,517)
Tax expenses - (352) - - (352)
Other expenses
(net of other
income) (241) (6,093) (2,336) (8,695) (17,365)
------------ ---------- --------------- ---------- -----------
Segment profit/(loss) 8 1,104 (736) (4,117) (3,741)
------------ ---------- --------------- ---------- -----------
Segment assets 150,024 29,933 4,673 540,844 725,474
------------ ---------- --------------- ---------- -----------
Segment liabilities 24,431 1,907 154 62,541 89,033
------------ ---------- --------------- ---------- -----------
Other disclosures
Investment in
Cepco - - - 24,570 24,570
Capital expenditure 1,489 3,768 32 26,948 32,237
Tangible 1,722 - - - 1,722
Assets under
construction 9 47 - - 56
Intangible
Segment revenue reported above represents revenue generated from
external customers. Inter-segment sales within the Group amounted
to approximate RM1.52 million (2015: RM2.27 million).
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARED 31 DECEMBER 2016
______________________________________________________________________________________________
4. Segmental information (continued)
The segmented results for the year ended 31 December 2015 are as
follows:
Plantation Tourism Manufacturing Others Total
RM'000 RM'000 RM'000 RM'000 RM'000
------------ --------- --------------- --------- ----------
Revenue
From external
customers 376 6,744 3,016 153 10,289
------------ --------- --------------- --------- ----------
Segment revenues 376 6,744 3,016 153 10,289
Finance income - 92 - 4,462 4,554
Other gains
and losses - 61 - 81 142
Share of profit/(loss)
of Cepco - - - 4,598 4,598
Depreciation
and amortisation (30) (1,188) (468) (91) (1,777)
Provision for
diminution in
value of stocks - (81) - (81)
Tax expenses - (7) - (36) (43)
Other expenses
(net of other
income) (305) (7,040) (3,947) (8,331) (19,623)
------------ --------- --------------- --------- ------------
Segment profit/(loss) 41 (1,338) (1,480) 836 (1,941)
------------ --------- --------------- --------- ------------
Segment assets 133,514 2,015 3,301 581,104 719,934
------------ --------- --------------- --------- ------------
Segment liabilities
(restated) 1,238 2,223 100 78,064 81,625
------------ --------- --------------- --------- ------------
Other disclosures
Investment in
Cepco - - - 24,740 24,740
Capital expenditure 35 1,804 36 96 1,971
Tangible 3,675 - - - 3,675
Assets under
construction 28 - 3 - 31
Intangible
Geographic information
The Group operates in two principal geographical areas -
Malaysia and Thailand.
The Group's revenue from continuing operations from external
customers by location of operations and information about its
non-current assets* by location of assets are detailed below.
Revenue from Non-current
external customers assets
2016 2015 2016 2015
RM'000 RM'000 RM'000 RM'000
Malaysia 8,785 7,950 500,777 460,285
Thailand 2,049 2,339 2,141 2,202
----------- ---------- --------- ---------
10,834 10,289 502,918 462,487
=========== ========== ========= =========
*non-current assets for this purpose consist
of property, plant and equipment, investment
property and intangible assets.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARED 31 DECEMBER 2016
______________________________________________________________________________________________
4. Segmental information (continued)
Information about major customers
Included in revenues arising from manufacturing are revenues of
approximately RM0.9 million (2015: RM1.2 million) which arose from
sales to the Group's largest customer. No other single customers
contributed 10% or more to the Group's revenue for both 2016 and
2015.
5. Other income and other gains and losses
Group Company
2016 2015 2016 2015
RM'000 RM'000 RM'000 RM'000
Other income
Rebates from investment
in unit trust 341 379 341 379
Sundry income 12 61 - -
Rental income from - 12 - -
investment property
Other rental income 236 195 28 28
Management fee to
subsidiary - - 300 300
Gain on foreign
exchange 10 (29) - (8)
Insurance claim - - - -
Interest for compensation 811* - - -
received
1,410 618 669 699
======== ======== ======== ========
* Interest for compensation received on compulsory acquisition
of the Company's land.
Other gains and losses
Gain on sale of - 51 - -
assets
(Loss)/gain on sale
of investment 3 (98) - (87)
Cumulative gain
reclassified from
equity on redemption
of short term investment 65 189 36 167
----- ------ ----- ------
68 142 36 80
===== ====== ===== ======
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARED 31 DECEMBER 2016
__________________________________________________________________________________________________
6. Operating loss
Group Company
2016 2015 2016 2015
RM'000 RM'000 RM'000 RM'000
The operating loss
is stated after
charging/(crediting):
Auditors' remuneration: 240 200
- Parent Company
auditor 54 146 240 200
- Subsidiaries'
auditor - -
Depreciation 1,463 1,761 33 16
Amortisation of
intangible assets 54 16 12 14
Operating leases 766 665 329 350
Staff costs (note
10) 6,086 6,798 3,201 3,712
Bad debts written - - - -
off
Loss/(gain) on foreign
exchange (10) 29 - 8
Provision for contingent - - - -
liability
Fixed assets written - - - -
off
Loss from diminution - 81 - -
in value of stocks
======== ======== ======== ========
The non-audit fees paid to the Company's external auditors
amounted to RM2,202 for the financial year 2016 (2015:
RM3,457).
Direct operating expenses from investment property that
generated rental income for the Group during the financial year
amounted to RM3,125 (2014: RM2,517).
7. Finance income and costs
Group Company
2016 2015 2016 2015
RM'000 RM'000 RM'000 RM'000
Finance income
Short term deposits 1,785 825 1,780 823
Short term investments 2,976 3,729 2,896 3,639
4,761 4,554 4,676 4,462
======== ======== ======== ========
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARED 31 DECEMBER 2016
_____________________________________________________________________________________________
8. Taxation
8.1 Income taxes recognised in profit and loss
The tax charge is made up as follows:
Group Company
2016 2015 2016 2015
RM'000 RM'000 RM'000 RM'000
In Malaysia
* Current taxation 352 41 - -
* Under/(over) provision in respect of prior years - 2 - -
352 43 - -
======== ======== ======== ========
Other than the subsidiary in Thailand which is a tax resident
there, the Company and the Group are tax residents in Malaysia. The
Group is liable to corporation tax in Malaysia and Thailand but is
not subject to United Kingdom corporation tax. The Group's
effective tax rate differs from the standard rate of corporation
tax in Malaysia of 24% (2015: 25%) as follows:
Group Company
2016 2015 2016 2015
RM'000 RM'000 RM'000 RM'000
Loss before taxation (3,389) (1,898) (3,406) (2,903)
Tax credit at standard
corporation tax
rate in Malaysia
of 24% (2014: 25%) (813) (474) (818) (726)
Tax effects of:
Expenses not deductible
for tax purposes 951 1,545 689 435
Income not subject
to tax (733) (188) (704) (20)
Utilisation of business
losses 1,084 (8) 857 -
Temporary timing
differences not
recognised (137) (834) (24) 311
Under/(over) provision - 2
in respect of prior - -
years
--------- --------- --------- ---------
Total tax charge
for year 352 43 - -
========= ========= ========= =========
8.2 Income taxes recognised in other comprehensive income
The tax charge relating to components of other comprehensive
income is as follows:
Group Company
2016 2015 2016 2015
RM'000 RM'000 RM'000 RM'000
Fair value gain
on freehold land
Before tax 7,500 16,742 - 5,000
Tax charge (1,800) (4,185) - (1,250)
--------- ---------- -------- ---------
After tax 5,700 12,557 - 3,750
--------- ---------- -------- ---------
Other comprehensive
income 5,700 12,557 - 3,750
========= ========== ======== =========
Deferred tax liabilities 1,800 4,185 - 1,250
========= ========== ======== =========
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARED 31 DECEMBER 2016
_____________________________________________________________________________________________
8. Taxation (continued)
8.3 Deferred tax balances
The estimated deferred tax assets at 24% (2015: 25%) not
recognised in these financial statements are as follows:
Group Company
2016 2015 2016 2015
RM'000 RM'000 RM'000 RM'000
Arising from:
Unused tax losses 6,842 7,033 6,501 5,744
Unutilised capital
allowances 210 494 73 49
-------- -------- -------- --------
7,052 7,527 6,574 5,793
======== ======== ======== ========
The key factors that may affect future tax charges include the
ability to claim capital allowances in excess of depreciation,
utilisation of unrelieved tax losses and changes in tax
legislation. The Group expects to be able to claim capital
allowances in excess of depreciation in future years based on its
capital investment plans. The Group also has unutilised tax losses
estimated to be RM28.5 million (2015: RM28 million ) which arise
mainly in relation to activities in Malaysia and which may
generally be carried forward without time limits applying. The
availability of the unused tax losses for offsetting against future
taxable profits of the Company and its subsidiaries are subject to
there being no substantial changes in shareholdings of the Company
and its subsidiaries under Section 44 (5A) & (5B) of Income Tax
Act, 1967 in Malaysia.
As for the subsidiary in Thailand, the unutilised tax losses is
estimated to be THB68.6 million (approximate RM8.2 million) (2015:
THB64.7 million (approximate RM7.7 million)) which may be carried
forward for a maximum of five (5) years.
The revaluation of available-for-sale investments and short term
investments that has been reported as part of other comprehensive
income on page 36 of these financial statements is not shown net of
taxation. This is on the basis that the Group and the Company have
unutilised losses which exceed the revalued amount. Unused tax
losses carried forward at the end of reporting period, which is
disclosed above, have been reduced correspondingly.
As disclosed in note 12, freehold lands have been revalued, and
a revaluation surplus arises. Deferred tax has been provided in
respect of the revaluation surplus where the carrying amount of
freehold lands is presumed to be recovered through sale after
implementation of the Group business plan.
The analysis of deferred tax liabilities is as follows:
Group Company
2016 2015 2016 2015
RM'000 RM'000 RM'000 RM'000
Deferred tax liabilities
due more than 12 months 77,578 76,028 22,900 22,900
Deferred tax liabilities - - - -
due within 12 months
---------- ---------- ---------- ----------
77,578 76,028 22,900 22,900
========== ========== ========== ==========
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARED 31 DECEMBER 2016
_____________________________________________________________________________________________
8.3 Deferred tax balances (continued)
The movement in deferred tax liabilities during the year,
without taking consideration the offsetting of balances within same
jurisdiction, is as follow:
Group Company
2016 2015 2016 2015
RM'000 RM'000 RM'000 RM'000
At 1 January 76,028 71,843 22,900 21,650
Adjustment (250) - - -
Charge to other comprehensive
income 1,800 4,185 - 1,250
---------- ---------- ---------- ----------
At 31 December 77,578 76,028 22,900 22,900
========== ========== ========== ==========
9. Loss per share
The calculation of loss per share is based on the Group's loss
for the year and the weighted average number of shares in issue
after adjusting for movement in treasury shares during the
financial year. There are no potential dilutive shares or share
options outstanding and therefore, the diluted loss per share is
the same as basic loss per share.
2016 2015
Net loss attributable to
the owners of the Company
(RM'000) (3,741) (1,941)
--------- ---------
Weighted average number of
ordinary shares in issue
after adjusting for movement
in treasury shares [Number
of shares ('000)] 403,209 403,209
--------- ---------
Basic and diluted loss per
share (Sen) (0.93) (0.48)
--------- ---------
10. Employee information
Group Company
2016 2015 2016 2015
RM'000 RM'000 RM'000 RM'000
Staff costs comprises:
Wages and salaries 5,738 6,406 3,050 3,558
Contribution to
a statutory
employees' provident
fund 348 392 151 154
6,086 6,798 3,201 3,712
======== ======== ======== ========
The decrease of Group wages and salaries in 2016 is due to less
number of staff employed.
The statutory employees' provident fund is a defined
contribution scheme funded by a government body in Malaysia.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARED 31 DECEMBER 2016
________________________________________________________________________________________
10. Employee information (continued)
The average monthly number of employees employed by the Group
during the year was as follows:
Group Company
2016 2015 2016 2015
Number Number Number Number
Plantation 20 20 20 20
Tourism 113 121 - -
Manufacturing 31 32 - -
Property development
and leasing 6 5 - -
Investment 2 2 2 2
-------- -------- -------- --------
172 180 22 22
======== ======== ======== ========
11. Directors' emoluments
Group Company
2016 2015 2016 2015
RM'000 RM'000 RM'000 RM'000
Directors' fees
& allowances 220 190 191 190
======== ======== ======== ========
Highest paid
Director 46 46 46 46
============ ======== ============ ==========
The above emoluments are made up as follows:
Basic
Salary Meeting Total Total
&
Fees Allowances 2016 2015
(RM) (RM) (RM) (RM)
------------------- --------- ------------ --------- ---------
Non-Executive
Directors
Dato' Adnan bin
Maaruf 40,000 6,000 46,000 46,000
Datuk Kamaruddin
bin Awang 30,000 6,750 36,750 38,250
Dato' Haji Muda
bin Mohamed 30,000 7,000 37,000 37,000
Dato' Tik bin
Mustaffa 30,000 7,000 37,000 35,750
Dr. Radzuan bin
A. Rahman 30,000 4,500 34,500 33,000
------------------- ------------ --------- ---------
160,000 31,250 191,250 190,000
=================== ========= ============ ========= =========
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARED 31 DECEMBER 2016
________________________________________________________________________________________
12. Property, plant and equipment
Group Freehold Prepaid Buildings Assets Others Total
lands land and under
land improvements construction
RM'000 RM'000 RM'000 RM'000 RM'000 RM'000
Cost or valuation
At 1 January
2015 432,852 3,590 19,921 1,054 8,775 466,192
Additions - - 1,342 3,675 629 5,646
Revaluations 16,742 - - - - 16,742
Disposals - - - (10) (10)
Exchange differences 29 49 255 - 378 711
------------ --------------------- ------------- ----------------- ---------- ---------
At 1 January
2016 449,623 3,639 21,518 4,729 9,772 489,281
Additions 20,000 6,948 3,359 3,075 577 33,959
Revaluations 7,500 - - - - 7,500
Disposals - - - - (20) (20)
Exchange differences 14 23 117 - 174 328
------------ --------------------- ------------- ----------------- ---------- ---------
At 31 December
2016 477,137 10,610 24,994 7,804 10,503 531,048
------------ --------------------- ------------- ----------------- ---------- ---------
Accumulated depreciation
At 1 January
2015 - 1,129 16,311 - 7,040 24,480
Charge for the
year - 39 1,080 - 641 1,760
On disposals - - - - (3) (3)
Exchange differences - 48 248 - 367 663
At 1 January
2016 - 1,216 17,639 - 8,045 26,900
Charge for the
year - 36 562 - 865 1,463
On disposals - - - - (20) (20)
Exchange differences - 23 115 - (161) (23)
------------ --------------------- ------------- ----------------- ---------- ---------
At 31 December
2016 - 1,275 18,316 - 8,729 28,320
------------ --------------------- ------------- ----------------- ---------- ---------
Carrying amount
At 31 December
2016 477,137 9,335 6,678 7,804 1,774 502,728
============ ===================== ============= ================= ========== =========
At 31 December
2015 449,623 2,423 3,879 4,729 1,727 462,381
============ ===================== ============= ================= ========== =========
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARED 31 DECEMBER 2016
___________________________________________________________________________________________
12. Property, plant and equipment (continued)
Fair value measurement of the Group's and Company's freehold
lands
The Group's freehold lands are stated at their revalued amounts,
being the fair value at the date of revaluation. In order to
establish the 31 December 2016 valuation of the Group's freehold
lands, valuations were obtained.
The fair value measurement of the Group's freehold lands in
Kajang and Bangi as at 31 December 2016 and 31 December 2015 were
performed by Nilai Properties Consultants Sdn Bhd (V(1) 0065), an
independent valuer not related to the Group, using the open market
basis method. These lands are currently being used for the Group's
plantation activities for growing of oil palm fresh fruit bunches.
The Group has been given consent for the change of use of the
lands. Further commentary on the Group's plans for its land is
included in the Chairman's Statement.
In the opinion of the Directors, there is no indication of any
significant difference between the carrying amount and market
values of the other freehold lands of the Group at 31 December
2016.
The historical cost of the above freehold lands of the Group is
RM107.242 million and of the Company is RM0.407 million. There are
no restrictions on the title of the Group's property, plant and
equipment.
The fair values of all the freehold lands of the Group and
Company are classified as Level 2. There were no transfers between
Levels 1 and 2 during the year.
Assets under construction
This represents 22 units of low cost terrace houses under
construction at Dunedin estate, Mukim of Semenyih. The total
contract sum is approximate RM6 million. The construction is
completed pending the issuance of certificate of occupancy which is
expected to be obtained in second half of year 2016, now extended
to late 2017.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARED 31 DECEMBER 2016
___________________________________________________________________________________________
12. Property, plant and equipment (continued)
Company Freehold Buildings Assets Others Total
lands under
construction
RM'000 RM'000 RM'000 RM'000 RM'000
Cost or valuation
At 1 January 2015 110,000 477 1,054 406 111,937
Additions - - 3,675 35 3,710
Revaluations 5,000 - - - 5,000
Disposals - - - - -
At 1 January 2016 115,000 477 4,729 441 120,647
Additions - - 3,075 135 3,210
Revaluations - - - (20) (20)
At 31 December
2016 115,000 477 7,804 556 123,837
---------- ----------- --------------- -------- ----------
Accumulated depreciation
At 1 January 2015 - 477 - 380 857
Charge for the
year - - - 16 16
On disposals - - - - -
At 1 January 2016 - 477 - 396 873
Charge for the
year - - - 33 33
On Disposal - - - (20) (20)
At 31 December
2016 - 477 - 409 886
---------- ----------- --------------- -------- ----------
Carrying amount
At 31 December
2016 115,000 - 7,804 147 122,951
========== =========== =============== ======== ==========
At 31 December
2015 115,000 - 4,729 45 119,773
========== =========== =============== ======== ==========
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARED 31 DECEMBER 2016
____________________________________________________________________________________________
13. Investment Property
Group 31 December 31 December
2016 2015
RM'000 RM'000
Cost
At 1 January 100 100
Addition / (Disposal) - -
-------------
At 31 December 100 100
------------- -------------
Accumulated depreciation
At 1 January 29 28
Charge for the year 2 1
-------------
At 31 December 31 29
------------- -------------
Carrying amount
At 31 December 69 71
============= =============
Included in investment property is apartment at Amber Tower Seri
Mas Condominium, Cheras, Kuala Lumpur.
The investment property is valued at cost less accumulated
depreciation. The fair value of the investment property is
estimated at RM0.3 million.
14. Intangible assets
Computer software and corporate website creation
Group Company
2016 2015 2016 2015
RM'000 RM'000 RM'000 RM'000
Cost
At 1 January 200 75 99 71
Additions 55 31 9 28
Disposals - - - -
-------- -------- -------- --------
At 31 December 255 106 108 99
-------- -------- -------- --------
Accumulated
amortisation
At 1 January 80 55 67 53
Amortisation
for the year 54 16 12 14
On disposals - - - -
-------- -------- -------- --------
At 31 December 134 71 79 67
-------- -------- -------- --------
Carrying amount
At 31 December 121 35 29 32
======== ======== ======== ========
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARED 31 DECEMBER 2016
____________________________________________________________________________________________
15. Investments in subsidiaries
Company
2016 2015
RM'000 RM'000
Cost
Shares in subsidiary undertakings 6,338 6,338
Provision for impairment loss
on investment in subsidiary (5,338) (5,338)
Loans to subsidiary undertakings 247,539 243,044
Allowance for doubtful debts (6,969) (6,969)
--------- ---------
241,570 237,075
========= =========
The loans to subsidiary undertakings are interest free and have
no fixed repayment terms.
The subsidiaries of the Group are as follows:
Name of company Country Nature Type Percentage
of of business of of % share
incorporation holding capital
held
2016 2015
Inch Kenneth
Hotels & Resorts Investment Ordinary
(M) Sdn Bhd Malaysia holding shares 100 100
Perhentian Island Operation
Resort Sdn Bhd of tourist Ordinary
# Malaysia resort shares 100 100
Inch Kenneth Property
Development development Ordinary
(M) Sdn Bhd Malaysia and leasing shares 100 100
IKKR Timur Sdn Malaysia Dormant Ordinary 100 -
Bhd (formerly shares
known as Saujana
Residensi Sdn
Bhd)
Inch Kenneth
Trading (M) Ordinary
Sdn Bhd # Malaysia Dormant shares 100 100
IKK Property Ordinary
(M) Sdn Bhd# Malaysia Dormant shares 100 100
Inch Kenneth
Plantations Ordinary
(M) Sdn Bhd Malaysia Dormant shares 100 100
Inch Kenneth
Sea Sports Adventure
(M) Sdn Bhd Ordinary
# Malaysia Dormant shares 100 100
Trading
IKK Rubber International of rubber Ordinary
(M) Sdn Bhd Malaysia blocks Shares 100 100
Manufacturing
Supara Company of rubber Ordinary
Limited # Thailand blocks Shares 100 100
Motel Desa Sdn Operation Ordinary
Bhd # Malaysia of a motel shares 100 100
Inch Kenneth
Tours (M) Sdn Ordinary
Bhd # Malaysia Dormant shares 100 100
# These subsidiaries are held indirectly by the Company.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARED 31 DECEMBER 2016
________________________________________________________________________________________
16. Investment in associated undertaking
Group
The Group's investment in its associated undertaking represents
a 22.40% (2015: 22.40%) interest in Concrete Engineering Products
Berhad ("Cepco"), a public company incorporated in Malaysia. The
principal activity of Cepco is the manufacture and distribution of
prestressed spun concrete piles and poles. The Group's investment
in Cepco is accounted for under the equity accounting method as
follows:
2016 2015
RM'000 RM'000
Shares
At 1 January and 31 December 40,914 40,914
========== ==========
Share of retained profits
At 1 January 15,441 10,843
Share of profit /(loss) (170) 4,598
---------- ----------
At 31 December 15,271 15,441
========== ==========
Share of dividend
At 1 January (1,104) (1,104)
Share of dividend - -
---------- ----------
At 31 December (1,104) (1,104)
Accumulated impairment
At 1 January (30,511) (30,511)
Impairment charge - -
---------- ----------
At 31 December (30,511) (30,511)
---------- ----------
Carrying amount 24,570 24,740
========== ==========
The Group's share of the net assets 2016 2015
of Cepco is as follow:
RM'000 RM'000
Share of assets
Share of non-current assets 19,907 19,290
Share of current assets 33,952 31,243
---------- ----------
53,859 50,533
---------- ----------
Share of liabilities
Share of non-current liabilities (3,076) (2,338)
Share of current liabilities (24,706) (21,948)
---------- ----------
(27,782) (24,286)
---------- ----------
Share of net assets 26,077 26,247
Goodwill (net of impairment) arising
on the acquisition of Cepco (1,507) (1,507)
Carrying value of Cepco 24,570 24,740
========== ==========
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARED 31 DECEMBER 2016
________________________________________________________________________________________
16. Investment in associated undertaking (continued)
Group (continued)
The Group's share of the results of Cepco is as follow:
2016 2015
RM'000 RM'000
Share of revenue 40,796 52,186
======== ========
Share of operating profit/(loss) 771 5,622
Share of finance costs (700) (712)
Share of taxation (241) (312)
-------- --------
Share of profit/(loss) which included
in Group statement of profit or
loss (170) 4,598
======== ========
Cepco's shares are quoted on the Bursa Securities and the market
value of the Group's investment in Cepco at the end of reporting
period was RM15.548 million (2015: RM18.256 million).
The financial year end for Cepco is 31 August while for the
Group it is 31 December. In order to equity account for the
associate as at 31 December the result from 1 September to 31
December is added to the results for the year ended 31 August 2016
while the results for the period in the prior year are deducted.
Accordingly the accounting period used to equity account for Cepco
is the same as the financial year for the Group.
Company
The movement in the Company's investment in Cepco is as
follows:
2016 2015
RM'000 RM'000
Cost
At 1 January and 31 December 40,236 40,236
======== ========
Accumulated impairment
At 1 January 22,090 22,090
Impairment charge - -
---------- ----------
22,090 22,090
========== ==========
Carrying amount 18,146 18,146
========== ==========
17. Available-for-sale investments
Group Company
2016 2015 2016 2015
RM'000 RM'000 RM'000 RM'000
Quoted shares:
At 1 January 66 57 7 20
Disposal of investments 1 - - -
Fair value adjustments (1) 27 5 (7)
At 31 December 66 84 12 13
========= ========= ========= =========
The above available-for-sale investments are stated at their
fair values. The historical cost of the above investments of the
Group is RM182,000 and of the Company is RM92,000.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARED 31 DECEMBER 2016
________________________________________________________________________________________
18. Goodwill
Group
2016 2015
RM'000 RM'000
At cost
At 1 January and 31 December 4,573 4,573
======== =========
Accumulated impairment
At 1 January and 31 December (4,502) (4,502)
Impairment charge (71) -
--------- ---------
(4,573) (4,502)
========= =========
Carrying amount - 71
===== ====
The Group has tested goodwill for impairment in accordance with
IAS 36. A full provision for impairment has been recommended for
the financial year ended 31 December 2016.
19. Inventories
Group Company
2016 2015 2016 2015
RM'000 RM'000 RM'000 RM'000
Resort stores 86 62 - -
Rubber blocks 950 1,493 - -
1,036 1,555 - -
======== ======== ======== ========
No harvested fresh fruit bunches are shown as inventory at the
year end because they are all sold immediately after being
harvested.
The amount stated at the estate and the resort is within the
normal inventories level.
20. Trade and other receivables
Group Company
2016 2015 2016 2015
RM'000 RM'000 RM'000 RM'000
Trade receivables 372 381 8 10
Other receivables
and prepayments 74,457 92,409 812 259
Corporation tax recoverable 1,050 1,030 1,030 1,030
75,879 93,820 1,850 1,299
========= ========= ========= =========
At 31 December 2016, included in other receivables approx. RM72
million was a settlement signed to acquire a leasehold industrial
land with an area approximate 8.75 acres (Plot 64006 of Parent Lot
PT 16708) in Mukim Petaling, which is expected to be registered to
the Group in 2017.
Included in other receivables in 2015 was RM11.3 million as
deposit for the acquisition of land and building, where a key
management personnel of the Group is a Director (Note 25) and an
amount of RM6.9 million related to consideration paid for land
acquired. Both are now transferred to non-current assets and in the
process of being registered titles to the Group.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARED 31 DECEMBER 2016
________________________________________________________________________________________
20. Trade and other receivables (continued)
At 31 December 2016 the trade and other receivables balances are
mainly incurred during the normal course of business. The
receivables outside their payment terms yet not provided for are as
follows:
Within credit terms 72,204 87,747 8 10
Outside credit terms
but not impaired:
0-1 month - 27 - 10
1-2 months - - - -
More than 2 months 2,625 5,016 812 249
-------- -------- ----- -----
74,829 92,790 820 269
======== ======== ===== =====
The directors are of the opinion that the receivables, both
within and outside the credit terms, are creditworthy and there
should be no issues on its recoverability.
21. Short term investments
Group Company
2016 2015 2016 2015
RM'000 RM'000 RM'000 RM'000
Investments on unit
trusts with:
Licensed investment
banks 93,875 110,422 91,819 107,940
========= ========= ========= =========
Unquoted unit trusts are measured at mark to market based on the
net asset value at each reporting date. The time weighted rate of
return of these investments at the reporting date were between 2.6%
and 4.6% (2015: 2.6% to 4.1%).
22. Cash and cash equivalents
Group Company
2016 2015 2016 2015
RM'000 RM'000 RM'000 RM'000
Cash at bank 2,377 2,763 711 558
Cash in hand 67 66 1 1
Deposits with licensed
banks 23,407 22,683 23,362 22,640
Investments with
licensed banks 1,279 1,243 1,108 1,076
-------- -------- -------- --------
27,130 26,755 25,182 24,275
======== ======== ======== ========
The effective interest rates of deposits at the reporting date
were between 1.9% and 3.6% (2015: 1.8% to 3.5%). Included in
deposits with licensed banks is the short term deposits totalling
to RM27,588 (2015: RM27,588) which was pledged with commercial
banks as collateral for issuing letters of guarantee.
The investments with licensed banks are qualified as a cash
equivalent as they are readily convertible to a known amount of
cash with an insignificant risk of changes in value.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARED 31 DECEMBER 2016
___________________________________________________________________________________________
23. Share capital
Group and Company
2016 2015
GBP'000 GBP'000
Authorised
1,000,000,000 ordinary shares
of 10p each 100,000 100,000
========= =========
2016 2015 2016 2015
RM'000 RM'000 GBP'000 GBP'000
Allotted, called up
and fully paid 420,750,000
ordinary shares of
10p each 287,343 287,343 42,075 42,075
========== ========== ========= =========
No ordinary shares were allotted during the year and the Company
does not have any share options or share warrants in issue at 31
December 2016.
24. Treasury shares
Group and
Company
2016 2015
Number Number
of shares Amount of shares Amount
------------ ------------ ------------ ------------
RM RM
At 1 January
and 31 December 17,540,800 15,979,529 17,540,800 15,979,529
============ ============ ============ ============
The shareholders of the Company approved an ordinary resolution
at the One Hundred and Sixth AGM held on 24 May 2016 for the
Company to repurchase its own shares up to a maximum of 10% of the
issued and paid-up capital of the Company ("Share Buy Back"). The
Directors of the Company are committed to enhancing the value of
the Company and believe that the purchase plan is being implemented
in the best interest of the Company and its shareholders.
During the financial year, the Company did not repurchase any of
its issued share capital. Pursuant to the provisions of Section
127(1) of the Companies Act 2016 (the "Act"), the Company may
either retain the repurchased shares as treasury shares or cancel
the repurchased shares or a combination of both. The repurchased
shares held as treasury shares may either be distributed as share
dividends, resold on Bursa Securities in accordance with the
relevant rules of Bursa Securities, subsequently cancelled or any
combination of the three.
As treasury shares, the rights attached as to voting, dividends
and participation in other distribution and otherwise are suspended
and the treasury shares shall not be taken into account in
calculating the number or percentage of shares or of a class of
shares for any purposes including substantial shareholdings,
takeovers, notices, the requisitioning of meetings, the quorum for
a meeting and the result of a vote on a resolution at a
meeting.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARED 31 DECEMBER 2016
______________________________________________________________________________________________
25. Trade and other payables
Group Company
2016 2015 2016 2015
RM'000 RM'000 RM'000 RM'000
Trade payables 168 211 - 8
Other payables 11,197 5,296 1,516 1,230
-------- -------- -------- --------
11,365 5,507 1,516 1,238
======== ======== ======== ========
The normal trade credit terms granted to the Group ranges from 7
to 90 days.
Employee entitlements
Group and Company
Provision
for employee
entitlements
RM'000
At 1 January and 31 December
2016 15
================
During the year, a freehold land and building was acquired by
the Group at RM20 million with a deferred consideration of RM5.35
million was included in other payables, where a key management
personnel of the Group is a Director of the selling company.
26. Financial instruments
26.1 Capital risk management
The Group's objectives when managing capital are to safeguard
the Group's ability to continue as a going concern in order to
provide returns for shareholders and benefits for other
stakeholders and to maintain an optimal capital structure to reduce
the cost of capital. In order to maintain or adjust the capital
structure, the Group may return capital to shareholders, issue new
shares or sell assets to reduce debt. The Group is not subjected to
any externally imposed capital requirement.
26.2 Classification of financial instruments
Financial assets and financial liabilities are measured on an
ongoing basis either at fair value or at amortised cost. The
principal accounting policies of the Group described how the
classes of financial instruments are measured, and how income and
expenses, including fair value gains and losses, are recognised,
The following table analysed the financial assets and liabilities
at the reporting date by the classes of financial instruments to
which they are assigned, and therefore by the measurement
basis.
Group
Loans Available-for-sale Financial
and receivables investments liabilities
at amortised Total
cost
31 December 2016 RM'000 RM'000 RM'000 RM'000
Financial Assets
Available-for-sale
investments - 66 - 66
Trade and other
receivables 75,879 - - 75,879
Short term investments - 93,875 - 93,875
Cash and cash
equivalents 27,130 - - 27,130
103,009 93,941 - 196,950
================== ==================== =============== =========
Financial Liabilities
Trade and other
payables - - 11,365 11,365
- - 11,365 11,365
==== =============================== ======== ========
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARED 31 DECEMBER 2016
______________________________________________________________________________________________
26. Financial instruments (continued)
26.2 Classification of financial instruments (continued)
Group
Loans and Available-for-sale Financial
receivables investments liabilities
at amortised Total
cost
31 December RM'000 RM'000 RM'000 RM'000
2015
Financial Assets
Available-for-sale
investments - 84 - 84
Trade and other
receivables 93,820 - - 93,820
Short term investments - 110,422 - 110,422
Cash and cash
equivalents 26,755 - - 26,755
120,575 110,506 - 231,081
============== ==================== =============== =========
Financial Liabilities
Trade and other
payables - - 5,507 5,507
---- ---- ------- -------
- - 5,507 5,507
==== ============================= ======= =======
C
Company
Loans Available-for-sale Financial
and receivables investments liabilities
at amortised Total
cost
31 December 2016 RM'000 RM'000 RM'000 RM'000
Financial Assets
Available-for-sale
investments - 12 - 12
Trade and other
receivables 1,850 - - 1,850
Short term investments - 91,819 - 91,819
Cash and cash
equivalents 25,182 - - 25,182
------------------ -------------------- --------------- ---------
27,032 91,831 - 118,863
================== ==================== =============== =========
Financial Liabilities
Trade and other
payables - - 1,516 1,516
-------- --------- ------- ---------
- - 1,516 1,516
======== ========= ======= =========
31 December 2015
Financial Assets
Available-for-sale
investments - 13 - 13
Trade and other
receivables 1,299 - - 1,299
Short term investments - 107,940 - 107,940
Cash and cash
equivalents 24,275 - - 24,275
-------- --------- ------- ---------
25,574 107,953 - 133,527
======== ========= ======= =========
Financial Liabilities
Trade and other
payables - - 1,238 1,238
---- ---- ------- -------
- - 1,238 1,238
==== =============================== ======= =======
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARED 31 DECEMBER 2016
______________________________________________________________________________________________
26. Financial instruments (continued)
26.3 Financial risk management objectives and policies
The Group's principal financial instruments consist of cash,
short-term deposits and short term investments. The main purpose of
these financial instruments is to finance the Group's operations
and investments. The Group has other financial instruments such as
receivables and payables that arise directly from its
operations.
The Directors recognise that financial risk management is an
area in which they may need to develop specific policies should the
Group become exposed to further financial risks as the business
develops.
The main risks arising from the Group's financial instruments
are credit risk and market risk which include foreign exchange
rates and equity prices. The Board reviews and agrees policies for
managing each of these risks as and when they arise. Currently, the
Group does not expose to interest rate risk and liquidity risk.
Credit risk
The Group has adopted a policy of only dealing with recognised
creditworthy third parties and obtaining sufficient collateral,
where appropriate, as a means of mitigating the risk of financial
loss from defaults.
The Group and the Company manages the exposures to credit risk
by performing credit evaluations on all of their major customers
requiring credit, and where appropriate, credit guarantee insurance
is purchased. The Group's maximum exposure to credit risk is
represented by the carrying amount of financial assets in the
financial statements which amounts to RM125 million.
As the Group trades only with recognised creditworthy third
parties, there is no requirement for collateral. The credit risk on
liquid funds is limited because counterparties are banks with high
credit ratings.
Foreign currency risk
The Group has some structural currency exposure as some of its
investments and operations are in Thai Baht. Apart from the
proceeds derived in Ringgit Malaysia, the Group also receives
proceeds from rubber block sales in US Dollars. However the foreign
currency risk is considered immaterial to the Group and the Company
as a whole.
Market price risk
The Group is exposed to unquoted unit trusts market price and
equity securities price risk, from the investments held by the
Group and classified as short term investments and
available-for-sale investments respectively.
Market price sensitivity analysis
The following table demonstrates the sensitivity to a reasonably
possible change in market price, with all other variables held
constant, of the Group's and the Company's profit before tax
(through the impact on fair value through profit or loss).
Group Company
RM'000 RM'000
31 December 2016
Investment in Malaysia
Market price increase by
10 percentage point 11,519 11,032
Market price decrease by
10 percentage point (11,519) (11,032)
========== =====================
31 December 2015
Investment in Malaysia
Market price increase by 13,710
10 percentage point 14,219 .
Market price decrease by
10 percentage point (14,219) (13,710)
========== =====================
Hedges
The Group did not enter into any interest rate swaps or forward
currency contracts to hedge against interest rate risk or foreign
currency risk.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARED 31 DECEMBER 2016
_________________________________________________________________________________________
26. Financial instruments (continued)
26.4 Fair values measurements
The fair values of financial assets and financial liabilities of
the Group and the Company approximates to their carrying amounts,
as disclosed in the statement of financial position and related
notes.
Fair value hierarchy
The Group's and the Company's financial instruments carried at
fair value are analysed as follows:
Level 1: Quoted prices (unadjusted) in active markets for
identical assets or liabilities;
Level 2: Inputs other than quoted prices included within Level 1
that are observable for the assets or liabilities, either directly
(i.e. as prices) or indirectly (i.e. derived from prices);
Level 3: Inputs for the assets or liabilities that are not based
on observable market date (unobservable inputs).
As at reporting date, the Group's and the Company's quoted other
investments are classified as Level 1.
There were no material transfers between Level 1, Level 2 and
Level 3 during the financial year. The Group and the Company do not
have any financial instruments classified as Level 2 and Level 3 as
at 31 December 2016.
27. Related party transactions
Transactions within the Group have been eliminated in the
preparation of the financial information set out in this report and
are not disclosed in this note. Balance and transaction with other
related parties and key personnel are either disclosed under the
relevant notes or disclosed below.
Compensation of key management personnel of the Group
Key management personnel of the Group are defined as those
persons having authority and responsibility for the planning,
directing and controlling the activities of the Group, directly or
indirectly. Key management of the Group are therefore considered to
be the Directors and top management personnel of the Company. The
following table summarises compensation paid to key personnel:
Group and Company
2016 2015
RM'000 RM'000
Short-term employment benefits 470 662
========== =========
Further information about the remuneration of individual
Directors is shown in note 11 and in the Corporate Governance
Statement.
28. Control
The Company and Group are controlled by its shareholders. No one
individual has overall control of the Company.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARED 31 DECEMBER 2016
______________________________________________________________________________________________
29. Commitments
Financial commitment
The Group and Company have the following future minimum lease
obligations payable under operating
leases:
Land and buildings
2016 2015
RM'000 RM'000
Group
Operating leases which
expire:
Within one year 462 760
Between two and five
years - 517
----------- -----------
462 1,277
=========== ===========
Company
Operating leases which
expire:
Within one year 219 328
Between two and five
years - 219
----------- -----------
219 547
=========== ===========
Operating lease payment represents rental payable by the Group
and the Company for the use of office premise.
Capital commitment
2016 2015
RM'000 RM'000
Group
Renovation of resorts
and motel rooms - 243
======= ========
30. Events after the balance sheet date
There were no material subsequent events since 31 December 2016
until 25 April 2017. The Directors proposed that a 2% interim
dividend for the financial year ended 31 December 2016 be
distributed to the shareholders during the year 2017. The interim
dividend is under the single tier system of GBP0.002 per share, on
403,209,200 ordinary shares.
31. Realised and unrealised Profits
The breakdown of retained profits of the Group, pursuant to the
format prescribed by Bursa Securities, is as follows:
As at As at
31 Dec 31 Dec
2016 2015
RM'000 RM'000
Total Retained Profits of the Company and its
subsidiaries:
- Realised b/f 133,277 133,187
(3,741) -
- Realised
(4,685) -
- Dividends
- Unrealised 170 90
---------- ----------
125,021 133,277
Total share of Retained Profits from associated
company:
- Realised b/f (2,149) -
- Unrealised (170) (2,149)
---------- ----------
Less : Consolidation effects (2,319) (2,149)
(7,307) (7,307)
---------- ----------
Total Group Retained Profit 115,395 123,821
---------- ----------
List of Properties Registered under the Group of companies
as at 31 December 2016
Age of Property (Year) Net Book Value 31/12/2016 Date of Acquisition/Last Revaluation
Leasehold/ Existing Use Land Area (RM'000)
Title Nos Tenure (Hectare)
------------------------------------- ------------- ------------------- --------------- --------------------------- ------------------------------ -----------------------------------------
1 Lot Nos: Freehold Oil Palm 138.57 101 324,000 Acquired on
204, 505, 626, 1005, Plantation 24.03.1914 -
1091, 653, 1204, 16.06.1916
1874, 1910, 1912, and last
1880, 1881, 1882, 23802, revalued on
23803, 23804, 23805, 15.02.2017
23806, 23807, 24375,
25269, 25270, 25275
Kajang estate, Mukim of Semenyih, Daerah Ulu Langat, Selangor
2 Lot Nos: Freehold Oil Palm 61.89 101 115,000 Acquired on
540, Plantation 24.03.1914 -
PT 21625 16.06.1916
PT 21630 and last
revalued on
15.02.2017
Dunedin estate, Mukim of Semenyih, Daerah Ulu Langat, Selangor
3 H.S.(D) 1470 Leasehold Resort 9.9947 27 5,476 Acquired on
PT Lot 354 expiring in Land and 18.08.1990
2050 Buildings
Mukim of Pulau Perhentian, Daerah Besut, Terengganu
Land, Factory Acquired on
Title and Office 24.08.2009
4 No. 9654 Freehold building 5.18 17 1,967 and last revalued on 22.01.2010
77/17 Moo 4 Bangmaruan Road, Tambon Bang Muang, Takuapa 82190, Phangnga, South Thailand
5 Lot No. 3468 Freehold Motel, Land and 2.38 32 19,434 Acquired on 30.10.2009 and last
Buildings revalued on
Mukim of Bukit Besar, Kuala Terengganu 11.01.2015
6 H.S.(D) 22923 Leasehold Leasehold 902.4195sq. m. 27.5 2,352 Acquired on
Bandar Port Swettenham expiring in Land 31.12.2012
2088
District of Klang, State of Selangor
List of Properties Registered under the Group of companies
as at 31 December 2016
Age of Property (Year) Net Book Value 31/12/2016 Date of Acquisition/Last Revaluation
Leasehold/ Existing Use Land Area (RM'000)
Title Nos Tenure (Hectare)
TL077512817 to
7 862 Leasehold Commercial, 5.278 47 6,948 Acquired on
TL077517170 to expiring Residential & 12.03.2014
830 in
TL0775256720to 2029 to Open Space
681 2069
TL 077517358 Land
to 545
District of
Sandakan,
Sabah
Lot 100,
8 GM1130 Freehold Industrial 4.046 24 20,000 Acquired on
Mukim Tanjung Land 29.12.2016
Dua
Belas
9 15-06A Leasehold Apartment 91 sq mtr 22 69 Acquired on
Amber Tower expiring 30.06.2003
in
Seri Mas 2085
Condominium
NOTICE OF ANNUAL GENERAL MEETING
NOTICE IS HEREBY GIVEN THAT the One Hundred and Seventh Annual
General Meeting ("AGM") of the Company will be held at Dewan Murni,
Ground Floor Menara Integriti, Institut Integriti Malaysia,
Persiaran Tuanku Syed Sirajuddin, Off Jalan Tuanku Abdul Halim,
50480 Kuala Lumpur, Malaysia, on Tuesday, 23 May 2017 at 10:00 a.m.
for the following purposes:
1. To lay before the meeting the financial statements for the year ended 31 December 2016 and
the Reports of the Directors and Auditors thereon.
2. To approve the payment of Directors' fees in respect of the year ended 31 December 2016. Resolution 1
3. To re-appoint Datuk Kamaruddin bin Awang who retires pursuant to Article 86 of the Company's Resolution 2
Articles of Association, and being eligible, offers himself for re-appointment.
4. To re-appoint the following Directors who retire pursuant to Article 86 of the Company's
Articles
of Association, and being eligible, offer themselves for re-appointment:
4.1 Dato' Adnan bin Maaruf Resolution 3
4.2 Dato' Haji Muda bin Mohamed Resolution 4
5. To re-appoint Messrs UHY Hacker Young LLP as Auditors of the Company and to authorise the Resolution 5
Directors to fix their remuneration.
AS SPECIAL BUSINESS
To consider and if thought fit, to pass the following Ordinary Resolutions:
6. CONTINUITY AS INDEPENT DIRECTORS
That subject to the passing of Resolutions 4.1 and 4.2, the following Directors who have
served
as Independent Non-Executive Directors for a cumulative term of more than nine (9) years,
continue to act as Independent Non-Executive Directors of the Company pursuant to
Recommendations
3.2 and 3.3 of the MCCG 2012:
6.1 Dato' Adnan bin Maaruf Resolution 6
6.2 Dato' Haji Muda bin Mohamed Resolution 7
7. CONTINUITY AS INDEPENT DIRECTOR
To re-appoint Dr. Radzuan bin A. Rahman who has served as Independent Non-Executive Director Resolution 8
for a cumulative term of more than nine (9) years, continue to act as Independent
Non-Executive
Director of the Company pursuant to Recommendations 3.2 and 3.3 of the MGGC 2012.
8. PROPOSED RESOLUTION TO EMPOWER THE DIRECTORS OF INCH KENNETH KAJANG RUBBER PUBLIC LIMITED Resolution 9
COMPANY ("IKKR" OR "THE COMPANY") TO ISSUE SHARES PURSUANT TO SECTION 551 OF THE UNITED
KINGDOM
COMPANIES ACT 2006 ("UK COMPANIES ACT 2006")
The New Mandate will enable the Directors to take swift action in case of, inter alia, a need
for corporate exercises or in the event of business opportunities or other arising
circumstances
which involve the issue of new shares, and to avoid delay and cost in convening general
meetings
to approve such issue of shares.
9. PROPOSED RENEWAL OF AUTHORITY FOR THE PURCHASE BY THE COMPANY OF ITS OWN SHARES Resolution 10
"THAT, subject to the Malaysian Companies Act 2016, the Memorandum and Articles of
Association
of the Company and the requirements of Bursa Malaysia Securities Berhad ("Bursa Securities")
and any other relevant authorities, the Company be generally and unconditionally authorised
to make market purchases (within the meaning of section 701(3) of the UK Companies Act 2006)
of ordinary shares of 10p each in the capital of the Company ("IKKR Shares") provided that:
(a) the maximum number of IKKR Shares hereby authorised to be purchased is 42,075,000
(representing
10% of the Company's issued ordinary share capital at 10 April 2017);
(b) the maximum amount of funds to be allocated by the Company shall not exceed the
audited retained
profits and the share premium account of the Company as at 31 December 2016 of
RM136,656,555
and RM8,434 respectively;
(c) the minimum price, exclusive of any expenses, which may be paid for an IKKR Share is
the prevailing
market share price;
(d) the maximum price, exclusive of any expenses, which may be paid for any such share is
an amount
not more than 15% above the weighted average share price for the five (5) market days
immediately
preceding the date of the purchase(s);
(e) upon the full implementation of the Proposed Share Buy-Back, the Directors of the
Company
be and hereby authorised to decide in their absolute discretion to either retain the
IKKR
Shares purchased by the Company pursuant to the Proposed Share Buy-Back ("Purchased
Shares")
as treasury shares to be resold on the stock exchanges where IKKR Shares are listed;
or the
Purchased Shares may be cancelled; or the Purchased Shares may in part be retained as
treasury
shares and the remainder cancelled;
(f) the authority hereby conferred shall be in force immediately upon the passing of this
resolution
until the earlier of 24 November 2018 (the date which is 18 months after the meeting)
or the
close of the next AGM of the Company or the authority is revoked or varied by ordinary
resolution
passed by the shareholders in a general meeting; and
(g) the Company may make a contract for the purchase of IKKR Shares under this authority
before
the expiry of this authority which would or might be executed wholly or partly after
the expiry
of such authority, and may make purchases of IKKR Shares in pursuance of such a
contract as
if such authority had not expired."
To transact any other business of which due notice shall have
been given.
By order of the Board
LEE THAI THYE (LS 0000737)
Company Secretary
Kuala Lumpur, Malaysia
2 May 2017
NOTES:
Appointment of Proxy
1. A member of the Company entitled to attend and vote is
entitled to appoint a proxy or proxies to attend and vote in his
stead. A proxy need not be a member of the Company.
2. The instrument appointing a proxy shall be in writing under
the hand of the appointor or his attorney duly authorised in
writing, or if the appointor is a corporation, either under its
common seal or signed by an officer or attorney duly
authorised.
3. Where a member appoints more than one proxy, the appointment
shall not be valid unless he specifies the proportion of his
holding to be represented by each proxy.
4. Any alteration in the proxy form must be initialled.
5. The instrument appointing a proxy must be deposited at the
Registrar's Office, 22nd Floor Menara Promet (KH), Jalan Sultan
Ismail, 50250 Kuala Lumpur, Malaysia, not less than forty-eight
(48) hours before the time for holding the meeting or any
adjournment thereof. For shareholders residing outside of Malaysia,
the Proxy Form could be forwarded by fax at +603 2141 9650 or by
email to ir@ikkr.com.my.
6. For the purpose of determining a member who shall be entitled
to attend the 107th AGM, the Company shall be requesting Bursa
Malaysia Depository Sdn Bhd to issue a General Meeting Record of
Depositors ("ROD") as at 17 May 2017. Only a depositor whose name
appears on the Register of Members/ROD therein shall be entitled to
attend the said meeting or appoint a proxy to attend and/or vote on
his/her stead.
Audited Financial Statements
7. The Audited Financial Statements laid at this meeting
pursuant to Section 340(1)(a) of the Malaysian Companies Act 2016
are meant for discussion only. It does not require shareholders'
approval, and therefore, not put forward for voting.
Directors' Fees
8. Section 230(1) of the Malaysian Companies Act 2016 provides
that "the fees" of the Directors and "any benefits" payable to the
Directors of a listed company and its subsidiaries shall be
approved at a general meeting. The Board agreed that the
shareholders' approval shall be sought at the 107(th) AGM on the
Directors' fees.
Re-election of Directors Who Retire Pursuant to Article 86 of
the Company's Articles of Association ("AA")
9. Article 86 of the AA provides an election of Directors shall
take place each year. At each AGM one-third of the Directors for
the time being (or if their number is not a multiple of three, the
number nearest to but no greater than one-third) shall retire from
office provided always that all Directors shall retire from office
once at least in each three (3) years but shall be eligible for
re-election.
With the current Board size of five (5), three (3) Directors are
to retire in accordance with Article 86 of the AA.
9.1 Datuk Kamaruddin bin Awang, who will be retiring and being
eligible, offers himself for re-appointment.
9.2 With the coming into force the Malaysian Companies Act 2016
on 31 January 2017, there is no age limit for Directors. At the
106(th) AGM of the Company held on 24 May 2016, Dato' Adnan bin
Maaruf and Dato' Haji Muda bin Mohamed, both being above the age of
70, were re-appointed pursuant to Section 129 of the Malaysian
Companies Act 1965 to hold office until the conclusion of the
107(th) AGM. Their term of office will end at the conclusion of the
107(th) AGM and they have offered themselves for
re-appointment.
The Nomination Committee of the Company has accessed the
criteria and contributions of the above three (3) Directors and
recommended for their re-appointment. The Board has also endorsed
the Nomination Committee recommendation that they be re-appointed
as Directors of the Company.
EXPLANATORY NOTES ON SPECIAL BUSINESS:
Continuity as Independent Directors
10. In line with Recommendations 3.2 and 3.3 of the MCCG 2012,
the Board has vide the Nomination Committee's recommendations that
both Dato' Adnan bin Maaruf and Dato' Haji Muda bin Mohamed to be
retained as Independent Non-Executive Directors. This will subject
to the passing of Resolutions No. 6 and 7.
The Nomination Committee has also recommended that Dr. Radzuan
bin A. Rahman to be retained as Independent Non-Executive
Director.
The Committee is of the opinion that the Directors have complied
with the independence criteria as prescribed in the Main Market
Listing Requirements ("MMLR") of Bursa Malaysia Securities Berhad
and remained independent in exercising their judgement and in
carrying out their duties as Independent Directors. The Company
benefits from the experience of these Independent Non-Executive
Directors who have over time, gained valuable insights into the
Group, its market and the industry.
Their knowledge of the Group's various core business operations
during their tenure of office will enable them to discharge their
duties effectively. They are able to act in the best interests of
the Company in their contributions and performance together with
ability to make analytical inquiries and offer advice and
guidance.
Issue Shares Pursuant to Section 551 of the UK Companies Act
2006
11. This Resolution is proposed pursuant to Section 551 of the
UK Companies Act 2006, and if passed, will give the Directors of
the Company, from the date of the above AGM, authority to issue
ordinary shares in the Company not exceeding 10% of the issued
capital of the Company. This authority, unless revoked or varied at
a general meeting, will expire at the conclusion of the next AGM of
the Company.
As at the date of this Notice, no new shares in the Company were
issued pursuant to the mandate granted to the Directors at the
106(th) AGM held on 24 May 2016 which will lapse at the conclusion
of the 107(th) AGM.
The renewal of this mandate will enable the Directors to avoid
any delay and cost involved in convening a general meeting. It is
thus appropriate to seek members' approval.
Proposed Renewal of Authority for the Purchase by the Company of
its Own Shares
12. The details on the Proposed Renewal of Authority is included
in the Statement to Shareholders dated 29 April 2017 which is
enclosed together with the Annual Report.
INCH KENNETH KAJANG RUBBER PUBLIC LIMITED COMPANY FORM OF
PROXY
CDS AC No: _____________________
No of Shares Held: _____________________
I/We________________________________________________________(NRIC/CO
NO): _____________________
(FULL NAME IN BLOCK LETTERS)
of_____________________________________________________________________________________________
(ADDRESS)
being a shareholder/shareholders of Inch Kenneth Kajang Rubber
Public Limited Company, hereby appoint *The Chairman of the Company
or
___________________________________________________________________________________(___________)
(FULL NAME OF PROXY) %
of_____________________________________________________________________________________________
(ADDRESS)
*and/or failing whom
__________________________________________________________________(__________)
FULL NAME OF PROXY) %
of_____________________________________________________________________________________________
(ADDRESS)
as *my/our proxy to vote on *my/our behalf at the 107th Annual
General Meeting of the Company to be held at Dewan Murni, Ground
Floor Menara Integriti, Institut Integriti Malaysia, Persiaran
Tuanku Syed Sirajuddin, Off Jalan Tuanku Abdul Halim, 50480 Kuala
Lumpur, Malaysia, on Tuesday, 23 May 2017 at 10:00 a.m. for the
following purposes:
NO RESOLUTION FOR AGAINST
1 To approve the payment of Directors' fees
2 Re-appointment of Datuk Kamaruddin bin Awang
3 Re-appointment of Dato' Adnan bin Maaruf
4 Re-appointment of Dato Haji Muda bin Mohamed
5 Re-appoint Messrs UHY Hacker Young LLP as Auditors of the Company and to authorise the
Directors
to fix their remuneration
6.1 SPECIAL BUSINESS - ORDINARY RESOLUTION 6
To re-appoint Dato' Adnan bin Maaruf
6.2 SPECIAL BUSINESS - ORDINARY RESOLUTION 7
To re-appoint Dato' Haji Muda bin Mohamed
7 SPECIAL BUSINESS - ORDINARY RESOLUTION 8
To re-appoint Dr. Radzuan bin A. Rahman
8 SPECIAL BUSINESS - ORDINARY RESOLUTION 9
To approve the proposed resolution to empower the Directors of the Company to issue shares
pursuant to section 551 of the UK Companies Act 2006
9 SPECIAL BUSINESS - ORDINARY RESOLUTION 10
To approve the proposed renewal of authority for the purchase by the Company of its own
shares
Please indicate with an 'X' in the appropriate spaces how you
wish your votes to be casted. If no specific direction as to voting
is given, your proxy will vote or abstain from voting at his/her
discretion.
_______________________________ Dated this day _______ of
__________ 2017
Signature/Seal of Shareholder(s)
Tel No: _________________________
*Delete whichever is not applicable.
Note:
A member of the Company entitled to attend and vote is entitled
to appoint a proxy or proxies to attend and vote in his stead. A
proxy need not be a member of the Company. Where a member appoints
more than one proxy, the appointment shall not be valid unless he
specifies the proportion of his holding to be represented by each
proxy. Any alteration in the proxy form must be initialled. The
instrument appointing a proxy must be deposited at the Registrar's
Office of the Company, not less than forty-eight (48) hours before
the time for holding the meeting. For shareholders residing outside
of Malaysia, the Proxy Form could be forwarded by fax at +603 2141
9650 or by email to ir@ikkr.com.my
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR OKCDDBBKKOQB
(END) Dow Jones Newswires
May 02, 2017 02:00 ET (06:00 GMT)
Inch Kenneth Kajang Rubber (LSE:IKK)
Historical Stock Chart
From Mar 2024 to Apr 2024
Inch Kenneth Kajang Rubber (LSE:IKK)
Historical Stock Chart
From Apr 2023 to Apr 2024