PERAK CORPORATION BERHAD INCORPORATED IN MALAYSIA (210915-U)
2017 ANNUAL REPORT page
NOTICE OF ANNUAL GENERAL MEETING 2
CORPORATE INFORMATION 6
FINANCIAL HIGHLIGHTS 7 PERAK CORPORATION CORPORATE STRUCTURE 8 BERHAD PROFILE OF DIRECTORS 9 INCORPORATED IN MALAYSIA (210915-U) KEY SENIOR MANAGEMENT 13 ANNUAL CHAIRMAN’S STATEMENT • PENYATA PENGERUSI 14 REPORT MANAGEMENT DISCUSSION AND ANALYSIS 20 SUSTAINABILITY STATEMENT 26
2017 CORPORATE GOVERNANCE OVERVIEW STATEMENT 31
STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL 42
AUDIT COMMITTEE REPORT 45
ADDITIONAL COMPLIANCE INFORMATION 49
ANALYSIS OF SHAREHOLDINGS 50
SUMMARY OF PROPERTIES 52
STATEMENT OF DIRECTORS’ RESPONSIBILITIES 53
FINANCIAL STATEMENTS PROXY FORM PERAK CORPORATION BERHAD (Company No.: 210915-U) (INCORPORATED IN MALAYSIA)
NOTICE OF ANNUAL GENERAL MEETING
NOTICE IS HEREBY GIVEN that the Twenty-seventh Annual General Meeting (“AGM”) of the Company will be held at Amanjaya Convention Centre, Casuarina @ Meru Hotel, No. 1-C, Jalan Meru Casuarina, Bandar Meru Raya, 30020 Ipoh, Perak Darul Ridzuan on Wednesday, 27 June 2018 at 10.00 a.m. to transact the following businesses:
AGENDA
1. To receive the Audited Financial Statements for the financial year ended 31 [Please refer December 2017 together with the Report of the Directors and Auditors thereon. to Note 8]
2. To approve the increase in Directors’ fees in respect of the financial year ended 31 Resolution 1 December 2017 and the payment of Directors’ fees of RM441,650 thereon.
3. To approve the payment of Directors’ benefits up to an amount of RM150,000, in Resolution 2 respect of the financial year ended 31 December 2017 and for the period until the next AGM of the Company.
4. To re-elect the following Directors who retire by rotation in accordance with Article 80 of the Articles of Association: a) Dato’ Dr Vasan a/l Sinnadurai Resolution 3 b) Datuk Dr Wan Norashikin binti Wan Noordin Resolution 4
5. To re-appoint Messrs Ernst & Young as Auditors of the Company for the financial year Resolution 5 ending 31 December 2018 and to authorise the Directors to fix their remuneration.
AS SPECIAL BUSINESS
To consider and, if thought fit, to pass the following resolutions with or without modifications:
6. Ordinary Resolution – Continuing in office as Independent Non-executive Resolution 6 Director
“That authority be and is hereby given to Tuan Haji Ab Rahman bin Mohammed who has served as an Independent Non-executive Director of the Company for a cumulative term of more than nine (9) years to continue to act as Independent Non-executive Director of the Company.”
page ANNUAL REPORT 2017 2 PERAK CORPORATION BERHAD (210915-U) NOTICE OF ANNUAL GENERAL MEETING (CONTINUED)
7. Ordinary Resolution – Proposed Renewal of Shareholders’ Mandate for Resolution 7 Recurrent Related Party Transactions of a Revenue or Trading Nature
“That approval be and is hereby given pursuant to Paragraph 10.09 of Bursa Malaysia Securities Berhad’s Main Market Listing Requirements for the Company and/or its subsidiaries to enter into the recurrent related party transactions of a revenue or trading nature which are necessary for day-to-day operations with the Related Parties, as detailed in Section 2.2 of Part A of the Circular to Shareholders of the Company dated 30 April 2018, subject to the following:
(a) the transactions are carried out in the ordinary course of business on terms not more favourable to the Related Parties than those generally available to the public and not detrimental to minority shareholders of the Company; and
(b) disclosure is made in the annual report of the aggregate value of transactions conducted pursuant to the shareholders’ mandate during the financial year based on the following information:
(i) the type of the recurrent related party transactions made; and (ii) the names of the Related Parties involved in each type of the recurrent related party transactions made and their relationship with the Company.
That the approval given in the paragraph above shall only continue to be in force until:
(a) the conclusion of the next AGM of the Company, at which time it will lapse, unless by a resolution passed at the said AGM, the authority is renewed;
(b) the expiration of the period within which the next AGM after the date it is required to be held pursuant to section 340(2) of the Companies Act 2016 (“Act”), but must not extend to such extension as may be allowed pursuant to section 340(4) of the Act; or
(c) revoked or varied by resolution passed by the shareholders in general meeting;
whichever is the earlier.
And that authority be and is hereby given to the Directors of the Company to complete and do all such acts and things (including executing all such documents as may be required) to give effect to the transactions contemplated and/or authorised by this Ordinary Resolution.”
8. Special Resolution – Proposed Adoption of a New Constitution of the Company Resolution 8
“That approval be and is hereby given to adopt a new Constitution of the Company as set out in Part B of the Circular to Shareholders of the Company dated 30 April 2018 in place of the existing Memorandum and Articles of Association of the Company with immediate effect.
And that authority be and is hereby given to the Directors of the Company to assent to any modifications, variations and/or amendments as may be required by the relevant authorities and to do all acts and things and take all such steps as may be considered necessary to give full effect to the foregoing.”
page ANNUAL REPORT 2017 3 PERAK CORPORATION BERHAD (210915-U) NOTICE OF ANNUAL GENERAL MEETING (CONTINUED)
9. To transact any other business of which due notice shall have been given in accordance with the Act and the Company’s Articles of Association.
By order of the Board
Cheai Weng Hoong Company Secretary
Ipoh 30 April 2018
NOTES: 1. A member of the Company entitled to attend and vote at the meeting may appoint any person to be his/ her proxy to attend and vote in his/her stead. A proxy may but need not be a member of the Company and there shall be no restriction as to the qualification of the proxy. A proxy shall have the same rights as the member to speak at the meeting. 2. Where a member is an Exempt Authorised Nominee which holds ordinary shares in the Company for multiple beneficial owners in one securities account (“omnibus account”), there is no limit to the number of proxies which the Exempt Authorised Nominee may appoint in respect of each omnibus account it holds. 3. When a member appoints more than one proxy the appointments shall be invalid unless he/she specifies the proportion of his/her shareholding to be represented by each proxy. 4. The instrument appointing a proxy shall be in writing under the hand of the appointor or his/her attorney duly authorised in writing or if the appointor is a corporation, either under its common seal or under the hand of an officer or attorney duly authorised. 5. The instrument appointing a proxy must be deposited at the Registered Office of the Company at D-3-7, Greentown Square, Jalan Dato’ Seri Ahmad Said, 30450 Ipoh, Perak Darul Ridzuan at least 48 hours before the time appointed for holding the AGM or at any adjournment thereof. 6. Only members whose names appear in the Record of Depositors as at 21 June 2018 will be entitled to attend and vote at the above Meeting. 7. The registration for the above Meeting will commence on Wednesday, 27 June 2018 at 9.00 a.m.
8. Audited Financial Statements for financial year ended 31 December 2017 The audited financial statements under Agenda 1 are meant for discussion only, as the provision of Section 340(1)(a) of the Act does not require a formal approval of the shareholders and hence, Agenda 1 is not put forward for voting. 9. Resolution 1 The proposed increase in Directors’ fees is equivalent to 10% , or RM6,600 for each director, as compared to the previous financial year. Resolution 1, if passed, will allow the Company to pay the Directors’ fees of RM441,650 in respect of the financial year ended 31 December 2017 comprised the following: Fees (RM) Non-Executive Directors 363,000 Executive Director 72,600 Audit Committee’s Chairman 6,050 The Chairman of the Company does not receive any Director’s fee. He is paid a remuneration pursuant to the terms and conditions of his appointment as an executive director of a subsidiary of the Company.
page ANNUAL REPORT 2017 4 PERAK CORPORATION BERHAD (210915-U) NOTICE OF ANNUAL GENERAL MEETING (CONTINUED)
10. Resolution 2 Resolution 2, if passed, will allow the Company to pay the Directors’ benefits comprising the meeting and travelling allowances to the directors for the financial year ended 31 December 2017 and as and when incurred for the period until the next AGM of the Company. 11. Resolutions 3 and 4 Resolutions 3 and 4, if passed, will re-elect Dato’ Dr Vasan a/l Sinnadurai and Datuk Dr Wan Norashikin binti Wan Noordin respectively as directors of the Company. Pursuant to Article 80 of the Company’s Articles of Association, an election of directors takes place subsequent to their appointment each year where one-third (1⁄3) of the directors or if their number is not three (3) or a multiple of three (3), then the number nearest to one-third (1⁄3), shall retire by rotation from office and shall be eligible for re-election at each AGM and that each director shall retire from office at least once in every three (3) years and shall be eligible for re-election. The profiles of the directors who retire by rotation and are standing for re-election are disclosed on pages 11 and 12 of the Annual Report and the details of their interest in the securities of the Company are disclosed under Analysis of Shareholdings on page 50 of the Annual Report. 12. Resolution 6 Resolution 6, if passed, will allow Tuan Haji Ab Rahman bin Mohammed to continue to act as an Independent Non-Executive Director of the Company. The term of office of Tuan Haji Ab Rahman bin Mohammed as an Independent Non-Executive Director of the Company shall be reaching a cumulative term of more than nine (9) years. The Board has assessed the independence of Tuan Haji Ab Rahman bin Mohammed and concurred with the recommendation of the Nomination and Remuneration Committee that the approval of the members be sought to re-appoint Tuan Haji Ab Rahman bin Mohammed as Independent Non-executive Director as he possesses the following aptitudes necessary in discharging his roles and functions as Independent Non-executive Director of the Company:- i. He has fulfilled the criteria under the definition of an independent director as stated in the Main Market Listing Requirements of Bursa Malaysia Securities Berhad; ii. He has ensured effective check and balance in the proceedings of the Board; iii. He has actively participated in Board deliberations, provided independent voice on the Board to ensure that objectivity in decision-making of the Board is achieved and that no judgement can be compromised by, amongst others, familiarity or close relationship with other Board members; iv. He has exercised due care in the interest of the Company and members during his tenure as independent director of the Company; and v. He has attended all the meetings held and participation in and contributions to the activities of the Board. 13. Resolution 7 Resolution 7, if passed, will allow the Company and its subsidiaries to enter into the recurrent related party transaction(s) of a revenue or trading nature which are necessary for the day-to-day operations and are in the ordinary course of business of the Group. Please refer to Part A of the Circular to Shareholders dated 30 April 2018 which is enclosed together with the Annual Report of the Company. 14. Resolution 8 Special Resolution 8, if passed, will bring the new Constitution of the Company in line with the enforcement of the Act and to ensure compliance with the Main Market Listing Requirements of Bursa Malaysia Securities Berhad. The details of the proposed new Constitution of the Company are set out in Part B of the Circular to Shareholders dated 30 April 2018 which is enclosed together with the Annual Report of the Company.
page ANNUAL REPORT 2017 5 PERAK CORPORATION BERHAD (210915-U) CORPORATE INFORMATION
BOARD OF DIRECTORS PRINCIPAL PLACE OF BUSINESS No. 1-A, Blok A, Menara PKNP YB Dato’ Nasarudin bin Hashim dimp, amp, bpc, bcm Chairman, Non-Independent Non-Executive Jalan Meru Casuarina Bandar Meru Raya Dato’ Wan Hashimi Albakri bin Wan Ahmad Amin Jaffri dimp 30020 Ipoh Non-Independent Non-Executive Perak Darul Ridzuan Tuan Haji Ab Rahman bin Mohammed Tel : +6 (05) 501 9888 Senior Independent Non-Executive Fax : +6 (05) 501 9999 Website : www.perakcorp.com.my Dato’ Abd Karim bin Ahmad Tarmizi dpmp Independent Non-Executive COMPANY SECRETARY Dato’ Dr Vasan a/l Sinnadurai dpmp Mr Cheai Weng Hoong (LS 0005624) Independent Non-Executive
Datuk Dr Wan Norashikin binti Wan Noordin dpsm, pmp AUDITORS Independent Non-Executive Ernst & Young (AF 0039) Chartered Accountants Dato’ Aminuddin bin Md Desa dsdk Group Chief Executive Officer, Non-Independent PRINCIPAL BANKERS CIMB Bank Berhad NOMINATION AND REMUNERATION COMMITTEE Malayan Banking Berhad Dato’ Abd Karim bin Ahmad Tarmizi dpmp (Chairman) Dato’ Wan Hashimi Albakri bin Wan Ahmad Amin Jaffri dimp REGISTERED OFFICE Dato’ Dr Vasan a/l Sinnadurai dpmp D-3-7, Greentown Square Datuk Dr Wan Norashikin binti Wan Noordin dpsm, pmp Jalan Dato’ Seri Ahmad Said 30450 Ipoh, Perak Darul Ridzuan AUDIT COMMITTEE Tel : +6 (05) 241 7762, 253 0760 Fax : +6 (05) 241 6761 Tuan Haji Ab Rahman bin Mohammed (Chairman) Dato’ Dr Vasan a/l Sinnadurai dpmp REGISTRAR Datuk Dr Wan Norashikin binti Wan Noordin dpsm, pmp Shared Services & Resources Sdn Bhd D-3-7, Greentown Square MANAGEMENT TEAM Jalan Dato’ Seri Ahmad Said 30450 Ipoh, Perak Darul Ridzuan Dato’ Aminuddin bin Md Desa dsdk Tel : +6 (05) 241 7762, 253 0760 Group Chief Executive Officer Fax : +6 (05) 241 6761 Perak Corporation Berhad Rozahan bin Osman STOCK EXCHANGE LISTING Group Chief Financial Officer Main Market, Perak Corporation Berhad Bursa Malaysia Securities Berhad Name : PRKCORP Stock Code : 8346
page ANNUAL REPORT 2017 6 PERAK CORPORATION BERHAD (210915-U) FINANCIAL HIGHLIGHTS 31 DECEMBER
2013 2014 2015 2016 2017
2013 2014 2015 2016 2017 RM ‘000 RM ‘000 RM ‘000 RM ‘000 RM ‘000
Revenue 133,987 167,043 134,174 146,704 185,788
Earnings before interest, taxes, 67,386 80,946 80,946 19,186 -263,170 depreciation and amortisation
Profit before tax 59,624 71,089 109,493 1,731 -320,109
Profit after tax 44,314 51,769 92,524 -16,015 -340,573
Net profit attributable 26,473 38,796 77,449 -15,580 -174,957 to equity holders
2013 2014 2015 2016 2017 Total assets RM ‘000 769,889 827,975 747,462 1,185,132 1,080,624 Shareholders' equity RM ‘000 599,713 651,423 661,842 643,063 299,986 Owners' equity RM ‘000 514,281 563,018 575,862 561,212 386,255 Total borrowings RM ‘000 102,416 104,925 29,172 446,136 536,557 Paid-up capital RM ‘000 100,000 100,000 100,000 100,000 272,770 Net assets per share RM 5.14 5.63 5.76 5.61 1.42 Share price as at fiscal year-end RM 2.92 2.28 2.26 2.26 1.28 Return on total assets % 7.74 8.59 14.65 0.15 -29.62 Return on equity % 5.15 6.89 13.45 -2.78 -45.30 Gross dividend per share % 8.50 0.00 0.00 0.00 0.00 Gross dividend yield per share % 2.91 0.00 0.00 0% 0% Earnings per share sen 26.47 38.80 77.45 -15.58 -64.14 Price-earnings ratio times 11.0 5.9 0.0 -0.15 -0.02 Gearing ratio % 1.0 14.0 -4.8 75.3 183.0
page ANNUAL REPORT 2017 7 PERAK CORPORATION BERHAD (210915-U) CORPORATE STRUCTURE AS AT 31 DECEMBER 2017
PERAK CORPORATION BERHAD MANAGEMENT SERVICES & OTHERS
PCB Leisure PCB Equity PCB Taipan PCB Development Sdn Bhd (100%) Sdn Bhd (100%) Sdn Bhd (100%) Sdn Bhd (100%)
Casuarina Pangkor Visi Cenderawasih Sdn Bhd (100%) Sdn Bhd (49%)
Casuarina Tanjong Unified Million (M) Malim Sdn Bhd (100%) Sdn Bhd (30%)
Casuarina Taiping Animation Theme Sdn Bhd (100%) Park Sdn Bhd (51%)
Casuarina Teluk Intan Lumut Maritime Terminal Sdn Bhd Cempaka Majujaya Sdn Bhd (30%) Sdn Bhd (100%) (50% + 1 share)
Casuarina Boathouse LMT Capital OPG Meru Land Sdn Bhd (100%) Sdn Bhd (100%) Sdn Bhd (20%)
Lanai Casuarina Gelombang Prestasi Sdn Bhd (100%) Sdn Bhd (20%)
Labu Sayong Cafe Casuarina Meru D’Aman Residences Sdn Bhd (100%) Sdn Bhd (89.54%) Sdn Bhd (20%)
Meru Raya Park Silveritage Corporation Sdn Bhd (100%) Sdn Bhd (100%)
Meru Raya Water Cash Complex Rungkup Port Sdn Bhd Park Sdn Bhd (100%) (73.91%) Sdn Bhd (70%)
BioD Leisure and Recreation Sdn Bhd (100%)
Rimba Land Sdn Bhd (100%) formerly known as Pangkor Village Resort Sdn Bhd
page ANNUAL REPORT 2017 8 PERAK CORPORATION BERHAD (210915-U) PROFILE OF DIRECTORS
DATO’ NASARUDIN BIN HASHIM dimp, amp, bpc, bcm Non-Independent Non-Executive Director Malaysian, Male, aged 67 years
Chairman
YB Dato’ Nasarudin bin Hashim was first appointed to the Board on 25 August 2009 and thereafter as the Chairman of the Board on 26 August 2009.
He graduated with a Bachelor of Arts with Honours from University of Malaya. He also holds a Certificate in Urban and Rural Planning, United Kingdom.
He has previously served as an Administrative and Diplomatic Services Officer for 23 years at state and federal level. He was a member of Parliament (Parit) from 2004 to 2008 and has been elected as a member of the State Legislative Assembly (Bota, Perak) since 2008. He was previously the Chairman of FELCRA Bhd (2006-2008) and Chairman of Technology Park Malaysia Corporation Sdn Bhd (2009 to 2015). He is the Executive Director of PCB Development Sdn Bhd, a wholly owned subsidiary of the Company, since 1 September 2009.
He attended 5 out of 7 Board of Directors’ meetings held during the financial year ended 31 December 2017. He does not have any family relationship with any director and/or major shareholder and has no conflict of interest with the Company. He has no conviction for any offence within the past 5 years nor any public sanction or penalty imposed by the relevant regulatory bodies during the financial year.
page ANNUAL REPORT 2017 9 PERAK CORPORATION BERHAD (210915-U) PROFILE OF DIRECTORS (CONTINUED)
TUAN HAJI AB RAHMAN BIN MOHAMMED Senior Independent Non-Executive Director, Malaysian, Male, aged 72 years
Tuan Haji Ab Rahman bin years. He has served as Deputy Mohammed was first appointed Auditor General of Jabatan to the Board on 7 August 2007. Audit Negara (1996-2000) and He was appointed as a member Chief Internal Auditor for Tenaga and thereafter the Chairman Nasional Berhad (2001-2005). of the Audit Committee on 29 He attended all 7 out of 7 Board August 2007 and 26 August 2009 of Directors’ meetings held respectively. during the financial year ended 31 He graduated with a Bachelor of December 2017. He does not have Economics with Honours from any family relationship with any University of Malaya in 1969. He director and/or major shareholder obtained Masters in Business and has no conflict of interest with Management from Asian Institute the Company. He has no conviction of Management, Philippines in for any offence within the past 5 1997. He is a Chartered Member of years nor any public sanction or the Institute of Internal Auditors, Malaysia. penalty imposed by the relevant regulatory bodies during the financial year. Previously, he sat on the Board on behalf of Permodalan Nasional Berhad, then a major shareholder of the He has an indirect interest via his spouse and child’s Company. He has been redesignated as an Independent shareholdings of 6,000 ordinary shares of the Company. Non Executive Director on 26 August 2009. He has served in various Government Departments for 30
DATO’ ABD KARIM BIN AHMAD TARMIZI dpmp Independent Non-Executive Director, Malaysian, Male, aged 68 years
Dato’ Abd Karim bin Ahmad Group Berhad. He has previously Tarmizi was first appointed to the served in the listed boards of Land Board on 2 November 2009. He and General Bhd, SPPK Bhd, RHB was appointed as the Chairman of Bhd and as a Council member of the Nomination and Remuneration the Malaysian Timber Council. He Committee on 24 November 2014. was active in the Petrochemical Industry as past President of the He graduated with a Bachelor of Plastic Resins Producers Group Economics from North Queensland (PRPG) and Vice President of University, Australia. An Australian the Malaysian Petrochemical trained Chartered Accountant, he Association (MPA). He also laid is also a member of the Malaysian the foundation as initial Chairman Institute of Accountants. for the formation of the Malaysian In 1976-1980, he served the Plastic Forum (MPF), a plastic government in the Accountant advocacy group. General’s Office in a senior He attended all 7 out of 7 Board of Directors’ meetings position. He left for the private sector initially joining held during the financial year ended 31 December Paremba/Sime UEP Bhd. Thereafter, he held a few 2017. He does not have any family relationship with any senior corporate positions in the Sime Darby Group. He director and/or major shareholder and has no conflict ended his professional corporate career as the Group of interest with the Company. He has no conviction Managing Director of Land & General Berhad. In 2001, for any offence within the past 5 years nor any public he initiated the management buyout of Industrial sanction or penalty imposed by the relevant regulatory Resins (Malaysia) Sdn Bhd and spearheaded its bodies during the financial year. operation and listing in 2005 as Chairman/CEO of IRM
page ANNUAL REPORT 2017 10 PERAK CORPORATION BERHAD (210915-U) PROFILE OF DIRECTORS (CONTINUED)
DATO’ WAN HASHIMI ALBAKRI BIN WAN AHMAD AMIN JAFFRI dimp Non-Independent Non-Executive Director Malaysian, Male, aged 59 years
Dato’ Wan Hashimi Albakri bin service company. Prior to that, Wan Ahmad Amin Jaffri was first he was the General Manager for appointed to the Board on 18 June General Lumber Construction 2008. He was appointed as the Sdn Bhd, the construction arm Chairman of the Nomination and of General Lumber & Fabricators Remuneration Committee on 2 Berhad. November 2009 and re-designated Throughout an extensive 36 as a member of the Nomination years experience in the property and Remuneration Committee on development and construction 24 November 2014. industry, he has been with various He graduated with a Bachelor organisations, including IKRAM, of Science in Civil Engineering. Pengurusan Lebuhraya Berhad He sits on the Board on behalf and Island & Peninsular Berhad. of Sime Darby Property Berhad, He is the Vice President of REHDA a major shareholder of the Malaysia and Chairman for REHDA Company where he is the Chief Operating Officer – (KL) Branch Malaysia. He is a member of Construction Township Development. Prior to that, he was the Chief Industry Transformation Programme Working Groups. Executive Officer of Negara Properties (M) Berhad, the In addition to that, he is the Chairman for the Task main property arm and subsidiary of Golden Hope Force on Property Development Handbook and the Plantations Berhad. Chairman for Taskforce on First Home Buyer’s Guide He was the Chief Operating Officer of Putrajaya for REHDA Malaysia. Homes Sdn Bhd, a subsidiary of Putrajaya Holdings He attended 5 out of 7 Board of Directors’ meetings Sdn Bhd, the master developer for Putrajaya. He has held during the financial year ended 31 December been involved, hands-on in the company’s activities 2017. He does not have any family relationship with any including strategizing, planning, development, director and/or major shareholder and has no conflict construction and marketing of 67,000 residential units of interest with the Company. He has no conviction in Putrajaya. for any offence within the past 5 years nor any public He was also the Executive Director with Irat sanction or penalty imposed by the relevant regulatory Management Services Sdn Bhd, a Project Management bodies during the financial year.
DATUK DR WAN NORASHIKIN BINTI WAN NOORDIN dpsm, pmp Independent Non-Executive Director, Malaysian, Female, aged 45 years
Datuk Dr Wan Norashikin binti Wan for Kampong Gajah from March Noordin was first appointed to 2008 to April 2013. the Board, a member of the Audit She attended all 7 out of 7 Board Committee and a member of the of Directors’ meetings held Nomination and Remuneration during the financial year ended 31 Committee on 2 November 2009. December 2017. She does not have She graduated with a Bachelor any family relationship with any of Dental Surgery (BDS) from director and/or major shareholder the University of Malaya in 1997. and has no conflict of interest She had previously served in the with the Company. She has no Ministry of Health as a Government conviction for any offence within Dental Officer from 1997 before the past 5 years nor any public she became a private dental sanction or penalty imposed by practitioner in 2005. She served as the relevant regulatory bodies the Perak State Assemblywoman during the financial year.
page ANNUAL REPORT 2017 11 PERAK CORPORATION BERHAD (210915-U) PROFILE OF DIRECTORS (CONTINUED)
DATO’ DR VASAN A/L SINNADURAI dpmp Independent Non-Executive Director, Malaysian, Male, aged 54 years
Dato’ Dr Vasan a/l Sinnadurai was He is currently the Consultant first appointed to the Board, a of Orthopaedic and Adult member of the Audit Committee Reconstruction Surgeon at and a member of the Nomination Pantai Hospital Ipoh and Adjunct and Remuneration Committee on Professor of AIMST University. He 2 November 2009. has provided medical services for more than 27 years. He graduated with Bachelor of Medicine and Bachelor of Surgery He attended 6 out of 7 Board of from University of Madras, India Directors’ meetings held during in 1991. He received the M. MED the financial year ended 31 Orthopaedic from University December 2017. He does not have Science Malaysia (USM) in 2001. any family relationship with any He also holds various fellowships, director and/or major shareholder among others, Fellowship in and has no conflict of interest Foot and Ankle Reconstruction with the Company. He has no (Australia), Fellowship in Sport and Shoulder (Korea), conviction for any offence within the past 5 years nor American Orthopaedic Travelling (USA) and is a any public sanction or penalty imposed by the relevant Certified Medical Independent Assessor (CMIA). regulatory bodies during the financial year.
DATO’ AMINUDDIN BIN MD DESA dsdk Non-Independent Executive Director, Malaysian, Male, aged 56 years, Group Chief Executive Officer
Dato’ Aminuddin bin Md Desa Chief Financial Officer of Malayan was appointed to the Board on Banking Bhd. 27 February 2013, following his He sits on the board of Majuperak appointment as the Group Chief Holdings Berhad and UiTM Executive Officer of the Company Holdings Sdn Bhd. He has also on 1 February 2013. served on the boards of Malayan He graduated with an Advance Banking Berhad, Maybank Diploma in Business Studies Investment Bank Bhd, Etiqa Takaful (Insurance) and a Diploma in Bhd, Etiqa Insurance Bhd, Pak- Accountancy from Universiti Kuwait Takaful Co. Ltd, Mayban Teknologi MARA. He is also Investment Management Bhd and an Associate Member of the a few off shore companies. Chartered Insurance Institute, He attended all 7 out of 7 Board of United Kingdom and of the Directors’ meetings held during the Malaysian Insurance Institute. financial year ended 31 December He is the Chief Executive of Perbadanan Kemajuan 2017. He does not have any family relationship with Negeri Perak where he was appointed on 1 February any director and/or major shareholder and has no 2013. Previously, he has served as Deputy General conflict of interest with the Company. He has no Manager of Syarikat Takaful Malaysia Bhd, General conviction for any offence within the past 5 years nor Manager of Arab Malaysian Assurance Bhd, CEO of any public sanction or penalty imposed by the relevant Takaful Nasional Sdn Bhd, Executive Director and CEO regulatory bodies during the financial year. of Mayban Fortis Holdings Bhd, Executive Director and He does not hold any shares of the Company.
page ANNUAL REPORT 2017 12 PERAK CORPORATION BERHAD (210915-U) KEY SENIOR MANAGEMENT
ROZAHAN BIN OSMAN Academic/ Professional Qualification(s) Malaysian, Male, aged 53 years ~~ The Association of Chartered Certified Accountants (ACCA) ~~ Certified Management Accountant (CMA) Group Chief Financial Officer ~~ Chartered Financial Analyst (CFA) Date of Appointment: 1 Jul 2013 ~~ Certified SAP Consultant- Controlling Present Appointment(s) ~~ Director Finance, Accounts & Administration of Perbadanan Kemajuan Negeri Perak ~~ Chief Financial Officer of Majuperak Holdings Berhad Directorships in Public Companies and Listed Issuer ~~ Nil Working Experiences ~~ Chief Financial Officer of Cement Industries of Malaysia Berhad ~~ General Manager, Finance/Corporate Planning of Malaysia Marine and Heavy Engineering Berhad ~~ Group Financial Controller of Magna Prima Berhad ~~ Financial Controller of Malakoff Berhad ~~ Research Analyst of Zalik Securities Sdn Bhd ~~ Audit Senior 1 of Ernst and Young Family Relationship He does not have any family relationship with any director and/or major shareholder and has no conflict of interest with the Company. Securities holdings in the Company ~~ Nil Conviction of offences He has no conviction for any offence within the past 5 years nor any public sanction or penalty imposed by the relevant regulatory bodies during the financial year.
MUBARAK ALI Academic/ Professional Qualification(s) BIN GULAM RASUL ~~ Master of Business Administration in General Management, University of Greenwich Malaysian, Male, aged 50 years ~~ LCCI in Accounting – Inter and Higher Directorships in Public Companies and Listed Issuer Chief Executive Officer ~~ Nil Lumut Maritime Terminal Sdn Bhd Working Experiences Date of Appointment: 1 Mar 2015 ~~ Director of Special Projects, National Air Cargo Middle East ~~ Director, Abel (M) Sdn Bhd ~~ Senior Vice President, Business Development, Konsortium Logistik Berhad ~~ General Manager Commercial, Spanco Sdn Bhd ~~ Senior Manager, Alam Flora Sdn Bhd ~~ Resources Management Manager, Malaysia Airlines ~~ Operations Manager, United Parcel Service Family Relationship He does not have any family relationship with any director and/or major shareholder and has no conflict of interest with the Company. Securities holdings in the Company ~~ Nil Conviction of offences He has no conviction for any offence within the past 5 years nor any public sanction or penalty imposed by the relevant regulatory bodies during the financial year. page ANNUAL REPORT 2017 13 PERAK CORPORATION BERHAD (210915-U) CHAIRMAN’S STATEMENT PENYATA PENGERUSI
On behalf of the Board of Directors, Bagi pihak Lembaga Pengarah, saya I am pleased to present the Annual dengan sukacitanya membentangkan Report of PERAK CORPORATION Laporan Tahunan PERAK CORPORATION BERHAD for the financial year ended BERHAD bagi tahun kewangan berakhir 31 December 2017. 31 Disember 2017.
EXECUTIVE SUMMARY RINGKASAN EKSEKUTIF
The Group operated in a virtuous economic Kumpulan ini telah beroperasi dalam persekitaran environment in 2017 when Malaysia’s economy ekonomi yang baik pada tahun 2017 apabila ekonomi recorded a growth of 5.9% (2016: 4.2%), supported Malaysia mencatat pertumbuhan sebanyak 5.9% by faster expansion in both private and public (2016: 4.2%), disokong oleh pengembangan yang sector spending. A key highlight for the year was lebih pesat dalam perbelanjaan sektor swasta dan the rebound in gross exports growth as global awam. Pencapaian penting pada tahun itu ialah demand strengthened. This was mainly due to peningkatan eksport kasar, ekoran permintaan global higher demand from major trading partners yang semakin kukuh. Keadaan ini diperkukuhkan lagi following the upswing in the global technology oleh permintaan yang lebih tinggi daripada rakan cycle, investment expansion in the advanced perdagangan utama berikutan peningkatan pesat economies and the turnaround in commodity dalam kitaran teknologi global, pengembangan prices. Meanwhile, headline inflation increased to pelaburan dalam negara maju dan pemulihan harga 3.7% in 2017 (2016:2.1%) which primarily driven by komoditi. Sementara itu, kadar Inflasi keseluruhan higher domestic fuel prices meningkat kepada 3.7% pada tahun 2017 (2016: 2.1%) yang didorong terutamanya oleh harga bahan api dalam negeri yang lebih tinggi.
Despite the positive overview on the economic Walaupun terdapat tanda positif di sudut ekonomi, front, the Group finds the year quite challenging Kumpulan mendapati tahun 2017 agak mencabar due to various factors especially with many kerana pelbagai faktor terutamanya banyak development projects of the Group yet to become projek pembangunan Kumpulan belum beroperasi fully operational. sepenuhnya.
However, the Group remains committed to its Walau bagaimanapun, Kumpulan tetap komited strategic initiatives that were in place since 2014. terhadap inisiatif strategiknya yang telah The focus continues to be on the three (3) core dilaksanakan sejak tahun 2014. Tumpuan akan businesses, namely ports and logistics, hospitality diteruskan di dalam tiga (3) perniagaan utama iaitu and tourism as well as property development. pelabuhan dan logistik, hospitaliti dan pelancongan serta pembangunan hartanah.
page ANNUAL REPORT 2017 14 PERAK CORPORATION BERHAD (210915-U) CHAIRMAN’S STATEMENT (CONTINUED) PENYATA PENGERUSI (SAMBUNGAN)
One of the key touch points is the soft opening Salah satu perkembangan menarik adalah bilamana of the first animation theme park in Asia which is taman tema animasi pertama di Asia iaitu Movie Movie Animation Park Studios (“MAPS”) and the Animation Park Studios (“MAPS”) memasuki fasa implementation of Lumut Maritime Terminal Sdn pra-operasi dan juga pelaksanaan Pelan Perniagaan Bhd’s (“LMTSB”) Business and Strategic Plan 2016- & Strategik 2016-2026 bagi Lumut Maritime Terminal 2026. Sdn Bhd (“LMTSB”).
The ports and logistics segment continue to Segmen pelabuhan dan logistik terus menunjukkan perform very well as compared to the previous prestasi yang baik berbanding tahun kewangan financial year, where for the first time Lumut Port sebelumnya, dimana buat pertama kalinya Pelabuhan has managed to exceed RM100 million in terms of Lumut berjaya menyumbang pendapatan melebihi revenue contribution to the Group. The current RM100 juta kepada Kumpulan. Pencapaian terkini results from the hospitality and tourism segment bagi segmen hospitaliti dan pelancongan pula telah has shown an encouraging performance due menunjukkan prestasi yang memberangsangkan to the soft opening of MAPS since 26 June 2017 berikutan pra-operasi MAPS mulai 26 Jun 2017 and supported by the performance of its hotel yang juga disokong oleh prestasi positif sektor operations. The second revenue contributor for perhotelannya. Penyumbang pendapatan kedua bagi the Group is from property development segment Kumpulan adalah daripada segmen pembangunan which recorded 23% of the Group’s total revenue hartanah yang telah mencatatkan 23% daripada and increased by 38% as compared to previous jumlah pendapatan Kumpulan iaitu meningkat year, due to sales of land. However, we are pleased sebanyak 38% berbanding tahun sebelumnya, to report that affordable housing projects in Bandar disebabkan oleh penjualan tanah. Walau Meru Raya, Ipoh which include the development bagaimanapun, kami dengan sukacitanya ingin of D’Aman Residensi, Casa Kayangan and Suria melaporkan bahawa projek perumahan mampu @ Meru involving a total delivery of 1,877 units’ milik di Bandar Meru Raya yang terdiri daripada houses will be completed in 2018 and will indirectly projek D’Aman Residensi, Casa Kayangan dan Suria boost the Group’s revenue in 2018. @ Meru yang melibatkan pembinaan sebanyak 1,877 unit rumah akan siap pada tahun 2018 dan secara tidak langsung akan meningkatkan pendapatan Kumpulan pada tahun 2018.
The Group’s results are particularly impacted by the Prestasi Kumpulan menerima impak daripada provision for impairment made in the hospitality peruntukan rosot nilai bagi segmen hospitaliti dan and tourism segment mainly by Animation Theme pelancongan terutamanya daripada Animation Park Sdn Bhd. Despite the challenges in this Theme Park Sdn Bhd. Walaupun terdapat cabaran segment, we believe this segment is set to become dalam segmen ini, kami percaya bahawa segmen a key contributor to the Group’s overall profitability ini akan menjadi penyumbang utama kepada once MAPS fully opens its Dream Zone in 2018. keuntungan keseluruhan Kumpulan apabila MAPS membuka Dream Zone sepenuhnya pada tahun 2018.
The Group is fully committed to diversify its Kumpulan terus komited untuk mempelbagaikan revenue base to avoid being overly dependent asas pendapatannya bagi mengurangkan on the ports and logistics segment alone as the kebergantungan pada segmen pelabuhan dan major contributor, and this effort is now slowly logistik sebagai penyumbang utama pendapatan, showing with the hospitality and tourism segment dan usaha ini telah menunjukkan hasil apabila contributing at 18% (FYE 2016: 9%) of the Group’s segmen hospitaliti dan pelancongan menyumbang total revenue in 2017 as compared to the previous sebanyak 18% (2016: 9%) daripada jumlah financial year. pendapatan Kumpulan bagi tahun 2017 berbanding tahun sebelumnya.
page ANNUAL REPORT 2017 15 PERAK CORPORATION BERHAD (210915-U) CHAIRMAN’S STATEMENT (CONTINUED) PENYATA PENGERUSI (SAMBUNGAN)
The Perak Corporation Berhad 2017 Annual Report Laporan Tahunan 2017 Perak Corporation Berhad dan and the essence of the Management Discussion intipati Perbincangan dan Analisis Pengurusan akan and Analysis will outline the Group’s performance menggariskan prestasi Kumpulan pada tahun 2017 in 2017 and the challenges, prospects and planning serta cabaran, prospek dan perancangan yang akan that are to be shared with all our stakeholders. dikongsi dengan semua pihak yang berkepentingan.
FINANCIAL REVIEW TINJAUAN KEWANGAN
For the financial year ended 31 December 2017, Bagi tahun kewangan berakhir 31 Disember 2017, the Group recorded revenue of RM185.8 million, Kumpulan mencatatkan pendapatan sebanyak an increase by 27%, as compared to the previous RM185.8 juta, meningkat sebanyak 27%, berbanding financial year revenue of RM146.7 million. Despite pendapatan tahun sebelumnya sebanyak RM146.7 the higher revenue achieved, the Group recorded a juta. Walaupun hasil yang lebih tinggi dicapai, pre-tax loss of RM320.1 million for the financial year Kumpulan mencatatkan kerugian sebelum cukai as compared to the pre-tax profit of RM1.7 million sebanyak RM320.1 juta bagi tahun kewangan recorded in the previous financial year which is berbanding keuntungan sebelum cukai sebanyak mainly due to the provision for impairment in the RM1.7 juta yang dicatatkan pada tahun kewangan hospitality and tourism segment. Accordingly, the sebelumnya yang disebabkan oleh peruntukan net loss attributable to shareholders was RM174.9 rosotnilai dalam segmen hospitaliti dan pelancongan. million in comparison to the net loss of RM15.6 Sehubungan itu, kerugian bersih yang diagihkan million in the previous financial year. kepada pemegang saham adalah RM174.9 juta berbanding kerugian bersih sebanyak RM15.6 juta pada tahun kewangan sebelumnya.
Earnings per share attributable to ordinary equity Perolehan sesaham yang diagihkan kepada holders of the Company achieved for the financial pemegang ekuiti biasa Syarikat yang dicapai bagi year under review was a loss of 174.96 sen (2016: tahun kewangan yang ditinjau adalah kerugian 15.58 sen) while the net assets per share as at 31 sebanyak 174.96 sen (2016: 15.58 sen) manakala aset December 2017 was RM1.42 (2016: RM5.61) based bersih sesaham pada 31 Disember 2017 ialah RM1.42 on the ordinary shares in issue of 100 million (2016: (2016: RM5.61) berdasarkan saham biasa dalam 100 million) units. terbitan 100 juta (2016: 100 juta) unit.
Further analysis of the financial performance of the Analisis lanjut tentang prestasi kewangan Kumpulan Group is contained in the Management Discussion terkandung dalam bahagian Perbincangan dan and Analysis section of this Annual Report. Analisis Pengurusan Laporan Tahunan ini.
CORPORATE REVIEW TINJAUAN KORPORAT
On 28 February 2012, the Company has entered Pada 28 Februari 2012, Syarikat telah memeterai into a conditional settlement agreement perjanjian penyelesaian bersyarat (“Perjanjian (“Settlement Agreement”) with Perak Equity Sdn Penyelesaian”) dengan Perak Equity Sdn Bhd Bhd to partially settle the total debt of RM104.62 untuk menyelesaikan sebahagian hutang sebanyak million (“PESB Debt”) owing at 31 December 2011 RM104.62 juta (“Hutang PESB”) pada 31 Disember by Perak Equity Sdn Bhd to the Company by way 2011 oleh Perak Equity Sdn Bhd kepada Syarikat of set-off against the total purchase consideration dengan cara set-off terhadap jumlah pembelian of RM70.27 million for two (2) properties to be sebanyak RM70.27 juta untuk dua (2) hartanah yang acquired by the Company from Perak Equity Sdn akan diambil oleh Syarikat dari Perak Equity Sdn Bhd Bhd (“Proposed Settlement”). The resolution (“Cadangan Penyelesaian”). Resolusi berkenaan with respect to the Proposed Settlement were duly dengan Cadangan Penyelesaian telah diluluskan oleh approved by the shareholders of the Company on para pemegang saham pada 26 Julai 2012. 26 July 2012.
page ANNUAL REPORT 2017 16 PERAK CORPORATION BERHAD (210915-U) CHAIRMAN’S STATEMENT (CONTINUED) PENYATA PENGERUSI (SAMBUNGAN)
On 12 February 2015, the Company has entered Pada 12 Februari 2015, Syarikat telah memeterai into a supplementary agreement to the Settlement perjanjian tambahan kepada Perjanjian Penyelesaian Agreement with Perak Equity Sdn Bhd to vary dengan Perak Equity Sdn Bhd untuk meminda butiran certain pieces of land located at Perak Hi-Tech tanah yang terletak di Perak Hi-Tech Park yang Park which resulted in a revised acreage and mengakibatkan semakan kepada tanah dan jumlah total purchase consideration of 959.87 acres and pembelian masing-masing sebanyak 959.87 ekar dan RM70.36 million respectively. RM70.36 juta.
The Settlement Agreement has yet to be Perjanjian Penyelesaian masih belum selesai completed as certain conditions precedent in kerana syarat-syarat tertentu berkaitan dengannya connection therewith have not been fully met as masih belum dipenuhi sepenuhnya pada ketika at to-date. The latest request for extension of time ini. Permohonan untuk lanjutan masa sehingga 30 to 30 September 2018 from Perak Equity Sdn Bhd September 2018 daripada Perak Equity Sdn Bhd telah has been approved by the Board. The PESB Debt as diluluskan oleh Lembaga Pengarah. Hutang PESB at 31 December 2017 amounted to RM75.24 million. sehingga 31 Disember 2017 berjumlah RM75.24 juta.
CORPORATE GOVERNANCE TADBIR URUS KORPORAT
The Board is committed to ensuring that good Lembaga Pengarah komited untuk memastikan corporate governance is practiced throughout tadbir urus korporat yang baik diamalkan di seluruh the Group. The Group has adopted and complied, Kumpulan. Kumpulan telah menerima pakai dan as far as practicable, with the principles and mematuhi prinsip dan syor yang dinyatakan di dalam recommendations set out in the Malaysian Code Kod Tadbir Urus Korporat Malaysia 2017 sepanjang on Corporate Governance 2017 throughout the tahun kewangan berakhir 31 Disember 2017. financial year ended 31 December 2017.
PROSPECTS FOR THE YEAR 2018 PROSPEK BAGI TAHUN 2018
For 2018, growth prospects are further lifted Bagi tahun 2018, prospek pertumbuhan ditingkatkan by strengthening global economic conditions. lagi dengan pengukuhan keadaan ekonomi global. Growth will be underpinned by continued Pertumbuhan akan disokong oleh pengembangan expansion in private sector activity. The strong yang berterusan dalam aktiviti sektor swasta. growth momentum will also be supported Momentum pertumbuhan yang kukuh juga akan by the continued positive spillovers from the disokong oleh limpahan positif yang berterusan external sector to the domestic economic activity. daripada sektor luaran kepada aktiviti ekonomi Malaysia’s trade performance will benefit from dalam negeri. Prestasi perdagangan Malaysia favorable global demand, exposure to the global akan mendapat manfaat daripada permintaan technology cycle and new export production global yang menggalakkan, dedahan kepada capacity. On the domestic front, continued income kitaran teknologi global, dan kapasiti pengeluaran and employment growth will sustain household eksport baharu. Di dalam negeri, pertumbuhan spending, amid the continuation of Government pendapatan dan guna tenaga yang berterusan akan measures and improving consumer sentiments. mengekalkan perbelanjaan isi rumah yang mampan, In this positive environment, Malaysia is projected yang disokong pula oleh langkah-langkah Kerajaan to remain firmly on a steady growth path to grow yang berterusan dan sentimen pengguna yang by 5.5% – 6.0% (2017: 5.9%). (Source: Bank Negara bertambah baik. Dalam persekitaran yang positif Malaysia) ini, Malaysia diunjurkan akan terus berada pada landasan pertumbuhan yang stabil sebanyak 5.5% – 6.0% (2017: 5.9%). (Sumber: Bank Negara Malaysia)
page ANNUAL REPORT 2017 17 PERAK CORPORATION BERHAD (210915-U) Headline inflation is expected to average between Inflasi keseluruhan dijangka berpurata antara 2.0%– 2.0% – 3.0% in 2018 (2017: 3.7%). While global 3.0% pada tahun 2018 (2017: 3.7%). Walaupun harga energy and commodity prices are expected to tenaga dan komoditi global dijangka meningkat trend higher in 2018, the higher base in 2017 pada tahun 2018, asas yang agak besar ditahun 2017 will result in a smaller contribution to headline akan menghasilkan impak yang lebih kecil kepada inflation. In addition, a stronger ringgit exchange inflasi keseluruhannya. Selain itu, kadar pertukaran rate compared to 2017 will partially offset the ringgit yang lebih kukuh berbanding dengan tahun impact of higher global energy and commodity 2017 akan mengimbangi sebahagian kesan kenaikan prices. It will also contain increases in import costs. harga tenaga dan komoditi global. Pengukuhan kadar pertukaran ringgit juga akan membendung kenaikan dalam kos import.
Given the dependency of domestic inflation on the Memandangkan inflasi dalam negeri bergantung trajectory of global oil prices, there remains a high pada trajektori harga minyak global, masih wujud degree of uncertainty surrounding the inflation banyak ketidakpastian tentang unjuran inflasi. projection. Underlying inflation, as measured by Inflasi asas, seperti yang diukur oleh inflasi teras, core inflation, is also expected to moderate in juga dijangka menurun pada tahun 2018 disebabkan 2018, due to smaller cost pass-through to retail oleh kesan pindahan kos yang lebih kecil kepada prices compared to the previous year. Inflationary harga runcit berbanding dengan tahun sebelumnya. pressures from domestic demand factors will be Tekanan inflasi daripada faktor permintaan contained by improving labour productivity and dalam negeri akan dikekang oleh peningkatan ongoing investments for capacity expansion, produktiviti pekerja dan pelaburan berterusan untuk according to Bank Negara annual report 2017. pengembangan kapasiti, berdasarkan laporan tahunan Bank Negara 2017.
More resources and efforts will be put in to explore Lebih banyak sumber dan usaha akan dikerah bagi collaborative opportunities to improve the revenue meneroka peluang kolaborasi untuk meningkatkan and profitability of the Group’s. pendapatan dan keuntungan Kumpulan.
While ports and logistics segment remain Walaupun segmen pelabuhan dan logistik kekal the staple contributor to the Group revenue, sebagai penyumbang utama kepada pendapatan hospitality and tourism segment has shown an Kumpulan, segmen hospitaliti dan pelancongan telah improvement in terms of its revenue contribution menunjukkan peningkatan dalam menyumbang in 2017 as compared to 2016. We do expect that pendapatan kepada Kumpulan bagi tahun 2017 this segment will start to bear fruits once MAPS berbanding pada tahun 2016. Kami menjangkakan become fully operational by the end of first half bahawa segmen ini akan membuahkan hasil apabila 2018 and supported by Casuarina products and MAPS beroperasi sepenuhnya pada akhir separuh offerings. pertama 2018 selain disokong oleh perkembangan produk yang ditawarkan oleh Casuarina.
We believe the business is now fundamentally Kami percaya bahawa perniagaan Kumpulan berada good and looking ahead, the Group will continue pada asas yang kukuh pada ketika ini dan melihat ke to adopt a cautious business strategy and will hadapan, Kumpulan akan terus menerapkan strategi persevere to complete all its development as perniagaan dengan berhati-hati dan gigih dalam planned. melengkapkan semua pembangunan seperti yang telah dirancang.
page ANNUAL REPORT 2017 18 PERAK CORPORATION BERHAD (210915-U) DIVIDEND DIVIDEN
The Board does not recommend the payment of a Lembaga Pengarah tidak mencadangkan dividend in respect of the financial year ended 31 pembayaran dividen pada tahun kewangan berakhir December 2017. 31 Disember 2017.
APPRECIATION PENGHARGAAN
On behalf of the Board of Directors, I would like to Bagi pihak Lembaga Pengarah, saya ingin take this opportunity to express our gratitude to mengambil kesempatan ini untuk mengucapkan our clients, suppliers, bankers, business associates terima kasih kepada para pelanggan, pembekal, and the various government authorities for their bank, rakan perniagaan dan pelbagai pihak support and confidence in the Group. The Board berkuasa kerajaan atas sokongan dan keyakinan would also like to extend its appreciation to the mereka terhadap Kumpulan. Lembaga Pengarah management and staff for their dedication and juga ingin merakamkan penghargaan kepada commitment in their work throughout the financial pihak pengurusan dan kakitangan atas dedikasi dan year under review. komitmen mereka dalam kerja mereka sepanjang tahun kewangan yang ditinjau.
Lastly, to our shareholders, the Board would like to Akhir sekali, kepada para pemegang saham kami, pledge its commitment in protecting and further Lembaga Pengarah ingin menjanjikan komitmennya enhancing the shareholders’ value in the coming dalam melindungi dan mempertingkatkan nilai years. pemegang saham pada tahun-tahun akan datang.
YB DATO’ NASARUDIN BIN HASHIM YB DATO’ NASARUDIN BIN HASHIM Chairman Pengerusi
30 April 2018 30 April 2018
page ANNUAL REPORT 2017 19 PERAK CORPORATION BERHAD (210915-U) MANAGEMENT DISCUSSION AND ANALYSIS
OVERVIEW
Perak Corporation Berhad (“PCB”) is a public listed Malaysian company which focuses on three (3) core businesses which are property development, ports and logistics as well as hospitality and tourism.
The Group’s main contributor during the financial year under review is from the ports and logistics segment (“PL segment”). The Group manages Lumut Port, through its subsidiary Lumut Maritime Terminal Sdn Bhd (“LMTSB”) which is primarily a bulk cargo terminal owner, operator and port services provider. The PL segment contributed 57% of the Group’s total revenue in 2017 (2016: 67%), followed by the property development segment (“PD segment”) and hospitality and tourism segment (“HT segment”) by contributing 22% (2016: 22%) and 18% (2016: 9.2%) respectively of the Group’s total revenue. The increase in revenue by the HT segment is due to the soft opening of Movie Animation Park Studios (“MAPS”) on 26 June 2017 and its hotel operations in 2017.
The Group will continue to build on its strengths in all of its business segments and diversify its revenue base to remain competitive and improve on its financial performance in the future. The performance of the three core businesses under the Group is reviewed below
FINANCIAL REVIEW
185.8
(320.1)
The Group posted a loss before tax (“LBT”) of RM320.1 million for the financial year under review (2016: PBT RM1.7 million) on the back of RM185.8 million in revenue in 2017 (2016: RM146.7 million). The significant drop in our pre-tax earnings was mainly due to the provision for impairment made in the HT segment.
page ANNUAL REPORT 2017 20 PERAK CORPORATION BERHAD (210915-U) MANAGEMENT DISCUSSION AND ANALYSIS (CONTINUED)
The Group’s source of revenue for 2017 has increased by 27% from the previous year’s revenue of RM146.7 million. The increase in revenue for the Group is contributed by the better performance in the PL segment, PD segment as well as the HT segment due to increase in sales of land as well as the HT segment showed a positive performance during 2017.
Contributions from the segments are as follows:
M mil
300.0 1 200.0 105 3 100.0 1 3 5 33 0 23 - ort o i ti ropert e elopment o pitalit ouri m Mana ement er i e otal (100.0) ot er (200.0)
(300.0) 23 5
(400.0) 3 (500.0)
(600.0) 5 5 (700.0)
Note: Revenue and Profit/ (loss) before tax excludes Group elimination amounting at RM2.9 million and RM279.4 million respectively.
The Group’s revenue for 2017 is more varied, as some of our core businesses recorded revenue growth despite the challenging 2017 market environment.
The Group’s revenue is mainly contributed by the PL segment amounting to RM105.3 million in 2017 as compared to RM98.0 million in 2016 due to an increase in the amount of throughput cargoes reported for Lumut Port in 2017.
Historically, the Group relied on the PL segment to contribute most of the revenue. The Group has always strived to mitigate the risk from depending too heavily on this segment due to factors that may affect the performance and profitability of Lumut Port and in this regard, efforts are taken to diversify revenue and the HT segment is targeted to provide growing sources of revenue for the Group from development of theme parks, hotels and resorts as well as food and beverages outlet businesses. The desired results will only be achieved in a few years’ time as most of the projects are still in the early development phase.
The improvement of the HT segment is recorded when its revenue increased by RM17.7 million from the previous year to RM33.0 million, mainly derived from higher demands for accommodations, convention halls, food and beverages business in Hotel Casuarina @ Meru and from Lanai’s products. In addition to that, the revenue for this segment is also contributed by the soft opening of MAPS on 26 June 2017 and the commencement of food and beverages outlet chain business under the Group, namely Labu Sayong Signature @ Meru and Labu Sayong Café @ Silveritage. However, the HT segment posted LBT of RM374.8 million in 2017 (2016: LBT RM6.6 million) due to provisions for impairment made during the financial year under review.
page ANNUAL REPORT 2017 21 PERAK CORPORATION BERHAD (210915-U) MANAGEMENT DISCUSSION AND ANALYSIS (CONTINUED)
For the financial year ended 31 December 2017, the PD segment’s revenue increased by 38% to RM43.5 million from RM31.6 million in the previous financial year due to increase in sales of land and recorded a loss before tax of RM239.5 million due to provision of impairment during the financial year under review.
The management services and other segment (“MS segment”) contributed RM6.8 million to the Group’s revenue in 2017 (2016: RM17.9 million) derived from dividend income, and office rental. This segment recorded pre-tax loss of RM23.7 million increased by more than 100% as compared to RM6.8 million pre- tax loss in the previous year. The increase in the LBT is mainly due to higher finance costs and operating expenses incurred in 2017.
The Group recorded loss per share attributable to owners of the Company of 174.96 sen per share as at 31 December 2017 as compared to previous year, recorded a loss of 15.58 sen per share. The net assets per share of the Group as at 31 December 2017 is RM1.42 compared to RM5.61 in 2016.
OPERATIONAL REVIEW
Ports and Logistics
Ports contribution in the economic growth is significant to the state’s and nation’s Gross Domestic Product (GDP). This economic impact can be further amplified by the availability of well-connected logistics network, including inland depot and freight villages.
The Group manages Lumut Port, through its subsidiary Lumut Maritime Terminal Sdn Bhd (LMTSB) with the vision to be the most efficient bulk cargo terminal operator in South East Asia. LMTSB provides an integrated port services, inclusive of tuggage, pilotage, berthing, stevedorage, cargo handling, storage and ancillary services. LMTSB is also the operator and manager of Lekir Bulk Terminal (“LB Terminal”), a dedicated terminal to handle coal for Janakuasa Sultan Azlan Shah in Sri Manjung, Perak.
Since the implementation of phase 1 of LMTSB’s strategic business plan from 2016, LMTSB has begun to record an increase in cargo handling amounting to 3.88 million MT in 2017 from 3.26 million MT in 2016 and 3.05 million MT in 2015. LMTSB has also planned for the expansion of Lumut Port in phase 2, located in Batu Undan, Lumut Perak and will be expected to handle clean cargo covering an area of approximately 115 acres. This development plan will indirectly increase port capacity from 4.84 million MT per annum to 14 million MT per annum, once all phases of its business improvement plan are implemented.
Ports & Logistics segment contribution LMT & LB Terminal Cargo Throughput (Mil MT) FYE 2016 & FYE 2017 FYE 2015 – FYE 2017 2015 2016 2017
RM' 000 + 7.5% LB Terminal Cargo +19.8% Throughput 11 5 120,000 105 31 Mil M 100,000 - 3% 80,000 60,000 3 2 3 1 3 5 LMT +19% 40,000 Cargo 3 2 Throughput 3 05 20,000 Mil M
- 0 5 10 15 e enue rofit o efore a
page ANNUAL REPORT 2017 22 PERAK CORPORATION BERHAD (210915-U) MANAGEMENT DISCUSSION AND ANALYSIS (CONTINUED)
Strong performance was shown in the PL segment where its revenue grew by 7.5% to RM105.3 million in the financial year 2017 from RM98.0 million in 2016, as 2017 saw the increase in cargo throughput in Lumut Port of 19%. The PL segment continues to perform very well as compared to 2016 where for the first time Lumut Port has managed to exceed RM100.0 million in terms of revenue and the results have shown an encouraging performance to the Group. We believe the business is now fundamentally strong and will continue to be a key contributor to the Group’s overall profitability.
This segment has contributed about 57% to the Group’s total revenue in 2017 (2016: 67%). The pre-tax profit of RM41.4 million in 2017 is however lower compared to RM42.8 million in 2016 in the previous year despite higher throughput achieved. This is caused by the fact that the increase in throughput came from the lower margin type of cargo while the administrative and operating expenses slightly increased.
Hospitality and Tourism
The Group owns and operates Hotel Casuarina @ Meru, Lanai Casuarina @ Cempaka Sari, Parit, Casuarina Boathouse @ Temenggor 1, Restoran Rumah Tradisional Melayu (“RRTM”) and manages some properties of Perak State, namely Rumah Rehat Kerajaan Negeri, Pangkor (“RRKN”) and Pasir Salak Eco Resort (“PSER”). The Group is also in the restaurant business, namely Labu Sayong Signature @ Meru and Labu Sayong Café @ Silveritage. These cafes provide delicious and authentic fare to both locals and visitors and have opened since August 2017 and November 2017 respectively.
Moving forward, the Group will continue with the expansion plan to open more hotels and cafés in Perak State including Hotel Casuarina @ Teluk Intan, Lanai Casuarina @ Kuala Kangsar, Hotel Casuarina @ Taiping, Taiping Rest House, Labu Sayong Café @ Taiping Rest House, Labu Sayong Café @ Teluk Intan.
The Group, through PCB Development Sdn Bhd’s (“PCBD”) 51% shareholding in ATP, owns a comprehensive entertainment park which features MAPS. The park soft opening was on 26 June 2017 and expected to be fully operational by July 2018 with targeted annual visitors of 0.5 million. In the financial year 2018, MAPS will initiate more aggressive marketing campaigns in line with current market trends and continue to leverage on online marketing and digital media advertising to increase its brand awareness among its target visitors.
Hospitality & Tourism segment contribution FYE 2016 & FYE 2017
3 1
21 LBT +>100%
33 011 +>100% 15 2
M 000
The HT segment registered an increased revenue of RM33.0 million for the financial year under review compared to RM15.3 million in the previous financial year, primarily due to the revenue contribution from MAPS, Labu Sayong Signature @ Meru and Labu Sayong Café @ Silveritage as well as RRKN and PSER in 2017. Despite the increase in revenue, the HT segment registered a LBT of RM374.9 million (2016: LBT RM6.6 million) mainly due to provision of impairment during the financial year under review.
page ANNUAL REPORT 2017 23 PERAK CORPORATION BERHAD (210915-U) MANAGEMENT DISCUSSION AND ANALYSIS (CONTINUED)
Property Development
PCBD, the Company’s wholly owned subsidiary is the Group’s main contributor of this segment.
During the financial year under review, the Malaysian property market is seeing growth and improved sentiment compared to the “quiet market” in the previous year. However, it is still plagued by issues related to accessibility of loans and financing to potential buyers.
Property Development segment contribution FYE 2016 & 2017
23 2
LBT + >100% 1 50
+38% 3 5 0 31 5
The PD segment capitalised on the local demand and focused tenaciously on managing ongoing projects to ensure delivery of high quality products to its purchasers. Among the affordable housing projects that are currently under construction include D’Aman Residensi @ Bandar Meru Raya (“BMR”), Casa Kayangan and Suria @ Meru which offer about 1,877 residential units to locals located especially in BMR, Ipoh. It is heartening to note that all the aforesaid projects are expected to be completed in 2018. Nevertheless, sales from land stocks for the financial year under review remain slow, partly impacted by the soft economic sentiment in this particular sector and we expect the scenario to remain challenging in 2018.
Despite the challenges, BMR, a township which has been developed by PCBD, is actively becoming an integrated township with a vibrant community, residential properties, commercial centres, hospitality and tourism attractions and government agencies offices. The Group has recently completed the development of RRTM located in BMR which offers a truly immersive “Perak experience” through its authentic ambience and cuisine.
Bulatan Amanjaya, a recreational park that is owned and managed by the Group, is the green lung of BMR equipped with various facilities such as mini wading pool for kids, skating area, playground area and mini wall climbing. It also has open areas for hosting activities and programs. Bulatan Amanjaya is filled with a green landscape within its 18 acres of space in BMR. The park recently won the Best Outdoor Public Space 2017 awarded by The Malaysian Institute of Planners (MIP) – Think City MyPlace Awards. This award was given based on the park’s contribution in providing leisure facilities with a creative space to the local communities.
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Being a key player in propelling the economic growth in Perak state, the Group strives to ensure its stakeholders continue to benefit from its ventures into new territories. In this regard, South Perak Region (“SPR”) will be the new frontier which holds massive opportunities for economic development on a regional scale and Kumpulan Perbadanan Kemajuan Negeri Perak through PCB Group is committed to ensure the success of the SPR development. SPR is a vast area covering one (1) million acres of land that consists of four (4) interconnected nodes. The nodes are focusing on 14 Economic Catalysts Projects and each node represents its own unique strength. It plans to develop new township, commercial areas and industrial developments in this region.
The PD segment registered a better revenue of RM43.5 million in the financial year under review as compared to RM31.6 million in the previous financial year mainly due to increase in land sales transaction which recorded a 38% increase in revenue as compared from the previous year. The revenue from the PD segment derives mainly from sales of land, profits from property development joint ventures and other ancillary services. The PD segment registered a pre-tax loss of RM239.5 million as compared to pre-tax loss in the previous financial year of RM16.5 million due to provision of impairment of its investment in ATP. The impact of this impairment however is eliminated in the Group consolidated financial result for financial year end 2017.
The property market sentiment is anticipated to remain subdued in 2018 and continues to be impacted by the economic uncertainties although the local residential property market is expected to be sustained by the implementation of various property-related incentives and strong local demand; particularly in the affordable housing segment.
Management Services and Others
The Group’s main contributors of this segment are the Company itself and PCB Taipan Sdn Bhd. The Company derives its income from dividends from its subsidiaries and office rental. PCB Taipan Sdn Bhd mainly obtains income from dividends from LMTSB, office rental and interest income.
In 2017, the segment contributed RM6.8 million to the Group’s revenue, decreased by more than 100% as compared to previous financial year at RM17.9 million. The decrease in revenue is mainly due to lower land sales transaction. This segment recorded LBT of RM23.7 million (2016: LBT RM6.8 million) due to higher finance costs and operating expenses in 2017 compared to the previous year.
FUTURE PROSPECTS
The Group shall strive to achieve good results for the financial year ending 31 December 2018 through continuous commitment to its long-term strategies which will lead to the growth of the Group. As we move forward, we will continue to strengthen our position and build on our strong operational performance, improving further as we progress through the coming years.
More resources and efforts will be put in to explore collaborative opportunities to improve the revenue and profitability of the Group. While the PL segment remains the staple contributor to the Group’s earnings by contributing at 57% of Group’s revenue, the HT segment has shown an improvement in terms of its segmental revenue by contributing 18% as compared to previous year which contributed only 9% of the Group’s revenue. We do expect that this segment will start to bear fruits once MAPS become fully operational in 2018 and supported by Casuarina’s product. We believe the business is now fundamentally good and will continue to be a key contributor to the Group’s overall profitability.
The Group recognises it will face a challenging environment in 2018 but is nevertheless confident it is now on a strong platform to persevere and bounce back with a stronger performance in the future.
page ANNUAL REPORT 2017 25 PERAK CORPORATION BERHAD (210915-U) SUSTAINABILITY STATEMENT
INTRODUCTION
The Board of Directors (“Board”) of Perak Corporation Berhad (“Company” or “PCB”) is committed to ensure the Company and its subsidiaries (“Group”) run their businesses in a responsible and sustainable manner so as to achieve a fair balance between profitability and how they impact the economy, environment and society.
Sustainability has always been an integral part of our way of doing business and a guiding principle in our decision making and development processes. Over the years, the Group has undertaken various efforts to ensure top priority in our sustainability initiatives especially towards our three core businesses within the Group, namely Township and Property Development, Ports and Logistics as well as Hospitality and Tourism Business.
This Statement incorporates some standard disclosures from Bursa Malaysia Securities Berhad (“Bursa Malaysia”) on the Sustainability Reporting Guideline and meeting the expectations of Bursa Malaysia’s Main Market Listing Requirements covering sustainability reporting. Through this Statement, we aim to provide our stakeholders with a reliable economic, environmental and social (EES) information about our Company and in doing so, strengthen trust and relationship with our stakeholders through increased transparency and disclosure.
A. ECONOMIC
Property Development
Recognising the significance of townships and its communities, the Group leads the way in creating integrated townships in identified places to support progressive community needs, to facilitate the creation of values within existing townships and develop plans with the ultimate goal of raising overall socio-economic values in the areas.
Bandar Meru Raya (“BMR”), a fast-emerging township dubbed as the “New Heartbeat of Ipoh”, has a unique mix of residential, commercial and retail areas. Developed as Ipoh’s satellite metropolis, it is designed as the epitome of comprehensive and integrated destination for work, live, play and learn.
BMR currently houses 6 government offices in an expanding Government Precinct. With the relocation of 18 more government agencies in the pipeline, BMR is set to be the main administrative centre of Perak Darul Ridzuan.
Being a key player which takes the driver’s seat in propelling economic growth in Perak State, the Group strives to ensure the stakeholders as well as the community within the area feel the development impact.
Moving forward from the success of BMR, the Group also places key emphasis on new growth regions with huge potentials which is located in South Perak Region. PCB Group is part of Kumpulan Perbadanan Kemajuan Negeri Perak (PKNP Group) and we have place strong commitment to be a key player in the South Perak Region Development which holds massive opportunities for economic development on a regional scale.
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The South Perak Region is a vast area covering over 1 million acres of land that consists of four (4) interconnected nodes. The nodes are focusing on 14 Economic Catalysts Projects and each node represents its own unique strength. It plans to develop new townships, commercial areas and industrial developments in this region. This development will ensure continuous value creation by harnessing current resources for current and future generations.
Hospitality and Tourism – Supporting Perak goals in the tourism industry
Perak state will be in a position to capitalise on the positive economic overview, especially in the hospitality and tourism sector. With the current optimistic sentiment of the Malaysian economy, the number of domestic visitors, number of trips and the current spendings continue to increase, according to Domestic Tourism Survey (DTS) for the year 2016. Each category recorded increases of 7%, 8% and 10.2% respectively from the previous year.
In supporting Perak state and the Group’s goals in the tourism industry, development of attraction centres, hotels as well as rebranding of rest houses in the state takes centre stage under the hospitality and tourism division. The Group is currently operating Movie Animation Park Studios (MAPS) and it is expected to attract 1 million visitors in its first operation year after the full opening of MAPS, including Dream Zone which would galvanise economic growth in the area.
The Group is also managing the operations of Hotel Casuarina @ Meru, Bulatan Amanjaya and Restaurant Rumah Traditional Melayu (“RRTM”) which are located side by side in BMR. RRTM is an area hosting three (3) traditional themed restaurants with a food truck area besides the restaurant which currently accommodates approximately eight (8) food trucks. The Group is committed to continue its development of 2 Casuarina 4-star hotels at Teluk Intan and Kuala Kangsar whilst Lanai Casuarina @ Cempaka Sari, Parit has opened to public since 1 July 2016 and is located by the riverside of Sungai Perak.
Vibrant and competitive development components such as an integrated township, exceptional tourist attractions, efficient connectivity and the right skills and community mix are key factors to catalyse economic growth.
Port and Logistics
Ports play the important role in facilitating internal and external trades. Acting as enablers, ports provide key logistical services thus opening up trades and creating economic opportunities. Ports contribution in the economic growth is significant to the state’s and nation’s Gross Domestic Product (GDP). This economic impact can be further amplified by the availability of well-connected logistics network, including inland depot and freight villages.
There is no denial that the Group’s main contributor is in the Ports and Logistics segment. The Group manages Lumut Port, through its subsidiary Lumut Maritime Terminal Sdn Bhd (“LMTSB”) with the vision to be the most efficient bulk cargo terminal operator in South East Asia. LMTSB provides an integrated port services, inclusive of tuggage, pilotage, berthing, stevedorage, cargo handling, storage and ancillary services.
Since the implementation of phase 1 of LMTSB’s (LMT1) strategic business plan from 2016, LMTSB has begun to record an increase in cargo handling of 3.88 million MT in 2017 compared to 3.26 million MT in 2016. LMTSB has also planned a comprehensive development plan for Lumut Port in phase 2 (LMT2) located in Batu Undan, Lumut Perak and will be expected to handle clean cargo covering an area of approximately 115 acres. This development plan will indirectly increase port capacity from 4.84 million MT per annum to 14 million MT per annum (LMT1 and LMT2).
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B. ENVIRONMENTAL
From the time of our establishment since 1991, PCB Group has always been committed to comply with the legal and regulatory requirements of the Malaysian Department of Environment (DOE) and other regulators and authorities. To this end, environmental protection measures and considerations have long been embedded in our three core business.
Environmental Conservation through Bulatan Amanjaya, Recreational Park
Bulatan Amanjaya, a recreational park that is managed by the Group, is the green lung of BMR equipped with various facilities such as mini wading pool for kids, skating area, playground area and mini wall climbing. It also has open areas for hosting activities and programs.
Bulatan Amanjaya is filled with a green landscape within its diameters of 18 acres in BMR. In recognition of its development, the Group won the Best Outdoor Public Space 2017 given by The Malaysian Institute of Planners (MIP) – Think City MyPlace Awards. This award was given based on the Group’s contribution in providing leisure facilities with a creative space to the local communities.
Environmental Conservation through Sungai Sah Beautification in BMR
The Group recognises that several of its activities may have an impact to the environment. As a result, the Group has begun plans to beautify the Sungai Sah in BMR. Sungai Sah is about 10 kilometres away from Ipoh Town and it has overall length about 8.5 kilometres. It has about 1,274 hectares total catchment area and around 265 hectares total catchment area within BMR.
The strategies used for this environmental conservation includes: ~~ Improving the quality of water; ~~ Increasing the water depth for recreational area; ~~ Increasing the water depth to be used as water resources and; ~~ Designing the landscape along 1.5km in Sungai Sah reserves area.
Lumut Maritime Terminal (“LMT”) certified to ISO 9001:2015
Lumut Port endeavours to control and mitigate the impacts of LMTSB’s activities on the environment through responsible business activities. It adopts initiatives to conserve biodiversity via various programs in partnership with local groups, community and associations.
On 24 August 2016, LMT has been certified with ISO 9001:2015. This certification shows LMTSB has established a systematic approach to instil quality by ensuring that its products meet customer requirements.
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C. SOCIAL
PCB has always believed that the way to build a great and enduring company is to strike a balance between profitability and fulfilling its social responsibilities. In today’s inter-connected world, no business can operate as an entity onto itself. Companies are also measured in terms of their standing in the eyes of the community. Throughout the year 2017, PCB Group continued to make progress to operate responsibly and with care to meet the changing expectations on society.
Affordable Housing Development – Meeting Housing needs
PCB through its subsidiary, PCB Development Sdn Bhd, has established joint venture companies for the development of affordable housing project in BMR. To-date, the Group has launched three affordable housing projects namely D’Aman Residensi, Casa Kayangan and Suria @ Meru and offers about 1,877 residential units to locals which are located in BMR.
Besides meeting the needs of the rakyat to own houses, the aim here is to also encourage entrepreneurial growth, especially among the Bumiputera community, and present entrepreneurs with opportunities to rise up to meet the challenges of growing their capabilities and capacity in construction industry.
Local Communities Development
We believe fulfilling our dues to society should not solely be driven by the Company, but also from individuals as well. PCB Group has always encouraged its management and staffs to be involved in welfare work and charity and we are pleased that the spirit of giving is very much alive within the Group.
Perak Corp Nature Foundation (“PCNF”)
The Group through PCNF on 26 April 2017 has collaborated with Malaysian SWCorp to organise a Recycling Education Program at SK Jati, Meru Ipoh. Officiated by YB Dato’ Nasarudin bin Hashim, the Chairman of PCB Group, this program is one of the social responsibility program in fostering and maintaining the spirit of loving the environment among schoolchildren. The program for the day included lectures, workshops and creative activities. PCNF sponsored a total of 10 kinds of herbs to the Herb Garden Corner SK Jati in order to bring more students close to values and importance in maintaining the environment.
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Giving Back to the Society
In furtherance to the Blood Donation Campaign which received overwhelming response from the workforce over the years, the Biro Kebajikan Kelab Warga Kumpulan continued this noble course in 2017 at Hotel Casuarina @ Meru, Ipoh.
The target donors are among employees of the Group, government departments and local residents around BMR. As human blood is a scarce and precious resource, this drive has successfully raised awareness on blood donation and encouraged the culture of voluntary blood donation as it is a safe, simple and speedy process that helps to save lives.
In 2017, with the aim to promote social welfare among the less fortunate, the Group sponsored charity activities which include iftar program with Pertubuhan Anak Yatim & Miskin, Bait- Al-Amin, Perak, Rumah Ar Ridhwani, Manjoi and Rumah DaHikmah, Gopeng. This program has become one of our Corporate Social Responsibility (CSR) programmes to care for the welfare of the people.
Development of Human Resources
At PCB Group, we value the contribution of each and every one of our employees, which is why we place utmost importance in creating a conducive work environment to nurture our employees’ growing talent and ambitions. We believe that by helping our employees realise their full potential, they in turn, can help us achieve PCB Group’s corporate aspiration, making the Group an ideal place to attract talented individuals to build their careers.
For continuous employees’ development, training is one of the most important facet in PCB Group. In line with the Strategic Human Capital Management Plan, the Group establishes a system to continuously: ~~ Identify knowledge gap; ~~ Identify training programmes suitable to achieve Company and Group objectives; ~~ Establish training support from both internal and external resources; and ~~ Continuous assessment on the effectiveness of training programmes.
CONCLUSION
In our journey towards integrating sustainability in our business, the Group will establish formal procedures in internalising sustainability considerations in our organisation. We will strive to further seek enhancement opportunities in pursuing business, environment and social sustainability. A copy of the Group’s Sustainability Policy is available on PCB Group’s website at www.perakcorp.com.my, under Investor Relations column.
page ANNUAL REPORT 2017 30 PERAK CORPORATION BERHAD (210915-U) CORPORATE GOVERNANCE OVERVIEW STATEMENT
Perak Corporation Berhad (“PCB” or the “Company”) fully support the Malaysian Code on Corporate Governance 2017 (“MCCG 2017”) which sets out the principles, intended outcomes and practices for good corporate governance that should apply towards achieving the optimal framework to protect and enhance shareholders value and the financial performance of the Company and its subsidiaries (“Group”).
The Board of Directors (“Board”) of PCB is responsible for delivering shareholders value over the long-term, through the Group’s culture, strategy, values and governance. This Statement provides an overview of the Company’s commitment to apply the three principles and the practices with reference to the principles set out in the MCCG 2017, except where stated otherwise, during the financial year ended 31 December 2017 under the leadership of the Board. The extent of the application of each practice encapsulated in the principles of the MCCG 2017 is further presented in the Corporate Governance Report which can be viewed on the Company’s website at www.perakcorp.com.my.
SECTION 1: BOARD LEADERSHIP AND EFFECTIVENESS
Board Roles and Responsibilities
The Board has seven (7) members as at the date of this Statement, comprising one (1) executive director who is the Group Chief Executive Officer (“GCEO”), two (2) non-executive non-independent directors and four (4) independent directors. More than half of the Board members are independent directors.
The profile of the Board members is set out on pages 9 to 12 of this Annual Report.
The Board retains full and effective control of the Company. This includes responsibility for determining the Company’s overall strategic direction as well as development and control of the Group. No individual or group of individuals dominates the Board’s decision making and the number of directors fairly reflects the nominees of each of the Company’s major shareholders. The Company considers that its complement of non-executive directors provides an effective Board with a mix of industry-specific knowledge and business and commercial experience. This balance enables the Board to provide clear and effective leadership to the Company and to bring informed and independent judgement to many aspects of the Company’s strategy and performance so as to ensure that the Company maintains the highest standard of conduct and integrity.
The functions reserved for the Board are clearly stated in the Board Charter besides the discharge of their fiduciary duties.
In order to assist the Board in the discharge of its responsibilities, the Board has also delegated certain responsibilities to other Board committees, which operate within clearly defined terms of reference. The Board Committees are the Audit Committee and the Nomination and Remuneration Committee. The respective Committees report to the Board on the matters considered and their recommendations thereon. The ultimate responsibility for the final decision on all matters, however, lies with the Board.
The Board Chairman
YB Dato’ Nasarudin bin Hashim is the non-independent non-executive Chairman of the Board. The Chairman is responsible for the oversight, leadership, effectiveness, conduct and governance of the Board.
Although the Chairman is not an independent director, all decisions of the Board are based on the decision of the majority of the Board members and matters are deliberated with active participation of the four (4) independent directors.
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The majority of the Board members are independent directors since the Company recognises the contribution of independent directors as equal Board members in the development of the Company’s strategy, the importance of representing the interest of public shareholders and providing a balanced and independent view to the Board. The independent directors are independent of management and free from any relationship that could interfere with their independent judgement.
Separation of Roles between the Chairman and the Group Chief Executive Officer
Dato’ Aminuddin bin Md Desa, the GCEO and a Board member, leads the management team. There is a clear division of responsibility between the Chairman and the GCEO and between the non-executive Board members and the GCEO together with his executive management team to ensure a balance of power and authority.
The GCEO has the overall responsibility for the day-to-day management of the business and implementation of the Board’s policies and decisions. The GCEO is responsible to ensure due execution of strategic goals, effective operation within the Company, and to explain, clarify and inform the Board on matters pertaining to the Group. The GCEO is supported by the senior management team with their respective scope of responsibilities. The senior management team’s performance is assessed by the GCEO based on the approved key performance indexes and then reported to the Board.
Company Secretary
The Board is supported by an experienced and competent Company Secretary who is qualified to act as company secretary under Section 235(2) of the Companies Act 2016. The Company Secretary reports directly to the Board and plays an advisory role to the Board and Board Committees, particularly with regard to their policies and procedures and the Company’s compliance with regulatory requirements, rules, guidelines and legislation, as well as the best practices of corporate governance.
All directors have access to the advice and services of the Company Secretary and are updated on the changes in the regulatory framework and corporate governance practices. The Company Secretary provides support to the Board in ensuring that the applicable rules and regulations are complied with as well as that the governance structure of the Group remains relevant and effective.
The Company Secretary attends all meetings of the Board and Board Committees and ensures that meeting procedures are followed and deliberations and proceedings at the meetings are accurately recorded and well-documented.
Supply of Information
Each Board member receives quarterly interim financial reports, including comprehensive review and analysis. Prior to each Board meeting, directors are sent an agenda and a full set of Board papers for each agenda item prepared and presented in a concise and comprehensive manner so that the directors have a proper and relevant depiction of the issues to be discussed at the meeting. This is issued in sufficient time to enable the directors to obtain further explanations, where necessary.
Directors have access to all information within the Company whether as full board members or in their individual capacity, in furtherance to their duties. Directors have also direct access to the services of the Company Secretary who is responsible for ensuring the Board procedures are followed. Directors are entitled to obtain independent professional advice in the course of discharging their duties at the Company’s expense.
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Board Charter
The Company has formalised a Board Charter which clearly set out the composition, roles and responsibilities of the Board and Board committees and the processes and procedures for convening their meetings. The Board Charter serves as a reference providing prospective and existing members of the Board and management insight into the fiduciary duties of directors.
The Board reviews the Board Charter on a regular basis to keep up to date with changes in Bursa Malaysia Securities Berhad’s (“Bursa Malaysia”) Main Market Listing Requirements (“Listing Requirements”), other regulation and best practices and ensure its effectiveness and relevance to Board’s objectives. The details of the Board Charter are available for reference on the Company’s website at www.perakcorp.com.my.
Code of Conduct
The Board has formalised a Code of Conduct (“Code”) which is based on the principles in relation to integrity sincerity, honesty, responsibility, social responsibility and accountability in order to enhance the standard of corporate governance and behaviour.
The Board is committed to create a corporate culture within the Group to operate the businesses of the Group in an ethical manner and to uphold the highest standards of professionalism and exemplary corporate conduct.
The Code is to assist the directors and all personnel of the Group in defining the ethical standards and conduct at work and extent beyond normal working hours which they should possess in discharging their duties and responsibilities.
The Board reviews the Code when deemed necessary to ensure it remains relevant and appropriate and the Code can be viewed on the Company’s website at www.perakcorp.com.my.
Whistle Blowing Policy
The Board has established a Whistle Blowing Policy to improve the overall organisational effectiveness and to uphold the integrity of the Group which acts as a formal internal communication channel, where the staff may communicate in cases where the Group’s business conduct is deemed to the contrary to the common values of the Group.
The Group is committed to maintain the highest possible standards of integrity, openness and accountability in the conduct of its businesses and operations within the Group and aspires to conduct its affairs in an ethical, responsible and transparent manner. The policy is intended to provide and facilitate a mechanism for any persons to report concerns related to any suspected and/or known misconduct, wrongdoing, corruption, fraud, waste and/or abuse of which they become aware, and to ensure that the reporting person can report allegation of such malpractice or misconduct in an appropriate manner and without fear of retaliation.
All reports will be investigated promptly and dealt with fairly and equitably. Actions will be taken based on the nature of the allegation and may be resolved by agreed action.
The Board reviews the policy when deemed necessary to ensure it remains relevant and appropriate and the policy can be viewed on the Company’s website at www.perakcorp.com.my.
Tenure of Independent Directors
In determining the independence of individual directors, the Board, through the Nomination and Remuneration Committee, conducts assessment on the independent directors of the Company annually.
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As at the financial year ended 31 December 2017, the tenure of the independent directors is as follows:
Appointment Date Tenure Tuan Haji Ab Rahman bin Mohammed 26 August 2009 8 years Dato’ Abd Karim bin Ahmad Tarmizi 2 November 2009 8 years Dato’ Dr Vasan a/l Sinnadurai 2 November 2009 8 years Datuk Dr Wan Norashikin binti Wan Noordin 2 November 2009 8 years
The Board has carefully assessed and reviewed the performance carried out by the existing independent directors and concluded that they are able to discharge their duties and responsibilities effectively to ensure that there is a balance of power and authority on the Board. Based on the recent annual review, the Board is satisfied that the independent directors have fulfilled the criteria as defined in the Listing Requirements.
The Board noted that the MCCG 2017 recommends that the tenure of an independent director should not exceed a cumulative term of nine (9) years. The Board believes that the length of service of the independent director on the Board does not interfere with their exercise of independent judgment and act in the best interest of the Group notably in discharging their roles. The Board shall undertake further assessment on independence of its independent directors whose tenure exceeds the cumulative term of nine (9) years.
All four (4) independent directors’ tenure have yet to exceed the cumulative term of nine (9) years as at the end of the financial year 2017.
The Board, through the Nomination and Remuneration Committee, have determined that Tuan Haji Ab Rahman bin Mohammed, who declared himself as independent since 26 August 2009, reaching a cumulative term of nine (9) years in the financial year 2018, remains unbiased, objective and independent in expressing his opinion and in participating in decision-making of the Board. The length of his services on the Board has not in any way interfered with his objective and independent in carrying his roles as member of the Board. Accordingly, Tuan Haji Ab Rahman bin Mohammed has been assessed and reviewed and the Board is satisfied with his independence. He is a person of high calibre and integrity and based on his immense knowledge and expertise as well as experience, in this respect, the Board recommend that the approval of shareholders be sought to allow Tuan Haji Ab Rahman bin Mohammed to continue to act as independent director of the Company.
Board Diversity Policy
The Board recognises the importance of diversity in determining the optimum composition of the Board and amongst its workforce, including but not limited to race, ethnicity, age, gender, skills, experience, exposure and competencies. The ultimate decision will be based on the competency, ability, leadership quality and qualification, particularly candidates with specialised knowledge, that meet the Group’s needs.
The Board considers that gender diversity contributes positively to the performance of the Board which is vital to the sustainability of the Group’s businesses. Currently, the Board has one female director out of a total of seven directors, representing approximately 14% of women participation in the boardroom. The Board will actively work towards identifying suitably female directors to be appointed to the Board. The Board recognises that the evolution of the diversity is a long process and weighs the various factors relevant to board balance and diversity when vacancies arise.
Overall, the Board is satisfied with the existing number and composition of the members and is of the view that the Board comprises a good mix of members with diverse experiences background to provide for a collective range of skills, expertise and experience which are relevant to support the growth and cope with the complexities of the Group’s businesses.
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Sourcing and Nomination of Board members
The Board, through the Nomination and Remuneration Committee, continuously reviews the composition of the Board and source for suitable directors considering the diversity in business background, area of expertise, skills, educational background, gender, and ethnicity as well as other factors that may provide the Board with a boarder range of viewpoints and perspectives.
The Nomination and Remuneration Committee is responsible for proposing new nominees for appointment to the Board, and recommends to the Board for approval on the appointment, re-appointment, re-election and annual assessment of directors.
The Nomination and Remuneration Committee considers and recommends to the Board candidates of sufficient calibre, knowledge, integrity, reliability, professionalism and experience to fulfill the duties of a director. This Committee also considers the ability of the candidate to attend Board and Board committees’ meetings regularly and devote sufficient time and effort to carry out their duties and responsibilities effectively, and be committed to serve on the Board for an extended period of time.
Directors’ Training
All directors are encouraged to continuously undertake training and regularly update and refresh their skills and knowledge to enable them to effectively discharge their duties. In this connection, the Board has adopted the Guidelines for Directors’ Training Needs as recommended by the Nomination and Remuneration Committee. The guidelines require each director to attend at least one (1) seminar/course/workshop during the financial year.
From time to time, directors also receive further training on developments which may have a bearing on their duties and contribution to the Board, from professional bodies, regulatory institutions and corporations. Basically, all directors have complied with the Guidelines for Directors’ Training Needs for the year 2017 as they were briefed on changes in regulatory environment with the implementation of the Companies Act 2016 and MCCG 2017: Key changes and highlights internally during the year.
The directors who have attended the training programmes are as follows:
YB Dato’ Nasarudin bin Hashim ~~ Sustainability Forum for Directors/CEOs: The Velocity of Global Change & Sustainability – The New Business Model ~~ Corporate Governance Breakfast Series with Directors: Board Excellence – How to Engage and Enthuse Beyond Compliance with Sustainability ~~ International Directors Summit 2017
Tuan Haji Ab Rahman bin Mohammed ~~ The New Companies Act 2016 – The Key Issues and Potential Pitfalls and Disclosure of Interest by Nominee Directors ~~ PNB Investment Series 2017 – The Future of Fintech / Digital Disruption ~~ PNB Investment Series 2017 – The Future of Globalisation and Liberalisation: Are We Losing the Battle?
Dato’ Wan Hashimi Albakri bin WAA Jaffri ~~ The 20th National Housing & Property Summit ~~ PAM Housing and Urbanity Symposium 2017 ~~ CEO Series 2017
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Dato’ Dr Vasan a/l Sinnadurai ~~ Implementing A Risk Management & Internal Control Framework based on The Malaysian Code of Corporate Governance 2017
Datuk Dr Wan Norashikin binti Wan Noordin ~~ Effective Internal Audit Function for Audit Committee
Nomination and Remuneration Committee
The Nomination and Remuneration Committee comprises four (4) non-executive directors, three (3) of whom are independent. The Committee is headed by Dato’ Abd Karim bin Ahmad Tarmizi and the other members are Dato’ Wan Hashimi Albakri bin Wan Ahmad Amin Jaffri, Dato’ Dr Vasan a/l Sinnadurai and Datuk Dr Wan Norashikin binti Wan Noordin. The Committee is empowered to bring to the Board recommendations as to the appointment of any new executive or non-executive director upon evaluation of the candidate’s ability to discharge the expected responsibilities. In addition, the Committee is responsible for establishing a formal and transparent procedure for developing policy on the remuneration packages of the executive and non-executive directors of the Company.
The Chairman of the Nomination and Remuneration Committee is not the Senior Independent Director, who is currently the Audit Committee’s Chairman, for better segregation of duties among the directors.
In 2017, the Committee held two (2) meetings on the following dates: 22 February and 22 November 2017.
The attendance of the members is as follows:
Meeting attendance in 2017 Dato’ Abd Karim bin Ahmad Tarmizi (Chairman) 2/2 Dato’ Wan Hashimi Albakri bin Wan Ahmad Amin Jaffri 1/2 Dato’ Dr Vasan a/l Sinnadurai 2/2 Datuk Dr Wan Norashikin binti Wan Noordin 2/2
The activities of the Nomination and Remuneration Committee during the financial year ended 31 December 2017 include recommendation to the Board on the following matters:
(a) Renewal of contract of service of the Group Chief Financial Officer; (b) Directors’ remuneration packages for executive and non-executive directors and gratuity payment to directors; (c) Evaluation and assessment of directors, the Board as a whole and the independence directors; (d) Evaluation and assessment of the performance of the Audit Committee’s members and the Audit Committee as a whole; (e) Re-appointment and re-election of directors at the Annual General Meeting (“AGM”) of the Company; and (f) Assessment of the Directors’ training needs to ensure all Directors receive appropriate continuous training.
page ANNUAL REPORT 2017 36 PERAK CORPORATION BERHAD (210915-U) CORPORATE GOVERNANCE OVERVIEW STATEMENT (CONTINUED)
Board, Audit Committee and Individual Director Assessment
The Nomination and Remuneration Committee conducts annual assessment of each individual director under the evaluation process to ensure the effectiveness of the Board as a whole. The assessment of directors is an examination of each director’s ability to contribute to the effective decision making of the Board.
The Nomination and Remuneration Committee also conducts annual review of the term of office performance of the Audit Committee’s members annually and assess whether the Audit Committee as a whole carried out their duties in accordance with its terms of reference.
The overall results of the evaluation process and the improvements recommended thereon are presented by the Chairman of the Nomination and Remuneration Committee to the Board in respect of the performance of the Audit Committee and the Board as a whole.
Based on the recent annual review, the Nomination and Remuneration Committee is satisfied that the Board composed of directors with appropriate mix of skill and experience to meet the Company’s requirements and the Audit Committee and its members discharged their functions, duties and responsibilities in accordance with its terms of reference.
Board Meetings
In 2017, the Board held seven (7) meetings on the following dates: 22 February, 8 May, 30 May, 30 June, 23 August, 5 September and 22 November 2017. At each scheduled meeting, there is a full financial and business review and discussion, including operational and financial performance to date against annual budget and financial plan previously approved by the Board for that year.
The details of meeting attendance of each individual director are as follows:
Meeting attendance in 2017 YB Dato’ Nasarudin bin Hashim (Chairman) 5/7 Tuan Haji Ab Rahman bin Mohammed 7/7 Dato’ Wan Hashimi Albakri bin Wan Ahmad Amin Jaffri 5/7 Dato’ Abd Karim bin Ahmad Tarmizi 7/7 Dato’ Dr Vasan a/l Sinnadurai 6/7 Datuk Dr Wan Norashikin binti Wan Noordin 7/7 Dato’ Aminuddin bin Md Desa 7/7
Remuneration Policy and Procedure
For the remuneration policy, the Nomination and Remuneration Committee reviews the salaries, annual fees, attendance allowance and other benefits for the executive and non-executive directors of the Company bench marked against industry standards and market competitiveness in light of the performance of the Group in the industry. The decision to determine the level of remuneration shall be the responsibility of the Board as a whole after considering recommendations from the Nomination and Remuneration Committee. In addition, the annual fees of non-executive directors shall be subject to the ultimate approval of shareholders at the AGM.
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Directors’ Remuneration
The remuneration of the current directors of the Company on a named basis for the financial year ended 31 December 2017 is as follows:
Other Benefit-in- Fees Salaries emoluments kind Total Name of directors RM RM RM RM RM Company YB Dato’ Nasarudin bin Hashim - - 4,800 - 4,800 Dato’ Wan Hashimi Albakri 72,600 - 4,800 - 77,400 bin Wan Ahmad Amin Jaffri Tuan Haji Ab Rahman 78,650 - 10,350 - 89,000 bin Mohammed Dato’ Abd Karim bin 72,600 - 6,000 - 78,600 Ahmad Tarmizi Dato’ Dr Vasan a/l Sinnadurai 72,600 - 8,400 - 81,000 Datuk Dr Wan Norashikin 72,600 - 7,800 - 80,400 binti Wan Noordin Dato’ Aminuddin bin Md Desa 72,600 - 7,800 - 80,400 Group YB Dato’ Nasarudin bin Hashim - 150,000 4,800 - 154,800 Dato’ Aminuddin bin Md Desa 119,374 - 56,333 - 175,707
Senior Management’ Remuneration
The remuneration component including salary, bonus, benefits in-kind and other emoluments of the current senior management on a named basis in bands of RM50,000 for the financial year ended 31 December 2017 is as follows:
Band of remuneration Name of senior managements RM100,001 to RM150,000 Rozahan bin Osman RM150,001 to RM200,000 Dato’ Aminuddin bin Md Desa RM650,001 to RM700,000 Mubarak Ali bin Gulam Rasul
page ANNUAL REPORT 2017 38 PERAK CORPORATION BERHAD (210915-U) CORPORATE GOVERNANCE OVERVIEW STATEMENT (CONTINUED)
SECTION 2: EFFECTIVE AUDIT AND RISK MANAGEMENT
Audit Committee
The Audit Committee comprises three (3) independent directors. The Audit Committee is headed by Tuan Haji Ab Rahman bin Mohammed, who is the Senior Independent Director, and the other members are Dato’ Dr Vasan a/l Sinnadurai and Datuk Dr Wan Norashikin binti Wan Noordin. The Committee provides assistance to the Board in fulfilling its oversight responsibilities of the financial reporting process, the system of internal controls, the audit process and the process of monitoring compliance with laws and regulations and the code of conduct.
The role and summary of the activities of the Audit Committee are described in more detail in the Audit Committee Report set out on pages 45 to 48 of this Annual Report.
Financial Reporting
For financial reporting through quarterly interim financial reports to Bursa Malaysia and the audited annual financial statements to shareholders, the Board has a responsibility to present a balanced and fair assessment of the Group’s financial position, performance and future prospects.
The Statement of Directors’ Responsibility in relation to the preparation of the annual audited financial statements of the Company and the Group is set out on page 53 of the Annual Report.
The Audit Committee assists the Board in scrutinising the financial reporting processes and quality of the financial reporting of the Group. This Committee, on a quarterly basis, reviews the quarterly interim financial reports and yearly financial statements to ensure accuracy, adequacy and completeness as well as to comply with applicable financial reporting standards and other regulatory and legal requirements.
Assessment of Suitability and Independence of External Auditors
Through the Audit Committee, the Company has always maintained a close and transparent relationship with its external auditors in seeking professional advice and ensuring compliance with applicable financial reporting standards in Malaysia. This Committee is accorded the power to communicate directly with the external auditors.
Following the cessation of office of Messrs KPMG PLT as the external auditors of the Company at the conclusion of the Twenty-sixth AGM, the Audit Committee has reviewed the profile, competence, audit quality, resource capacity and experience of Messrs Ernst & Young after taking into account of the size and complexity of the Group’s operation as well as the suitability, objectivity and independence of Messrs Ernst & Young and was of the opinion that Messrs Ernst & Young would be able to meet the audit obligations of the Group in compliance with the Listing Requirements and provisions of the Companies Act 2016.
Having regard to the outcome of the assessment of external auditors by the Audit Committee, the Board has agreed with the Audit Committee’s recommendation to seek shareholders’ approval at an Extraordinary General Meeting. The resolution for the appointment of Messrs Ernst & Young as auditors of the Company was approved by the shareholders at the Extraordinary General Meeting held on 22 November 2017.
The Audit Committee conducts an annual assessment of the suitability, objectivity and independence of the external auditors by considering among other – • the competence, audit quality and resource capacity of the external auditor in relation to the audit; • the nature and extent of the non-audit services rendered and the appropriateness of the level of fees; and • obtaining written assurance from the external auditors confirming that they are, and have been, independent throughout the conduct of the audit engagement in accordance with the terms of all relevant professional and regulatory requirements.
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Messrs Ernst & Young has confirmed that they were and have been independent throughout the conduct of the audit engagement in accordance with the terms of all relevant professional and regulatory requirements, including the By-laws (on Professional Ethics, Conduct and Practice) of the Malaysian Institute of Accountants.
Based on the annual assessment, the Audit Committee is satisfied with the independence, objectivity, technical competency and professionalism demonstrated by Messrs Ernst & Young. Having regard to the outcome of the annual assessment of external auditors by the Audit Committee, the Board has agreed with the Audit Committee’s recommendation to seek shareholders’ approval at the forthcoming AGM on the appointment of Messrs Ernst & Young as external auditors of the Company for the financial year ending 31 December 2018.
Risk Management and Internal Control
The Board takes responsibility for the Group’s risk management and internal control system and for reviewing its adequacy and integrity. The Board is of the view that the current system of risk management and internal control in place throughout the Group is sufficient to safeguard the Group’s assets and shareholders’ investment.
The Statement on Risk Management and Internal Control as set out on pages 42 to 44 in this Annual Report provides an overview of the state of risk management and internal controls within the Group.
Internal Audit Function
The Board recognises that effective monitoring on a continuous basis is a vital component of a sound internal control system. The Group has in place an adequately resourced internal audit department of the Company’s ultimate holding corporation who conduct regular reviews of the internal controls and report to the Audit Committee.
SECTION 3: INTEGRITY IN CORPORATE REPORTING AND MEANINGFUL RELATIONSHIP WITH STAKEHOLDERS
Communication with Shareholders and other Stakeholders
The Board acknowledges the importance of effective, transparent and timely dissemination of material information and has in place internal corporate disclosure procedures which enable comprehensive, accurate and timely disclosures relating to the Company to shareholders, regulators and other stake stakeholders. These procedures also set out the authority and responsibility to approve such disclosure. In formulating these procedures, the Board is guided by Investor Relations Policy and Corporate Disclosure Guide 2011 introduced by Bursa Malaysia whilst adhering with the corporate disclosure requirements as set out in the Listing Requirements.
Announcements via Bursa LINK of Annual Reports, quarterly interim financial reports and business acquisitions and disposals provide the shareholders and the investing public with an overview of the Group’s performance, operations and directions. Members of the public can obtain the Annual Reports, full financial results, quarterly interim financial reports and the Company’s announcements on the Company’s website at www.perakcorp.com.my. Notices of general meetings and minutes of general meetings are also available on the Company’s website.
The Board has designated Tuan Haji Ab Rahman bin Mohammed as the Senior Independent Director of the Company to whom shareholders may address their concerns relating to the Group. In addition, nominees of the Company’s substantial shareholders sit on the Board. This provides a platform for interactions and direct communications between the Board, management and shareholders. At all times, any queries from other shareholders may be communicated through the Company Secretary.
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Conduct of General Meetings
The AGM is the principal forum for dialogue with shareholders. Notice of the AGM together with the Annual Report will be sent out to shareholders at least twenty-eight (28) days before the date of meeting.
The Board encourages participation from shareholders by having a question and answer session during the AGM. The directors and the GCEO are available to provide responses to questions from shareholders during the meeting.
All resolutions set out in the notice of general meetings of the Company are to be conducted by poll and an independent scrutineer is appointed to monitor the conduct of polling for each general meeting.
At the AGM held on 30 June 2017, poll voting was conducted in respect of all resolutions by way of e-polling process and Symphony Corporatehouse Sdn Bhd was appointed as Scrutineers to verify the poll results. The outcome of the poll against the resolutions was announced at the same meeting and detailed results stating the votes cast were announced via Bursa LINK.
Other than the AGM, an Extraordinary General Meeting was held on 22 November 2017 to consider the following resolution:
Resolution Result Ordinary Resolution Approved Proposed Appointment of Auditors
Poll voting was also conducted in respect of the resolution and the result of the poll was scrutinised by Symphony Corporatehouse Sdn Bhd, the appointed Scrutineers.
page ANNUAL REPORT 2017 41 PERAK CORPORATION BERHAD (210915-U) STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL
INTRODUCTION
The Board is responsible for the adequacy and effectiveness of the risk management framework and to maintain a system of internal control in the Company and its subsidiaries (“Group”) to safeguard shareholders’ investments and the Group’s assets. Paragraph 15.26(b) of Bursa Malaysia Securities Berhad’s Main Market Listing Requirements (“Listing Requirements”) requires directors of listed companies to include a statement in annual reports on the state of the internal control of the listed issuer as a group. The recent guidelines on the Statement on Risk Management and Internal Control (Guidelines for Directors of Listed Issuers) (“Risk Management and Internal Control Guidance”) further emphasises the need for maintaining a risk management framework and internal control system.
Set out below is the Board’s Statement on Risk Management and Internal Control, which has been prepared in accordance with the Risk Management and Internal Control Guidance.
BOARD RESPONSIBILITY
The Board recognises the importance of risk management practices and internal controls to good corporate governance. The Board affirms its overall responsibility for the Group’s system of risk management and internal control, and for reviewing the adequacy and integrity of those systems. Due to the limitations that are inherent in any system of internal control, the system is designed to manage rather than eliminate the risk of failure to achieve corporate objectives. Accordingly, the system can provide only reasonable and not absolute assurance against material misstatement or loss. The system of internal control covers, inter alia, risk management and financial, organisational, operational and compliance controls. The Board confirms that in four (4) of its meetings in 2017, Internal Audit matters were presented and discussed to ensure an on-going process for identifying, evaluating, monitoring and managing the significant risks affecting the achievement of the Group’s business objectives. The Board shall regularly review this process and ensure compliance with the Risk Management and Internal Control Guidance.
RISK MANAGEMENT FRAMEWORK
In accordance with the Risk Management and Internal Control Guidance, the Board would also like to affirm its overall responsibility for identifying, evaluating and managing risks faced by the Group and the Group has instituted risk management framework and policy for two significant entities within the Group.
The key elements of the risk management framework of the two significant entities of the Group involve the following:
1. Risk Management Committee
The Risk Management Committee shall identify risks, their changes and action plans to manage the risks.
page ANNUAL REPORT 2017 42 PERAK CORPORATION BERHAD (210915-U) STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL (CONTINUED)
2. Risk Management Policies and Procedures Manual
Risk management policies and procedures have been drafted and reviewed to adapt to current business activities as well as risk exposures in the forthcoming year.
In order to sustain corporate resilience, the Group shall continue to strengthen continuous risk awareness and assessment to ensure proper actions to mitigate risks as well as to address the various risk exposures in the forthcoming year.
REVIEW OF INTERNAL CONTROL EFFECTIVENESS
The Group, via the ultimate holding corporation’s internal audit department, provides support to the Audit Committee in discharging its duties with respect to the adequacy and integrity of the internal control’s systems within the Group. During the financial year under review, the internal auditors of the ultimate holding corporation carried out procedures on the operating subsidiaries of the Group based on an internal audit plans approved by the Audit Committee. Their internal audit reports were tabled at the Audit Committee meetings, where Audit Committee members reviewed the findings with management. Internal auditors shall ensure that recommendations to improve controls are implemented by management.
OTHER KEY ELEMENTS OF INTERNAL CONTROL
The Group has in place the following key elements of internal control:
1. Strategic Blue Print and Objectives
In order to chart the Group’s business direction, the ultimate holding corporation and the Company have produced the Group’s Strategic Blue Print (2014-2018) where strategic thrusts to support the achievement of the Group’s key business strategic objectives are identified and undertaken by the Group.
2. Organisational Structure
The Group has put in place an organisational structure with clearly defined lines of accountability and delegated authority for all aspects of the business as set out in the Board Charter and Limits of Authority to the Board committees, the Group Chief Executive Officer and the operating units.
3. Policies and Operating Procedures Manual
There is an Operating Procedures Manual that sets out the policies, procedures and practices covering activities including the following:
3.1 Limits of Authority Limits of Authority outlines and empowers the individual or group of persons in making decisions within the Group.
3.2 Budgeting Budgets are generated annually at each operating unit. The budgets will then be presented to the ultimate holding corporation and the Group’s Board for review and approval.
3.3 Senior Executive Committee (“SEC”) of the ultimate holding corporation Requests for major purchases of goods and services and procurement of contract works are submitted to the SEC for reviews and approvals.
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4. Management Financial Report
Quarterly interim financial reports are submitted to the Audit Committee and the Board which include the monitoring of results against budget, with major variances being explained and management actions taken for improvement of results. This involves the inclusion of Statements of Comprehensive Income, Statements of Financial Position, Group Statements of Changes in Equity and Statements of Cash Flows being presented to the Audit Committee and the Board. The Board confirms that financial discussions are held four (4) times in 2017 to monitor financial progress and performance within the Group.
5. Investment Appraisal
Investment proposals covering acquisition of property and long term investments are appraised by the Board. Post implementation reviews on these investments are conducted and reported to the Board on a quarterly basis. Likewise, similar actions are taken in respect of disposal of property/ long term investments/subsidiaries.
CONCLUSION
For the financial year under review and up to the date of issuance of the audited financial statements, the Board considers the system of risk management and internal control of the Group to be satisfactory and the risks to be at an acceptable level within the context of the Group’s business environment. The Board has received assurance from the Group Chief Executive Officer and the Group Chief Financial Officer of the Company who are satisfied with the adequacy, integrity and effectiveness of the Group’s system of risk management and internal controls. No material losses, contingencies or uncertainties have arisen from any inadequacy or failure of the Group’s system of risk management and internal control, except for a number of minor weaknesses which were identified and addressed during the year, that would require disclosure in the Annual Report.
page ANNUAL REPORT 2017 44 PERAK CORPORATION BERHAD (210915-U) AUDIT COMMITTEE REPORT
The Audit Committee provides assistance to the Board in fulfilling its oversight responsibilities of the financial reporting process, the system of internal controls, the audit process and the process of monitoring compliance with laws and regulations and the code of conduct.
COMPOSITION AND MEETING ATTENDANCE
The Audit Committee comprises three (3) independent non-executive directors.
The Audit Committee shall meet at least four (4) times a year, although additional meetings may be called at any time at the Chairman’s discretion and if requested by any member or internal or external auditors. The Committee may meet with the external auditors, the internal auditors or both without the attendance of other directors and employees of the Company, whenever deemed necessary. The Committee may invite any person to be in attendance at each meeting.
The Audit Committee met seven (7) times during the financial year under review on the following dates: 21 February, 5 April, 14 April, 29 May, 22 August, 5 September and 22 November 2017 and the attendance of members in 2017 is as follows: Meeting attendance in 2017 Tuan Haji Ab Rahman bin Mohammed (Chairman) 7/7 Senior Independent Non-Executive Dato’ Dr Vasan a/l Sinnadurai 7/7 Independent Non-Executive Datuk Dr Wan Norashikin binti Wan Noordin 6/7 Independent Non-Executive
The Nomination and Remuneration Committee has conducted annual review of the term of office and performance of the Audit Committee and its members and is satisfied that the Audit Committee as a whole and its members have carried out their duties in accordance with its terms of reference.
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SUMMARY OF ACTIVITIES
The summary of key activities undertaken by the Audit Committee during the financial year under review is provided below:
Financial Reporting
In its oversight of the financial reporting process, for the financial year under review, the Audit Committee obtained assurance from the Group Chief Financial Officer on the integrity of the quarterly interim financial reports and annual audited financial statements and that they comply with the applicable financial reporting standards and other legal requirements.
• The Audit Committee reviewed the quarterly interim financial reports with management during its quarterly scheduled meetings before submission with its recommendation to the Board for approval prior to the quarterly announcements made to Bursa Malaysia Securities Berhad and the Securities Commission; • The Audit Committee deliberated on the issues related to the audit of the financial statements of the Company for the financial year ended 31 December 2016 resulting in the delay in the issuance of the audited financial statements for the year ended 31 December 2016; and • The Audit Committee reviewed the annual audited financial statements and the audit report thereon as presented by the external auditors covering the following areas with management before submission with its recommendation to the Board for approval:
~~ appropriate accounting policies that have been adopted and applied consistently; ~~ audit approach; ~~ key audit issues which arose during the audit and their subsequent resolution; ~~ key significant audit findings; and ~~ external auditors’ management letter and management’s response thereto.
In its oversight of the external audit process, the Audit Committee met with the external auditors twice (2) during the year on 5 April 2017 and 29 May 2017.
External Audit
In respect of the financial year under review, the Company had, on 5 June 2017, announced to Bursa Malaysia Securities Berhad that Messrs KPMG PLT had indicated their intention not to seek for re-appointment as the auditors of the Company. In their place, on 22 November 2017, the Company appointed Messrs Ernst & Young as the external auditors of the Group for the financial year ended 31 December 2017.
• The Audit Committee considered the profile of Messrs Ernst & Young and assessed their competence, audit quality, resource capacity and experience after taking into account of the size and complexity of the Group’s operation as well as the suitability, objectivity and independence of Messrs Ernst & Young prior to their appointment as the external auditors of the Group. The Audit Committee recommended to the Board its support for the appointment of Messrs Ernst & Young as the external auditors of the Group for the financial year ended 31 December 2017;
• The Audit Committee discussed with Messrs Ernst & Young on their audit plan in respect of the audit for the financial year ended 31 December 2017, outlining the nature and scope of the audit work and the proposed fees for the statutory audit, as well as the audit procedures to be undertaken; and
• The Audit Committee obtained assurance from Messrs Ernst & Young that they are independent in respect of the audit for the financial year ended 31 December 2017 in accordance with the terms of the relevant professional and regulatory requirements.
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The amount of audit fees and non-audit fees payable to Messrs Ernst & Young for the financial year ended 31 December 2017, are as follows:
Audit fees (RM) Non-Audit fees (RM) Company 120,000 20,000 Group 492,000 93,500
The non-audit fees include assurance services rendered comprise annual review of the Statement on Risk Management and Internal Control.
Internal audit
In its oversight of the internal audit process, the Audit Committee met with the internal auditors four (4) times during the year on 21 February 2017, 29 May 2017, 22 August 2017 and 22 November 2017.
• The Audit Committee reviewed and approved the annual internal audit plan based on risk-based approach as presented by the internal auditors and discussed with them on the scope of work, adequacy of resources and coordination with the external auditors; and
• The Audit Committee reviewed the four (4) internal audit reports presented by the internal auditors on their findings and recommendations thereon with respect to system and controls weaknesses and management’s response to these recommendations and ensure the adequacy implementation of corrective actions to address such control deficiencies.
Risk Management and Others
• The Audit Committee reviewed and approved the Statement on Risk Management and Internal Control and the Audit Committee Report for inclusion in the Company’s Annual Report, for recommendation to the Board for approval;
• The Audit Committee reviewed the proposal for the acquisition of four (4) lots of leasehold land measuring a total area of approximately 115.312 acres all situated at Mukim Lumut, District of Manjung, State of Perak by Lumut Maritime Terminal Sdn Bhd, a 50% + 1 share subsidiary the Company, from Perbadanan Kemajuan Negeri Perak, the ultimate holding corporation of the Company, for a total purchase consideration of RM57.0 million exclusive of goods and services tax (“Proposed Acquisition”), for recommendation to the Board for approval. The Audit Committee was satisfied that the Proposed Acquisition is fair, reasonable and on normal commercial terms and is of the opinion that the Proposed Acquisition is in the best interest of the Company and not detrimental to the interest of the minority shareholders;
• The Audit Committee reviewed related party transactions and recurrent related party transactions entered into by the Company and its subsidiaries and the Circular to Shareholders related to recurrent related party transactions, for recommendation to the Board for approval. The Audit Committee was satisfied that these transactions are fair, reasonable and on normal commercial terms and is of the opinion that these transactions are in the best interest of the Company and not detrimental to the interest of the minority shareholders;
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INTERNAL AUDIT FUNCTION
The Board recognises that effective monitoring on a continuous basis is a vital component of a sound internal control system. In this respect, the Audit Committee is supported adequately by the internal audit department from the Company’s ultimate holding corporation in which the personnel have the relevant experience, competency and resources as well as able to access the necessary information to carry out their function and role effectively. The internal auditors may outsource to any other consultant or professional firm if there is a requirement to do so. The main role of the internal auditors is to review the effectiveness of the system of internal control and this is performed with impartiality, proficiency and due professional care. The internal auditors report directly to the Audit Committee on audit matters and to the Group Chief Executive Officer on administrative matters.
The internal audit activities have been carried out according to the internal audit plan based on risk-based approach, which has been approved by the Audit Committee. In 2017, the internal auditors have conducted a series of audits of the operating units including subsidiaries of the Company. The internal auditors ensured, on a follow up basis, that recommendations to improve controls are implemented by management. These initiatives, together with management’s adoption of the external auditor’s recommendations for improvement on internal controls noted during their annual audit, provide reasonable assurance that control procedures are in place.
The cost incurred on the internal audit function for the financial year ended 31 December 2017 amounted to RM100,000.
page ANNUAL REPORT 2017 48 PERAK CORPORATION BERHAD (210915-U) ADDITIONAL COMPLIANCE INFORMATION
RECURRENT RELATED PARTY TRANSACTIONS (“RRPT”) OF REVENUE NATURE
The RRPT of revenue nature conducted during the financial year is as follows:
Actual value Relations with the 1/1/2017 – 31/12/2017 Type of RRPT Name of related party Company (RM)
Procure and purchase of Nexus Jade Sdn Bhd See Note 1 below 2,866,618 merchandise by Animation (“NJSB”) Theme Park Sdn Bhd (“ATP”)
Operation and maintenance Lekir Bulk Terminal See Note 2 below 41,196,055 contract provided by Lumut Sdn Bhd (“LBTSB”) Maritime Terminal Sdn Bhd (“LMTSB”)
Note:
1. Perbadanan Kemajuan Negeri Perak holds 55.12% equity interest in Majuperak Holdings Berhad which in turn holds 51% equity interest in NJSB through two intermediate wholly owned subsidiaries. Perbadanan Kemajuan Negeri Perak holds 52.9% equity interest in Perak Corporation Berhad which in turn holds 51% equity interest in ATP through its wholly owned subsidiary.
2. Integrax Berhad holds 100% equity interest in Pelabuhan Lumut Sdn Bhd which in turn holds 50% minus 1 share equity interest in LMTSB and 80% equity interest in LBTSB.
UTILISATION OF PROCEEDS
No proceeds were raised by the Company from any corporate exercise during the financial year ended 31 December 2017.
MATERIAL CONTRACTS
There were no material contracts entered into by the Company or its subsidiary involving the interest of the directors and major shareholders, either still subsisting at the end of the financial year or entered into since the end of the previous financial year, except as disclosed in notes 37 and 38 of the financial statements of the Company for the financial year ended 31 December 2017.
page ANNUAL REPORT 2017 49 PERAK CORPORATION BERHAD (210915-U) ANALYSIS OF SHAREHOLDINGS AS 16 APRIL 2018
Total number of issued shares : 100,000,000 Class of Shares : Ordinary shares Voting Rights : One (1) vote per ordinary share held
DISTRIBUTION OF SHAREHOLDERS
Size of shareholdings No. of holders % Total shareholdings % Less than 100 252 11.00 11,513 0.01 100 to 1,000 237 10.34 152,599 0.15 1,001 to 10,000 1,395 60.89 5,042,261 5.04 10,001 to 100,000 354 15.45 10,969,174 10.97 100,001 to 4,999,999 51 2.23 26,193,203 26.20 5,000,000* and above 2 0.09 57,631,250 57.63 2,291 100.00 100,000,000 100.00 Note: * Denotes 5% of the issued capital
SUBSTANTIAL SHAREHOLDERS
No. of shares held No. Name of holders Direct % Indirect % 1 Perbadanan Kemajuan Negeri Perak 52,271,253 *1 52.27 627,150 * 2 0.63 2 Sime Darby Property Berhad 6,125,000 6.13 - - Note : *1 Including 51,506,250 shares held under CIMB Group Nominees (Tempatan) Sdn Bhd *2 Deemed interest through its direct and indirect wholly owned subsidiaries, namely Fast Continent Sdn Bhd, Cherry Blossom Sdn Bhd and Perak Equity Sdn Bhd
DIRECTORS’ SHAREHOLDINGS
No. of shares held No. Name of holder Direct % Indirect % 1 Tuan Haji Ab Rahman bin Mohammed - - 6,000* 0.01 Note: * Deemed interest through his spouse and child
page ANNUAL REPORT 2017 50 PERAK CORPORATION BERHAD (210915-U) ANALYSIS OF SHAREHOLDINGS (CONTINUED)
THIRTY LARGEST SHAREHOLDERS
No. of shares No. Name held % CIMB Group Nominees (Tempatan) Sdn Bhd 1 51,506,250 51.51 CIMB Bank Bhd for Perbadanan Kemajuan Negeri Perak (CBD-NR-PERAKCB) 2 Sime Darby Property Berhad 6,125,000 6.13 3 Pui Cheng Wui 3,930,600 3.93 KAF Trustee Berhad 4 3,912,000 3.91 KIFB for KAF Seagroatt & Campbell Berhad 5 Chua Sim Neo @ Diana Chua 3,785,500 3.79 CIMB Group Nominees (Asing) Sdn Bhd 6 1,461,700 1.46 Exempt an for DBS Bank Ltd (SFS) Kenanga Nominees (Asing) Sdn Bhd 7 1,000,000 1.00 Cantal Capital Inc. 8 Gan Kho @ Gan Hong Leong 831,600 0.83 9 Wong Shak On 830,000 0.83 10 Perbadanan Kemajuan Negeri Perak 765,003 0.76 11 Gan Kho @ Gan Hong Leong 706,900 0.71 Public Nominees (Tempatan) Sdn Bhd 12 474,500 0.47 Pledged Securities Account for Han Fook Fong (E-PPG) 13 Lim Gaik Bway @ Lim Chiew Ah 466,600 0.47 14 Tharumanathan a/l S. Eliathamby 463,000 0.46 15 Cherry Blossom Sdn Bhd 367,150 0.37 KAF Trustee Berhad 16 360,000 0.36 KIFB for Yayasan Istana Abdul Aziz KAF Trustee Berhad 17 351,000 0.35 KIFB for DYMM Tuanku Bainun Mohd Ali Kenanga Nominees (Tempatan) Sdn Bhd 18 319,700 0.32 Pledged Securities Account for Chin Kiam Hsung 19 Chee Ah Ngoh 309,700 0.31 20 Ng Poh Cheng 302,200 0.30 Public Nominees (Tempatan) Sdn Bhd 21 300,000 0.30 Pledged Securities Account for Tam Seng @ Tam Seng Sen (E-PTS) 22 Cheong Yoke Choy 250,000 0.25 23 Renfield Investment Limited 250,000 0.25 24 Fast Continent Sdn Bhd 247,500 0.25 Maybank Nominees (Tempatan) Sdn Bhd 25 240,000 0.24 Pledged Securities Account for Tay Ong Ngo @ Tay Boon Fang 26 Toh Hai Hai 234,400 0.23 UOB Kay Hian Nominees (Asing) Sdn Bhd 27 234,350 0.23 Exempt an for UOB Kay Hian Pte Ltd (A/C Clients) RHB Nominees (Tempatan) Sdn Bhd 28 230,000 0.23 Pledged Securities Account for Chin Kiam Hsung 29 Tan Teck Peng 228,000 0.23 30 Chin Kian Fong 211,600 0.21 80,694,253 80.69
page ANNUAL REPORT 2017 51 PERAK CORPORATION BERHAD (210915-U) SUMMARY OF PROPERTIES AS AT 31 DECEMBER 2017
Date of Acquisitions Approx. Age Approximate (Building) Land area Net Book Locations (acres ) Tenure Description Value Existing Use
Part of Lot 140407, 15437, 25459, 45.8 Freehold Agricultural land with 31.12.1997 Agriculture 33004, 52566, 21310, 18202 approvals for mixed RM7,054,528 (Proposed for mixed Mukmin Ulu Kinta, District Of Kinta, development from development) Perak Darul Ridzuan. Pejabat Pengarah & Galian. No. HDS 98757, PT 167585 Negeri 5.00 Freehold 3-storey institutional 1.1.2002 Vacant Perak, Mukmin Ulu Kinta, District building. RM3,613,136 Of Kinta, Perak Darul Ridzuan. 15 Years a) No. HSD 159908, PT 213246 0.062 Freehold Double storey 30.9.2011 Vacant building. RM1,137,500
PCB Deveploment Sdn Bhd b) No. HDS 159909, PT 213247 0.065 5 Years c ) No. HDS 159910, PT 213248 0.065 Mukim Ulu Kinta, District Of Kinta, Perak Darul Ridzuan. Lot PT 2273, Mukim Lumut, Daerah 27.46 Leasehold Waterbody 30.9.1995 Port operation Manjung, Perak Darul Ridzuan. (99 years) RM679,558 expiring year 2094 Lot PT 6973, Mukim Lumut, Daerah 72.54 Leasehold Wharf, warehouse, 10.4.1997 Port operation Manjung, Perak Darul Ridzuan. (99 years) & office complex RM81,595,549 expiring building 20 years year 2094 PT 6972/Lot 11063, Mukim Lumut, 1.65 Leasehold Waterbody 17.4.2013 Port operation Daerah Manjung, Perak Darul Ridzuan (99 years) RM2,434,180 (purchase vacant land in YR2013) expiring 4 years year 2094 PT 4859, Mukim Lumut, Daerah 3.49 Leasehold Waterbody 10.3.2015 Port operation Manjung, Perak Darul Ridzuan (99 years) RM1,838,912 (purchase vacant land in YR2014) expiring year 2113 PT 10445 and PT10447, Mukim Lumut, 13.3 Leasehold Waterbody 31.01.2017 Port operation Daerah Manjung, Perak Darul Ridzuan (99 years) RM12,510,538 (purchase vacant land in YR2017) expiring year 2105 PT 16661, 16662, 16838 & 16839, 115.31 Leasehold Waterbody 31.05.2017 Port operation Mukim Lumut, Daerah Manjung, Perak (99 years) RM60,900,612 Darul Ridzuan (purchase vacant land in expiring YR2017) year 2114 H.S(D) 204383 PT 245010, Mukim Ulu 7.34 Freehold Hotel, convention 31.2.2013 Hotel and office Kinta, District Of Kinta, Perak Darul centre & 2 office RM56,332,226 operation Ridzuan. towers. 4 Years
page ANNUAL REPORT 2017 52 PERAK CORPORATION BERHAD (210915-U) STATEMENT OF DIRECTORS’ RESPONSIBILITIES IN RESPECT OF THE ANNUAL AUDITED FINANCIAL STATEMENTS
The Directors are required by the Companies Act, 2016 to prepare financial statements for each financial year which give a true and fair view of the state of affairs of the Company and the Group at the end of the financial year and their results and cash flows for the financial year then ended.
In preparing the financial statements, the Directors have:
• Complied with the applicable MASB approved accounting standards in Malaysia.
• Adopted and consistently applied appropriate accounting policies.
• Made judgements and estimates that are prudent and reasonable.
The Directors have responsibility for ensuring that the Company and the Group keep accounting records, which disclose with reasonable accuracy the financial position of the Company and the Group and which enable them to ensure that the financial statements comply with the Companies Act, 2016.
The Directors have general responsibility for taking such steps that are reasonably open to them to safeguard the assets of the Company and the Group and to prevent and detect fraud and other irregularities.
page ANNUAL REPORT 2017 53 PERAK CORPORATION BERHAD (210915-U) This page has been intentionally left blank. page
PERAK DIRECTORS’ REPORT 1-9 CORPORATION BERHAD STATEMENT BY DIRECTORS 10
INCORPORATED IN MALAYSIA (210915-U) STATUTORY DECLARATION 10
INDEPENDENT AUDITORS’ REPORT 11-18 DIRECTORS’ STATEMENT OF COMPREHENSIVE INCOME 19 REPORT STATEMENTS OF FINANCIAL POSITION 20-21 AND AUDITED STATEMENTS OF CHANGES IN EQUITY 22-24 FINANCIAL STATEMENTS OF CASH FLOWS 25-27 STATEMENTS NOTES TO THE FINANCIAL STATEMENTS 28-149
FOR THE YEAR ENDED 31 DECEMBER 2017 210915-U
Perak Corporation Berhad (Incorporated in Malaysia)
Directors' report
The directors have pleasure in presenting their report together with the audited financial statements of the Group and of the Company for the financial year ended 31 December 2017.
Principal activities
The principal activities of the Company consist of property and investment holding, real property development and provision of management services.
The principal activities and other information of the subsidiaries, associates and joint operations are disclosed in Notes 17, 18 and 36 to the financial statements.
Ultimate holding corporation
The ultimate holding corporation is Perbadanan Kemajuan Negeri Perak, a body corporate established under Perak Enactment No. 3, 1967.
Results Group Company RM RM This page has been intentionally left blank. Loss for the year (340,572,671) (28,270,488)
Attributable to: Owners of the Company (174,957,156) (28,270,488) Non-controlling interests (165,615,515) - (340,572,671) (28,270,488)
There were no material transfers to or from reserves or provisions during the financial year other than as disclosed in the financial statements.
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.
Dividend
No dividend was paid during the financial year and the directors do not recommend any dividend to be paid for the financial year under review.
1 (Incorporated in Malaysia) Perak Corporation Berhad 210915-U material and unusual nature. during thefinancialyear werenotsubstantiallyaffected by anyitem,transaction or eventofa Company operationsoftheGroupand the directors,results ofthe In theopinionof statements. than as disclosed in the financial yearmaterial transferstoorfrom reserves orprovisionsthe financial There were other during no 1967. 3, No. Enactment Perak under established Perak, a bodycorporate The ultimateholdingcorporationisPerbadananKemajuanNegeri are disclosed inNotes17, 18and36tothefinancial statements. operations and joint associates subsidiaries, of the information and other activities The principal management services. developmentprovision of and The principal activitiesoftheCompanyconsistpropertyandinvestment holding,realproperty 2017. financial the December 31 ended year for Company the of and Group statements the of the auditedfinancial pleasure inpresentingtheirreporttogetherwithThe directorshave Dividend Non-controlling interests Owners oftheCompany Attributable to: Loss fortheyear Results corporation holding Ultimate Principal activities Directors' report to be paid for the financial yearunder review. thefinancial for to bepaid any dividend directors do not recommend year and the during the financial No dividend was paid 1 (340,572,671) (165,615,515) (174,957,156) (340,572,671) Group RM (28,270,488) (28,270,488) (28,270,488) Company RM - page 1
DIRECTORS’ REPORT AND AUDITED FINANCIAL STATEMENTS 2017 PERAK CORPORATION BERHAD (210915-U) page 2
DIRECTORS’ REPORT AND AUDITED FINANCIAL STATEMENTS 2017 PERAK CORPORATION BERHAD (210915-U) (Incorporated in Malaysia) Perak Corporation Berhad 210915-U financial the date yearof this report are: to ofthe office since thebeginning directorsoftheCompany'ssubsidiariesin The namesofthe this report are: date of ofthefinancial year tothe since thebeginning oftheCompanyinoffice The namesofthedirectors Jamal Bin Mohd Aris(resignedon3March 2017) Mohammad Fariz Victor (resignedon17April 2017) andre-appointedon22 December2017) Rustam Apandi Bin Jamaludin (appointed on 9March 2017,resignedon 17April 2017 Ahmad Al-HadiBinAbdulKhalid Dato' Aminuddin Bin Md Desa Dato' DrVasan A/L Sinnadurai Dato' AbdKarim BinAhmad Tarmizi Sdn.Bhd. ofPCBLeisure Directors Jamal Bin Mohd Aris(resignedon3March 2017) Rustam Apandi Bin Jamaludin (appointed on3March 2017andresignedon8 May 2017) Abdul RahimBinBohari@Bahari Dato' Aminuddin Bin Md Desa ofPCBEquity Sdn. Bhd. Directors Jamal Bin Mohd Aris(resignedon3March 2017) Rustam ApandiBin Jamaludin (appointed on9March 2017) Binti SyedKamaruddin NorHashimah Sharifah Dato' Aminuddin Bin Md Desa BinHashim Dato' Nasarudin Bhd. ofPCBDevelopment Sdn. Directors oftheCompany'ssubsidiaries Directors Dato' Aminuddin Bin Md Desa Noordin BintiWan Norashikin Dr Wan Datuk Dato' DrVasan A/L Sinnadurai Dato' AbdKarim BinAhmad Tarmizi Tuan HajiAbRahmanBin Mohammed AhmadAmin Hashimi Albakri Jaffri BinWan Dato' Wan BinHashim Dato' Nasarudin Directors 2 (Incorporated in Malaysia) Perak Corporation Berhad 210915-U Jamal Bin Mohd Aris(resignedon3March 2017) Mohammad Fariz Victor (resignedon17April 2017) Ahmad Al-HadiBinAbdulKhalid Apandi BinJamaludin Rustam Dato' Aminuddin Bin Md Desa Sdn.Bhd. andCasuarinaBoathouse Directors ofCasuarina Tanjong Malim Sdn. Bhd., Casuarina Teluk Intan Sdn. Bhd. Jamal Bin Mohd Aris(resigned on3March 2017) Mohammad Fariz Victor (resignedon17April 2017) Apandi BinJamaludin Rustam Ahmad Al-HadiBinAbdulKhalid Dato' Aminuddin Bin Md Desa Sdn. Bhd. ofCasuarinaPangkor Directors Jamal Bin Mohd Aris(resigned on3March 2017) Mohammad Fariz Victor (resignedon17April 2017) Apandi BinJamaludin Rustam Rozahan Bin Osman Yun Kam Fei Stephen AllanSanderson BinRamli Ramelle Ashram Dato' Aminuddin Bin Md Desa ofAnimation ThemeParkSdn.Bhd. Directors Salween Azila BintiAhmadTauffik Dato' Aminuddin Bin Md Desa Sdn. Bhd. ofRungkupPort Director Jamal Bin Mohd Aris(resignedon3March 2017) Rustam Apandi Bin Jamaludin (appointed on3March 2017andresignedon8 May 2017) Ahmad Al-Hadi Bin Abdul Khalid (appointed on 8 May 2017) Dato' Aminuddin Bin Md Desa Noordin BintiWan Norashikin Dr Wan Datuk AhmadAmin Hashimi Albakri Jaffri BinWan Dato' Wan ofPCBTaipanSdn.Bhd. Directors (contd.) oftheCompany'ssubsidiaries Directors (contd.) Directors 3 (Incorporated in Malaysia) Perak Corporation Berhad 210915-U Jamal Bin Mohd Aris(resignedon3March 2017) Mohammad Fariz Victor (resignedon17April 2017) Ahmad Al-HadiBinAbdulKhalid Apandi BinJamaludin Rustam Dato' Aminuddin Bin Md Desa Sdn.Bhd. andCasuarinaBoathouse Directors ofCasuarina Tanjong Malim Sdn. Bhd., Casuarina Teluk Intan Sdn. Bhd. Jamal Bin Mohd Aris(resignedon3March 2017) Mohammad Fariz Victor (resignedon17April 2017) Apandi BinJamaludin Rustam Ahmad Al-HadiBinAbdulKhalid Dato' Aminuddin Bin Md Desa Sdn. Bhd. ofCasuarinaPangkor Directors Jamal Bin Mohd Aris(resignedon3March 2017) Mohammad Fariz Victor (resignedon17April 2017) Apandi BinJamaludin Rustam Rozahan Bin Osman Yun Kam Fei Stephen AllanSanderson BinRamli Ramelle Ashram Dato' Aminuddin Bin Md Desa ofAnimation ThemeParkSdn.Bhd. Directors Salween Azila BintiAhmadTauffik Dato' Aminuddin Bin Md Desa Sdn. Bhd. ofRungkupPort Director Jamal Bin Mohd Aris(resignedon3March 2017) Rustam Apandi Bin Jamaludin (appointed on3March 2017andresignedon8 May 2017) Ahmad Al-Hadi Bin Abdul Khalid (appointed on 8 May 2017) Dato' Aminuddin Bin Md Desa Noordin BintiWan Norashikin Dr Wan Datuk AhmadAmin Hashimi Albakri Jaffri BinWan Dato' Wan ofPCBTaipanSdn.Bhd. Directors (contd.) oftheCompany'ssubsidiaries Directors (contd.) Directors 3 page 3
DIRECTORS’ REPORT AND AUDITED FINANCIAL STATEMENTS 2017 PERAK CORPORATION BERHAD (210915-U) page 4
DIRECTORS’ REPORT AND AUDITED FINANCIAL STATEMENTS 2017 PERAK CORPORATION BERHAD (210915-U) (Incorporated in Malaysia) Perak Corporation Berhad 210915-U Jamal Bin Mohd Aris(resignedon3March 2017) Mohammad Fariz Victor (resignedon17April 2017) Ahmad Al-Hadi Bin Abdul Khalid (appointed on17April 2017) Rustam ApandiBin Jamaludin (appointed on3March 2017) Dato' Aminuddin Bin Md Desa RayaPark Sdn.Bhd.andLabuSayongCafe ofMeru Water Directors Mohammad Fariz Victor (resignedon17April 2017) Salween Azila BintiAhmadTauffik Rozahan Bin Osman Directors ofBIOD Leisure & Recreation Sdn. Bhd. Jamal Bin Mohd Aris(resignedon3March 2017) Mohammad Fariz Victor (resignedon17April 2017) Dato' Aminuddin Bin Md Desa (resigned on 17 April 2017) Ahmad Al-HadiBinAbdulKhalid Apandi BinJamaludin Rustam Directors of MeruRaya ParkSdn. Bhd. Jamal Bin Mohd Aris(resignedon3March 2017) Mohammad Fariz Victor (resignedon17April 2017) Ahmad Al-HadiBinAbdulKhalid Apandi BinJamaludin Rustam Dato' Aminuddin Bin Md Desa Bhd. Casuarina Sdn. ofLanai Directors Jamal Bin Mohd Aris(resignedon3March 2017) Mohammad Fariz Victor (resignedon17April 2017) Ahmad Al-Hadi Bin Abdul Khalid (appointed on17April 2017) Apandi BinJamaludin Rustam Dato' Aminuddin Bin Md Desa Bhd. TaipingSdn. ofCasuarina Directors (contd.) oftheCompany'ssubsidiaries Directors (contd.) Directors 4 (Incorporated in Malaysia) Perak Corporation Berhad 210915-U Dato' Seri Mohammed Noor Mohammed Seri Dato' Mohd ShaifulBahriBinHussain Mohammad ZahirBinIsmail Dato' Khansiyah Dato' AzianBinOsman Dato' AminuddinBinMdDesa Directors ofCasuarinaMeruSdn.Bhd. Jamal Bin 2018) April 25 on (resigned Salween AzilaBintiAhmadTauffik Datuk Rozahan Bin Osman Dato' Aminuddin Bin Md Desa Dato' Azian Bin Osman Directors ofLumut Maritime Mohammad Fariz Rustam ApandiBin Jamaludin on22December (appointed 2017) Ahmad Al-HadiBinA Rozahan Bin Osman Directors ofR (contd.) oftheCompany'ssubsidiaries Directors (contd.) Directors Mohammad Fariz 2018) February 19 on (appointed Othman Hj Bin Azmi Mohd Dato' Rustam Apandi Jamal Bin Nik AzmanBin Jamal Bin on 21 Rustam ApandiBin (appointed March 2017) Jamaludin Directors ofSilveritageCorporationS Mohd S Directors ofLMT Jamal Bin Zainudin BinIbrahim haiful BahriBinHussain Mohd Aris(resignedon3March2017) Mohd Aris(resignedon3March2017) Mohd Aris(resignedon21March2017) Mohd Aris(resignedon3March2017) imba Bin Jamaludin(appointedon1October2017) @ Khamsiyah Victor Victor Capital Sdn.Bhd. Abdul Aziz Land Sdn. Bhd. (forme bdul Khalid (resignedon17April (resignedon29May2017) din B din Terminal Sdn. Bhd. B in Ali (appointed on 25 April 2018) April 25 on (appointed Ali in inti Yeop dn. Bhd.andCashComplexSdn. rly 2017) 5 known as Pangkor Village Resort Sdn. Bhd.) (Incorporated in Malaysia) Perak Corporation Berhad 210915-U Mohammad Fariz 2018) February 19 on (appointed Othman Hj Bin Azmi Mohd Dato' Rustam Apandi Dato' Khansiyah Dato' AzianBinOsman Dato' AminuddinBinMdDesa Directors ofCasuarinaMeruSdn.Bhd. Jamal Bin 2018) April 25 on (resigned Salween AzilaBintiAhmadTauffik Noor Mohammed Seri Dato' Mohd ShaifulBahriBinHussain Mohammad ZahirBinIsmail Datuk Rozahan Bin Osman Dato' Aminuddin Bin Md Desa Dato' Azian Bin Osman Directors ofLumut Maritime Mohammad Fariz Rustam ApandiBin Jamaludin on22December (appointed 2017) Ahmad Al-HadiBinA Rozahan Bin Osman Directors ofR (contd.) oftheCompany'ssubsidiaries Directors (contd.) Directors Jamal Bin Nik AzmanBin Directors ofSilveritageCorporationS Jamal Bin on 21 Rustam ApandiBin (appointed March 2017) Jamaludin Mohd S Directors ofLMT Jamal Bin Zainudin BinIbrahim haiful BahriBinHussain Mohd Aris(resignedon3March2017) Mohd Aris(resignedon3March2017) Mohd Aris(resignedon21March2017) Mohd Aris(resignedon3March2017) imba Bin Jamaludin(appointedon1October2017) @ Khamsiyah Victor Victor Capital Sdn.Bhd. Abdul Aziz Land Sdn. Bhd. (forme bdul Khalid (resignedon17April (resignedon29May2017) din B din Terminal Sdn. Bhd. B in Ali (appointed on 25 April 2018) April 25 on (appointed Ali in inti Yeop dn. Bhd.andCashComplexSdn. rly 2017) 5 known as Pangkor Village Resort Sdn. Bhd.) page 5
DIRECTORS’ REPORT AND AUDITED FINANCIAL STATEMENTS 2017 PERAK CORPORATION BERHAD (210915-U) page 6
DIRECTORS’ REPORT AND AUDITED FINANCIAL STATEMENTS 2017 PERAK CORPORATION BERHAD (210915-U) (Incorporated in Malaysia) Perak Corporation Berhad 210915-U officers wasRM10 million. of the Company officers the directors and LiabilityInsurance effected amount of Directors' for and Officers' Policy. The total respective capacity as, inter alia, of directors the and Company officers subject to the terms of the their in actscommitted from arising ofliabilities in respect Policy Insurance Liability and Officers' Directors' the under covered are Company the of officers year, and directors financial the During year. financial did not have any interest in the shares of the Company or its related corporations during the year the financial end of at the held office who directors above, the other than as disclosed Other were asfollows: year financial during the related corporations Company and its in the year in shares the financial end of at the office shareholdings,theinterestsofdirectorsin register ofdirectors’ According tothe is amember,orwitha companyinwhich the director hasasubstantial financial interest. made bytheCompany or arelatedcorporation any directororwitha firmofwhich with thedirector related corporationsasshownstatements) byin Note11tothefinancial reason of acontract and receivabledirectorsorthefixedsalaryofafull-time employee oftheCompanyor bythe due or received emoluments of amount aggregate the in included benefits than (other benefit a Since theendofpreviousyear, nodirector hasreceived financial orbecomeentitledtoreceive or debenturesoftheCompanyanyotherbodycorporate. means oftheacquisitionsharesin arrangement the Companywasparty,whereby might to which thedirectors a acquire benefitsby time duringthatyear, subsistany year,Neither attheendoffinancial didthere noratany Indemnity and insurancecosts Indemnity *deemed interestthroughhisspouse and child - indirect* Tuan HajiAbRahmanBin Mohammed The Company Directors' interests Directors' benefits 1January 6 6,000 2017 Number of ordinary shares Number ofordinary Bought - Sold - 31 December 6,000 2017 (Incorporated in Malaysia) Perak Corporation Berhad 210915-U (e) (d) (c) (b) (a) statutory information Other (ii) (i) At the date of this report, theredoes not exist: (ii) (i) (ii) (i) render: report, the directorscircumstances At the date of this are not aware of any whichwould Companyweremade out,thedirectorstookreasonable steps: Group andofthe the offinancial positionof ofcomprehensiveincome andstatements Before thestatements render any amount stated in the financial statementsmisleading.render anyamountstatedinthefinancial in thisreportorfinancial statements of dealt withthe GroupandofCompanywhichwould any circumstances this report,thedirectorsarenotawarenot otherwise At thedateof of or inappropriate. Company misleading of the Group and of the liabilities assets or ofvaluation method totheexisting render adherence which would At thedateofthisreport, the directors arenotawareany circumstances which of havearisen of the Company misleading. Company the of statementsoftheGroupand tothecurrentassetsinfinancial the values attributed amount which might be expected they so to realise. the accounting records in the ordinary course of business had been writtendownto an to ensurethat any current assets which wereunlikelytorealise their value asshownin debts; and allowancedoubtful and thatadequate had beenmadefor bad debtshadbeenwrittenoff known themselvesthatall debtsandsatisfied doubtful for ofallowance and themaking bad debts in tothewritingoffof relation to ascertainthatproperactionhadbeentaken extent; and and of the Company inadequate to any substantial statements of the Group the financial doubtful debtsfor in amountoftheallowance forbaddebtsorthe the amountwrittenoff the financial year. financial the any contingent liability Group or of the Company of the whicharisen since has the end of other person; or of any the liabilities year which secures end of the financial any charge on the assets of the Group or of the Company which has arisen since the 7 (Incorporated in Malaysia) Perak Corporation Berhad 210915-U (e) (d) (c) (b) (a) statutory information Other (ii) (i) At the date of this report, theredoes not exist: (ii) (i) (ii) (i) Group and of the Companyweremade out,thedirectorstookreasonablesteps: Group andofthe the offinancial positionof ofcomprehensiveincome andstatements Before thestatements render any amount stated in the financial statementsmisleading.render anyamountstatedinthefinancial in thisreportorfinancial statements of dealt withthe GroupandofCompanywhichwould any circumstances this report,thedirectorsarenotawarenot otherwise At thedateof of or inappropriate. Companymisleading of the Group and of the liabilities assets or ofvaluation method totheexisting render adherence which would At thedateofthisreport, the directors arenotawareany circumstances which of havearisen render: report, the directorscircumstances At the date of this are not aware of any whichwould amount which might be expected they so to realise. the accounting records in the ordinary course of business had been writtendownto an to ensurethat any current assets which wereunlikelytorealise their value asshownin debts; and allowancedoubtful and thatadequate had beenmadefor bad debtshadbeenwrittenoff known themselvesthatall debtsandsatisfied doubtful for ofallowance and themaking bad debts in tothewritingoffof relation to ascertainthatproperactionhadbeentaken the financial year. financial the any contingent liability Group or of the Company of the whicharisen since has the end of other person; or of any the liabilities year which secures end of the financial any charge on the assets of the Group or of the Company which has arisen since the misleading. Company the of statementsoftheGroupand tothecurrentassetsinfinancial the values attributed extent; and and of the Company inadequate to any substantial statements of the Group the financial doubtful debtsfor in amountoftheallowance forbaddebtsorthe the amountwrittenoff 7 page 7
DIRECTORS’ REPORT AND AUDITED FINANCIAL STATEMENTS 2017 PERAK CORPORATION BERHAD (210915-U) page 8
DIRECTORS’ REPORT AND AUDITED FINANCIAL STATEMENTS 2017 PERAK CORPORATION BERHAD (210915-U) (Incorporated in Malaysia) Perak Corporation Berhad 210915-U Details ofsubsequent disclosedevents statements. inNote38tothefinancial are statements. financial the to 37 Note in disclosed as yearare financial the during events significant The Subsequent events events Significant (f) Other statutory information (contd.) (ii) (i) In theopinion ofthedirectors: financial year in which this report is made. report year in which this financial the oroftheCompanyfor substantially theresultsofoperationsGroup between theendoffinancial yeardate ofthisreportwhich andthe likely toaffect is no item,transactionoreventmaterial andunusual ofa nature hasarisenintheinterval falldue;and when they obligations their meet to Company the of or Group the of ability the affect may or will enforceable withinthe periodoftwelveyear whichmonths after the endoffinancial become to likely is or enforceable become has liability other or contingent no 8 (Incorporated in Malaysia) Perak Corporation Berhad 210915-U since the financial year. since thefinancial during or made toindemnifyErnst&Young No an unspecifiedamount). paymenthasbeen (for theaudit from arising third parties againstclaimsby engagement audit ofits the terms of as part To theextentpermitted by law,theCompanyhasagreed to indemnifyitsauditors, Ernst&Young, Ipoh, Perak Darul Ridzuan, Darul Perak Ipoh, Malaysia BinHashim Dato' Nasarudin the BoardinaccordanceSigned onbehalf with of aresolution ofthedirectorsdated30April2018. Auditors' remuneration are disclosed in Note 9tothefinancial statements. The auditors,Ernst&Young, haveexpressed theirwillingness tocontinue inoffice. Auditors 9 Tuan HajiAbRahmanBin Mohammed (Incorporated in Malaysia) Perak Corporation Berhad 210915-U since the financial year. since thefinancial during or made toindemnifyErnst&Young No an unspecifiedamount). paymenthasbeen (for theaudit from arising third parties againstclaimsby engagement audit ofits the terms of as part To theextentpermitted by law,theCompanyhasagreed to indemnifyitsauditors, Ernst&Young, Ipoh, Perak Darul Ridzuan, Darul Perak Ipoh, Malaysia BinHashim Dato' Nasarudin the BoardinaccordanceSigned onbehalf with of aresolution ofthedirectorsdated30April2018. Auditors' remuneration are disclosed in Note 9tothefinancial statements. The auditors,Ernst&Young, haveexpressed theirwillingness tocontinue inoffice. Auditors 9 Tuan HajiAbRahmanBin Mohammed page 9
DIRECTORS’ REPORT AND AUDITED FINANCIAL STATEMENTS 2017 PERAK CORPORATION BERHAD (210915-U) 10 page
DIRECTORS’ REPORT AND AUDITED FINANCIAL STATEMENTS 2017 PERAK CORPORATION BERHAD (210915-U) (Incorporated in Malaysia) Perak Corporation Berhad 210915-U virtue of the provisions of the Statutory of virtuethe provisionsof the Statutory Declarations Act, 1960. correct, andImakethissolemndeclaration conscientiouslythe sametobetrueandby believing declare thattheaccompanyingopinion statements setoutonpages19to149areinmy financial sincerely solemnly and do Berhad, ofPerakCorporation management thefinancial responsible for primarily theofficer being 641127-08-5049), (NRIC No.: Abdul Khalid Bin I, AhmadAl-Hadi ended. then year the for flows cash and performance financial of their 2017 and December at 31 Company as the and of the Group position of financial requirements of the CompaniesAct2016in Malaysiaso as to give a true andfair viewthe of the and Standards Reporting Financial International Standards, Reporting Financial Malaysian accompanying 19to149aredrawnstatements financial upinaccordancewith set outonpages the directors, opiniondirectors ofPerakCorporationBerhad,doherebystatethat,in of the of the Mohammed, being two Ab Rahman Bin and Tuan Haji Bin Hashim We, Dato' Nasarudin Pursuant to Section 251(1)(b) of the CompaniesAct of 2016 251(1)(b) Pursuant toSection declaration Statutory Ridzuan, Darul Perak Ipoh, Malaysia BinHashim Dato' Nasarudin the BoardinaccordanceSigned onbehalf with of aresolution ofthedirectorsdated30April2018. Actof theCompanies 251(2) 2016 Pursuant toSection by directors Statement ak Darul Ridzuan Darul Perak Ipoh, Commissioner for A223) (No. Abdullah Bin Firdaus Mohd Before me, on 30April 2018. at IpohintheState ofPerak A abovenamed Subscribed and solemnly declared by Khalid Abdul Bin Al-Hadi hmad Oaths Darul Ridzuan the 10 Tuan HajiAbRahmanBin Mohammed (MIA 11619) Ahmad Al-HadiBinAbdulKhalid (Incorporat Perak Independent 210915-U We Opinion Report Profession Internationa statements Laws”) described the Professional repor cash in We Material provide statements, incurred In 149. date, positi Note perfo that Financ continue We Basis requirements We Independence accordance our hav draw c are statements a onducted ow for rmance t. the on 2.1,
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further the aysia (“By- for Group riate stated as indicate nancia t nancial o 19 (on the of
and of t o that to and o in our f l 11 page
DIRECTORS’ REPORT AND AUDITED FINANCIAL STATEMENTS 2017 PERAK CORPORATION BERHAD (210915-U) 12 page
DIRECTORS’ REPORT AND AUDITED FINANCIAL STATEMENTS 2017 PERAK CORPORATION BERHAD (210915-U) (Incorporat Perak Independent 210915-U Refer Key Key Acco the above, discounting signi cance As equipment) assessme Impairme communic impairment current together audit statements operate the In The and equipment operations description The Group’s We there recove property, estimating
addition at nancial audit have basis audit c Group we rdingly, to a 31 procedures is rrying Corporation rable w N year. d an do total Dec e ote m ful lled
with of nt nt pla by matt
have indication ated . is atters not the as to of of of our of ed loss of amount. statements ember in them 3.2 a nt amount our These r property, a
e the the the h the s ers the auditors' our property, t future quired provide u in and ow (Key
a in deter 31 amo bsidiary, a udit , the
m are Mal including udit Group subsidia continued our at risks audit D our matters 2017, equipment atter sou Berhad a ece responsibilities unted Acc of mined that opin those ca ays n to report. included plant of audit
a rces section appropriate the sh of plant mber
report p ordingly, and described separate the indica ia) ma the ion e ry in the rform were to matt of Group’s the the (contd. ows may a terial a delay Group’s of on CGU nd estimatio ddressed a R 2017 nancia nd tes using M of proc the to the matter ers the addressed equipment. be impa 167.2 our opinion the misstatement and equipment the that may in in performa that, Company amounted property rate. ) described edures i ac mpaired. the net V the report, Group irment l out ows a members s n companying million the statements the be
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describ uncertainty) in The c assets Material ommencement on impaired our carry matter perf in , estima nce
including a plant these test as the f Use for in to orementione pr ed are ormed that ing of a the ofessional of o RM232. the of context u whole, (“VIU”). 1 belo is f the of and h ted n matters. procedures amount 2 nancial by C will igher and provide certainty Auditors year the a nancia to in sh w com the equipment be 7 Note
r to a and G Estimating Genera
e of than ended of million, ddress reco roup lation judg derived paring d be For of d our the statements. ’
related
14 in impairment responsi in l the the its d verable statements. eac ement, forming and (Property, that audit e full ting 31 to the signed market representing relate t key in h he f these rom operation D to the
of c matter Unit matte respe bilities ece of ontext. c aud going the a were arrying d mount VIU our the the to
capit mber p review property, m (“CG it ct Company lant rs The res for a invol below, matters na opinion CGU, c of tters. of below, o alisation U”) of pond the amount ncern 2017. 64% and most of res them ncial gave the ves whenever and the audit ults plant our of to t provide thereon, theme section e o for relate rise
the
of and park b o w o u e the f and our ith r to d park its a n (Incorporat Perak Independent 210915-U (b) (a) As Due Impairme Key (c) considered evaluation CGUs (d) and How growth rat (e) part audit Obtained Evaluated Evaluated Involved Evalua othe estimate amount are the the assessments the are (i) the (ii) the to our which Corporation the of supportable included cash weig impairment a r income matters nt
u our operating ted e of dit signi cance this . sta revenu ed of include of an hted-averag ows the t an a addressed the the and he auditors' property, udit in the impairment intern c understa (co to a of in recoverable osts Mal adequacy key ssumptions ass e of CGU; procedures, be Note the ntd.)
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d the earned
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matter the test to of (contd. value ialist amount amount a used and the the nd appropriateness of to we of to sensitive. operating and of to to red capital equipment the the money; nancial disclosures be whether applied performe visitors by ) assess assist avera to an of and relev members the the t a d h The rea us ge and iscount subjectivity e Group costs. and whether ant in statements. th
past C d, in cost the of GU; e (contd. disclosures of internal amongst the assessing rate audit of ea trends o determination to of 1 rate f the ch relate 3 the used estimate capita ) foc key involved methodolo used c n and ontrol othe d us. u the re ects on assumptions mber l income
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f estimating o overable rate arket and current be llowing impairment value tors ne to we collected, a and which t outlook; and pproach he f gr ocus mark amounts procedures t present owth and e the the rminal the on et test, sensitivities related rec sta applied rate outcome overable value val we of costs and : u the e t o o f of 13 page
DIRECTORS’ REPORT AND AUDITED FINANCIAL STATEMENTS 2017 PERAK CORPORATION BERHAD (210915-U) 14 page
DIRECTORS’ REPORT AND AUDITED FINANCIAL STATEMENTS 2017 PERAK CORPORATION BERHAD (210915-U) (Incorporat Perak Independent 210915-U Refer Revenue Key (c) The Note (a) Sales its (b) from (c) and consider and How As (a) Port (b) signi cant part audit Obtained Obtained Inspected Rec Read Assesse Group’s serv the RM47.7 the have agr revenue entered evid conditions; revenue our 3 to of sales . Corporation 2 of Note land omputed eement
ices (Key s port ed a ence matters igni canc recognit t been u our h of dit revenu e d ed mil revenue 2.24 s into
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and r r devel ources component the an an ecognised e a addressed s the auditors' nd. uch udit cognised lion in acknowle s; and understanding understanding (Signi cant (co and with appropriatene compare manageme ion Mal sales Revenue e opm e as represent procedures,
ntd.) of
Berhad r of ecogniti for ays arch e the the s invoices ent the timatio the report for for dged s. ia) customers itect d revenue These agr matter from
revenue r a yea to (contd. e nt’s ing on ccounting venue eement b the cert n s to r we of of raised y as
s 57% port work uncertain ended
revenu the of the the the criteria a i cat performe f )
rom reve key fro f to rom and custome servic ing s Group’s Group’s for members
policie m obtain es wit 31 e audit nue the
on the 26% land port state ty) are and h D es
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chase of re services to , and respectively. cognition”), land. and vouchers and RM s procedures nance . agr m terms m amount amount 105.3 i aintenanc sstatement as eement doc by well which and million two umentary We o o : as f f s o e f
o f (Incorporat Perak Independent 210915-U (a) O As Refer Impairment Key (c) (b) As subsidiari of Information The The subsidiaries comprises Accordingly, impaire stateme estimating Our these other based How be the part at an audit Evaluated Cons de cit directors opinion as and assumptions recoverable our to btained 31 informa subsidiaries. area Company on Corporation an of Note d nts December a . es) idere matters ass u our estimate the of in the dit . of other indicated ed of 3.2 on umptions the the audit an of tion a addressed d the the auditors' information investments recoverable udit in
(Key the the the understanding amounted amount Company (co sha than are Mal Group methodology and The focus for 2017, procedures, nancia o ntd.) Company s Berhad reholders' ources bjec consistent ays that the the we estimation that the . report and t of ia) tivit nancial he do recoverable the in performed amount a l in of matter to the (contd. st re cluded investments y, of not e subsid a atements ca RM155. s funds highly inde re investment of to the timation we and and rrying e responsible of the xpress the statements performe pende of Company ) in iaries the within assumptions and 1 judgmental. releva th an the amount members amount million, of rec ese uncertainty) impairment any negative in nce annual the the overable in nt investments subsidi d, form and subsidiaries; for and and Group internal amongst and range representing of the o report au the applied our Accordingl 1 e operating of f aries assessed xpertis 5 ditors’ and amount other assura and of tes investments a control uditors’ , those in t othe Note using but
on of in e report the information. nce
of the the 32% whether does c the by rs, y, 17 a used separate ove the the sh we report conclusion the using Company determination (In thereon investments of ows r not in rm fair have
vestmen in estimating f the o subsidiaries such llowing the the thereon. include values s
The Company’s r of identi ed e nancial industry. ported fa does i meth thereon. ts ndepe ir other of i value procedures in n the the of the not subsidia odolog s may by t the ndent information nancial atements this total method assets cover c ertain fair be a y rea ries val assets.
: and values in the uers to is b y ; 15 page
DIRECTORS’ REPORT AND AUDITED FINANCIAL STATEMENTS 2017 PERAK CORPORATION BERHAD (210915-U) 16 page
DIRECTORS’ REPORT AND AUDITED FINANCIAL STATEMENTS 2017 PERAK CORPORATION BERHAD (210915-U) (Incorporat Perak Independent 210915-U Information approved Group In detect In error. responsibility are responsible information to disclosing, Company acc If, misstated. Auditors’ operations, this Our The Responsibilities rega the Group fraud Reporting is Companies the a based preparing connec in uence
ounting c high Group dir othe directors objectives rd. onsidered or ectors Corporation a and a nd
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tion information, standards or Sta and as of of or other unless Act the for ed is t the our determin h of applic ndards, is the the of and have materially with auditors' e of are of m a in to 2016
wor the economic assurance, ssessing nanc knowledge the missta a than Company C the Mal read terial to to the ompany our able, no k Company Berhad on directors
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and Company, going the be statements. or rially to control nts assurance expec ern error of other will in or are f of er raud ce Fin c the this of to basis oncern, the a due of with a ancial lways the o ted cea n ou the o as f d o r t o r f s o f e (Incorporat Perak Independent 210915-U Auditors’ (d) As (f) Internationa (a) professional (b) (e) (c) part Obtain Identify Evaluate Evaluate Conclude Obtain acc manner accountin entities exists statem Company’s Group of exists, procedures the appropriate inadequate, misstate obtained involve cause procedures internal Group an of
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ut of based whether conclude esentations, l report audit the (contd.)
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a from ctions mat in internal c order nd informatio nts the oncern statements or on a is on M disclosures purpose a relate nd a erial perform udit su cient statements the alay or a error, nancia the the m
and to materia mainta conditions . a aterial override control. sia uncert d evidence nd basis design nancial G
events disclosures as roup’s n and of performance
audit l of of fraud i and statements n are uncertainty l expressi o of ainty the the f of audit of or in m the may a the a y i n n g 17 page
DIRECTORS’ REPORT AND AUDITED FINANCIAL STATEMENTS 2017 PERAK CORPORATION BERHAD (210915-U) 18 page
DIRECTORS’ REPORT AND AUDITED FINANCIAL STATEMENTS 2017 PERAK CORPORATION BERHAD (210915-U) Date Kuala Lumpur,Ma Char AF: 0039 Ernst &Young (Incorporat Perak Independent 210915-U Auditors’ our We This Other outweigh timing Section We control assume requirements The other 2016 From appli statements most the auditors’ in extremely c also c report nancial report ter : ommunica c u 30April2018 were signi cance the m a r Corporation matters r of ble, rela ed A that ent a 266 responsibility provide responsibilities r tters the matt e the beca audited port is year on ccoun ed of we rare statements made audit regarding public that ers auditors' the 30 ted saf in use unless te identify a the circumstances, n commun M Mal laysia in tan with Companies m d and by sol the ay
Berhad directors the a a interest t egua y to ays r s another ely 2017. l e
for a the adverse reasonably s
du audit independ w ther igni ca report any of ia) to the
ring rds. or icated directors the the efore (contd. other bene ts regulation audit with of Act auditor our Group conse nt to members the we with ence, t audit 2016 person a the be he audit. of determi ) statement nancial rega the quences of thought key a who the members n in and ndings, preclude such d rding, nancial
audi for Mala of of director expressed ne to the the statements the communic t of to communicate ysia that
that a matter mong Company, Company s including doing c bea o statements
s, ontent public 1 f and a we 8 we
r matter
an s. on other have for so determi We ation. of unmodi ed Char No. 03157/01/2019J Muhammad Syariz disc our of would no a for the as d ny this shou c (contd.) m losure escrib with indepe omplied ter other a the atters, signi ca
Group ne body, report. ed A reasona ld year them those e about n purpose.
ndence, these ccoun o opin the in and t with end
nt be a all matt bly pla ccordanc de cie ion the of ed c matter relationships tan relevant al BinAbd ommuni nned be the and We ers of 31 matte t expec those ncies December Company that do where s s
e c in
r ope ethic not with cated
or our were ul Rahim ted in nancia when, and internal and al t o i o n for f l (IncorporatedinMalaysia) PerakCorporationBerhad 210915-U The accompanying accounting policies and explanatory information form an integral part of the financialstatements. The accompanyingof the form accounting policiesandexplanatoryinformation an integralpart fortheyear Basic/Diluted,forloss (senpershare): oftheCompany toowners Loss pershareattributable Non-controlling interests Owners oftheCompany Attributable to: (Loss)/profit beforetax ofassociates Shareofprofit Income taxexpense fortheyear comprehensiveloss representingtotal Net lossfortheyear, Otherexpenses Financecosts For thefinancialyear ended31December2017 Statements ofcomprehensiveincome Interestincome Other itemsofincome Administrativeexpenses Other itemsofexpense Otherincome Gross profit Cost ofsales Revenue Note 13 12 9 8 6 7 5 4 (340,572,671) (165,615,515) (174,957,156) (320,108,659) (340,572,671) (306,453,159) (104,863,120) 119,546,100 185,787,810 (20,464,012) (37,137,727) (66,241,710) 4,048,448 4,173,940 576,859 (174.96) 19 2017 RM Group 146,704,228 (16,015,158) (15,579,986) (16,015,158) (17,745,878) (30,800,941) (59,844,794) (59,337,087) 87,367,141 (6,959,258) 1,730,720 4,959,000 6,939,961 (435,172) 69,611 (15.58) 2016 RM (28,270,488) (28,270,488) (28,270,488) (28,409,096) (13,983,295) (15,883,676) (9,893,264) 7,918,870 3,363,695 4,288,000 (924,305) 138,608 68,574 2017 RM Company - - (21,470,129) (21,470,129) (21,470,129) (21,398,748) (15,091,377) (5,243,750) (4,971,421) 3,797,193 110,607 (71,381) 2016 RM - - - - - (IncorporatedinMalaysia) PerakCorporationBerhad 210915-U The accompanying accounting policies and explanatory information form an integral part of the financialstatements. The accompanyingof the form accounting policiesandexplanatoryinformation an integralpart fortheyear Basic/Diluted,forloss (senpershare): oftheCompany toowners Loss pershareattributable Non-controlling interests Owners oftheCompany Attributable to: Income taxexpense (Loss)/profit beforetax ofassociates Shareofprofit fortheyear comprehensiveloss representingtotal Net lossfortheyear, Interestincome Other itemsofincome For thefinancialyear ended31December2017 Statements ofcomprehensiveincome Otherexpenses Financecosts Gross profit Cost ofsales Revenue Administrativeexpenses Other itemsofexpense Otherincome Note 13 12 9 6 8 5 4 7 (340,572,671) (165,615,515) (174,957,156) (320,108,659) (340,572,671) (306,453,159) (104,863,120) 119,546,100 185,787,810 (20,464,012) (37,137,727) (66,241,710) 4,048,448 4,173,940 576,859 (174.96) 19 2017 RM Group 146,704,228 (16,015,158) (15,579,986) (16,015,158) (17,745,878) (30,800,941) (59,844,794) (59,337,087) 87,367,141 (6,959,258) 1,730,720 4,959,000 6,939,961 (435,172) 69,611 (15.58) 2016 RM (28,270,488) (28,270,488) (28,270,488) (13,983,295) (28,409,096) (15,883,676) (9,893,264) 3,363,695 7,918,870 4,288,000 (924,305) 138,608 68,574 2017 RM Company - - (21,470,129) (21,470,129) (21,470,129) (21,398,748) (15,091,377) (5,243,750) (4,971,421) 3,797,193 110,607 (71,381) 2016 RM - - - - - 19 page
DIRECTORS’ REPORT AND AUDITED FINANCIAL STATEMENTS 2017 PERAK CORPORATION BERHAD (210915-U) 20 page
DIRECTORS’ REPORT AND AUDITED FINANCIAL STATEMENTS 2017 PERAK CORPORATION BERHAD (210915-U) (Incorporated inMalaysia) (Incorporated Berhad PerakCorporation 210915-U Port facilities Property, plantand equipment assets Non-current Assets As at31December2017 position Statements offinancial Other investments Other associates in Investments insubsidiaries Investments properties Investment Intangible assets Finance lease receivable Finance lease Inventories Finance lease receivable Finance lease investments Other assets Current Trade andotherreceivables Trade Inventories Other current assets Other current Cash andbankbalances Cash Tax recoverable Total assets Note 15 14 19 18 17 16 20 21 22 21 19 23 22 24 25 1,080,624,216 171,451,309 364,816,611 610,963,004 217,110,015 198,316,545 469,661,212 42,772,047 22,711,387 16,268,153 32,569,083 3,576,859 4,750,635 4,868,913 455,000 429,156 109,967 418,536 20 2017 RM Group - 1,185,131,944 471,450,951 620,364,948 262,736,608 173,609,509 564,766,996 94,736,321 23,911,564 24,311,387 25,934,842 93,564,341 1,100,000 4,829,725 1,182,571 7,739,125 25,000 2016 RM - - - 155,098,590 156,121,850 238,109,350 484,375,339 328,253,489 87,651,188 1,023,260 2,031,250 350,473 103,766 7,462 2017 RM Company ------155,098,589 155,868,585 202,110,169 449,666,024 293,797,439 83,611,235 6,086,544 1,646,758 769,996 338,671 4,062 2016 RM ------(Incorporated inMalaysia) (Incorporated Berhad PerakCorporation 210915-U The accompanyingaccounting policiesandexplanatoryinformation form an integralpartofthe financialstatements. As at31December2017(contd.) position Statements offinancial Loans andborrowings liabilities Current Equity andliabilities Trade andotherpayablesTrade Deferred income Deferred Total liabilities Deferred taxliabilities Deferred Trade andotherpayablesTrade Loans andborrowings Non-current liabilities Net current (liabilities)/assets Net current Tax payable Net assets Share capital totheCompany owners to Equity attributable Retained earnings Share premium Non-controlling interests Non-controlling Total equity Total equity and liabilities Note 26 28 29 30 28 26 31 32 1,080,624,216 (158,471,652) 414,762,067 185,071,822 628,132,864 780,638,671 152,505,807 121,794,537 299,985,545 272,770,440 386,254,629 113,484,189 299,985,545 (86,269,084) 23,519,659 12,812,474 17,898,796 4,779,316 21 2017 RM Group - 1,185,131,944 149,485,567 331,496,431 233,270,565 542,068,769 308,798,204 296,650,614 643,063,175 100,000,000 561,211,785 288,441,345 172,770,440 643,063,175 69,984,740 12,032,072 81,851,390 4,154,347 9,645,911 115,518 2016 RM 110,011,677 203,369,779 124,883,710 207,119,431 277,255,908 272,770,440 277,255,908 484,375,339 277,255,908 14,872,033 82,235,721 32,039,644 50,002,017 4,485,468 194,060 2017 RM Company - - - - 100,039,424 181,640,421 112,157,018 144,139,628 305,526,396 172,770,440 100,000,000 305,526,396 449,666,024 305,526,396 12,117,594 31,982,610 31,775,329 32,755,956 194,060 13,221 2016 RM - - - (Incorporated inMalaysia) (Incorporated Berhad PerakCorporation 210915-U The accompanyingaccounting policiesandexplanatoryinformation form an integralpartofthe financialstatements. Loans andborrowings liabilities Current Equity andliabilities As at31December2017(contd.) position Statements offinancial Trade andotherpayablesTrade Deferred income Deferred Total liabilities Deferred taxliabilities Deferred andotherpayablesTrade Loans andborrowings Non-current liabilities (liabilities)/assets Net current Tax payable Net assets Share capital totheCompany owners to Equity attributable Retained earnings Share premium Non-controlling interests Non-controlling Total equity Total equity and liabilities Note 26 28 29 30 28 26 31 32 1,080,624,216 (158,471,652) 414,762,067 185,071,822 628,132,864 780,638,671 152,505,807 121,794,537 299,985,545 272,770,440 113,484,189 386,254,629 299,985,545 (86,269,084) 23,519,659 12,812,474 17,898,796 4,779,316 21 2017 RM Group - 1,185,131,944 149,485,567 331,496,431 233,270,565 542,068,769 308,798,204 296,650,614 643,063,175 100,000,000 288,441,345 172,770,440 561,211,785 643,063,175 69,984,740 12,032,072 81,851,390 9,645,911 4,154,347 115,518 2016 RM 110,011,677 203,369,779 124,883,710 207,119,431 277,255,908 272,770,440 277,255,908 484,375,339 277,255,908 14,872,033 82,235,721 50,002,017 32,039,644 4,485,468 194,060 2017 RM Company - - - - 100,039,424 181,640,421 112,157,018 144,139,628 305,526,396 172,770,440 100,000,000 305,526,396 449,666,024 305,526,396 12,117,594 31,982,610 31,775,329 32,755,956 194,060 13,221 2016 RM - - - 21 page
DIRECTORS’ REPORT AND AUDITED FINANCIAL STATEMENTS 2017 PERAK CORPORATION BERHAD (210915-U) 22 page
DIRECTORS’ REPORT AND AUDITED FINANCIAL STATEMENTS 2017 PERAK CORPORATION BERHAD (210915-U)
210915-U
Perak Corporation Berhad (Incorporated in Malaysia)
Statements of changes in equity For the financial year ended 31 December 2017
|------Attributable to owners of the Company ------| Equity attributable I------Non-distributable ------I Distributable to owners of Non- Equity the Company Share Share Retained controlling total total capital premium earnings interests RM RM RM RM RM RM
Group
At 1 January 2016 661,842,069 575,862,448 100,000,000 172,770,440 303,092,008 85,979,621
Total comprehensive loss (16,015,158) (15,579,986) - - (15,579,986) (435,172)
Transactions with owners: Acquisition of subsidiaries 12,236,263 - - - - 12,236,263 Changes in ownership interest in a subsidiary - 929,323 - - 929,323 (929,323) Dividend paid by a subsidiary to a non-controlling interest (14,999,999) - - - - (14,999,999) (2,763,736) 929,323 - - 929,323 (3,693,059)
At 31 December 2016 643,063,175 561,211,785 100,000,000 172,770,440 288,441,345 81,851,390
22 210915-U
Perak Corporation Berhad (Incorporated in Malaysia)
Statements of changes in equity For the financial year ended 31 December 2017 (contd.)
|------Attributable to owners of the Company ------| Equity attributable I------Non-distributable ------I Distributable to owners of Non- Equity the Company Share Share Retained controlling total total capital premium earnings interests Note RM RM RM RM RM RM
Group
At 1 January 2017 643,063,175 561,211,785 100,000,000 172,770,440 288,441,345 81,851,390
Total comprehensive loss (340,572,671) (174,957,156) - - (174,957,156) (165,615,515)
Transactions with owners: Acquisition of subsidiaries 17 (4,960) - - - - (4,960) Dividend paid by a subsidiary to a non-controlling interest (2,499,999) - - - - (2,499,999) (2,504,959) - - - - (2,504,959)
Transfer arising from implementation of Companies Act 2016 - - 172,770,440 (172,770,440) - - At 31 December 2017 299,985,545 386,254,629 272,770,440 - 113,484,189 (86,269,084)
23 23 page
DIRECTORS’ REPORT AND AUDITED FINANCIAL STATEMENTS 2017 PERAK CORPORATION BERHAD (210915-U) 24 page
DIRECTORS’ REPORT AND AUDITED FINANCIAL STATEMENTS 2017 PERAK CORPORATION BERHAD (210915-U)
210915-U
Perak Corporation Berhad (Incorporated in Malaysia)
Statements of changes in equity For the financial year ended 31 December 2017 (contd.)
I------Non-distributable ------I Distributable Equity Share Share Retained total capital premium earnings RM RM RM RM
Company
At 1 January 2016 326,996,525 100,000,000 172,770,440 54,226,085 Total comprehensive loss (21,470,129) - - (21,470,129) At 31 December 2016 305,526,396 100,000,000 172,770,440 32,755,956 Total comprehensive loss (28,270,488) - - (28,270,488) Transfer arising from implementation of Companies Act 2016 - 172,770,440 (172,770,440) - At 31 December 2017 277,255,908 272,770,440 - 4,485,468
The accompanying accounting policies and explanatory information form an integral part of the financial statements.
24 (Incorporated in Malaysia) Perak Corporation Berhad 210915-U boughtforward changes capital inworking before cashflows Operating Total adjustments Unrealised gainonforexexchange associates Shareofprofit receivables impairment losson trade Reversal ofallowance for written off Property,plant andequipment Portfacilities written off Inventories written off realisable value Inventories written down to net parties -third -tradeandotherreceivables -property,plant andequipment -investment inan associate - investment in a subsidiary -intangible assets -amountduefromanassociate Impairmentloss Interest income associateupon obtaining control Gain on revaluation of an Finance costs Dividendincome -investment properties -portfacilities -property,plant andequipment Depreciation Baddebts written off property rights Amortisation of intellectual Adjustments for: tax before (Loss)/profit Operating activities For thefinancialyear ended 31 December 2017 Statements ofcash flows (320,108,659) 329,739,647 167,239,506 90,413,310 19,392,746 37,137,727 15,784,137 (4,048,448) 9,630,988 3,355,176 (576,859) (860,064) 359,700 854,107 583,230 25 15,443 79,090 23,014 (4,155) (9,510) 1,497 2017 RM Group - - - - 21,218,583 19,487,863 (4,959,000) (1,543,883) 2,325,562 3,830,942 1,054,040 6,959,258 3,129,425 7,287,936 1,730,720 879,735 514,350 (69,611) 79,090 2016 RM 19 ------(25,961,238) (28,409,096) (7,918,870) 2,447,858 9,893,264 473,464 2017 RM Company ------(19,392,312) (21,398,748) (3,797,193) 2,006,436 4,971,421 500,000 332,208 2016 RM ------(Incorporated in Malaysia) Perak Corporation Berhad 210915-U boughtforward changes capital inworking before cashflows Operating Total adjustments Unrealised gainonforexexchange associates Shareofprofit receivables impairment losson trade Reversal ofallowance for written off Property,plant andequipment Portfacilities written off Inventories written off realisable value Inventories written down to net parties -third -tradeandotherreceivables -property,plant andequipment -investment inan associate - investment in a subsidiary -intangible assets -amountduefromanassociate Impairmentloss Interest income associateupon obtaining control Gain on revaluation of an Finance costs Dividendincome -investment properties -portfacilities -property,plant andequipment Depreciation Baddebts written off property rights Amortisation of intellectual Adjustments for: tax before (Loss)/profit Operating activities For thefinancialyear ended 31 December 2017 Statements ofcash flows (320,108,659) 329,739,647 167,239,506 37,137,727 15,784,137 90,413,310 19,392,746 (4,048,448) 3,355,176 9,630,988 (576,859) (860,064) 583,230 359,700 854,107 25 79,090 23,014 15,443 (9,510) (4,155) 1,497 2017 RM Group - - - - 21,218,583 19,487,863 (4,959,000) (1,543,883) 6,959,258 3,129,425 7,287,936 1,730,720 2,325,562 3,830,942 1,054,040 879,735 514,350 (69,611) 79,090 2016 RM 19 ------(28,409,096) (25,961,238) (7,918,870) 9,893,264 2,447,858 473,464 2017 RM Company ------(21,398,748) (19,392,312) (3,797,193) 4,971,421 2,006,436 500,000 332,208 2016 RM ------25 page
DIRECTORS’ REPORT AND AUDITED FINANCIAL STATEMENTS 2017 PERAK CORPORATION BERHAD (210915-U) 26 page
DIRECTORS’ REPORT AND AUDITED FINANCIAL STATEMENTS 2017 PERAK CORPORATION BERHAD (210915-U) (Incorporated in Malaysia) Perak Corporation Berhad 210915-U investing activities used Net cash in flows receivable lease Finance and plant property, - equipment -portfacilities -otherinvestments Purchase of acquisitionof subsidiaries(Note 17) Net cash inflow/(outflow) on Investment in an associate investments ofother Proceeds fromredemption investments Proceeds fromdisposalsofother plantandequipment disposalsProceeds from ofproperty, government grant Receipt of Dividend received Additions tointangible assets Investing activities from/(used in) operating activities generated Net cashflows Taxes paid Interest paid Interest received operations in) Cash flows generated from/(used Total changesinworking capital Tradeand other payables Othercurrentassets Tradeand other receivables Inventories capital: in working Changes carried forward changes capital inworking before cashflows Operating For thefinancialyear ended 31 December 2017(contd.) Statements ofcash flows (187,746,200) (136,341,631) 146,743,298 (43,631,558) (44,059,634) (23,752,305) (80,071,661) (16,188,429) 98,229,036 88,598,048 30,670,000 42,457,497 (1,900,000) 4,048,448 9,666,689 9,630,988 (429,156) 334,035 (20,208) 26 2,906 9,510 2017 RM Group 5 - - (104,896,976) (115,600,103) (21,770,719) (83,678,393) (14,091,637) (98,769,896) (49,735,610) (80,152,521) (15,109,991) 11,567,188 21,218,583 26,847,102 12,824,933 (3,602,631) (8,180,218) (1,100,000) 4,959,000 25,094 2016 RM ------(62,985,018) (37,023,780) (35,999,181) (25,961,238) (65,205,296) (9,893,264) (4,039,953) 7,918,870 3,018,754 (738,531) (726,728) (245,884) (11,802) (3,400) 2017 RM Company (1) ------(105,349,308) (108,135,951) (85,956,996) (92,189,818) (19,392,312) (4,971,421) (3,011,174) (1,612,415) 3,797,193 9,248,058 (143,979) (156,851) 12,872 (4,062) 2016 RM ------(Incorporated in Malaysia) Perak Corporation Berhad 210915-U The accompanyingaccounting policiesandexplanatoryinformation form an integralpartofthe financialstatements. Overdraft(Note26) maturingmorethan3months Deposits with licensed banks to certainsubsidiaries (Note 25) andotherbanking granted facilities Deposits pledgedforguarantees bankingfacility (Note 25) Bankbalancepledged fora (Note25) Deposits with licensed banks Cashand bank balances(Note 25) Cash andcashequivalentscomprise: at31December Cash andcashequivalents at 1 January Cash andcashequivalents and cash equivalents Net (decrease)/increaseincash financing activities generatedfrom Net cashflows -termloans -BaIDs liabilities -hirepurchaseandfinancelease Repayments of -termfinancing-i - revolving credits Proceeds from pledged bank balances (Placement)/uplift of licensed banks Placement of deposits with deposits pledged (Placement)/uplift of interest Dividend paidtoanon-controlling Financing activities For thefinancialyear ended 31 December 2017(contd.) Statements ofcash flows (19,529,103) (78,329,303) (14,126,017) (14,021,283) 32,569,083 24,485,153 85,857,413 66,959,400 37,040,000 61,279,529 (5,123,000) (2,499,999) 7,528,110 8,083,930 7,528,110 (369,453) (323,960) (369,453) (19,417) (19,417) 27 2017 RM Group - 172,372,713 196,678,520 (15,000,000) (14,999,999) 85,857,413 93,564,341 51,184,012 42,380,329 85,857,413 78,820,413 (2,199,108) (5,507,820) (1,657,779) 7,037,000 7,330,314 21,657 2016 RM - - - - - 59,961,049 50,000,000 10,000,000 (5,982,778) 6,086,544 103,766 103,766 103,766 (38,951) 50,108 53,658 2017 RM Company ------100,000,000 14,408,585 99,957,889 (8,322,041) 6,086,544 6,086,544 5,514,060 6,086,544 572,484 (42,111) 2016 RM ------(Incorporated in Malaysia) Perak Corporation Berhad 210915-U The accompanyingaccounting policiesandexplanatoryinformation form an integralpartofthe financialstatements. Overdraft(Note26) maturingmorethan3months Deposits with licensed banks to certainsubsidiaries (Note 25) andotherbanking granted facilities Deposits pledgedforguarantees bankingfacility (Note 25) Bankbalancepledged fora (Note25) Deposits with licensed banks Cashand bank balances(Note 25) Cash andcashequivalentscomprise: at31December Cash andcashequivalents at 1 January Cash andcashequivalents and cash equivalents Net (decrease)/increaseincash financing activities generatedfrom Net cashflows -termloans -BaIDs liabilities -hirepurchaseandfinancelease Repayments of -termfinancing-i - revolving credits Proceeds from pledged bank balances (Placement)/uplift of licensed banks Placement of deposits with deposits pledged (Placement)/uplift of interest Dividend paidtoanon-controlling Financing activities For thefinancialyear ended 31 December 2017(contd.) Statements ofcash flows (14,021,283) (19,529,103) (78,329,303) (14,126,017) 37,040,000 61,279,529 32,569,083 24,485,153 85,857,413 66,959,400 (2,499,999) (5,123,000) 7,528,110 8,083,930 7,528,110 (369,453) (369,453) (323,960) (19,417) (19,417) 27 2017 RM Group - 196,678,520 172,372,713 (14,999,999) (15,000,000) 85,857,413 93,564,341 51,184,012 42,380,329 85,857,413 78,820,413 (2,199,108) (5,507,820) (1,657,779) 7,330,314 7,037,000 21,657 2016 RM - - - - - 50,000,000 10,000,000 59,961,049 (5,982,778) 6,086,544 103,766 103,766 103,766 (38,951) 50,108 53,658 2017 RM Company ------100,000,000 14,408,585 99,957,889 (8,322,041) 6,086,544 6,086,544 5,514,060 6,086,544 572,484 (42,111) 2016 RM ------27 page
DIRECTORS’ REPORT AND AUDITED FINANCIAL STATEMENTS 2017 PERAK CORPORATION BERHAD (210915-U) 28 page
DIRECTORS’ REPORT AND AUDITED FINANCIAL STATEMENTS 2017 PERAK CORPORATION BERHAD (210915-U) (Incorporated in Malaysia) Perak Corporation Berhad 210915-U 2. 1. For thefinancialyear ended 31 December 2017 Notes tothefinancialstatements 2.1 policies accounting Summary ofsignificant Corporate information financial statements. financial to the are disclosed in Notes 17, 18 and 36 subsidiaries, associates and joint operations property development andprovisionofmanagementservices. Theprincipalactivitiesthe of The principal activitiesoftheCompanyconsistpropertyandinvestment holding,real No.3of1967. abodycorporateestablishedunderPerakEnactment Negeri Perak, Perbadanan Kemajuan Companyis ofthe holdingcorporation andultimate The immediate Meru Raya, 30020 Ipoh, Perak Darul Ridzuan. the Company is located atNo.1-A, Blok A,Menara PKNP,JalanMeru Casuarina,Bandar of of business principal place Ridzuan. The Ipoh, Perak Darul Ahmad Said, 30450 Dato' Seri GreentownSquare,Jalan Company islocatedatD-3-7, office of the Berhad. Theregistered Securities ofBursaMalaysiaand islistedontheMain and domiciledinMalaysia, Market company, incorporated liability public limited Company")isa Berhad("the Perak Corporation Basis ofpreparation payment obligations for the next12months. tomeettheir funds hassufficient theGroup ensure that will The paymentholiday million. two year payment holiday 2019 on up to principal repayments amounting to RM50 Management processofrenegotiating lenders toprovide isinthe a the termswith the loan. requested fortheimmediaterepaymentofsyndicatedterm and hasnot adefaultevent statements, thefacilityagenthasnotcalledfor offinancial As ofthedate in Note26. asdisclosed to covenantbreaches liabilitydue million tocurrent subsidiary ofRM238.7 a term loanof ofasyndicated reclassification the following million RM158.5 assets by December 2017that date,theGroup’s currentliabilities andasof exceeded itscurrent 31 financial year ended the million during loss of RM340.6 a net The Group incurred otherwise indicated. ("RM") unless Malaysia inRinggit are presented statements The financial policies below. accounting summaryofsignificant indicatedinthe historical costbasis,unlessotherwise on the prepared been have Company of the and Group of the statements financial The dates as described fully in Note 2.2. the and amendedMFRS mandatoryforfinancialperiodsbeginningonor after whichare new year, adopted Company the and financial current of the Group the beginning At the Malaysia. 2016 in CompaniesAct ofthe the requirements and Standards Financial Reporting ("MFRS"), Standards International Financial Reporting Malaysianaccordance with in prepared been have Company the of and Group statements the of financial The 28 (Incorporated in Malaysia) Perak Corporation Berhad 210915-U 2. 2.2 2.1 (contd.) policies accounting Summary ofsignificant Amendments toMFRS 12 Disclosure ofInterestsinOtherEntities Annual Improvements toMFRS Standards 2014–2016 Cycle (AmendmentstoMFRS 112) MFRS Assets Unrealised 112 Losses Recognitionof for Deferred Tax MFRS 107 Disclosure Initiative (Amendments to MFRS 107) Description policies Changes inaccounting (contd.) Basis ofpreparation Company have been prepared on a going concern basis. concern a on going prepared been have Company above statements Due of to considerations, the the the Group financial and of the due. fall they when and as liabilities their meet to Group Group permit repayment and suchrepaymentwillnot adversely affect the ability of the thembytheGroupinnextowing except 12months to as thefundsof insofar amount the of repayment demand not also will PKNP due. fall they when and as liabilities company, hasagreedtoprovide assistancetotheGroupenable meetits financial itto immediate parent In addition, Perbadanan Kemajuan Negeri Perak (“PKNP”), being the needarise. shouldthe payment obligations cash to meet any The Group has also identified certain lands that can be disposed for 2017: 1 January forannualfinancialperiodsbeginningonorafter amended MFRSs mandatory and new following adoptedthe Groupandthe Company 2017,the On 1January except asfollows: year previousfinancial ofthe consistentwiththose adopted are policies The accounting impact ontheGroupand ontheCompany. hashadno these amendments theapplication of Note 26(f), disclosures includedin the additional preceding periods. Apart from provide comparative information for cash changes.Oninitialapplicationoftheseamendments, entitiesarenotrequiredto and non- cash flows arising from changes both including financing activities, from arising liabilities in changes evaluate to statements financial of users enable that disclosures The amendmentstoMFRSStatement of CashFlows 107 requires anentitytoprovide to MFRS107) (Amendments Initiative MFRS 107Disclosure 29 annual periods 1 January2017 1 January2017 1 January2017 beginning on Effective for or after (Incorporated in Malaysia) Perak Corporation Berhad 210915-U 2. 2.1 (contd.) policies accounting Summary ofsignificant 2.2 Amendments toMFRS 12 Disclosure ofInterestsinOtherEntities Annual Improvements toMFRS Standards 2014–2016 Cycle (AmendmentstoMFRS 112) MFRS Assets Unrealised112 Losses Recognition of for Deferred Tax MFRS 107 Disclosure Initiative (Amendments to MFRS 107) Description policies Changes inaccounting (contd.) Basis ofpreparation Company have been prepared on a going concern basis. concern a on going prepared been have Company above statements Due of considerations, to the the the Group financial and of the due. fall they when and as liabilities their meet to Group Group permitrepayment and suchrepaymentwillnot adversely affect the ability of the thembytheGroupinnextowing except 12months to as thefundsof insofar amount the of repayment demand not also will PKNP due. fall they when and as liabilities company, hasagreedtoprovide assistancetotheGroupenable meetits financial itto immediate parent In addition, Perbadanan Kemajuan Negeri Perak (“PKNP”), being the needarise. shouldthe payment obligations cash to meet any The Group has also identified certain lands that can be disposed for 2017: 1 January forannualfinancialperiodsbeginningonorafter amended MFRSs mandatory and new following adoptedthe Groupandthe Company 2017,the On 1January except asfollows: year previousfinancial ofthe consistentwiththose adopted are policies The accounting impact ontheGroupand ontheCompany. hashadno these amendments theapplication of Note 26(f), disclosures includedin the additional preceding periods. Apart from provide comparative information for cash changes.Oninitialapplicationoftheseamendments, entitiesarenotrequiredto and non- cash flows arising from changes both including financing activities, from arising liabilities in changes evaluate to statements financial of users enable that disclosures The amendmentstoMFRSStatement of CashFlows 107 requires anentitytoprovide to MFRS107) (Amendments Initiative MFRS 107Disclosure 29 annual periods 1 January2017 1 January2017 1 January2017 beginning on Effective for or after 29 page
DIRECTORS’ REPORT AND AUDITED FINANCIAL STATEMENTS 2017 PERAK CORPORATION BERHAD (210915-U) 30 page
DIRECTORS’ REPORT AND AUDITED FINANCIAL STATEMENTS 2017 PERAK CORPORATION BERHAD (210915-U) (Incorporated in Malaysia) Perak Corporation Berhad 210915-U 2. 2.2 (contd.) policies accounting Summary ofsignificant Changes in accounting policies (contd.) policies Changes inaccounting taxable profits in awaythat is consistent amendments.with these Company astheGroup and theCompanyalreadyassesssufficiency of future The application amendmentshashadnoimpactontheGroupand ofthese amount. whichmay includetherecoveryofsomeassetsformorethantheircarrying taxable profit how an entity shoulddeterminefuture taxable profits and explain in the circumstances on theamendmentsprovidedeductible temporarydifference. Furthermore, guidance profits against whichit maymake sources oftaxabledeductions onthereversalofthat The amendments clarify thatanentity needs toconsider whethertaxlawrestricts the Losses for Unrealised of Deferred Tax AssetsMFRS 112 Recognition statements. The amendmentsdonot haveanyimpactontheGroup's and theCompany's financial deduction. the of utilisation tothe withregards lawrestrictions should considertax be available,it willprofits sufficient Inaddition,future taxablean entityassesseswhether when profits. taxable of thosedeductibletemporary differences an entityevaluateswhen whetherithas with excluding entity'sfuturetaxable the profits deductionsresultingthe reversal from tax that deductible temporary differences should be compared The amendments also clarify inOtherEntities: Disclosure ofInterests Amendmentsto MFRS12 2016 Cycle AnnualImprovements toMFRSStandards2014 – (Amendmentsto MFRS112) Clarification of the scope of disclosure requirements in MFRS 12 inMFRS requirements of disclosure scope of the Clarification 30 (Incorporated in Malaysia) Perak Corporation Berhad 210915-U 2. 2.3 (contd.) policies accounting Summary ofsignificant Assetsbetween anInvestor anditsAssociate or JointVenture Amendments toMFRS 10 andMFRS 128: Sale or Contribution of MFRS 17 InsuranceContracts IC Interpretation23Uncertainty over IncomeTaxTreatments (AmendmentstoMFRS 119) MFRS 119 Plan Amendment, CurtailmentorSettlement Annual Improvements toMFRS Standards 2015–2017 Cycle (AmendmentstoMFRS 128) MFRS 128 Long-termInterestsinAssociatesand Joint Ventures MFRS 16Leases (AmendmentstoMFRS 9) MFRS 9Prepayment with Features Negative Compensation Advance Consideration Currency Foreign 22 Interpretation IC and Transactions Annual Improvements toMFRS Standards 2014–2016 Cycle (AmendmentstoMFRS 140) MFRS 140 ofInvestment Property Transfers MFRS 15 Revenue from Contracts with Customers MFRS 9 Financial Instruments Transactions (Amendments to MFRS 2) MFRS 2Classification andMeasurementShare-based Payment of Description butnotyeteffective Standards issued Company intend to adoptthesestandards, if applicable,when theybecomeeffective. and theCompany'sfinancial statements aredisclosedThe Groupandthe below. uptodateofissuancetheGroup's The standardsthatareissuedbutnotyeteffective 31 annual periods 1 January2021 1 January2019 1 January2019 1 January2019 1 January2019 1 January2019 1 January2019 1 January2018 1 January2018 1 January2018 1 January2018 1 January2018 1 January2018 beginning on Effective for Deferred or after (Incorporated in Malaysia) Perak Corporation Berhad 210915-U 2. 2.3 (contd.) policies accounting Summary ofsignificant Assetsbetween anInvestor anditsAssociate or JointVenture Amendments toMFRS 10 andMFRS 128: Sale or Contribution of MFRS 17 InsuranceContracts IC Interpretation23Uncertainty over IncomeTaxTreatments (AmendmentstoMFRS 119) MFRS 119 Plan Amendment, CurtailmentorSettlement Annual Improvements toMFRS Standards 2015–2017 Cycle (AmendmentstoMFRS 128) MFRS 128 Long-termInterestsinAssociatesand Joint Ventures MFRS 16Leases (AmendmentstoMFRS 9) MFRS 9Prepayment with Features Negative Compensation Advance Consideration Currency Foreign 22 Interpretation IC and Transactions Annual Improvements toMFRS Standards 2014–2016 Cycle (AmendmentstoMFRS 140) MFRS 140 ofInvestment Property Transfers MFRS 15 Revenue from Contracts with Customers MFRS 9 Financial Instruments Transactions (Amendments to MFRS 2) MFRS 2Classification andMeasurementShare-based Payment of Description butnotyeteffective Standards issued Company intend to adoptthesestandards, if applicable,when theybecomeeffective. and theCompany'sfinancial statements aredisclosedThe Groupandthe below. uptodateofissuancetheGroup's The standardsthatareissuedbutnotyeteffective 31 annual periods 1 January2021 1 January2019 1 January2019 1 January2019 1 January2019 1 January2019 1 January2019 1 January2018 1 January2018 1 January2018 1 January2018 1 January2018 1 January2018 beginning on Effective for Deferred or after 31 page
DIRECTORS’ REPORT AND AUDITED FINANCIAL STATEMENTS 2017 PERAK CORPORATION BERHAD (210915-U) 32 page
DIRECTORS’ REPORT AND AUDITED FINANCIAL STATEMENTS 2017 PERAK CORPORATION BERHAD (210915-U) (Incorporated in Malaysia) Perak Corporation Berhad 210915-U 2. 2.3 (contd.) policies accounting Summary ofsignificant Standards issued but not yet effective (contd.) butnotyeteffective Standards issued statements of the Group and of the Company. Group andof statements ofthe the financial on the standard of applying effects thequantitative finalising currently Company are customer. The Group and the performance to the obligation is transferred particular the services underlying or of thegoods i.e.when “control” satisfied, obligation is (or as) a performance revenue when recognises Under 15, MFRSan entity services. consideration to which entity expects the to be entitled in exchange those for goods or the that reflects customers in an amount of promised goods or services to the transfer revenuewhichdepict shouldrecognise is thatanentity MFRS 15 The coreprincipleof effective. whenit becomes related interpretations Contractsandthe Revenue, MFRS111Construction guidance includingMFRS118 revenue contracts customers. MFRSrecognition supersede thecurrent with 15will from arising will that model to revenue apply five-step a new establishes MFRS 15 Customers with Revenue fromContracts MFRS 15 Impairment (ii) andmeasurement Classification (i) follows: as statements financial Group’s the 9 to MFRS of impact circumstances date,thedirectorsthat existat oftheCompanyhave assessedthe and the basisoffacts as at31December2017on assetsandliabilitiesfinancial the Group’s analysisof Basedonthe isnotcompulsory. information comparative January 2018,with earlyapplication permitted.Retrospective application isrequired, but 1 after onor annualperiodsbeginning for 9 iseffective MFRS accounting. and hedge new classificationand MFRS9 introduces requirements for measurement, impairment Financial Instruments MFRS 9 of its loans and receivables, the loss allowance willthe lossallowance increase. of itsloansandreceivables, all tradeandotherreceivables. expects theunsecurednature TheGroup that,dueto on losses expected lifetime record and approach simplified the apply will Group The sharesthatwerecarried atcost. including thoseunquoted previously value, at fair instruments equity measure is to impact the main expects The Group 32 (Incorporated in Malaysia) Perak Corporation Berhad 210915-U 2. 2.3 (contd.) policies accounting Summary ofsignificant Standards (contd.) butnotyeteffective Standards issued not haveasignificantimpact ontheGroup’s and theCompany’s statements. financial amendments to variousMFRSs, summarisedbelow.which are amendments do These 2016 Cycle include a number of The Annual Improvements to MFRS Standards 2014 – 2016 Cycle AnnualImprovements toMFRSStandards2014 – Group doesnotexpecton itsconsolidatedfinancialstatements. anyeffect issued,the the clarifications in linewith practiceis current since theGroup’s However, must be disclosed. The Group will amendments apply these whenthey become effective. use ofhindsight)orprospectively.Earlier applicationoftheamendmentsispermitted and Entities can apply these amendments either retrospectively (ifthisispossible without the inuse. of change doesnotprovide evidence of aproperty intentions for the use change inmanagement’s definition ofinvestment andthereisevidence in property use.Amere ofthechange state that a change in the use property occurs meets, whenor ceases to meet, the investment The amendments property. under constructionordevelopmentor outof into, The amendmentsclarifyan entityshouldtransfer thatwhenproperty, including property to MFRS 140) MFRS 140 Transfers of InvestmentProperty(Amendments for first-time adopters first-time for short-term exemptions Deletionof Standards – Financial Reporting Malaysian Adoption of MFRSFirst-time 1 Descriptions is not a first-time a first-time adopter of MFRS.is not This amendment is notapplicable Group asthe tothe 33 (Incorporated in Malaysia) Perak Corporation Berhad 210915-U 2. 2.3 (contd.) policies accounting Summary ofsignificant Standards (contd.) butnotyeteffective Standards issued Group does not expect any effect Group doesnotexpecton itsconsolidatedfinancialstatements. anyeffect issued,the the clarifications in linewith practiceis current since theGroup’s However, must be disclosed. The Group will amendments apply these whenthey become effective. use ofhindsight)orprospectively.Earlier applicationoftheamendmentsispermitted and Entities can apply theseamendments either retrospectively (ifthisispossible without the inuse. of change doesnotprovide evidence of aproperty intentions for the use change inmanagement’s definition ofinvestment andthereisevidence in property use.Amere ofthechange state that a change in use the occurs property whenmeets, or ceases to meet, the investment The amendments property. under constructionordevelopmentor outof into, The amendmentsclarifyan entityshouldtransfer thatwhenproperty, including property to MFRS 140) MFRS 140 Transfers of InvestmentProperty(Amendments not haveasignificantimpact ontheGroup’s and theCompany’s statements. financial amendments to variousMFRSs, summarisedbelow.which are amendments do These 2016 Cycle include a number of The Annual Improvements to MFRS Standards 2014 – 2016 Cycle AnnualImprovements toMFRSStandards2014 – for first-time adopters first-time for short-term exemptions Deletionof Standards – Financial Reporting Malaysian Adoption of MFRSFirst-time 1 Descriptions is not a first-time a first-time adopter of MFRS.is not This amendment is notapplicable Group asthe tothe 33 33 page
DIRECTORS’ REPORT AND AUDITED FINANCIAL STATEMENTS 2017 PERAK CORPORATION BERHAD (210915-U) 34 page
DIRECTORS’ REPORT AND AUDITED FINANCIAL STATEMENTS 2017 PERAK CORPORATION BERHAD (210915-U) (Incorporated in Malaysia) Perak Corporation Berhad 210915-U 2. 2.3 (contd.) policies accounting Summary ofsignificant Standards Annual 2014–2016Cycle toMFRSStandards (contd.) Improvements (contd.) butnotyeteffective Standards issued investment choice an investment-by- is loss or profit through value fair at investees that measuring Clarification – Ventures in Associates and Joint 128 Investments MFRS Descriptions that isaninvestment entity. and theGroupdoesnothave anyassociateorjointventure the Groupasis not aventurecapitalorganisation to These amendments are not applicable must be disclosed. and permitted are amendments these of application Earlier ifanentity,thatis notitselfaninvestment entity,hasan - anentitythat is aventurecapital organisation, or other - The amendments clarify that: (c) the investment entity associate or joint venture first an investment becomes venture or joint the associate (b) (a) theinvestment entityassociateorjoint venture isinitially on which: investment entityassociate orjointventure,atalaterdate each made separatelyfor subsidiaries. Thiselectionis investment entityassociate’s orjointventure’s interestsin investment entityassociate orjointventuretothe elect toretainthefairvalue measurementapplied bythat entity, the entity may, when applying theequitymethod, interest in associateorjointventure thatisaninvestment loss. or through profit valuein associatesandjointventuresatfair investment-by-investment basis, to measure its investments on an recognition, at initial elect, entity, may qualifying becomes aparent. entity; and recognised; 34 (Incorporated in Malaysia) Perak Corporation Berhad 210915-U 2. 2.3 (contd.) policies accounting Summary ofsignificant Standards issued but not yet effective (contd.) butnotyeteffective Standards issued Company’s financial statements. Company’s financial amendments are notexpectedtohavea significant impact ontheGroup’sand the The amendmentsmustbe applied retrospectively. Earlierapplication These is permitted. the early termination of thecontract. pays or receivesreasonablecompensation for of whichparty contract andirrespective or circumstancethat causes theearlytermination criterion regardless ofthe of theevent assetpassestheSPPI thatafinancial 9 clarify TheamendmentstoMFRSclassification. criterion) andtheinstrument isheldwithintheappropriatebusiness modelfor that payments ofprincipalandinterestontheamountoutstanding(theSPPI through othercomprehensiveincome, solely cash flows providedthatthecontractual are Under MFRSa debt instrument can be measured valueat amortised cost or at fair 9, with Negative Compensation MFRS 9PrepaymentFeatures currency in away is consistent that amendments. with the inforeign advance consideration receipt of the paymentor involvingtransactions the Companyand Group as the Company and on the Group for accounting already are must be disclosed. The application of these amendments not willhave an impact on the and is permitted Earlyapplication application. provisionsapplytoprospective transition Entities mayapply theamendments either retrospectively or prospectively. Specific consideration. thetransactiondateforeachpaymentor receiptofadvance the entity must determine the advance consideration. Iftherearemultiple paymentsorreceiptsinadvance, then from arising liability assetornon-monetary thenon-monetary recognises an entityinitially non-monetary asset ornon-monetary liability, dateoftransactionistheonwhich the ofa recognition whichresulted inthe currency a foreign inadvance paid orreceived thatitemhasbeen consideration for or income,when ofanasset,expense recognition touseoninitial The interpretationclarifies that,indeterminingtheexchange rate Consideration andAdvance CurrencyTransactions 22 Foreign IC Interpretation MFRS 117. under financeleases for accounting the similar to model position offinancial statement single on- accountfor allleasesundera requires lessees to and disclosureofleases therecognition, sets outtheprinciplesfor measurement, a Lease.MFRSpresentation 16 Interpretation SubstanceofTransactionsInvolving127 Evaluatingthe LegalFormof the 115Operating Lease-IncentivesLease, ICInterpretation and Arrangement contains a MFRS 16will MFRS replace 117Leases, IC Interpretation 4 Determining whether an MFRS 16Leases (Amendmentsto MFRS9) 35 (Incorporated in Malaysia) Perak Corporation Berhad 210915-U 2. 2.3 (contd.) policies accounting Summary ofsignificant Standards issued but not yet effective (contd.) butnotyeteffective Standards issued Company’s financial statements. Company’s financial amendments are notexpectedtohavea significant impact ontheGroup’sand the The amendmentsmustbe applied retrospectively. Earlierapplication These is permitted. the early termination of thecontract. pays or receivesreasonablecompensation for of whichparty contract andirrespective or circumstancethatcauses the earlytermination criterion regardless ofthe of theevent assetpassesthe SPPI thatafinancial 9 clarify TheamendmentstoMFRSclassification. criterion) andtheinstrument isheldwithintheappropriatebusiness modelfor that payments ofprincipalandinterestontheamountoutstanding(theSPPI through othercomprehensiveincome, solely cash flows providedthatthecontractual are Under MFRSa debt instrument can be measured valueat amortised cost or at fair 9, with Negative Compensation MFRS 9PrepaymentFeatures currency in away is consistent that amendments. with the inforeign advance consideration receipt of the paymentor involvingtransactions Company the and Group as the Company and on the Group for accounting already are must be disclosed. The application of these amendments not willhave an impact on the and is permitted Earlyapplication application. provisionsapplytoprospective transition Entities mayapply theamendments either retrospectively or prospectively. Specific consideration. thetransactiondateforeachpaymentor receiptofadvance the entity must determine the advance consideration. Iftherearemultiple paymentsorreceiptsinadvance, then from arising liability assetornon-monetary thenon-monetary recognises an entityinitially non-monetary asset ornon-monetary liability, dateoftransactionistheonwhich the ofa recognition whichresulted inthe currency a foreign inadvance paid orreceived thatitemhasbeen consideration for or income,when ofanasset,expense recognition touseoninitial The interpretationclarifies that,indeterminingtheexchange rate Consideration andAdvance CurrencyTransactions 22 Foreign IC Interpretation MFRS 117. under financeleases for accounting the similar to model position offinancial statement single on- accountforallleasesundera requires lessees to and disclosureofleases therecognition, sets outtheprinciplesfor measurement, a Lease.MFRSpresentation 16 Interpretation SubstanceofTransactionsInvolving127 Evaluatingthe LegalFormof the 115Operating Lease-IncentivesLease, ICInterpretation and Arrangement contains a MFRS 16will MFRS replace 117Leases, IC Interpretation 4 Determining whether an MFRS 16Leases (Amendmentsto MFRS9) 35 35 page
DIRECTORS’ REPORT AND AUDITED FINANCIAL STATEMENTS 2017 PERAK CORPORATION BERHAD (210915-U) 36 page
DIRECTORS’ REPORT AND AUDITED FINANCIAL STATEMENTS 2017 PERAK CORPORATION BERHAD (210915-U) (Incorporated in Malaysia) Perak Corporation Berhad 210915-U 2. 2.3 (contd.) policies accounting Summary ofsignificant Standards issued but not yet effective (contd.) butnotyeteffective Standards issued statements. expect the amendments to have any impact on the Group’s and the Company’s financial eliminate ambiguityin wordingof thestandard,directorsCompany donot the amendments andapplication mustbedisclosed.Astheamendments ofthe is permitted Entities must apply theamendments retrospectively, withcertain exceptions. Early arise fromapplyingMFRS 128Investments in Associatesand Joint Ventures. associaterecognised asadjustments to thenetinvestmentin orjointventurethat the associate,orjointventure, oranyimpairmentlossesonthenetinvestment, (long-term interests). Inapplyingentity does notaccountforanylossesof MFRS9,an investmentbut that,insubstance,formpartofthenet intheassociateorjointventure term interests in an associate or joint venture to which equity method the is not applied The amendments clarify thatanentity applies MFRS9 Financial Instruments to long- and JointVentures InterestsinAssociatesMFRS 128Long-term statements financial in year2018. The GroupandtheCompanyplan toassessthepotentialeffect on their of MFRS 16 approach. retrospective oramodified retrospective a full usingeither the standard to apply application ispermitted but notbeforeanentityapplies MFRS 15.Alesseecan choose 1January2019.Early after onor annualperiodsbeginning for MFRS16 iseffective disclosures thanunderMFRS 117. more extensive lesseesandlessorstomake leases. MFRS16 alsorequires finance principle asin MFRSand distinguish 117 between twotypesofleases: operating and sameclassification allleasesusingthe to classify will continue Lessors MFRS 117. the same as theaccounting under Lessor accountingunderMFRS 16 is substantially asoperatingcashflows). be presented portion(whichwill and aninterest cashflows) as financing be presented will into aprincipal(which payments willbesplit lease are presentedasoperatingcashflows,whereasunderMFRSMFRS 16,the 117 under payments lease operating as affected be also willflows cash of Classification modifications. impact of lease well as the that date.Subsequently, theleaseliabilityis adjustedforinterestand leasepayments,as at paid not are that payments lease the of value present at measured initially is liability The lease liability. lease of the remeasurement forany adjusted losses, impairment accumulated depreciation and exceptions), less (subject to certain measured at cost lease term.Theright-of-use measured atcostandsubsequently asset isinitially underlyingpayments andanassetrepresentingtherighttouse assetduringthe lease make to liability a recognise will lessee a alease, of date commencement the At MFRS 16 Leases (contd.) (Amendmentsto MFRS128) 36 (Incorporated in Malaysia) Perak Corporation Berhad 210915-U 2. 2.3 (contd.) policies accounting Summary ofsignificant Standards (contd.) butnotyeteffective Standards issued not haveasignificantimpact ontheGroup’s and theCompany’s statements. financial amendments to variousMFRSs, summarisedbelow.which are amendments do These The AnnualImprovementstoMFRS Standards2015 2017Cycle AnnualImprovements toMFRSStandards2015– in a joint operation Previously heldinterests Combinations – MFRS 3Business equity classifiedas instruments payments onfinancial consequences of Income tax Taxes – MFRS112 Income in a joint operation Previously heldinterests Arrangements – MFRS 11Joint Descriptions earliest comparative period. earliest comparative ofthe thebeginning onorafter recognised of dividends amendments, it income applies them to the tax consequences applicationWhen ispermitted. an entityfirstapplies these Earlier 1 January 2019. after on or periods beginning An entityapplies theseamendmentsforannualreporting orevents. thosepasttransactions originally recognised the entity where accordingto incomeorequity comprehensive orloss,other in profit consequences ofdividends to owners.Therefore, an entityrecognises the incometax that generated distributable events profits than to distributions or pasttransactions directlyto linkedmore dividends are of consequences incometax clarifythatthe The amendments on or 1 after January 2019. period annual beginning reporting the first of thebeginning after onor control joint it obtains An entityapplies theseamendments to transactionsinwhich remeasured. that thepreviously heldinterestsinthatjoint operationarenot clarify amendments inMFRS3. The as defined a business operation inwhich the activity jointoperation ofthe constitutes joint ofthe control obtainjoint might operation a joint A partythatparticipates in,butdoes not have jointcontrolof, after after 1 January 2019. Earlier application is permitted. on or beginning period annualreporting first of the beginning the combinations forwhichthe acquisitiondateisonorafter An entityapplies theseamendmentstobusiness joint operation. the in interest held previously entire its remeasures acquirer so, the In doing value. fair at jointoperation of the liabilities and previously intheassets remeasuring heldinterests including in stages, achieved abusinesscombination for a business thatisajointoperation, it appliestherequirements The amendments clarify that, entity whenobtains control of an 37 – 2017 Cycle includeanumber of (Incorporated in Malaysia) Perak Corporation Berhad 210915-U 2. 2.3 (contd.) policies accounting Summary ofsignificant Standards (contd.) butnotyeteffective Standards issued not haveasignificantimpact ontheGroup’s and theCompany’s statements. financial amendments to variousMFRSs, summarisedbelow.which are amendments do These The AnnualImprovementstoMFRS Standards2015 2017Cycle AnnualImprovements toMFRSStandards2015– equity classifiedas instruments payments onfinancial consequences of Income tax Taxes – MFRS112 Income in a joint operation Previously heldinterests Arrangements – MFRS 11Joint in a joint operation Previously heldinterests Combinations – MFRS 3Business Descriptions earliest comparative period. earliest comparative ofthe thebeginning onorafter recognised of dividends amendments, it income applies them to the tax consequences applicationWhen ispermitted. an entityfirstapplies these Earlier 1 January 2019. after on or periods beginning An entityapplies theseamendmentsforannualreporting orevents. thosepasttransactions originally recognised the entity where accordingto incomeorequity comprehensive orloss,other in profit consequences ofdividends to owners.Therefore, an entityrecognises the incometax that generated distributable events profits than to distributions or pasttransactions directlyto linkedmore dividends are of consequences incometax clarifythatthe The amendments on or 1 after January 2019. period annual beginning reporting the first of thebeginning after onor control joint it obtains An entityapplies theseamendments to transactionsinwhich remeasured. that thepreviously heldinterestsinthatjoint operationarenot clarify amendments inMFRS3. The as defined a business operation inwhich the activity jointoperation ofthe constitutes joint ofthe control obtainjoint might operation a joint A partythatparticipates in,butdoes not have jointcontrolof, after 1 January 2019. Earlier application is permitted. on or beginning period annualreporting first of the beginning the combinations forwhichthe acquisitiondateisonorafter An entityapplies theseamendmentstobusiness joint operation. the in interest held previously entire its remeasures acquirer so, the In doing value. fair at jointoperation of the liabilities and previously intheassets remeasuring heldinterests including in stages, achieved abusinesscombination for a business thatisajointoperation, it appliestherequirements The amendments clarify that, entity whenobtains control of an 37 – 2017 Cycle includeanumber of 37 page
DIRECTORS’ REPORT AND AUDITED FINANCIAL STATEMENTS 2017 PERAK CORPORATION BERHAD (210915-U) 38 page
DIRECTORS’ REPORT AND AUDITED FINANCIAL STATEMENTS 2017 PERAK CORPORATION BERHAD (210915-U) (Incorporated in Malaysia) Perak Corporation Berhad 210915-U 2. 2.3 (contd.) policies accounting Summary ofsignificant Standards (contd.) butnotyeteffective Standards issued financial statements. financial Company’s andthe impacton theGroup’s not haveasignificant will These amendments 1 settlements January 2019,withthat occuronorafter earlierapplication permitted. The amendmentsshouldbeapplied curtailments prospectively toplanamendments, or requirements. ceiling affect the asset amendment, curtailmentorsettlement aplan for accounting for requirements the how clarify also amendments The reporting period. curtailmentorsettlement,whichoccurs duringthe a planamendment, periodafter interest fortheremainderofannualreporting current servicecostandnet updatedactuarialassumptionstodetermine The amendmentsrequireentitiestousethe orSettlement Amendment,Curtailment MFRS 119Plan 2017Cycle(contd.) AnnualImprovements toMFRS Standards 2015– eligible for capitalisation for eligible Borrowingcosts Costs – MFRS 123Borrowing (Amendmentsto MFRS119) Descriptions application ispermitted. Earlier 1 January 2019. after on or periods beginning reporting thebeginningofannual incurred onorafter An entity applies these amendments to borrowingcosts are complete. use or sale its intended that assetfor necessary toprepare the activities all of substantially asset when qualifying todevelopa originallymade borrowings anyborrowing of general The amendments clarify that an entity treats as part 38 (Incorporated in Malaysia) Perak Corporation Berhad 210915-U 2. 2.3 (contd.) policies accounting Summary ofsignificant Standards issued but not yet effective (contd.) butnotyeteffective Standards issued - - - - the following: addresses specifically The interpretation relating tointerest andpenalties associated withuncertain tax treatments. requirements include specifically it does nor 112, MFRS of scope the outside levies or involveuncertainty that affects the application ofMFRS112 anddoesnotapply totaxes The interpretation addresses the accounting for income taxes when tax treatments over Income Tax Treatments 23 Uncertainty IC Interpretation amendments are notexpectedtohaveanyimpactontheGroup. These ispermitted. Earlierapplication Board. Accounting Standards Malaysian the by determined be to date a after or on beginning periods annual in occurring The amendmentsaretobeapplied prospectivelyof assets tothesaleorcontribution that constitute a businessisrecognisedin full. transactions involvingthe saleorcontribution ofassetstoanassociateorajointventure resulting from gainsandlosses intheassociateorjointventure;and investors’ interests venture arerecognised statementsonlyin theentity’sfinancial totheextentofunrelated assets thatdonotconstitute a business,between investorand itsassociateor joint involving transactions from resulting and losses gains that clarify The amendments between of AssetsAmendmentsto MFRS10and128:SaleorContribution effective date. the interpretationfrom its apply Company will Group and the The should be followed. the uncertainty resolution of or moreuncertaintaxtreatments. together withThe approachthatbetterpredicts one the An entitymustdeterminewhether toconsidereachuncertaintaxtreatmentseparately or an Investor and its or Joint Venture an Investor and its Associate how an entity considers changes in facts inand circumstances. facts how anentityconsiderschanges unused taxcredits and taxrates; how anentitydetermines taxable profit (tax loss),tax bases, unused tax losses, authorities; the assumptionsanentitymakesaboutestimation oftaxtreatmentsbytaxation whether anentityconsidersuncertain tax treatmentsseparately; 39 (Incorporated in Malaysia) Perak Corporation Berhad 210915-U 2. 2.3 (contd.) policies accounting Summary ofsignificant Standards issued but not yet effective (contd.) butnotyeteffective Standards issued amendments are notexpectedtohaveanyimpactontheGroup. These ispermitted. Earlierapplication Board. Accounting Standards Malaysian the by determined be to date a after or on beginning periods annual in occurring The amendmentsaretobeapplied prospectivelyof assets tothesaleorcontribution that constitute a businessisrecognisedin full. transactions involvingthe saleorcontribution ofassetstoanassociateorajointventure resulting from gainsandlosses intheassociateorjointventure;and investors’ interests venture arerecognised statementsonlyin theentity’sfinancial totheextentofunrelated assets thatdonotconstitute a business,between investorand itsassociateor joint involving transactions from resulting and losses gains that clarify The amendments between of AssetsAmendmentsto MFRS10and128:SaleorContribution - - - - the following: addresses specifically The interpretation relating tointerest andpenalties associated withuncertain tax treatments. requirements include specifically it does nor 112, MFRS of scope the outside levies or involveuncertainty that affects the application ofMFRS112 anddoesnotapply totaxes The interpretation addresses the accounting for income taxes when tax treatments over Income Tax Treatments 23 Uncertainty IC Interpretation the interpretation from its effective date. the interpretationfrom its apply Company will Group and the The should be followed. the uncertainty resolution of or moreuncertaintaxtreatments. together withThe approachthatbetterpredicts one the An entitymustdeterminewhether toconsidereachuncertaintaxtreatmentseparately or an Investor and its or Joint Venture an Investor and its Associate how an entity considers changes in facts inand circumstances. facts how anentityconsiderschanges unused taxcredits and taxrates; how anentitydetermines taxable profit (tax loss),tax bases, unused tax losses, authorities; the assumptionsanentitymakesaboutestimation oftaxtreatmentsbytaxation whether anentityconsidersuncertain tax treatmentsseparately; 39 39 page
DIRECTORS’ REPORT AND AUDITED FINANCIAL STATEMENTS 2017 PERAK CORPORATION BERHAD (210915-U) 40 page
DIRECTORS’ REPORT AND AUDITED FINANCIAL STATEMENTS 2017 PERAK CORPORATION BERHAD (210915-U) (Incorporated in Malaysia) Perak Corporation Berhad 210915-U 2. 2.4 (contd.) policies accounting Summary ofsignificant Basis ofconsolidation difference difference the Company. is recognised directly inequityandattributed toowners of to reflect the changesintheirrelativeinterestssubsidiaries. Theresulting Group’sinterestsandthenon-controlling interestsareadjusted carrying amountsofthe The asequitytransactions. for subsidiariesareaccounted overthe Group losingcontrol Changes in the Group’s ownership interests in subsidiaries that do not result in the balance. inadeficit results Losses within asubsidiaryareattributed to thenon-controllinginterests evenifthat full. in areeliminated transactions intra-group andlossesresultingfrom gains income andexpensesunrealised balances, ofthesubsidiary. Allintra-group ceases whentheCompanylosescontrol and controloverthesubsidiary consolidated whentheCompanyobtains Subsidiaries are Any additional facts and circumstancesthat indicate thattheCompanyhas,ordoes (iv) and othercontractualarrangements; from Rightsarising (iii) Potentialvoting held bytheCompany, rights othervoteholdersorparties; (ii) and othercontractualarrangements; from Rightsarising (i) rights inaninvestee aresufficient to giveitpower over the investee: voting Company’s notthe whetheror inassessing thefollowing Company considers When ofan investee,the Company has less than a majorityof the votingthe rights Theability to use itspower over the investee to affect its returns. (iii) Exposure,returns from to variableitsinvestment orrights, the investee; with and (ii) Power overtheinvestee (suchasexisting rightsthat give itthecurrent ability to (i) following: the all has Company the if only and if investee an controls Company The similar circumstances. transactions and events in like for are applied policies Consistent accounting Company. dateasthe same reporting the financial for prepared are statements consolidated the of preparation the in used subsidiaries of the statements financial date. The the reporting at subsidiaries as and its oftheCompany statements financial comprisethe statements financial The consolidated need to be made, including voting patterns need tobemade,includingat previousshareholders’meetings. have,not current the relevantthe ability direct to activities decisions that time the at direct therelevant activities oftheinvestee); 40 (Incorporated in Malaysia) Perak Corporation Berhad 210915-U 2. 2.4 (contd.) policies accounting Summary ofsignificant Basis of consolidation (contd.) Basis ofconsolidation cost oninitialrecognitionoftheinvestment. investment retainedintheformer subsidiary atthedatecontrolislostregarded as the valuewheredirectly toretainedearnings.Thefair applicable,transferred ofany toprofitorloss inequityarereclassified comprehensive incomeandaccumulated in other recognised gainorlosswhichhasbeen cumulative The subsidiary’s or loss. inprofit is recognised interest, non-controlling and any subsidiary of the liabilities of anyretainedinterestand(ii)thepreviouscarryingamount value of theassetsand and thefair valueof theconsiderationreceived of thefair between (i)theaggregate When the Grouplosescontrolofasubsidiary,gainorlosscalculatedasdifference in Note2.9(a). is setout goodwill for policy Theaccounting purchase. gain onbargain as a or loss profit in is recognised the difference the subsidiary acquired, assets of the net value of than fair islower Ifthisconsideration assumed. andliabilities assetsacquired identifiable the net interests over fornon-controlling amount recognised and the consideration transferred Goodwillinitially is measuredatcost,beingtheexcessthe aggregate of the of loss. profit or through date acquisition the at value fair to remeasured is acquiree the in interest equity held previously acquirer’s the If thebusinesscombinationisachievedof the acquisition datefairvalue instages, acquiree. date. Thisincludes theseparationofembeddedderivatives by inhostcontracts the acquisition at the conditions as terms, economic circumstances and pertinent contractual in accordance with the classification and designation assumed for appropriate assetsandliabilities assesses thefinancial acquiresabusiness,it the Group When MFRS. with appropriate accordance in measured the where thecontingentconsiderationdoes notfallwithin scopeofMFRSis the 139,it withinbe re-measured. Subsequent settlement is accountedequity. In instances for not itwill asequity, isclassified consideration thecontingent income.If comprehensive accordance orlossMFRSwith orasachangetoother 139eitherinprofit in be recognised will whichis deemedtobeanassetorliability, consideration contingent valuethe changes Subsequent of date. acquisition the at fair the in value atfair be recognised will by theacquirer tobetransferred consideration Any contingent expenses. and includedinadministrative expensed costsincurredare assets. Transaction identifiable net the acquiree’s share of the non-controllinginterestsinacquireeeitheratfair or attheproportionate value acquiree. The Group elects on a transaction-by-transaction basis whetherto measure at acquisitiondatefair and theamountofanynon-controllinginterestsinvalue the measured consideration transferred, of the measured astheaggregate an acquisitionis of method. The cost using the acquisition for subsidiaries are accounted Acquisitions of Business combinations 41 (Incorporated in Malaysia) Perak Corporation Berhad 210915-U 2. 2.4 (contd.) policies accounting Summary ofsignificant Basis of consolidation (contd.) Basis ofconsolidation cost oninitialrecognitionoftheinvestment. investment retainedintheformer subsidiary atthedatecontrolislostregarded as the valuewheredirectly toretainedearnings.Thefair applicable,transferred ofany toprofitorloss inequityarereclassified comprehensive incomeandaccumulated in other recognised gainorlosswhichhasbeen cumulative The subsidiary’s or loss. inprofit is recognised interest, non-controlling and any subsidiary of the liabilities of anyretainedinterestand(ii)thepreviouscarryingamount value of theassetsand and thefair valueof theconsiderationreceived of thefair between (i)theaggregate When the Grouplosescontrolofasubsidiary,gainorlosscalculatedasdifference in Note2.9(a). is setout goodwill for policy Theaccounting purchase. gain onbargain as a or loss profit in is recognised the difference the subsidiary acquired, assets of the net value of than fair islower Ifthisconsideration assumed. andliabilities assetsacquired identifiable the net interests over fornon-controlling amount recognised and the consideration transferred Goodwillinitially is measuredatcost,beingtheexcessthe aggregate of the of loss. profit or through date acquisition the at value fair to remeasured is acquiree the in interest equity held previously acquirer’s the If thebusinesscombinationisachievedof the acquisition datefairvalue instages, acquiree. date. Thisincludes theseparationofembeddedderivatives by inhostcontracts the acquisition at the conditions as terms, economic circumstances and pertinent contractual in accordance with the classification and designation assumed for appropriate assetsandliabilities assesses thefinancial acquiresabusiness,it the Group When MFRS. with appropriate accordance in measured the where thecontingentconsiderationdoes notfallwithin scopeofMFRSis the 139,it withinbe re-measured. Subsequent settlement is accountedequity. In instances for not itwill asequity, is classified consideration thecontingent income.If comprehensive accordance orlossMFRSwith orasachangetoother 139eitherinprofit in be recognised will whichis deemedtobeanassetorliability, consideration contingent valuethe changes Subsequent date. of acquisition the at fair the in value atfair be recognised will by theacquirer tobetransferred consideration Any contingent expenses. and includedinadministrative expensed costsincurredare assets. Transaction identifiablenet the acquiree’s share of the non-controllinginterestsinacquireeeitheratfair or attheproportionate value acquiree. The Group elects on a transaction-by-transaction basis whetherto measure at acquisitiondatefair and theamountofanynon-controllinginterestsinvalue the measured consideration transferred, of the measured astheaggregate an acquisitionis of method. The cost using the acquisition for subsidiaries are accounted Acquisitions of Business combinations 41 41 page
DIRECTORS’ REPORT AND AUDITED FINANCIAL STATEMENTS 2017 PERAK CORPORATION BERHAD (210915-U) 42 page
DIRECTORS’ REPORT AND AUDITED FINANCIAL STATEMENTS 2017 PERAK CORPORATION BERHAD (210915-U) (Incorporated in Malaysia) Perak Corporation Berhad 210915-U 2. 2.7 2.6 2.5 (contd.) policies accounting Summary ofsignificant Associates interests non-controlling Transactions with Subsidiaries associate. the investeebecomesan thedateonwhich accountedfor from An associateisequity acquired. Group’s share of the associate’s profit the period in which the investment or is loss for amount oftheinvestmentincome inthedetermination andisinsteadincludedas of the liabilities ofthe investeeoverthecostofinvestment isexcludedfromthecarrying valueof the identifiable assets and Any excessthe Group’s share of the net fair of investment. amountofthe the carrying asgoodwillandincludedin recognised investee is of the liabilities and assets identifiable of the value fair net the of share Group’s the On acquisitionof costofinvestment aninvestmentinassociate,anyexcess ofthe over investee butisnotcontrolorjointover thosepolicies. the of decisions policy operating and financial in the participate to the power is influence Significant influence. hassignificant Group which the in isanentity An associate balance. a deficit having interests non-controlling inthe this results even if interests, non-controlling to allocated proportionately is income comprehensive total All equity. shareholder’s of financial separately parentequity withinin the statements position of from the Group, Groupand presented separatelyinthestatements of comprehensiveincomethe are interests Non-controlling by theGroup. orindirectly nothelddirectly subsidiaries net assetsin profit or lossand representtheportionof Non-controlling interests included in profit or loss. profit included in is investments,disposal proceedsandtheircarryingamounts between thedifference net losses.Ondisposalofsuch less anyaccumulatedimpairment at cost accounted for In the Company’s separate financial statements, investments in subsidiaries are Theability to use itspower over the investee to affect its returns. (iii) Exposure,returns from to variableitsinvestment orrights, the investee; with and (ii) Power overtheinvestee (suchasexisting rightsthat give itthecurrent ability to (i) overwhichfollowing: the Companyhas allthe A subsidiaryisanentity direct therelevant activities oftheinvestee); 42 (Incorporated in Malaysia) Perak Corporation Berhad 210915-U 2. 2.7 (contd.) policies accounting Summary ofsignificant (d) Associates (contd.) or loss. isincludedinprofit amounts carrying andtheir disposal proceeds between net difference the losses.Ondisposalofsuchinvestments, any accumulatedimpairment at costless In theCompany’s statements, separatefinancial investmentassociate isaccountedfor in increases. investment subsequently recognised totheextentan impairmentloss thattherecoverableamountof is withcarrying its amount. Any impairment loss is recognised in profit or loss. Reversal of costs tosell) value less fair in useand ofvalue(higher amount itsrecoverable comparing single asset,by with ofAssetsasa MFRSimpairment inaccordance 136 Impairment tested for the investmentassociate. When necessary, the entire amount carrying of is recognise additionalany impairment with loss investment net its to respect the in Instruments: Recognition andMeasurement todeterminewhethernecessary to itis After application equitymethod,theGroup ofthe applies MFRS139Financial line withthose of theGroup. policiesin bringtheaccounting Where necessary, adjustments are madeto the Group. as date reporting same the of as prepared are associates the of statements financial The transferred. oftheasset of animpairment providesevidence unless thetransaction eliminated are losses Unrealised associate. the in interests investors’ unrelated of extent Group anditsassociatearerecognisedintheGroup’sfinancialstatements only tothe upstream and downstream betweenProfits and losses resulting from transactions the associate. of the paymentsonbehalf obligationsormade constructive or incurred legal it has further losses, unless recognise does not associate, the Group in the exceeds its interest or equal an associate losses in of share the Group’s When acquisition. of the date after the associate other comprehensiveincomeof orlossand shareoftheprofit Group's the torecognise increased ordecreased amountis atcost,andthecarrying recognised is associate an in investment the recognition initial on method, equity the Under Associates 43 (Incorporated in Malaysia) Perak Corporation Berhad 210915-U 2. 2.7 (contd.) policies accounting Summary ofsignificant (d) Associates (contd.) or loss. isincludedinprofit amounts carrying andtheir disposal proceeds between net difference the losses.Ondisposalofsuchinvestments, any accumulatedimpairment at costless In theCompany’s statements, separatefinancial investmentassociate isaccountedfor in increases. investment subsequently recognised totheextentan impairmentloss thattherecoverableamountof is withcarrying its amount. Any impairment loss is recognised in profit or loss. Reversal of costs tosell) value less fair in useand ofvalue(higher amount itsrecoverable comparing single asset,by with ofAssetsasa MFRSimpairment inaccordance 136 Impairment tested for the investmentassociate. When necessary, the entire amount carrying of is recognise additionalany impairment with loss investment net its to respect the in Instruments: Recognition andMeasurement todeterminewhethernecessary to itis After application equitymethod,theGroup ofthe applies MFRS139Financial line withthose of theGroup. policiesin bringtheaccounting Where necessary, adjustments are madeto the Group. as date reporting same the of as prepared are associates the of statements financial The transferred. oftheasset of animpairment providesevidence unless thetransaction eliminated are losses Unrealised associate. the in interests investors’ unrelated of extent Group anditsassociatearerecognisedintheGroup’sfinancialstatements only tothe upstream and downstream betweenProfits and losses resulting from transactions the associate. of the paymentsonbehalf obligationsormade constructive or incurred legal it has further losses, unless recognise does not associate, the Group in the exceeds its interest or equal an associate losses in of share the Group’s When acquisition. of the date after the associate other comprehensiveincomeof orlossand shareoftheprofit Group's the torecognise increased ordecreased amountis atcost,andthecarrying recognised is associate an in investment the recognition initial on method, equity the Under Associates 43 43 page
DIRECTORS’ REPORT AND AUDITED FINANCIAL STATEMENTS 2017 PERAK CORPORATION BERHAD (210915-U) 44 page
DIRECTORS’ REPORT AND AUDITED FINANCIAL STATEMENTS 2017 PERAK CORPORATION BERHAD (210915-U) (Incorporated in Malaysia) Perak Corporation Berhad 210915-U 2. 2.8 (contd.) policies accounting Summary ofsignificant Investment in joint operations in joint Investment unrelated investors’ in interests thejointoperation. are recognisedintheGroup’sconsolidated statements financial only totheextentof operations transactions Profits andlossesresultingfrom between Groupanditsjoint the assets, liabilities,revenues and expenses. interest in jointoperations in accordancewith theMFRSs applicabletotheparticular The Groupaccountsfortheassets,liabilities,revenues andexpensesrelatingtoits jointly. ofanyexpensesincurred their shares including theirexpenses, (v) operations;and thesaleofoutputbyjoint theirsharesoftherevenuefrom (iv) the joint arising from shares of the output of their the sale their revenue from (iii) jointly; incurred of any liabilities their shares including their liabilities, (ii) jointly; held assets any of shares their including assets, their (i) in joint operations: The Group as in joint relation operator to recognise their interests parties sharing control. of the unanimous consent arrangement, which existsonlywhen decisionsabout the relevant activitiesrequire the control ofan agreed sharingof the contractually arrangement. Joint controlis obligations arrangement theliabilities,to theassets,and have rights for relating tothe A jointoperationisaarrangement thathavewherebyjoint controlofthe theparties operations; 44 (Incorporated in Malaysia) Perak Corporation Berhad 210915-U 2. 2.9 (contd.) policies accounting Summary ofsignificant (b) (a) Intangible assets Intellectual property ("IP") rights Goodwill useful lives3 to3.5years. useful of the pointatwhich assetisavailable the for use, onastraight-line basis overits are amortised from amortisation and accumulated impairment losses. The IP rights cost less accumulated at acquired licenses, are stated include Acquired IP rights retained. unit cash-generating the of portion the and of disposed operations values fair relative the on based measured the of is circumstance this in of disposed Goodwill operation. the of disposal on loss or gain the whendetermining operation the of amount carrying the in included is of disposed that cash-generating the goodwillunit isdisposedof, associated with theoperation operationwithin part ofthe cash-generating unit and partofa forms Where goodwill periods. reversed in subsequent forgoodwillarenot losses recognised carrying amount,animpairmentlossisinprofit or loss.Impairment the recognised the cash-generating unit islessthan the recoverableamountof unit. Where amountofthecash-generating the recoverable goodwill, with allocated including the unit, the carrying amountofthecash-generating unit maybeimpaired,bycomparing thecash-generating there isanindicationthat annuallyandwheneverimpairment The cash-generating unit towhichgoodwillhasbeenallocated istestedfor combination. the of thesynergies from benefit cash-generating acquisition date,toeachoftheGroup's units thatareexpectedto the from allocated, is acquired goodwill testing, impairment of purposes the For impairmentlosses. less anyaccumulated measured atcost goodwillis recognition, Followinginitial atcost. measured Goodwill isinitially 45 (Incorporated in Malaysia) Perak Corporation Berhad 210915-U 2. 2.9 (contd.) policies accounting Summary ofsignificant (b) (a) Intangible assets Goodwill Intellectual property ("IP") rights useful lives3 to3.5years. useful of the pointatwhich assetisavailable the for use, onastraight-line basis overits are amortised from amortisation and accumulated impairment losses. The IP rights cost less accumulated at acquired licenses, are stated include Acquired IP rights retained. unit cash-generating the of portion the and of disposed operations values fair relative the on based measured the of is circumstance this in of disposed Goodwill operation. the of disposal on loss or gain the whendetermining operation the of amount carrying the in included is of disposed that cash-generating the goodwillunit isdisposedof, associated with theoperation operationwithin part ofthe cash-generating unit and partofa forms Where goodwill periods. reversed in subsequent forgoodwillarenot losses recognised carrying amount,animpairmentlossisinprofit or loss.Impairment the recognised the cash-generating unit islessthan the recoverableamountof unit. Where amountofthe cash-generating the recoverable goodwill, with allocated including the unit, the carrying amountofthecash-generating unit maybeimpaired,bycomparing thecash-generating there isanindicationthat annuallyandwheneverimpairment The cash-generating unit towhichgoodwillhasbeenallocated istestedfor combination. the of thesynergies from benefit cash-generating acquisition date,toeachoftheGroup's units thatareexpectedto the from allocated, is acquired goodwill testing, impairment of purposes the For impairmentlosses. less anyaccumulated measured atcost goodwillis recognition, Followinginitial atcost. measured Goodwill isinitially 45 45 page
DIRECTORS’ REPORT AND AUDITED FINANCIAL STATEMENTS 2017 PERAK CORPORATION BERHAD (210915-U) 46 page
DIRECTORS’ REPORT AND AUDITED FINANCIAL STATEMENTS 2017 PERAK CORPORATION BERHAD (210915-U) (Incorporated in Malaysia) Perak Corporation Berhad 210915-U 2. 2.10 (contd.) policies accounting Summary ofsignificant Property, plant and equipment anddepreciation Property, plantandequipment Other assets Attractions improvements and Buildings annual rates: the costofeachassettoitsresidualvalue useful overitsestimated life, atthefollowing of other property, plant and equipment is basis provided on for a straight-line to write off Depreciation depreciated. is not therefore life and unlimited useful has an Freehold land any accumulatedimpairmentlosses. accumulated depreciationand less Subsequent torecognition,property,plantandequipmentarestatedatcost reliably. be measured item can of the cost and the probable thatfuture economic benefits associated withflow to theGroup theitemwill item ofproperty,plantandequipment itis is recognised as anassetif,andonly plantAll items of property, and equipmentare initially at cost. Thecost of an recorded derecognised. derecognition of theassetisincluded orlossintheyearassetis inprofit loss on Any gain or its use or disposal. economic benefits are expected from future upon derecognised is equipment and no plant when or property, of item An disposal prospectively, adjusted and year-end, appropriate. if at each financial are reviewed life and depreciation method useful The residual values, recoverable. eventschanges incircumstances or indicate thatthecarrying valuemay notbe of property,plantandequipment for impairment whenThe carryingvaluesare reviewed use. for available assetsarenotyet arenotdepreciatedasthese in progress workAssets undercapital Equipment, furniture and fittings and furniture Equipment, Refurbishment and renovations and Refurbishment Motor vehicles Computers 46 10% 10% 2% - 2% 25% 10% - 20% 33.33% 5% - (Incorporated in Malaysia) Perak Corporation Berhad 210915-U 2. 2.12 2.11 (contd.) policies accounting Summary ofsignificant Investment properties Port facilities value over its estimated useful life. The principal annual depreciation rate is 2%. is rate depreciation annual principal The life. useful estimated its over value to its residual each buildings the cost of basis to write down on straight-line depreciated Buildingsare depreciated. is not therefore lifeand unlimited useful has an Freehold land change in use. 2.10 up to the date of accordance withthe accountingpolicyfor property, plantandequipmentsetoutinNote owner-occupied property to investmentproperty,thepropertyisin accountedfor from transfer For a inuse. change the dateof valueat fair isthe accounting subsequent investment from propertytoowner-occupied thedeemedcostfor For atransfer property, investment inTransfers are made toorfrom propertyonlywhenthereisachange use. retirement or disposal.an investment is recognised in profit or loss in the year of property ordisposalof on theretirement itsdisposal.Anygainsorlosses isexpectedfrom benefit the investmentpropertyispermanentlywithdrawnfuture from economic use andno Investment propertiesarederecognisedwhenbeen disposedoforwhen either theyhave value. fair at carried is property investment an as classified lease capital appreciationorboth.Anysuchproperty rentals orfor interest underanoperating investment on property a property-by-property basis whenthe Group holds it to earn as an andaccountedfor leaseisclassified under anoperating interest A property recognised in profit or lossinthe year inwhich theyarise. are investment properties values of changes in the fair arising from Gains or losses any accumulatedimpairmentlosses. accumulated depreciationand costs. Subsequent to initialrecognition,investment propertyisstatedatcost less transaction including cost, at measured initially is property Such both. for or appreciation Investment property is which a property income or for capital is held either to earn rental use. for available assetsarenotyet arenotdepreciatedasthese in progress workAssets undercapital Port equipments Port structure land Leasehold port are: ofdepreciation annual rates The principal lives. useful overtheirestimated the assets thecostof off basis to write interest costcapitalised in accordancewith Note2.20areamortisedonastraight-line inclusiveof facilities development ofport associatedwith incurred, All expenditure impairment losses. andanyaccumulated atcostlessaccumulateddepreciation are stated Port facilities vr1 20 years over 10 – over 50years over 99years 47 (Incorporated in Malaysia) Perak Corporation Berhad 210915-U 2. 2.11 (contd.) policies accounting Summary ofsignificant 2.12 Investment properties Port facilities Leasehold port land Leasehold port are: ofdepreciation annual rates The principal lives. useful overtheirestimated the assets thecostof off basis towrite interest costcapitalised in accordancewith Note2.20areamortisedonastraight-line inclusiveof facilities development ofport associatedwith incurred, All expenditure impairment losses. andanyaccumulated atcostlessaccumulateddepreciation are stated Port facilities value over its estimated useful life. The principal annual depreciation rate is 2%. is rate depreciation annual principal The life. useful estimated its over value to its residual each buildings the cost of basis to write down on straight-line depreciated Buildings are depreciated. is not therefore lifeand unlimited useful has an Freehold land change in use. 2.10 up to the date of accordance withthe accountingpolicyfor property, plantandequipmentsetoutinNote owner-occupied property to investmentproperty,thepropertyisin accountedfor from transfer For a inuse. change the dateof valueat fair isthe accounting subsequent investment from propertytoowner-occupied thedeemedcostfor For atransfer property, investment inTransfers are made toorfrom propertyonlywhenthereisachange use. retirement or disposal.an investment is recognised in profit or loss in the year of property ordisposalof on theretirement itsdisposal.Anygainsorlosses isexpectedfrom benefit the investmentpropertyispermanentlywithdrawnfuture from economic use andno Investment propertiesarederecognisedwhenbeen disposedoforwhen either theyhave value. fair at carried is property investment an as classified lease capital appreciationorboth.Anysuchproperty rentals orfor interest underanoperating investment on property a property-by-property basis whenthe Group holds it to earn as an andaccounted for leaseisclassified under anoperating interest A property recognised in profit or lossinthe year inwhich theyarise. are investment properties values of changes in the fair arising from Gains or losses any accumulatedimpairmentlosses. accumulated depreciationand costs. Subsequent to initialrecognition,investment propertyisstatedatcost less transaction including cost, at measured initially is property Such both. for or appreciation Investment property is which a property income or for capital is held either to earn rental use. for available assetsarenotyet arenotdepreciatedasthese in progress workAssets undercapital Port equipments Port structure vr1 20 years over 10 – over 50years over 99years 47 47 page
DIRECTORS’ REPORT AND AUDITED FINANCIAL STATEMENTS 2017 PERAK CORPORATION BERHAD (210915-U) 48 page
DIRECTORS’ REPORT AND AUDITED FINANCIAL STATEMENTS 2017 PERAK CORPORATION BERHAD (210915-U) (Incorporated in Malaysia) Perak Corporation Berhad 210915-U 2. 2.13 (contd.) policies accounting Summary ofsignificant (ii) (i) Inventories Property developmentcosts property developmentLand heldfor operating cycle. operating demonstrated that thedevelopment activitiescanbecompleted normal within the the pointwhen developmentactivities havecommencedand where itcanbe development asat property costs propertydevelopment isreclassified Land heldfor impairmentlosses. atcostless anyaccumulated and isstated asnon-current classified Such landis operatingcycle. withinthe normal completed have beencarried out orwheredevelopment activities arenotexpected tobe no developmentactivities development oflandwhere property consists Land heldfor within other current liabilities. other current within billings classified asprogress inor lossis recognised profit purchasers overrevenue to other current assets and theexcessofbillings withinclassified asaccruedbillings is over billingstopurchasers or loss inprofit The excessofrevenuerecognised asset, whichmeasured at the lower is and net realisable ofcost value. asan asanexpensearerecognised Property developmentcostsnotrecognised as an expense immediately. period, is recognised liability defects Any expected lossonadevelopment project, including coststobeincurredover the which theyareincurred. in the period as an expense in sold are recognised on properties development costs development probable is that incurred costs recoverable,be will property and property development revenue only isrecognised totheextentof property estimated, be reliably cannot development activity outcomeofa Where the financial to theestimatedtotalproperty development costs. bear to date development forworkperformed proportion thatproperty costsincurred determined bythe ofcompletionmethod.Thestage is using thestage property developmentin profitorlossby revenueandexpensesarerecognised When the financial outcome ofadevelopment activitycanbereliablyestimated, activities. development activities can orthat be allocatedonareasonable basis tosuch Property development costscompriseall thatare costs directlyattributableto 48 (Incorporated in Malaysia) Perak Corporation Berhad 210915-U 2. 2.14 2.13 (contd.) policies accounting Summary ofsignificant Impairment ofnon-financial assets (iv) (iii) (contd.) Inventories to those units or groups of units. groups unitsor to those areassigned Group of the liabilities assets or other ofwhether irrespective combination, the synergiesexpected benefit of from the of CGUs, that are to Group's CGUs, or groups the acquisition acquired in a business combination is, from date, allocated to each of the Goodwill the assetbelongsto. determined forthecash-generating unit ("CGU")towhich case, recoverable isthe amountis other assets.Ifthis largely independentofthosefrom cash flows that are asset basis unless the asset does not generate on an individual determined is amount recoverable assets, of these testing of impairment For the purpose identified. are impairment of indicators when frequently For goodwill, recoverable ateachreporting the amountisestimated date ormore of impairment loss. recoverable amount is estimated to determine the amount whether indication isany there impairment. of indication such any If exists, asset's the inventories anddeferred tax assets,arereviewedat eachreporting date todetermine properties, investment assets,otherthan non-financial amountsof The carrying Other inventories properties Completed attributable todevelopingthe propertiestocompletionand borrowing costs. ofcommoncost proportions andappropriate direct cost ofland, the acquisition in expenditures incurred includes properties costofcompleted value. The realisable net and cost of held lower the at properties measured are Completed sale for the sale. make costsnecessaryto andtheestimated costsofcompletion less theestimated course ofbusiness, intheordinary sellingprice estimated value isthe Net realisable and condition. location their existing themto and bringing inventories theother acquiring incurred in includes expenditure calculated usingcost ofotherinventories theweightedaverage methodand is Other inventories aremeasuredatthelowerand net realisable ofcost value. The 49 (Incorporated in Malaysia) Perak Corporation Berhad 210915-U 2. 2.14 2.13 (contd.) policies accounting Summary ofsignificant Impairment ofnon-financial assets (iv) (iii) (contd.) Inventories to those units or groups of units. groups unitsor to those areassigned Group of the liabilities assets or other ofwhether irrespective combination, the synergiesexpected benefit from of the of CGUs, that are to Group's CGUs, or groups the acquisition acquired in a business combination is, from date, allocated to each of the Goodwill the asset belongsto. determined forthecash-generating unit ("CGU")towhich case, recoverable isthe amountis other assets.Ifthis largely independentofthosefrom cash flows that are asset basis unless the asset does not generate on an individual determined is amount recoverable assets, of these testing of impairment For the purpose identified. are impairment of indicators when frequently For goodwill, recoverable ateachreporting the amountisestimated date ormore of impairment loss. recoverable amount is estimated to determine the amount whether indication any is there impairment. of indication such any If exists, asset's the inventories anddeferred tax assets,arereviewedat eachreporting date todetermine properties, investment assets,otherthan non-financial amountsof The carrying Other inventories properties Completed attributable todevelopingthe propertiestocompletionand borrowing costs. ofcommoncost proportions andappropriate direct cost ofland, the acquisition in expenditures incurred includes properties costofcompleted value. The realisable net and cost of held lower the at properties measured are Completed sale for the sale. make costsnecessaryto andtheestimated costsofcompletion less theestimated course ofbusiness, intheordinary sellingprice estimated value isthe Net realisable and condition. location their existing themto and bringing inventories theother acquiring incurred in includes expenditure calculated usingcost ofotherinventories theweightedaverage methodand is Other inventories aremeasuredatthelowerand net realisable ofcost value. The 49 49 page
DIRECTORS’ REPORT AND AUDITED FINANCIAL STATEMENTS 2017 PERAK CORPORATION BERHAD (210915-U) 50 page
DIRECTORS’ REPORT AND AUDITED FINANCIAL STATEMENTS 2017 PERAK CORPORATION BERHAD (210915-U) (Incorporated in Malaysia) Perak Corporation Berhad 210915-U 2. 2.15 2.14 (contd.) policies accounting Summary ofsignificant Financial assets (contd.) assets non-financial of Impairment assets. financial and available-for-sale investments held-to-maturity receivables, loans and orloss, profit through valuefair at assets financial include categories andthe recognition, initial at assets financial of their classification the determine Company and the Group The costs. transaction value assets notin the caseoffinancial through profit or loss, at fair directly attributable value,plus, atfair measured they are initially, recognised assetsare the financial When instrument. financial when, the Group and the Company become a party to the contractual provisions of the when, andonly offinancial position inthestatements recognised are Financial assets increase. Impairment loss on goodwill is not reversed in a subsequent period. a subsequent reversed in goodwill isnot losson increase. Impairment measured at revalued amount, in which case the reversal is treated as a revaluation orlossunless the assetis Such reversal is recognised in profit recognised previously. depreciation, of net determined, been been would loss that impairment no had have amount Thatincreasecannotexceedthecarrying recoverable amount. increased toits impairment loss isthecase, carryingamountoftheassetis wasrecognised. If that since thelast theasset’srecoverableamount usedtodetermine the estimates in change hasbeena onlyifthere impairmentlossisreversed recognised A previously have may or decreased. exist longer no may losses impairment recognised previously that indication any is there any previous revaluation. Anassessment is madeat each reportingdate asto whether income uptotheamountof the impairmentisalsorecognised in othercomprehensive revalued where the revaluation was to taken other comprehensive income. In this case assetsthatare previously for orloss except inprofit lossesrecognised Impairment are basis. ofunitsonapro-rata otherassetsintheunitorgroups reduce thecarryingamountof carrying amountofanygoodwill ofunitsandthen,to allocatedtothoseunitsorgroups toreducethe or groups of CGUsareallocatedfirst recognised inrespectofaCGU considered impaired andiswrittenrecoverable down amount. Impairment toits losses asset exceeds asset is Where amount, the its recoverable the carrying amount ofan totheasset. risks specific andthe value ofmoney assessmentsofthetime market discountusing apre-tax ratethatreflects current discounted totheirpresentvalue to sellanditsvalue assessing inuse.In valuein use,theestimated future cash flowsare An asset's recoverable amount is the higher of an asset's or CGU's fair value less costs 50 (Incorporated in Malaysia) Perak Corporation Berhad 210915-U 2. 2.15 (contd.) policies accounting Summary ofsignificant (iii) (ii) (i) Financial assets (contd.) Held-to-maturity investments Loans andreceivables Financial assetsat fairvalue through profit orloss maturity within 12 months after thereporting maturity within12 months after date whichare classifiedascurrent. thosehavingHeld-to-maturity investmentsfor as non-current,except areclassified process. amortisation the and through investmentsor loss whentheheld-to-maturity arederecognised in profit or impaired, recognised losses are interestmethod.Gainsand costusingtheeffective amortised Subsequent toinitialrecognition,held-to-maturity investments measuredat are investment tomaturity. as held-to-maturity when the Group has the intention and ability to hold the classified are maturity fixed and payments determinable or fixed with assets Financial current. are classifiedasnon- afterthereportingdatewhichdates laterthan12months Loans andreceivables areclassifiedascurrent,exceptthose havingmaturity for process. amortisation loss whenorimpaired, the loansand receivablesand through the arederecognised or in profit are recognised and losses interest method. Gains effective cost using the atamortised aremeasured loansandreceivables toinitialrecognition, Subsequent receivables. asloans are and classified market Financial assets with or determinable payments fixed that are not quoted in an active settlementdate. based ascurrentornon-current onthe purposes arepresented fortrading presented ascurrentwhereasassets thatarenotheldprimarily financial non-current. Financialprimarily for trading purposes are assets that are held value profitorlosscouldbepresentedascurrent fair Financial through assetsat other lossesorincome. of value profitor loss are separately in recognised profit or lossas part fair through assetsat income onfinancial dividendinterest and income. Exchangedifferences, not includeexchangedifferences, interest anddividend through profitorlossdo value at fair assets financial losses on or net gains or loss. Net in profit recognised valuevalue.gains or losses arising from are measured at changes fair in fair are Any loss or profit through value fair at assets financial recognition, initial to Subsequent term. near the in selling of purpose the for principally acquired assets financial arederivativesassets heldfortrading (includingseparatedembeddedderivatives)or Financial initial recognition. assuchupon designated tradingorare heldfor they are if or loss profit valuethrough atfair assets asfinancial classified are Financial assets 51 (Incorporated in Malaysia) Perak Corporation Berhad 210915-U 2. 2.15 (contd.) policies accounting Summary ofsignificant (iii) (ii) (i) Financial assets (contd.) Financial assetsat fairvalue through profit orloss Held-to-maturity investments Loans andreceivables maturity within 12 months after thereporting maturity within12 months after date whichare classifiedascurrent. thosehavingHeld-to-maturity investmentsfor as non-current,except areclassified process. amortisation the and through investmentsor loss whentheheld-to-maturity arederecognised in profit or impaired, recognised losses are interest method.Gainsand costusingtheeffective amortised Subsequent toinitialrecognition,held-to-maturity investments measuredat are investment tomaturity. as held-to-maturity when the Group has the intention and ability to hold the classified are maturity fixed and payments determinable or fixed with assets Financial current. are classifiedasnon- afterthereportingdatewhichdates laterthan12months Loans andreceivables areclassifiedascurrent,exceptthose havingmaturity for process. amortisation loss whenorimpaired, the loansand receivablesand through the arederecognised or in profit are recognised and losses interest method. Gains effective cost using the atamortised aremeasured loansandreceivables toinitialrecognition, Subsequent receivables. asloans are and classified market Financial assets with or determinable payments fixed that are not quoted in an active settlementdate. based ascurrentornon-current onthe purposes arepresented fortrading presented ascurrentwhereasassets thatarenotheldprimarily financial non-current. Financialprimarily for trading purposes are assets that are held value profitorlosscouldbepresentedascurrent fair Financial through assetsat other lossesorincome. of value profitor loss are separately in recognised profit or lossas part fair through assetsat income onfinancial dividendinterest and income. Exchangedifferences, not includeexchangedifferences, interest anddividend through profitorlossdo value at fair assets financial losses on or net gains or loss. Net in profit recognised valuevalue.gains or losses arising from are measured at changes fair in fair are Any loss or profit through value fair at assets financial recognition, initial to Subsequent term. near the in selling of purpose the for principally acquired assets financial arederivativesassets heldfortrading (includingseparatedembeddedderivatives)or Financial initial recognition. assuchupon designated tradingorare heldfor they are if or loss profit valuethrough atfair assets asfinancial classified are Financial assets 51 51 page
DIRECTORS’ REPORT AND AUDITED FINANCIAL STATEMENTS 2017 PERAK CORPORATION BERHAD (210915-U) 52 page
DIRECTORS’ REPORT AND AUDITED FINANCIAL STATEMENTS 2017 PERAK CORPORATION BERHAD (210915-U) (Incorporated in Malaysia) Perak Corporation Berhad 210915-U 2. 2.15 (contd.) policies accounting Summary ofsignificant (iv) Financial assets (contd.) Company committopurchase or selltheasset. recognised orderecognised datethattheGroup and the on thetradedatei.e., assetsare financial purchases andsalesof wayconcerned. Allregular the marketplace in convention or regulation by established generally period the within assets of delivery assets thatrequire financial sales arepurchasesorof Regular waypurchasesor or loss. in profit recognised income is in other comprehensive recognised had been gain or loss that any cumulative received the sumofconsideration and difference between thecarryingamountand the assethasexpired. Onthederecognitionofafinancial asset initsentirety,the from when right to receive cash flows A financial asset isderecognised the contractual Available-for-sale financialassets expected berealised within 12monthsafterthereporting to date. are unless assets are classified as non-current they financial Available-for-sale impairment losses. less anyaccumulated measured atcost Investments inequityinstrumentswhosefair cannot bereliablymeasuredare value established. recognised inor losswhentheCompany's profit righttoreceivepaymentis are instrument equity available-for-sale an on Dividends loss. or profit in recognised interest method is effective derecognised. Interest income calculated using the assetis whenthe financial reclassification adjustment as a or loss profit to equity from reclassified is income comprehensive other in recognised previously orloss gain The cumulative orloss. inprofit recognised methodare interest the effective andinterestcalculatedusing monetary instruments gains andlosseson in othercomprehensiveincome,exceptthat impairmentlosses,foreign exchange recognised assets are valueof thefinancial changesinfair from Any gainsorlosses value. fair at are measured assets financial available-for-sale recognition, initial After categories. preceding the three in anyof not classified saleorare available for as designated are that assets financial are assets financial Available-for-sale 52 (Incorporated in Malaysia) Perak Corporation Berhad 210915-U 2. 2.16 (contd.) policies accounting Summary ofsignificant (ii) (i) Impairment offinancialassets objective evidence that a financial asset is impaired. is asset afinancial that evidence objective The GroupandtheCompanyassessateachreportingdatewhetherthere isany Unquoted equity securities carried atcost carried Unquoted equitysecurities cost Trade and other receivables and other financial assets carried at amortised Such impairment losses are not reversed in subsequent periods. not reversed in Such impairment losses are asset. asimilarfinancial rateofreturnfor currentmarket flows discountedatthe futurecash between asset'scarryingamountandthepresentvalueofestimated the measured asthedifference the lossis theamountof cost hasbeenincurred, at assetscarried on financial loss animpairment evidencethat isobjective If there or loss. in profit is recognised amount of reversal date. The cost atthe carrying amount of the asset does not exceed its amortised the reversal recognised, thepreviously impairment recognised lossisreversedtotheextent that after was impairment the occurring event an to objectively related be can decrease subsequent period,decreases and the the amount of the impairment loss If in a account. allowance the against off written is it uncollectible, becomes receivable allowance account. When a trade the useofan amount isreducedthrough the carrying receivables, where of trade assets withthe exception financial for all directly loss the impairment reduced by asset is the financial amountof The carrying orloss. inprofit is recognised loss The impairment interestrate. effective asset’soriginal the financial cashflowsdiscounted at future difference between asset’scarryingamountandthepresentvalueofestimated the amountIf anysuchevidence ofimpairmentlossismeasuredasthe exists,the on receivables. default with thatcorrelate economic conditions orlocal innational observable changes and period credit average portfolio the the in past payments delayed of number the in and increase payments, of collecting past experience the Company's Group’s and includethe ofreceivablescould aportfolio for impairment evidenceof Objective on similarriskcharacteristics. based basis acollective on impairment for assessed subsequently are individually beimpaired areassessednotto receivables,assetsthat assets, suchastrade offinancial categories certain payments. For delayin orsignificant and default ofthedebtor financialdifficulties or significant of insolvency probability such asthe consider factors the Company and the Group assets has been incurred, financial To determinewhether thereisobjectiveevidence thatanimpairmentlosson 53 (Incorporated in Malaysia) Perak Corporation Berhad 210915-U 2. 2.16 (contd.) policies accounting Summary ofsignificant (ii) (i) Impairment offinancialassets objective evidence that a financial asset is impaired. is asset afinancial that evidence objective The GroupandtheCompanyassessateachreportingdatewhetherthere isany cost Trade and other receivables and other financial assets carried at amortised Unquoted equity securities carried atcost carried Unquoted equitysecurities Such impairment losses are not reversed in subsequent periods. not reversed in Such impairment losses are asset. asimilarfinancial rateofreturnfor currentmarket flows discountedatthe futurecash between asset'scarryingamountandthepresentvalueofestimated the measured asthedifference the lossis theamountof cost hasbeenincurred, at assetscarried on financial loss animpairment evidencethat isobjective If there or loss. in profit is recognised amount of reversal date. The cost atthe carrying amount of the asset does not exceed its amortised the reversal recognised, thepreviously impairment recognised lossisreversedtotheextent that after was impairment the occurring event an to objectively related be can decrease subsequent period,decreases and the the amount of the impairment loss If in a account. allowance the against off written is it uncollectible, becomes receivable allowance account. When a trade the useofan amount isreducedthrough the carrying receivables, where of trade assets withthe exception financial for all directly loss the impairment reduced by asset is the financial amountof The carrying orloss. inprofit is recognised loss The impairment interestrate. effective asset’soriginal the financial cashflowsdiscounted at future difference between asset’scarryingamountandthepresentvalueofestimated the amountIf anysuchevidence ofimpairmentlossismeasuredasthe exists,the on receivables. default with thatcorrelate economic conditions orlocal innational observable changes and period credit average portfolio the the in past payments delayed of number the in and increase payments, of collecting past experience the Company's Group’s and includethe ofreceivablescould aportfolio for impairment evidenceof Objective on similarriskcharacteristics. based basis collective a on impairment for assessed subsequently are individually beimpaired areassessednotto receivables,assetsthat assets, suchastrade offinancial categories certain payments. For delayin orsignificant and default ofthedebtor financialdifficulties or significant of insolvency probability such asthe consider factors the Company and the Group assets has been incurred, financial To determinewhether thereisobjectiveevidence thatanimpairmentlosson 53 53 page
DIRECTORS’ REPORT AND AUDITED FINANCIAL STATEMENTS 2017 PERAK CORPORATION BERHAD (210915-U) 54 page
DIRECTORS’ REPORT AND AUDITED FINANCIAL STATEMENTS 2017 PERAK CORPORATION BERHAD (210915-U) (Incorporated in Malaysia) Perak Corporation Berhad 210915-U 2. 2.19 2.18 2.17 (contd.) policies accounting Summary ofsignificant (i) Financial liabilities Provisions Cash andcashequivalents either financial liabilities at fair value through profit or loss or other financial liabilities. financial other or loss profit through value at fair liabilities financial either as are classified Financial liabilities instrument. financial provisionsofthe the contractual financial position when, and only when, the Group and the Company become a party to of in the statements MFRS139, are recognised the scope of within Financial liabilities, liability. financial a of definitions the and into entered arrangements contractual ofthe thesubstance accordingto are classified Financial liabilities cost. asafinance oftimeisrecognised to thepassage the provisiondue in increase used, the is discounting liability. When tothe specific risks the appropriate, provisionsis material, arediscountedusingacurrentpretaxratethatreflects, where of money of thetimevalueto settletheobligation,provisionreversed. Iftheeffect is required willbe ofeconomicresources anoutflow probable that no longer Ifitis estimate. Provisionsthe currentbest at eachreportingdateandadjustedtoreflect arereviewed reliably. estimated canbe obligation the amountof andthe theobligation tosettle be required will economic resources (legal orconstructive) as aresultofpastevent,it isprobablethat an outflow of Provisions and Group recognised are when have Company the the obligation a present and deposits. pledged bankbalances and bank overdrafts netof equivalents arepresented and cash flows, cash of cash statements purpose ofthe For the managementoftheirshorttermcommitments. in the Group and the Company are used by the original maturities of three months or less, and value in with fair risk of changes have an insignificant which investments and highly liquid deposits withCash andcashequivalentsconsistofonhand,balances banks Financial liabilities atfair value through profit orloss value through profit or loss. profit through value fair liabilities asat anyfinancial Companyhavenotdesignated The Groupandthe on derivatives includeexchangedifferences. orlosses inor loss.Netgains profit gainsorlossesrecognised withany resultant atfair value, stated subsequently at fair value and measured are initially liabilities and theCompanythatdonotmeethedgeaccounting criteria.Derivative intobytheGroup entered tradingincludederivatives held for Financial liabilities orloss. through profit value asatfair recognition uponinitial designated liabilities financial tradingand for held liabilities or loss include financial profit through value at fair Financial liabilities 54 (Incorporated in Malaysia) Perak Corporation Berhad 210915-U 2. 2.20 2.19 (contd.) policies accounting Summary ofsignificant Borrowing costs Borrowing (ii) Financial liabilities (contd.) recognised in profit or loss. in profit recognised amounts is carrying intherespective difference and the ofanew liability, the recognition and liability original the of derecognition a as is treated modification or exchange an such modified, are substantially existing liability ofan terms,ortheterms different substantially on lender same the from another by replaced is liability financial existing an When extinguished. liabilityis when theobligationunder is derecognised liability A financial incurred. are in which they or loss in the period in profit are recognised costs All other borrowing capitalisation. for costseligible theborrowing from isdeducted assets on qualifying expenditure investment of specific borrowings pending their income earned on the temporary time astheassetsaresubstantially readyfortheirintended useorsale.Investment of thoseassets,untilsuch their intendeduseorsale,areaddedtothecost get readyfor to periodoftime a substantial take are assetsthatnecessarily assets,whichqualifying Borrowing costs directly attributable to the acquisition, construction or production of Other financial liabilities the liabilities are derecognised, and through the amortisation process. theamortisation andthrough are derecognised, the liabilities when or loss in profit recognised losses are gains and liabilities, financial For other reporting date. months afterthe defer settlementoftheliabilityunconditionalfor at least12 rightto hasan unlesstheGroup classified as current method. Borrowings are interest cost using the effective amortised subsequently measured at incurred, and costs transaction net of value, initiallyatfair recognised borrowings are Loans and interest method. the effective costusing atamortised measured transactioncostsandsubsequently attributable directly plus value fair at initially recognised are payables other and Trade payablesother borrowings. and loans and payables, trade include liabilities financial other Company's the and Group's The 55 (Incorporated in Malaysia) Perak Corporation Berhad 210915-U 2. 2.20 2.19 (contd.) policies accounting Summary ofsignificant Borrowing costs Borrowing (ii) Financial liabilities (contd.) incurred. are in which they or loss in the period in profit are recognised costs All other borrowing capitalisation. for costseligible theborrowing from isdeducted assets on qualifying expenditure investment of specific borrowings pending their income earned on the temporary time astheassetsaresubstantially readyfortheirintended useorsale.Investment of thoseassets,untilsuch their intendeduseorsale,areaddedtothecost get readyfor to periodoftime a substantial take are assetsthatnecessarily assets,whichqualifying Borrowing costs directly attributable to the acquisition, construction or production of or loss. in profit recognised amounts is carrying intherespective difference and the ofanew liability, the recognition and liability original the of derecognition a as is treated modification or exchange an such modified, are substantially existing liability ofan terms,ortheterms different substantially on lender same the from another by replaced is liability financial existing an When extinguished. liabilityis when theobligationunder is derecognised liability A financial Other financial liabilities the liabilities are derecognised, and through the amortisation process. theamortisation andthrough are derecognised, the liabilities when or loss in profit recognised losses are gains and liabilities, financial For other reporting date. months afterthe defer settlementoftheliabilityunconditionalfor at least12 rightto hasan unlesstheGroup classified as current method. Borrowings are interest cost using the effective amortised subsequently measured at incurred, and costs transaction net of value, initiallyatfair recognised borrowings are Loans and interest method. the effective costusing atamortised measured transactioncostsandsubsequently attributable directly plus value fair at initially recognised are payables other and Trade payablesother borrowings. and loans and payables, trade include liabilities financial other Company's the and Group's The 55 55 page
DIRECTORS’ REPORT AND AUDITED FINANCIAL STATEMENTS 2017 PERAK CORPORATION BERHAD (210915-U) 56 page
DIRECTORS’ REPORT AND AUDITED FINANCIAL STATEMENTS 2017 PERAK CORPORATION BERHAD (210915-U) (Incorporated in Malaysia) Perak Corporation Berhad 210915-U 2. 2.22 2.21 (contd.) policies accounting Summary ofsignificant (iii) (ii) (i) Employee benefits Bai Bithaman Ajil IslamicDebt Securities ("BaIDS") respectively. series rate of each constant profit cost, at a as finance or loss in profit recognised initial recognition, the profit element attributable to theBaIDSineachperiodare After received. consideration the value of fair being cost, at recognised initially are BaIDS Ajil. Bithaman financeconceptofBai in accordancewiththeIslamic The BaIDSarebondsissued Termination benefits Termination plans Defined contribution Short termbenefits withdrawal. of possibility andwithoutrealistic the termination plan for formal detailed a as benefits expense an and liability Group when Company the and the have a termination recognise Company the and The Group benefits. these for exchange date retirement normal whenever or employeean in redundancy voluntary accepts employment isbefore the whenTermination benefits are payable terminated recognised as an expense in profit or lossasincurred. recognised as anexpenseinprofit pension scheme,theEmployees ProvidentFund("EPF"). Such contributionsare As requiredbylaw,the GroupandCompanymake contributions tothe statutory recognised the absences occur. when sick leaveare compensatedabsences suchas short termnon-accumulating compensated absences, and increasetheir entitlementtofuture employees that such aspaidannualleaveare recognised by when services arerendered accumulatingcompensated andtheCompany.Shortterm absences the Group expense in the year in which the associated services are rendered by employees of asan contributions arerecognised social security Wages, salaries, bonusesand 56 (Incorporated in Malaysia) Perak Corporation Berhad 210915-U 2. 2.24 2.23 (contd.) policies accounting Summary ofsignificant (i) Revenue andotherincomerecognition (ii) (i) Leases the fair value of consideration received or receivable. receivedor consideration value of the fair and other income can be reliably measured. Revenue and other income are measured at economic benefits associated withthe transaction will totheGroup and therevenue flow Revenue andotherincomearerecognisedtotheextentthat theyareprobable the Dividend income As lessor As lessee accounting policy for rental income is set out in Note 2.24(v). Note in out set is income rental for policy accounting asset andrecognisedover leasetermonthesamebasesasrentalincome.The the leased to thecarryingamountof negotiating anoperatingleaseareadded in costincurred Initial direct asoperatingleases. asset areclassified of the andrewardsofownership retainssubstantiallyalltherisks theGroup Leases where basis. a straight-line by thelessorisrecognisedasareduction of rentalexpense on overtheleaseterm benefit ofincentivesprovided Theaggregate the leaseterm. straight-line basis over Operating lease paymentsarerecognised or lossona as anexpenseinprofit usefullife leaseterm. of theestimated andthe ownership end of the lease term, the assets by the are depreciated over shorter the asset. However, if there is no reasonable certainty that the Group willobtain the usefullifeof estimated depreciatedoverthe purchase assetsare Leased orhire which theyareincurred. as expenses periods in profit or loss. Contingent rents, if any, are charged in the to arecharged charges Finance liability. balance ofthe remaining onthe interest reduction ofthelease orhirepurchaseliabilityso astoachievea constantrateof betweencharges and the finance or hirepurchasepaymentsareapportioned payments. Any initial direct costs are also added to theamount capitalised. Lease minimumleasehire purchaseassetor,iflower,at thepresentvalueof item, arecapitalised inception atthe of theleaseat fair valueof theleasedor or hire purchase of the leased to ownership and rewards incidental all the risks substantially Group the to transfer which liabilities, purchase hire or leases Finance Dividend income is recognised when the right to receive payment is established. is payment receive to when right the recognised is income Dividend 57 (Incorporated in Malaysia) Perak Corporation Berhad 210915-U 2. 2.23 (contd.) policies accounting Summary ofsignificant 2.24 (i) Revenue andotherincomerecognition (ii) (i) Leases the fair value of consideration received or receivable. receivedor consideration value of the fair and other income can be reliably measured. Revenue and other income are measured at economic benefits associated withthe transaction will totheGroup and therevenue flow Revenue andotherincomearerecognisedtotheextentthat theyareprobable the Dividend income As lessor As lessee Dividend income is recognised when the right to receive payment is established. is payment receive to when right the recognised is income Dividend 2.24(v). Note in out set is income rental for policy accounting asset andrecognisedover leasetermonthesamebasesasrentalincome.The the leased to thecarryingamountof negotiating anoperatingleaseareadded in costincurred Initial direct asoperatingleases. asset areclassified of the andrewardsofownership retainssubstantiallyalltherisks theGroup Leases where basis. a straight-line by thelessorisrecognisedasareduction of rentalexpense on overtheleaseterm benefit ofincentivesprovided Theaggregate the leaseterm. straight-line basis over Operating lease paymentsarerecognised or lossona as anexpenseinprofit usefullife leaseterm. of theestimated andthe ownership end of the lease term, the assets by the are depreciated over shorter the asset. However, if there is no reasonable certainty that the Group willobtain the usefullifeof estimated depreciatedoverthe purchase assetsare Leased orhire which theyareincurred. as expenses periods in profit or loss. Contingent rents, if any, are charged in the to arecharged charges Finance liability. balance ofthe remaining onthe interest reduction ofthelease orhirepurchaseliabilityso astoachievea constantrateof betweencharges and the finance or hire purchasepaymentsareapportioned payments. Any initial direct costs are also added to theamount capitalised. Lease minimumleasehire purchaseassetor,iflower,at thepresentvalueof item, arecapitalised inception atthe of theleaseat fair valueof theleasedor or hire purchase of the leased to ownership and rewards incidental all the risks substantially Group the to transfer which liabilities, purchase hire or leases Finance 57 57 page
DIRECTORS’ REPORT AND AUDITED FINANCIAL STATEMENTS 2017 PERAK CORPORATION BERHAD (210915-U) 58 page
DIRECTORS’ REPORT AND AUDITED FINANCIAL STATEMENTS 2017 PERAK CORPORATION BERHAD (210915-U) (Incorporated in Malaysia) Perak Corporation Berhad 210915-U 2. 2.24 (contd.) policies accounting Summary ofsignificant (vii) (vi) (v) (iv) (iii) (ii) (contd.) Revenue andotherincomerecognition Rental income Theme parkrelatedoperations Port services Hotel operations Sale ofland properties Sale ofcompleted consideration will flow willflow to theGroup. consideration the sale that is probable andit are met agreements and purchase the sale ownership havebeentransferred to buyersuponall conditionsprecedentstated in and rewards whenof the risks land isrecognised Revenue from the sale of have been transferred have beentransferred to buyer. ofownership whenthe riskandrewards propertiesisrecognised Sale ofcompleted basis. a straight-line on the lease term income over rental of is recognisedasareduction provided tolessees aggregate cost ofincentives Rental incomeisrecognisedonastraight-line basis over termofthelease.The the that thepassis valid. over andthe period recognised thesaleofannualpassesisdeferred Revenue from areredeemed. tickets when arerecognised offacilities ofenjoyment rights collectedfor Entrance fees and when servicesareperformed. as netofdiscounts isrecognised sale ofservices Revenue from been transferred. and rewards have recognised based oninvoicedvalueofgoodssoldwhenrisks andbeverages) (merchandises, photo, are food sale ofgoods Revenue from accrues and, wherenot fixed in nature, as and when services are rendered. Agreement (“LBT O&M”), in nature, is recognised in profit or loss as it where fixed Operations and Maintenance Lekir Bulk Terminal rendered. Revenue from when port services is recognised in profit or loss as services Revenueand are from provided. beverages andotherrelatedincome arerecognisedwhentheservices and of food sale hotel rooms, of comprising rental operations hotel Revenue from 58 (Incorporated in Malaysia) Perak Corporation Berhad 210915-U 2. 2.24 (contd.) policies accounting Summary ofsignificant (xi) (x) (ix) (viii) (contd.) Revenue andotherincomerecognition Management fees development under Sale ofproperties operations Revenue fromrestaurant income Interest are recognised whenthe services areprovided. Management servicesin respectofthemanagement fees providedbytheGroup recognised recognised when theservicesareprovided. andbeveragesare food restaurantoperationscomprisingsale of Revenue from expected to be incurred. the reporting period asaproportionoftotalcosts costs incurredup until theend of basedonthe ofworkcompleted ismeasured In suchsituations,thepercentage inits workinprogress of the ownership rewards of risksand Allsignificant (ii) Thebuyer controlsthework inprogress, typically whenthelandonwhich the (i) isappliedwhen: progress in Continuoustransfer of work progresses. asworkrecognised and revenueis is applied recognition revenue of method percentage-of-completion the purchaser, tothe in progress represents ofworkthe construction the continuoustransfer however, aresuchthat termsofthecontract transferred to thebuyer.If, thelegal the significant risks andrewardsofownershiptherealestate havebeen when recognised property, revenue is the saleof judged tobefor Where the contractis 2.13(ii). in Note method as described of completion using the percentage recognised revenue the construction of a property, is to be for is judged Where a contract estimated. reliably be can andwhetherthe financial outcome ofthedevelopmentactivity completed property a forthesaleof contract comprisesatoconstructpropertyor such propertywhenconstruction is complete,thedirectorsconsider whetherthe tosell has beenreached and agreement developmentWhere property isunder yield ontheasset. basisInterest income is recognised on a time proportion the effective that reflects when buyer cannotwhen puttheincomplete propertybacktotheGroup. typically, progresses, as construction buyer to the aretransferred present state development place takes by thefinalcustomer;and isowned 59 (Incorporated in Malaysia) Perak Corporation Berhad 210915-U 2. 2.24 (contd.) policies accounting Summary ofsignificant (xi) (x) (ix) (viii) (contd.) Revenue andotherincomerecognition Management fees development under Sale ofproperties operations Revenue fromrestaurant income Interest are recognised whenthe services areprovided. Management servicesin respectofthemanagement fees providedbytheGroup expected to be incurred. the reporting periodasaproportionoftotalcosts costs incurredup until the end of basedonthe ofworkcompleted ismeasured In suchsituations,thepercentage inits workinprogress of the ownership rewards of risksand Allsignificant (ii) Thebuyer controlsthework in progress, typically whenthelandonwhich the (i) isappliedwhen: progress in Continuoustransfer of work progresses. asworkrecognised and revenueis is applied recognition of revenue method percentage-of-completion the purchaser, tothe in progress represents ofworkthe construction the continuoustransfer however, aresuchthat termsofthecontract transferred to thebuyer.If, thelegal the significant risks andrewardsofownershiptherealestatehavebeen when recognised property, revenue is the saleof judged tobefor Where the contractis 2.13(ii). in Note method as described of completion using the percentage recognised revenue the construction of a property, is to be for is judged Where a contract estimated. reliably be can andwhetherthe financial outcome ofthedevelopmentactivity completed property a forthesaleof contract comprisesatoconstructpropertyor such propertywhenconstruction is complete,thedirectorsconsider whetherthe tosell has beenreached and agreement developmentWhere property isunder recognised when theservicesareprovided. andbeveragesare food restaurantoperationscomprisingsale of Revenue from yield ontheasset. basisInterest income is recognised on a time proportion the effective that reflects when buyer cannotwhen puttheincompleteproperty back totheGroup. typically, progresses, as construction buyer to the aretransferred present state development place takes by thefinalcustomer;and isowned 59 59 page
DIRECTORS’ REPORT AND AUDITED FINANCIAL STATEMENTS 2017 PERAK CORPORATION BERHAD (210915-U) 60 page
DIRECTORS’ REPORT AND AUDITED FINANCIAL STATEMENTS 2017 PERAK CORPORATION BERHAD (210915-U) (Incorporated in Malaysia) Perak Corporation Berhad 210915-U 2. 2.25 (contd.) policies accounting Summary ofsignificant (ii) (i) Income taxes Deferred tax Current tax - where the deferred tax liability arises from the initial recognition ofgoodwill orof recognition the initial arises from tax liability deferred where the - except: differences, temporary all for recognised are liabilities tax Deferred purposes. reporting financial for amounts reporting datebetween the taxbasesofassets and liabilitiesand their carrying Deferred tax isprovidedusingtheliabilitymethod on temporarydifferences at the inequity. income ordirectly comprehensive other either in orloss, outsideprofit recognised to items relates Current taxes arerecognised in profit theextentthattax or lossexcept to reporting date. to computetheamountarethosethatenacted orsubstantivelyenactedby the recovered from orpaid taxation to the authorities. Thetax rates andtax lawsused Current taxassets and liabilities measuredat are theamountexpected tobe - in respect of deductible temporary differences investments in associated with differences ofdeductibletemporary inrespect - deductible temporary deferred wheretax asset relatingtothe difference the - be utilised except: losses can of andunusedtax unused tax credits carryforward differences, and the temporary deductible the which willagainst availablebe profit taxable that forward ofunusedtaxcredits andunusedtaxlosses, totheextentthatitisprobable deductible temporary differences, carry recognised forall Deferred tax assetsare inrespect oftaxable temporary differences associated with investmentsin - which the temporary differences differences can be utilised. the temporary which be availableagainst will profit future and taxable foreseeable reverse inthe will recognised only theextentthatit to isprobablethatthe temporary differences tax assets are joint ventures, deferred interests in subsidiaries, associates and orloss;and accounting profitnortaxable the transaction,affects neither the a businesscombinationand,atthetimeof thatisnot in atransaction asset orliability ofan theinitialrecognition arises from temporary differences future. not reverse in the foreseeable will reversal ofthetemporarydifferences can becontrolledanditisprobablethatthe subsidiaries, associatesandinterests injointventures,where timingofthe the loss; and or profit noraccounting profit taxable the transaction,affects neither the time of an assetorliabilityin atransaction that isnotabusiness combinationand, atthe 60 (Incorporated in Malaysia) Perak Corporation Berhad 210915-U 2. 2.25 (contd.) policies accounting Summary ofsignificant 2.26 Goods and Services Tax ("GST") (ii) (contd.) Income taxes in other payables or other receivables in the statements of financial position. offinancial in thestatements other receivables payablesor in other payableto orreceivablefrom the respectiveauthoritiesatreportingdate, is included and input GST, betweenoutput GST GST being the difference amount of The net Deferred tax (contd.) Deferred tax deferred deferred taxes relatetothesametaxable entityandsametaxation authority. right existsto set off current tax assets against current tax liabilitiesthe and enforceable alegally if offset, are liabilities tax deferred and assets tax Deferred goodwillonacquisition. against isadjusted abusinesscombination from tax arising transaction eitherinothercomprehensive income ordirectlyinequityanddeferred the underlying to incorrelation recognised are taxitems orloss.Deferred profit outside recognised is loss or profit outside recognised items to relating tax Deferred date. rates andtax lawsthat havebeenenacted or substantively enactedat the reporting to apply the year whentheasset is realisedorthe liability issettled,based ontax Deferred taxassets and liabilitiesare measuredatthetaxratesthatexpected deferred tax assets to be utilised. the extent that it has become probable that future profit taxablewillallow the to dateandarerecognised reporting ateach taxassetsarereassessed deferred Unrecognised utilised. be to asset tax deferred the of part or all allow to available reduced totheextentthatitis nolongerprobable that sufficient taxablebe will profit taxassetsisat eachreportingdateand The carryingamountofdeferred reviewed 61 (Incorporated in Malaysia) Perak Corporation Berhad 210915-U 2. 2.25 (contd.) policies accounting Summary ofsignificant 2.26 Goods and Services Tax ("GST") (ii) (contd.) Income taxes in other payables or other receivables in the statements of financial position. offinancial in thestatements other receivables payablesor in other payableto orreceivablefrom the respectiveauthoritiesatreportingdate, is included and input GST, betweenoutput GST GST being the difference amount of The net Deferred tax (contd.) Deferred tax deferred deferred taxes relatetothesametaxable entityandsametaxation authority. right existsto set off current tax assets against current tax liabilitiesthe and enforceable alegally if offset, are liabilities tax deferred and assets tax Deferred goodwillonacquisition. against isadjusted abusinesscombination from tax arising transaction eitherinothercomprehensive income ordirectlyinequityanddeferred the underlying to incorrelation recognised are taxitems orloss.Deferred profit outside recognised is loss or profit outside recognised items to relating tax Deferred date. rates andtax lawsthat havebeenenacted or substantively enactedat thereporting to apply the year whentheasset is realisedorthe liability issettled,based ontax Deferred taxassets and liabilitiesare measuredatthetaxratesthatexpected deferred tax assets to be utilised. the extent that it has become probable that future profit taxablewillallow the to dateandarerecognised reporting ateach taxassetsarereassessed deferred Unrecognised utilised. be to asset tax deferred the of part or all allow to available reduced totheextentthatitis nolongerprobable that sufficient taxablebe will profit taxassetsisat eachreportingdateand The carryingamountofdeferred reviewed 61 61 page
DIRECTORS’ REPORT AND AUDITED FINANCIAL STATEMENTS 2017 PERAK CORPORATION BERHAD (210915-U) 62 page
DIRECTORS’ REPORT AND AUDITED FINANCIAL STATEMENTS 2017 PERAK CORPORATION BERHAD (210915-U) (Incorporated in Malaysia) Perak Corporation Berhad 210915-U 2. 2.29 2.28 2.27 (contd.) policies accounting Summary ofsignificant Share capital and share issuance expenses and share issuance Share capital Segment reporting Contingencies as accrued. or loss in profit interest expense as arerecognised Dividendsthereon discretionary. not are payments or ifdividend holders, equity ofthe the option dateorat specific on a it is redeemable liability if as financial classified share capital is Preference equity. within distributions as recognised are thereon Dividends discretionary. butonlyattheCompany’soption,andanydividendsare redeemable is or is non-redeemable, ifit asequity isclassified sharecapital Preference aredeclared. intheperiodwhichthey arerecognisedinequity ordinary shares on asequity.Dividends costs. Ordinary sharesareclassified incremental transaction Ordinary sharesarerecordedattheproceedsreceived, netofdirectlyattributable instruments. sharesareequity Ordinary liabilities. of its deductingall after the Company An equity instrument is any contract that evidences a residual interest in the assets of of the Group and of the Company. Group and of the of the position of financial statements inthe not recognised are and assets liabilities Contingent uncertain future event(s) notwholly withinthecontrolofGroup. and whosebe confirmed existence willonly bytheoccurrenceornon-occurrenceof A contingentliabilityor assetisapossibleobligation orassetthatarisesfrompastevents the measurement basis of segment information. basisofsegment the measurement the factors are shownNote42,includingused to identify the reportablesegments and in these segments disclosures oneachof performance. Additional the segment to assess tothesegmentsand regularly reviewthe segmentresultsinordertoallocate resources who oftheGroup the management reportdirectlyto segment managers charge. The undertheir respectivesegments of the theperformance managers responsiblefor and segment their products services whichareindependentlymanaged by therespective basedon organised intooperatingsegments purposes,theGroupis For management 62 (Incorporated in Malaysia) Perak Corporation Berhad 210915-U 2. 2.30 (contd.) policies accounting Summary ofsignificant Fair valuemeasurement significant to the fair value measurement as a whole) at the end of each reporting period. each reporting endof at the asa whole) measurement value to thefair significant hierarchy byre-assessing categorisation (based onthelowest levelinputthatis basis, theGroupdetermines whetherhave occurred between transfers Levelsinthe arecurring on statements financial the in recognised are that liabilities and assets For fair to the input thatissignificant forwhichthe lowestlevel Valuationtechniques Level 3- fair to the input thatissignificant forwhichthe lowestlevel Valuationtechniques Level 2- identical for Quoted(unadjusted)market assetsor prices inactivemarkets 1 - Level the lowest is significant level input that to the fair valuemeasurement as a whole: on valuehierarchy, describedasfollows, based the fair are categorised statements within or disclosed in the financial measured whichfair value is for and liabilities All assets inputs. theuseofunobservable andminimising observable inputs relevant of use the maximising value, fair measure to available are data sufficient which The Groupusesvaluation thatareappropriateinthecircumstancesandfor techniques best use. highest and best use or by selling another it to market participant that would use the asset in its and highest its in asset the using by benefits economic generate to ability participant’s non-financial into accountamarket asset takes measurement ofa valueA fair participants act intheireconomicbestinterest. market that assuming liability, or asset the pricing when use would participants market assumptions that usingthe is measured oraliability of anasset value The fair mustbeaccessibleThe principalorthemostadvantageous market bytheGroup. theassetor most advantageous for a principalmarket, in the market Intheabsenceof - the principal market the asset for or or liability, In - either: place takes liability the transfer measurement isvalue basedonthepresumptionthattransactiontosell theassetor between participants in anorderlytransaction market at themeasurement date. Thefair a liability to transfer or paid an asset to sell would be received that price the is value Fair liability. value measurement isunobservablevalue observable is directlyorindirectly value measurement liabilities 63 (Incorporated in Malaysia) Perak Corporation Berhad 210915-U 2. 2.30 (contd.) policies accounting Summary ofsignificant Fair valuemeasurement significant to the fair value measurement as a whole) at the end of each reporting period. each reporting endof at the asawhole) measurement value to thefair significant hierarchy byre-assessing categorisation (based onthelowest levelinputthatis basis, theGroupdetermines whetherhave occurred between transfers Levelsinthe arecurring on statements financial the in recognised are that liabilities and assets For fair to the input thatissignificant forwhichthe lowestlevel Valuationtechniques Level 3- fair to the input thatissignificant forwhichthe lowestlevel Valuationtechniques Level 2- identical for Quoted(unadjusted)market assetsor prices inactivemarkets 1 - Level the lowest is significant level input that to the fair valuemeasurement as a whole: on valuehierarchy, describedasfollows, based the fair are categorised statements within or disclosed in the financial measured whichfair value is for and liabilities All assets inputs. theuseofunobservable andminimising observable inputs relevant of use the maximising value, fair measure to available are data sufficient which The Groupusesvaluation thatareappropriateinthecircumstancesandfor techniques best use. highest and best use or by selling another it to market participant that would use the asset in its and highest its in asset the using by benefits economic generate to ability participant’s non-financial into accountamarket asset takes measurement ofa valueA fair participants act intheireconomicbestinterest. market that assuming liability, or asset the pricing when use would participants market assumptions that usingthe is measured oraliability of anasset value The fair mustbeaccessibleThe principalorthemostadvantageous market bytheGroup. theassetor most advantageous for a principalmarket, in the market Intheabsenceof - the principal market the asset for or or liability, In - either: place takes liability the transfer measurement isvalue basedonthepresumptionthattransactiontosell theassetor between participants in anorderlytransaction market at themeasurement date. Thefair a liability to transfer or paid an asset to sell would be received that the price is value Fair liability. value measurement isunobservablevalue observable is directlyorindirectly value measurement liabilities 63 63 page
DIRECTORS’ REPORT AND AUDITED FINANCIAL STATEMENTS 2017 PERAK CORPORATION BERHAD (210915-U) 64 page
DIRECTORS’ REPORT AND AUDITED FINANCIAL STATEMENTS 2017 PERAK CORPORATION BERHAD (210915-U) (Incorporated in Malaysia) Perak Corporation Berhad 210915-U 2. 2.31 2.30 (contd.) policies accounting Summary ofsignificant (ii) (i) Foreign currencies (contd.) Fair valuemeasurement and the level of the fair value hierarchy as explained above. valuehierarchy asexplained and theleveloffair asset or liability ofthe andrisks characteristics the nature, basisof on the and liabilities assets hasdeterminedclassesof the Group value disclosures, offair For thepurpose maintained. knowledge,professional standards market are reputation, independence and whether include criteria Selection annually. upon decided is valuers external of Involvement assets,suchasproperties. for valuation ofsignificant External valuersareinvolved discontinued operation. distribution in the for assets held measurement, such as non-recurring assets, and for properties and unquoted available-for-sale financial measurement, such as investment both fairvalue recurring thepoliciesandproceduresfor The Groupdetermines Foreign currency transactions currency Foreign currency and presentation Functional non-monetary items are also recognised directly in equity. directlyin alsorecognised items are non-monetary such arising from equity. Exchange differences directly in losses are recognised and which gains respect of itemsin ofnon-monetary on thetranslation arising thedifferences for theperiodexcept or lossfor in profit included value are fair at carried items non-monetary of translation the on arising Exchange differences in orloss. profit reporting datearerecognised monetary itemsatthe translating monetary itemsoron settlementof Exchangearising onthe differences at thedatewhen the fair value was determined. exchange rates using the valueare translated currencies foreign measured atfair the initialtransactions.Non-monetary rates asatthedatesof items denominatedin usingtheexchange are translated athistoricalcost are measured currencies that reporting date. Non-monetary items denominated in foreign exchange ruling at the rate of at the translated are currencies inforeign denominated liabilities assets and dates.Monetaryexchange approximating rulingatthetransaction rates those at currencies inthefunctional recognition oninitial recorded Company andare currencyofthe functional inthe currenciesaremeasured inforeign Transactions currency. functional is also the Company's Malaysia("RM"), which Ringgit in arepresented statements consolidatedfinancial currency").The functional the currencyofprimaryeconomicenvironment in which entity operates("the the using aremeasured the Group in ofeach entity statements financial The individual 64 (Incorporated in Malaysia) Perak Corporation Berhad 210915-U 2. 2.34 2.33 2.32 (contd.) policies accounting Summary ofsignificant Government grant Redeemable Convertible PreferenceShares ("RCPS") guarantee contracts Financial deducting the grants in arriving at the carrying amountoftheasset. deducting thegrantsinarrivingatcarrying value of financial positionrelated to an asset, the fair is presented in the statements by that thegrantwillbe received andallconditions attached willbe met.Where the grant assurance reasonable is valuewhere there fair the at recognised are grants Government recognised. werefirst the instruments componentswhen and equity proceeds totheliability allocationof RCPS basedonthe Transaction costs components areapportionedbetween ofthe theliabilityandequity liability. tax deferred costsand of transaction equity, net andincludedinshareholders' recognised is component, liability valueofthe fair deductingthe after amount, The residual accounting policy for other payables setoutinNote2.19. with the liability in accordance as a financial is carried and this amount convertible debt non- rateforanequivalent usingamarket determined component is the liability value of RCPS, using theeffective interest ratemethod.Onissuanceofthe thefair profit or loss expense in asinterest sharesarerecognised costs.Thedividendson those transaction of position,net offinancial in thestatements liability asafinancial is recognised liability component.exhibits ThecomponentofRCPSand anequity characteristics that of a component liability consistingofa instruments, as compound are regarded The RCPS asaprovision. accounted for amount and obligation guarantee contract theobligation, islower value thecarrying tothe than isadjusted financial of the value carrying made. Ifthe is obligation ofthe an estimate probable, becomes financial guarantee contract settlementofa When the guarantee. discharge of contractual period,recognisedinthere isnospecified or, whenor lossupon profit a straight-line method over the contractual period or lossusing to profit and isamortised income asdeferred areclassified contracts financialguarantee from arising Fair value instrument. make paymentwhenterms ofadebt the originalormodified in accordancewith due to debtor fails because a specified a loss it incurs the holder for payments to reimburse specified make theissuerto requires contract that contractisa guarantee A financial 65 (Incorporated in Malaysia) Perak Corporation Berhad 210915-U 2. 2.34 2.33 2.32 (contd.) policies accounting Summary ofsignificant Government grant Redeemable Convertible PreferenceShares ("RCPS") guarantee contracts Financial deducting the grants in arriving at the carrying amountoftheasset. deducting thegrantsinarrivingatcarrying value of financial positionrelated to an asset, the fair is presented in the statements by that thegrantwillbe received andallconditions attached willbe met.Where the grant assurance reasonable is valuewhere there fair the at recognised are grants Government recognised. werefirst the instruments componentswhen and equity proceeds totheliability allocationof RCPS basedonthe Transaction costs components areapportionedbetween ofthe theliabilityandequity liability. tax deferred costsand of transaction equity, net andincludedinshareholders' recognised is component, liability valueofthe fair deductingthe after amount, The residual accounting policy for other payables setoutinNote2.19. with the liability in accordance as a financial is carried and this amount convertible debt non- rateforanequivalent usingamarket determined component is the liability value of RCPS, using theeffective interest ratemethod.Onissuanceofthe thefair profit or loss expense in asinterest sharesarerecognised costs.Thedividendson those transaction of position,net offinancial in thestatements liability asafinancial is recognised liability component.exhibits ThecomponentofRCPSand anequity characteristics that of a component liability consistingofa instruments, as compound are regarded The RCPS asaprovision. accounted for amount and obligation guarantee contract theobligation, islower value thecarrying than tothe isadjusted financial of the value carrying made. Ifthe is obligation ofthe an estimate probable, becomes financial guarantee contract settlementofa When the guarantee. discharge of contractual period,recognisedinthere isnospecified or, whenor lossupon profit a straight-line method over the contractual period or lossusing to profit and isamortised income asdeferred areclassified contracts financialguarantee from arising Fair value instrument. make paymentwhenterms ofadebt the originalormodified in accordancewith due to debtor fails because a specified a loss it incurs the holder for payments to reimburse specified make theissuerto requires contract that contractisa guarantee A financial 65 65 page
DIRECTORS’ REPORT AND AUDITED FINANCIAL STATEMENTS 2017 PERAK CORPORATION BERHAD (210915-U) 66 page
DIRECTORS’ REPORT AND AUDITED FINANCIAL STATEMENTS 2017 PERAK CORPORATION BERHAD (210915-U) (Incorporated in Malaysia) Perak Corporation Berhad 210915-U 3. 3.2 3.1 judgementsandestimates accounting Significant (i) uncertainty Key sources ofestimation plantandequipment of property, Impairment in applyingaccountingpolicies Judgements made (ii) the amounts recognised in the financial the amountsrecognisedinfinancial statements: effect on significant most the has which judgement, following the made has management policies, and the Company's accounting the Group's applying the process of In are discussedbelow: year financial next the within liabilities and assets of amounts carrying the to adjustment a material datea significant risk of causing uncertainty atthe thathave reporting sourcesofestimation andotherkey concerningthefuture assumptions The key use. valueless costs of disposal and its value in higher of its fair valueof an asset or cash generating unit exceeds its recoverable amount, whichthe is arewhether impaired. TheGroupalsorecordsimpairment they losswhenthe carrying reviewsits property,plantandequipmentateachreportingdatetoassess The Group Revenue fromportservices Revenue from sales of land work of specialists. work judgement, the Groupevaluates basedonpastexperience and byrelying on the ownership aswelltherecoverabilitythe development of projects.Inmakingthe of and rewards of risks transfer assessing the in judgement is required Significant flow to theGroup. transferred to thebuyerandwhetherprobable that it is the saleconsideration will havebeen the realestates ownership of risksandrewardsof whether significant as to based on the assessment sales of land revenue from The Group recognises accordance with the contractual arrangements. the contractual accordance with in are rendered services whether in determining is required judgement Significant based onthecontractual arrangements. The Grouprecognises revenue fromportserviceswhenservices arerenderedand 66 (Incorporated in Malaysia) Perak Corporation Berhad 210915-U 3. 3.2 (contd.) judgementsandestimates accounting Significant (iii) (contd.) uncertainty Key sources ofestimation properties and IP rights investment and equipment, plant onproperty, assessment Impairment details are disclosed in Notes 14 and 20. details are disclosed respectively wereprovided forinthecurrent financial year. Further (2016 :RMNil) (2016 : RM Nil) and RM19,292,185 RM167,239,506 of equipment and IP rights Based ontheGroup's impairment review,impairment loss onproperty,plantand statements. of theCompanyasatreporting date willbedisclosed inthenotesto financial Groupand equipment ofthe carrying ofproperty,plantand cash flows. amounts The to chooseasuitablediscount rate in ordertocalculatethepresentvalue of those theCGUandalso cash flows from anestimateoftheexpectedfuture Group tomake are allocated. Estimating the value-in-use the equipment and IP rights requires estimation value-in-useincluding oftheCGU the towhichtheproperty,plant and In addition,theGroupcarriedout theimpairmenttestbasedon avarietyof sale of surrounding property. or last transacted valuers byprofessional market value determined prevailing basedon is determined recoverableamount impairment testingoflandandbuildings,the For thepurposeof in use is estimated. or itsvalue costs tosell value less of itsfair higher amount whichisthe recoverable there is anyindication ofimpairment.Ifanysuch indication exists,the asset's whetherrights ateachreportingdatetodetermine investment and IP properties The Groupreviewsthe carryingamountsofproperty,plantandequipment, 67 (Incorporated in Malaysia) Perak Corporation Berhad 210915-U 3. 3.2 (contd.) judgementsandestimates accounting Significant (iii) (contd.) uncertainty Key sources ofestimation properties and IP rights investment and equipment, plant onproperty, assessment Impairment details are disclosed in Notes 14 and 20. details are disclosed respectively wereprovided forinthecurrent financial year. Further (2016 :RMNil) (2016 : RM Nil) and RM19,292,185 RM167,239,506 of equipment and IP rights Based ontheGroup's impairment review,impairment loss onproperty,plantand statements. of theCompanyasatreporting date willbedisclosed inthenotesto financial Group and equipment ofthe carrying ofproperty,plantand cash flows. amounts The to chooseasuitablediscount rate in ordertocalculatethepresentvalue of those theCGUandalso cash flows from anestimateoftheexpectedfuture Group tomake are allocated. Estimating the value-in-use the equipment and IP rights requires estimation value-in-useincluding oftheCGU the towhichtheproperty,plant and In addition,theGroupcarriedout theimpairmenttestbasedon avarietyof sale of surrounding property. or last transacted valuers byprofessional market value determined prevailing basedon is determined recoverableamount impairment testingoflandandbuildings,the For thepurposeof in use is estimated. or itsvalue costs tosell value less of itsfair higher amount whichisthe recoverable there is anyindication ofimpairment.Ifanysuch indication exists,the asset's whetherrights ateachreportingdatetodetermine investment and IP properties The Groupreviewsthe carryingamountsofproperty,plantandequipment, 67 67 page
DIRECTORS’ REPORT AND AUDITED FINANCIAL STATEMENTS 2017 PERAK CORPORATION BERHAD (210915-U) 68 page
DIRECTORS’ REPORT AND AUDITED FINANCIAL STATEMENTS 2017 PERAK CORPORATION BERHAD (210915-U) (Incorporated in Malaysia) Perak Corporation Berhad 210915-U Fixed deposits 6. 5. 4. Rental income Management fees Port services Theme park Restaurant - management services - portservices -Hall and offices - theme park operations - themepark - restaurant -Foodandbeverages - hoteloperations Cost ofservicesrendered Cost of land sold -Room Hotel revenue land Sales of throughprofitorloss Financial assets at fair value Otherreceivables Interest incomefrom: income Interest sold properties completed of Cost Cost ofsales Sales ofcompletedproperties Revenue 185,787,810 105,314,216 14,316,281 66,241,710 40,542,741 12,286,021 47,668,338 1,800,000 1,172,724 2,185,482 9,443,466 9,708,939 5,796,231 1,015,875 2,980,378 4,048,448 198,958 181,152 909,168 261,678 160,000 68 84,125 52,195 2017 2017 2017 RM RM RM Group Group Group 146,704,228 97,988,604 59,337,087 34,836,063 13,484,113 33,009,498 8,883,716 9,558,072 4,989,701 2,006,620 2,777,314 1,458,839 1,487,000 4,959,000 343,834 175,066 1,875 2016 2016 2016 RM RM RM ------4,288,000 4,288,000 7,888,545 7,918,870 924,305 924,305 18,523 11,802 2017 2017 2017 RM RM RM Company Company Company ------3,655,457 3,797,193 129,609 12,127 2016 2016 2016 RM RM RM ------(Incorporated in Malaysia) Perak Corporation Berhad 210915-U 8. 7. -property,plant andequipment Sundry income exchange forex on gain Unrealised - inventories assets Capitalised inqualifying of buildings of leasing from Rental income receivables impairmentloss ontrade allowance for Reversal of Recognised in profit orloss inprofit Recognised Project management income Project management preference shares preference - redeemableconvertible leaseliabilities - finance - term loans - revolving credits associateupon obtaining control Gain onrevaluation of an DebtSecurities ("BaIDS") Islamic Ajil - Bai Bithaman - advances relatedparties from Interest expenses Finance costs Dividend income Other income 45,458,417 45,458,417 37,137,727 26,071,878 8,096,409 4,173,940 1,161,269 2,138,942 5,778,859 9,922,857 3,645,446 224,281 860,064 69 39,377 4,155 9,510 2017 2017 RM RM Group Group - - - 21,770,719 14,514,819 21,770,719 15,133,095 6,939,961 3,517,293 1,786,945 6,959,258 2,404,317 1,543,883 3,194,842 296,642 932,510 91,840 24,380 81,575 2016 2016 RM RM - - - 9,893,264 9,893,264 9,893,264 8,067,689 1,823,426 68,574 13,957 54,617 2,149 2017 2017 RM RM Company Company ------4,971,421 4,971,421 4,971,421 2,952,054 2,014,690 110,607 79,624 30,983 4,677 2016 2016 RM RM ------(Incorporated in Malaysia) Perak Corporation Berhad 210915-U 8. 7. -property,plant andequipment exchange forex on gain Unrealised Sundry income - inventories assets Capitalised inqualifying receivables impairmentloss ontrade allowance for Reversal of buildings of leasing from Rental income Recognised in profit orloss inprofit Recognised Project management income Project management - finance leaseliabilities - finance preference shares preference - redeemableconvertible - term loans associateupon obtaining control Gain onrevaluation of an DebtSecurities ("BaIDS") Islamic Ajil - Bai Bithaman - revolving credits Dividend income Other income - advances relatedparties from Interest expenses Finance costs 45,458,417 45,458,417 37,137,727 26,071,878 8,096,409 4,173,940 1,161,269 2,138,942 5,778,859 9,922,857 3,645,446 224,281 860,064 69 39,377 4,155 9,510 2017 2017 RM RM Group Group - - - 21,770,719 14,514,819 21,770,719 15,133,095 6,939,961 3,517,293 1,786,945 6,959,258 2,404,317 1,543,883 3,194,842 296,642 932,510 91,840 24,380 81,575 2016 2016 RM RM - - - 9,893,264 9,893,264 9,893,264 8,067,689 1,823,426 68,574 13,957 54,617 2,149 2017 2017 RM RM Company Company ------4,971,421 4,971,421 4,971,421 2,952,054 2,014,690 110,607 79,624 30,983 4,677 2016 2016 RM RM ------69 page
DIRECTORS’ REPORT AND AUDITED FINANCIAL STATEMENTS 2017 PERAK CORPORATION BERHAD (210915-U) 70 page
DIRECTORS’ REPORT AND AUDITED FINANCIAL STATEMENTS 2017 PERAK CORPORATION BERHAD (210915-U) (Incorporated in Malaysia) Perak Corporation Berhad 210915-U 9. -intangible assets (Note20) 14) (Note -property,plant andequipment 23) (Note -amountduefromanassociate 18) (Note -investment inan associate 17) (Note - investment in a subsidiary -thirdparties (Note 23) -tradeandotherreceivables Impairment loss (Note10) Employee benefitsexpense (Note11) andremuneration Directors' fees 16) (Note -investment properties -portfacilities (Note15) 14) (Note -property,plant andequipment Depreciation Bad debts written off services -taxandother non-audit - under provision in prior year -currentyear -assurancerelated Non-audit fees provision under - in year prior -currentyear Statutory audits Auditors’ remuneration property rights Amortisation ofintellectual followingThe have items includedbeen in tax: before arriving at(loss)/profit (Loss)/profit beforetax 167,239,506 19,392,746 90,413,310 62,910,772 15,784,137 1,537,552 3,355,176 492,000 583,230 70 15,000 21,000 79,090 23,014 72,500 2017 RM Group - - - - 38,785,355 1,054,040 3,830,942 2,325,562 1,465,812 3,129,425 7,287,936 149,000 341,000 15,000 79,090 2016 RM 19 ------15,378,078 120,000 491,600 473,464 15,000 5,000 2017 RM Company ------14,231,449 149,000 500,000 446,682 332,208 70,000 2016 RM ------(Incorporated in Malaysia) Perak Corporation Berhad 210915-U 10. 9. Royalty fees - plant and office equipment office and plant - -miscellaneous -premises -portequipments -motorvehicles Rental expense in respect of Realised foreign exchange loss exchange foreign Realised written off Property, plant and equipment Port facilities written off Inventories written off Other staff related expenses related Other staff SOCSO Salaries and wagesSalaries Employee benefitsexpense realisablevalue Inventories written down tonet The following itemshave beenincluded inarriving beforetax(contd.): at(loss)/profit (Loss)/profit beforetax(contd.) contributions Employees Provident Fund 11,470,724 62,910,772 48,431,753 7,763,784 6,186,453 474,788 236,497 500,007 443,156 359,700 528,782 854,107 71 77,818 21,935 15,443 1,497 2017 2017 RM RM Group Group 38,785,355 28,370,670 9,394,916 6,126,455 4,003,136 206,050 690,575 879,735 285,094 514,350 26,630 41,864 2016 2016 RM RM - - - - 15,378,078 11,943,303 1,223,666 2,103,244 761,836 107,865 3,245 2017 2017 RM RM Company Company ------14,231,449 11,543,975 1,767,379 398,796 839,058 81,037 3,540 2016 2016 RM RM ------(Incorporated in Malaysia) Perak Corporation Berhad 210915-U 10. 9. Royalty fees - plant and office equipment office and plant - -miscellaneous -premises -portequipments -motorvehicles Rental expense in respect of loss exchange foreign Realised written off Property, plant and equipment Port facilities written off Inventories written off Other staff related expenses related Other staff SOCSO realisablevalue Inventories written down tonet The following itemshave beenincluded inarriving beforetax(contd.): at(loss)/profit (Loss)/profit beforetax(contd.) contributions Employees Provident Fund and wagesSalaries Employee benefitsexpense 11,470,724 62,910,772 48,431,753 7,763,784 6,186,453 474,788 236,497 500,007 443,156 359,700 528,782 854,107 71 77,818 21,935 15,443 1,497 2017 2017 RM RM Group Group 38,785,355 28,370,670 9,394,916 6,126,455 4,003,136 206,050 690,575 879,735 285,094 514,350 26,630 41,864 2016 2016 RM RM - - - - 15,378,078 11,943,303 1,223,666 2,103,244 761,836 107,865 3,245 2017 2017 RM RM Company Company ------14,231,449 11,543,975 1,767,379 398,796 839,058 81,037 3,540 2016 2016 RM RM ------71 page
DIRECTORS’ REPORT AND AUDITED FINANCIAL STATEMENTS 2017 PERAK CORPORATION BERHAD (210915-U) 72 page
DIRECTORS’ REPORT AND AUDITED FINANCIAL STATEMENTS 2017 PERAK CORPORATION BERHAD (210915-U) 210915-U
Perak Corporation Berhad (Incorporated in Malaysia)
11. Directors' fees and remuneration
The details of remuneration receivable by directors of the Group and of the Company during the year are as follows:
Salaries Defined and other contribution emoluments* Fees plan Total Group RM RM RM RM
2017 Executive directors: Dato' Aminuddin Bin Md Desa 51,469 119,374 4,864 175,707 Jamal Bin Mohd Aris 10,508 10,323 1,074 21,905 Rozahan Bin Osman 52,500 60,000 6,240 118,740 Rustam Apandi Bin Jamaludin 4,000 - - 4,000 Salween Azila Binti Ahmad Tauffik 3,750 60,000 - 63,750 122,227 249,697 12,178 384,102 Non-executive directors: Dato' Abd Karim Bin Ahmad Tarmizi 6,000 72,600 - 78,600 Dato' Azian Bin Osman 22,750 150,000 - 172,750 Dato' Dr Vasan A/L Sinnadurai 8,400 72,600 - 81,000 Dato' Khansiyah @ Khamsiyah Binti Yeop 4,000 24,000 - 28,000 Dato' Nasarudin Bin Hashim 154,800 - - 154,800 Dato' Wan Hashimi Albakri Bin Wan Ahmad Amin Jaffri 4,800 72,600 - 77,400 Datuk Dr Wan Norashikin Binti Wan Noordin 7,800 72,600 - 80,400 Datuk Zainuddin Bin Ibrahim 3,000 60,000 - 63,000 Mohammad Zahir Bin Ismail 51,000 60,000 - 111,000 Mohd Shaiful Bahri Bin Hussain 52,500 60,000 - 112,500 Ramelle Ashram Bin Ramli - 105,000 - 105,000 Tuan Haji Ab Rahman Bin Mohammed 10,350 78,650 - 89,000 325,400 828,050 - 1,153,450 Total directors' remuneration 447,627 1,077,747 12,178 1,537,552
72 210915-U
Perak Corporation Berhad (Incorporated in Malaysia)
11. Directors' fees and remuneration (contd.)
Salaries Defined and other contribution emoluments* Fees plan Total Group (contd.) RM RM RM RM
2016 Executive directors: Dato' Aminuddin Bin Md Desa 34,222 104,595 3,942 142,759 Jamal Bin Mohd Aris 51,750 60,000 6,240 117,990 Rozahan Bin Osman 21,428 60,000 2,298 83,726 Salween Azila Binti Ahmad Tauffik 750 22,097 - 22,847 108,150 246,692 12,480 367,322
Non-executive directors: Dato' Abd Karim Bin Ahmad Tarmizi 4,350 67,860 - 72,210 Dato' Azian Bin Osman 11,400 150,000 - 161,400 Dato' Dr Vasan A/L Sinnadurai 6,000 67,860 - 73,860 Dato' Khansiyah @ Khamsiyah Binti Yeop - 24,000 - 24,000 Dato' Nasarudin Bin Hashim 154,650 - - 154,650 Dato' Wan Hashimi Albakri Bin Wan Ahmad Amin Jaffri 2,550 66,000 - 68,550 Datuk Dr Wan Norashikin Binti Wan Noordin 6,750 67,860 - 74,610 Datuk Zainuddin Bin Ibrahim 2,250 60,000 - 62,250 Mohammad Zahir Bin Ismail 50,250 60,000 - 110,250 Mohd Shaiful Bahri Bin Hussain 49,500 60,000 - 109,500 Ramelle Ashram Bin Ramli - 105,000 - 105,000 Tuan Haji Ab Rahman Bin Mohammed 8,850 73,360 - 82,210 296,550 801,940 - 1,098,490 Total directors' remuneration 404,700 1,048,632 12,480 1,465,812
73 73 page
DIRECTORS’ REPORT AND AUDITED FINANCIAL STATEMENTS 2017 PERAK CORPORATION BERHAD (210915-U) 74 page
DIRECTORS’ REPORT AND AUDITED FINANCIAL STATEMENTS 2017 PERAK CORPORATION BERHAD (210915-U) 210915-U
Perak Corporation Berhad (Incorporated in Malaysia)
11. Directors' fees and remuneration (contd.) Salaries Defined and other contribution emoluments* Fees plan Total Company RM RM RM RM 2017 Executive director: Dato' Aminuddin Bin Md Desa 7,800 72,600 - 80,400 Non-executive directors: Dato' Abd Karim Bin Ahmad Tarmizi 6,000 72,600 - 78,600 Dato' Dr Vasan A/L Sinnadurai 8,400 72,600 - 81,000 Dato' Nasarudin Bin Hashim 4,800 - - 4,800 Dato' Wan Hashimi Albakri Bin Wan Ahmad Amin Jaffri 4,800 72,600 - 77,400 Datuk Dr Wan Norashikin Binti Wan Noordin 7,800 72,600 - 80,400 Tuan Haji Ab Rahman Bin Mohammed 10,350 78,650 - 89,000 42,150 369,050 - 411,200 Total directors' remuneration 49,950 441,650 - 491,600 2016 Executive director: Dato' Aminuddin Bin Md Desa 3,900 66,692 - 70,592 Non-executive directors: Dato' Abd Karim Bin Ahmad Tarmizi 4,350 67,860 - 72,210 Dato' Dr Vasan A/L Sinnadurai 6,000 67,860 - 73,860 Dato' Nasarudin Bin Hashim 4,650 - - 4,650 Dato' Wan Hashimi Albakri Bin Wan Ahmad Amin Jaffri 2,550 66,000 - 68,550 Datuk Dr Wan Norashikin Binti Wan Noordin 6,750 67,860 - 74,610 Tuan Haji Ab Rahman Bin Mohammed 8,850 73,360 - 82,210 33,150 342,940 - 376,090 Total directors' remuneration 37,050 409,632 - 446,682 74 210915-U
Perak Corporation Berhad (Incorporated in Malaysia)
11. Directors' fees and remuneration (contd.)
* Includes bonus, meeting allowances and executive committee members allowances.
The number of directors of the Group and of the Company whose total remuneration during the year fell within the following bands are analysed as follows:
Number of directors Number of directors Group Company 2017 2016 2017 2016
Executive directors: Below RM50,000 2 1 - - RM50,001 - RM100,000 1 1 1 1 RM100,001 - RM150,000 1 2 - - RM150,001 - RM200,000 1 - - -
Non-executive directors: Below RM50,000 1 1 1 1 RM50,001 - RM100,000 6 6 5 5 RM100,001 - RM150,000 3 3 - - RM150,001 - RM200,000 2 2 - -
75 75 page
DIRECTORS’ REPORT AND AUDITED FINANCIAL STATEMENTS 2017 PERAK CORPORATION BERHAD (210915-U) 76 page
DIRECTORS’ REPORT AND AUDITED FINANCIAL STATEMENTS 2017 PERAK CORPORATION BERHAD (210915-U) (Incorporated in Malaysia) Perak Corporation Berhad 210915-U 12. recognisedin profit orloss expense/(credit) tax Income Real property gains tax Over provision of Malaysian gainstax in prior year Over provision propertyof real incometax in prior year Malaysian income tax Current tax: expense Income tax Underprovision in prioryear differences reversal oftemporary Relating tooriginationand 30): (Note tax Deferred increase in chargeable income as compared to the immediate preceding year of assessment. theimmediateprecedingyear incomeascomparedto increase inchargeable on the percentage of of Assessment 2018.The reduction in the income tax rate is based Year 2017and of Assessment fortheYear assessableprofit the estimated : 24%)of 24% (2016 Domestic income taxis calculated attheMalaysianstatutory taxrateswhich rangefrom20%to 20,464,012 20,119,271 19,683,610 (138,608) (297,053) (116,553) 780,402 896,955 76 2017 RM Group - 17,745,878 18,113,269 18,127,782 (381,904) (381,904) 112,416 (97,903) 2016 RM - - (138,608) (138,608) (138,608) 2017 RM Company ------112,416 (41,035) 71,381 71,381 2016 RM - - - - - (Incorporated in Malaysia) Perak Corporation Berhad 210915-U 12. gainstax in prior year Over provision propertyof real recognisedin profit orloss expense/(credit) tax Income in prior year Underprovision tax ofdeferred incometax in prior year Over provision of Malaysian Real property gains tax tax assets unrecogniseddeferred previously Utilisationof Adjustments: capital allowances lossesand unabsorbed recognisedonunutilised tax Deferredtaxassets not Incomenotsubject totax Non-deductible expenses tax before (Loss)/profit expense(contd.) Income tax taxrateof 24%(2016 :24%) Taxation at applicable statutory Company isasfollows: incomeincome tax rates toincometax expense effective and taxrates of theGroup atthe of the A reconciliationof incometaxexpense applicableto(loss)/profit before taxatthestatutory (320,108,659) (76,826,078) 20,464,012 97,361,969 (1,303,199) (138,608) (297,185) 896,955 770,158 77 2017 RM Group - - 17,745,878 19,291,735 (1,127,617) 1,730,720 (848,126) 112,416 415,373 (97,903) 2016 RM - - - (28,409,096) (6,818,183) 6,818,183 (138,608) (138,608) 2017 RM Company ------(21,398,748) (5,135,700) 5,142,934 112,416 (41,035) 71,381 (7,234) 2016 RM - - - - (Incorporated in Malaysia) Perak Corporation Berhad 210915-U 12. recognisedin profit orloss expense/(credit) tax Income gainstax in prior year Over provision propertyof real Real property gains tax in prior year Underprovision tax ofdeferred incometax in prior year Over provision of Malaysian Adjustments: tax assets unrecogniseddeferred previously Utilisationof capital allowances lossesand unabsorbed recognisedonunutilised tax Deferredtaxassets not taxrateof 24%(2016 :24%) Taxation at applicable statutory expense(contd.) Income tax Incomenotsubject totax Non-deductible expenses tax before (Loss)/profit Company isasfollows: incomeincome tax rates toincometax expense effective and taxrates of theGroup atthe ofthe A reconciliationof incometaxexpense applicableto(loss)/profit before taxatthestatutory (320,108,659) (76,826,078) 20,464,012 97,361,969 (1,303,199) (138,608) (297,185) 896,955 770,158 77 2017 RM Group - - 17,745,878 19,291,735 (1,127,617) 1,730,720 (848,126) 112,416 415,373 (97,903) 2016 RM - - - (28,409,096) (6,818,183) 6,818,183 (138,608) (138,608) 2017 RM Company ------(21,398,748) (5,135,700) 5,142,934 112,416 (41,035) 71,381 (7,234) 2016 RM - - - - 77 page
DIRECTORS’ REPORT AND AUDITED FINANCIAL STATEMENTS 2017 PERAK CORPORATION BERHAD (210915-U) 78 page
DIRECTORS’ REPORT AND AUDITED FINANCIAL STATEMENTS 2017 PERAK CORPORATION BERHAD (210915-U) (Incorporated in Malaysia) Perak Corporation Berhad 210915-U 13. (b) (a) Loss perordinary share Diluted Loss fortheyear Basic loss per ordinary share (sen) for: average numberofordinary shares inissue Weighted theCompany (RM) ordinary to attributable Loss equity of holders Basic perordinary share ordinary shares. no has Company the as share per loss on dilutive no is effect of There issue potential year. financial the in issueduring ordinary equityholdersoftheCompanyby weightedaverage number of ordinary shares to the year attributable the loss for by dividing is calculated ordinary share The basic loss per 78 (174,957,156) 100,000,000 (174.96) 2017 RM Group 100,000,000 (15,579,986) (15.58) 2016 RM 210915-U
Perak Corporation Berhad (Incorporated in Malaysia)
14. Property, plant and equipment Equipment, furniture and Refurbishment Capital Freehold Buildings and fittings and Motor and work-in- land improvements Attractions computers vehicles renovations progress Total Group RM RM RM RM RM RM RM RM
Cost
At 1 January 2016 16,258,439 67,757,586 - 21,219,355 2,563,634 11,275,975 840,347 119,915,336 Acquisition through business combination 54,014,400 - - 950,413 7,300 - 225,894,718 280,866,831 Additions - 796,164 - 3,390,205 979,917 59,704 89,441,350 94,667,340 Disposals - - - (30,789) - - - (30,789) Written off - - - (8,703) - - (873,673) (882,376) Reclassifications - - - 433,637 609,930 - (1,043,567) - Transfer to inventories (3,523,640) - - - - - (57,048) (3,580,688) At 31 December 2016 66,749,199 68,553,750 - 25,954,118 4,160,781 11,335,679 314,202,127 490,955,654 Additions - 4,131,528 - 7,116,518 1,153,986 420,319 133,415,809 146,238,160 Disposals - - - (4,843) - - - (4,843) Written off - - - (6,550) - - (359,697) (366,247) Government grant received ------(30,670,000) (30,670,000) Reclassifications - - - 6,890,457 - (6,890,457) - - Transfer from capital work-in-progress - 170,861,098 35,196,372 43,147,373 72,000 - (249,276,843) - Transfer to intangible assets (Note 20) ------(38,816,251) (38,816,251) At 31 December 2017 66,749,199 243,546,376 35,196,372 83,097,073 5,386,767 4,865,541 128,495,145 567,336,473
79 79 page
DIRECTORS’ REPORT AND AUDITED FINANCIAL STATEMENTS 2017 PERAK CORPORATION BERHAD (210915-U) 80 page
DIRECTORS’ REPORT AND AUDITED FINANCIAL STATEMENTS 2017 PERAK CORPORATION BERHAD (210915-U) 210915-U
Perak Corporation Berhad (Incorporated in Malaysia)
14. Property, plant and equipment (contd.) Equipment, furniture and Refurbishment Capital Freehold Buildings and fittings and Motor and work-in- land improvements Attractions computers vehicles renovations progress Total Group (contd.) RM RM RM RM RM RM RM RM
Accumulated depreciation and impairment losses
At 1 January 2016 - 2,736,428 - 6,500,531 1,520,756 1,313,011 - 12,070,726 Acquisition through business combination - - - 153,590 787 - - 154,377 Depreciation for the year - 1,381,731 - 3,931,217 650,862 1,324,126 - 7,287,936 Disposals - - - (5,695) - - - (5,695) Written off - - - (2,641) - - - (2,641) At 31 December 2016 - 4,118,159 - 10,577,002 2,172,405 2,637,137 - 19,504,703 Impairment loss for the year (Note 9) - 84,515,628 16,847,243 22,904,961 520,573 - 42,451,101 167,239,506 Depreciation for the year - 4,918,667 1,808,708 8,103,686 802,774 150,302 - 15,784,137 Disposals - - - (1,937) - - - (1,937) Written off - - - (6,547) - - - (6,547) Reclassifications - - - 2,421,294 - (2,421,294) - - At 31 December 2017 - 93,552,454 18,655,951 43,998,459 3,495,752 366,145 42,451,101 202,519,862
Net carrying amount
At 31 December 2016 66,749,199 64,435,591 - 15,377,116 1,988,376 8,698,542 314,202,127 471,450,951
At 31 December 2017 66,749,199 149,993,922 16,540,421 39,098,614 1,891,015 4,499,396 86,044,044 364,816,611
80 (Incorporated in Malaysia) Perak Corporation Berhad 210915-U 14. At 31December2017 At 31December2016 Net carryingamount At 31December2017 At 31December2016 At 1 January 2016 Accumulated depreciation At 31December2017 At 31December2016 At 1 January 2016 Cost Company (contd.) Property, plantandequipment Depreciationthe year for Depreciationthe year for Additions Additions 81 Equipment, and fittings 1,092,914 furniture 472,277 533,748 620,637 417,152 242,812 950,900 794,049 203,485 174,340 142,014 156,851 RM 1,374,059 vehicles 550,983 236,248 823,076 553,097 395,229 789,345 789,345 269,979 157,868 584,714 Motor RM - 1,023,260 1,443,713 1,740,245 1,583,394 2,466,973 769,996 970,249 638,041 156,851 473,464 332,208 726,728 Total RM (Incorporated in Malaysia) Perak Corporation Berhad 210915-U 14. At 31December2016 Net carryingamount At 31December2017 At 31December2016 At 1 January 2016 Accumulated depreciation At 31December2017 At 31December2016 At 1 January 2016 Cost Company (contd.) Property, plantandequipment At 31December2017 Depreciationthe year for Additions Additions Depreciationthe year for 81 Equipment, and fittings 1,092,914 furniture 242,812 950,900 794,049 472,277 533,748 620,637 417,152 174,340 142,014 156,851 203,485 RM 1,374,059 vehicles 395,229 789,345 789,345 550,983 236,248 823,076 553,097 157,868 584,714 269,979 Motor RM - 1,740,245 1,583,394 1,023,260 1,443,713 2,466,973 638,041 156,851 769,996 970,249 332,208 726,728 473,464 Total RM 81 page
DIRECTORS’ REPORT AND AUDITED FINANCIAL STATEMENTS 2017 PERAK CORPORATION BERHAD (210915-U) 82 page
DIRECTORS’ REPORT AND AUDITED FINANCIAL STATEMENTS 2017 PERAK CORPORATION BERHAD (210915-U) (Incorporated in Malaysia) Perak Corporation Berhad 210915-U 14. (a) (contd.) Property, plantandequipment (e) (d) (c) (b) Finance leaseliabilities Cash payments improvements Buildings and Motor vehicles the useful life of the depreciable asset by way of a reduced depreciation charge. depreciable assetbywayofareduced life of the the useful carrying grant is recognised in profit or loss over to amount arrive of at the the asset. The received ofthegrant plant and equipmentisreducedbytheamount cost oftheproperty, of the project. The region. The grant was received during the year upon the completion specified ina Studios("MAPS"), MovieAnimation Park themepark, standard international an of commissioning and testing completing, installing, equipping, constructing, theplanning,RM30,670,000October 2014tofacilitate developing, financing, in has beenawardedagovernmentgrant, amountedto A subsidiaryoftheGroup Company. the to granted facilities carrying amountofRM66,533,589with a (2016:RM66,672,076)chargedtosecurebank Included in property, plant and equipment is a property known as Casuarina Hotel Meru Group (seeNote26). RM27,979,963RM54,014,400) tosecure tothe (2016: bank loansgranted ischarged a carryingamountof Groupwith freehold land ofthe At 31December2017,certain RM80,152,521). excluding borrowing costscapitalised amountingtoRM136,341,631 (2016: capitalised amounting to RM8,096,409 (2016:RM14,514,819).Thenetcashpayments, During thefinancialyear,included incashpaymentsoftheGroupareborrowing costs were of: means by acquired plantandoftheCompany During theyear,property, ofGroup andequipment follows: are as leasearrangements finance and equipmentheldunderhirepurchase plantNet carryingamountofproperty, : RM Nil) which is held in trust by a director of the Group and of the Company. (2016 ofRM467,772a carryingamount vehicle with vehiclesisamotor Included inmotor 144,438,040 146,238,160 1,800,120 7,459,181 14,104 2017 2017 82 RM RM Group Group 94,667,340 94,667,340 5,745,569 62,921 2016 2016 RM RM - 726,728 726,728 14,103 2017 2017 RM RM Company Company - - 156,851 156,851 62,921 2016 2016 RM RM - - (Incorporated in Malaysia) Perak Corporation Berhad 210915-U 14. (f) (contd.) Property, plantandequipment Terminal growth rate Discount rate The sensitivityto changesinthekeyassumptions ofitsVIU are assetoutbelow: (historical data). sources internal and sources external both on based are and industry the in trends future management's assessment of assumptionsrepresent key assigned tothe The values • • • assumptions: key following expected to be generated from the continuing use of the divisionwas based on the and based onitsvalueinuse("VIU")andwas determined by discountingthefuture cash flows year theaboveDecember 2017.Therecoverablefinancial was amountfor ended31 the resulting inanetcarrying amountofRM232,683,074(2016:RM350,488,311) for or loss in profit recognised Nil) was (2016 : RM loss of RM167,239,506 impairment plantandequipment.An carried outareviewoftherecoverable amountofitsproperty, a subsidiary of the Group, During Animation the Theme financial Park year,Sdn. Bhd. AnimationTheme ParkSdn.Bhd. Impairment average cost of capital. average cost the division.discount ratewas The estimated based ontheindustryaverage weighted A pre-tax applied indetermining therecoverablediscount ratefor 10% was amountof at3%. Terminal growthrateisprojected Cash flows were based projected on actual operating results and a 5 years projection. 83 Change in assumption 1% 1% Increase in VIU by 16% VIU Increase in by 15% VIU Decrease in assumption Decrease in VIU by 12% VIU Decrease in by 20% VIU Increase in assumption (Incorporated in Malaysia) Perak Corporation Berhad 210915-U 14. (f) (contd.) Property, plantandequipment Terminal growth rate Discount rate • assumptions: key following expected to be generated from the continuing use of the divisionwas based on the and based onitsvalueinuse("VIU")andwas determined by discountingthefuture cash flows year theaboveDecember 2017.Therecoverablefinancial was amountfor ended31 the resulting inanetcarrying amountofRM232,683,074(2016:RM350,488,311) for or loss in profit recognised Nil) was (2016 : RM loss of RM167,239,506 impairment plantandequipment.An carried outareviewoftherecoverable amountofitsproperty, a subsidiary of the Group, During Animation the Theme financial Park year,Sdn. Bhd. AnimationTheme ParkSdn.Bhd. Impairment The sensitivityto changesinthekeyassumptions ofitsVIU are assetoutbelow: (historical data). sources internal and sources external both on based are and industry the in trends future management's assessment of assumptionsrepresent key assigned tothe The values • • average cost of capital. average cost the division.discount ratewas The estimated based ontheindustryaverage weighted A pre-tax applied indetermining therecoverablediscount ratefor 10% was amountof at3%. Terminal growthrateisprojected Cash flows were based projected on actual operating results and a 5 years projection. 83 Change in assumption 1% 1% Increase in VIU by 16% VIU Increase in by 15% VIU Decrease in assumption Decrease in VIU by 12% VIU Decrease in by 20% VIU Increase in assumption 83 page
DIRECTORS’ REPORT AND AUDITED FINANCIAL STATEMENTS 2017 PERAK CORPORATION BERHAD (210915-U) 84 page
DIRECTORS’ REPORT AND AUDITED FINANCIAL STATEMENTS 2017 PERAK CORPORATION BERHAD (210915-U) (Incorporated in Malaysia) Perak Corporation Berhad 210915-U 15. means of: During the additions year,to port facilities byof the Group and of the Company were acquired Written off Written Cash payments At 31December2017 At 31December2016 Net carryingamount At 31December2017 year (Note9) Depreciation forthe At 31December2016 year (Note9) Depreciation forthe At 1 January 2016 depreciation Accumulated At 31December2017 Additions At 31December2016 Additions At 1 January 2016 Cost Group Port facilities Written off Written 12,646,285 28,328,346 16,026,894 31,873,045 19,226,760 19,226,760 Leasehold 3,544,699 3,199,866 3,005,915 port land 344,833 193,951 RM - - - 22,647,481 89,116,426 89,116,426 88,049,426 62,514,213 64,498,209 26,602,213 24,618,217 1,983,996 1,970,736 1,067,000 84 structure Port RM - - - equipment 10,942,627 21,316,854 19,875,391 19,005,365 12,823,386 11,907,365 1,553,286 1,026,347 8,493,468 7,968,026 (111,823) (110,326) 964,738 870,026 Port RM Capital work in progress 65,872,090 72,115,282 80,071,661 72,115,282 6,243,192 6,243,192 6,243,192 Group andCompany 2017 RM RM ------214,421,607 134,461,769 126,281,551 171,451,309 80,071,661 36,596,023 94,736,321 42,970,298 39,725,448 8,180,218 8,180,218 3,355,176 3,129,425 (111,823) (110,326) Total 2016 RM RM (Incorporated in Malaysia) Perak Corporation Berhad 210915-U 16. At 31December Fair value At 31December Net carryingamount At 31December Depreciation fortheyear(Note9) At 1January Accumulated depreciation At 1 January and 31 December Cost Investment properties Freehold land Included in the above are: Buildings reference to recent transaction value. transaction recent to reference method comparison valuations valued. being makes that properties the on based are The by accreditedindependent valuersrecent experience with in thelocation and category of of investmentpropertieshavedetermined basedon valuationThe fairvalue been performed 85 11,550,000 4,750,635 5,390,949 1,679,998 4,750,635 3,070,637 640,314 561,224 79,090 2017 RM Group 10,000,000 4,829,725 5,390,949 1,679,998 4,829,725 3,149,727 561,224 482,134 79,090 2016 RM (Incorporated in Malaysia) Perak Corporation Berhad 210915-U 16. At 31December Fair value Buildings Freehold land Included in the above are: At 31December Net carryingamount At 31December Depreciation fortheyear(Note9) At 1January Accumulated depreciation At 1 January and 31 December Cost Investment properties reference to recent transaction value. transaction recent to reference method comparison valuations valued. being makes that properties the on based are The by accreditedindependent valuersrecent experience with in thelocation and category of of investmentpropertieshavedetermined basedonvaluationThe fairvalue been performed 85 11,550,000 4,750,635 3,070,637 1,679,998 4,750,635 5,390,949 640,314 561,224 79,090 2017 RM Group 10,000,000 4,829,725 3,149,727 1,679,998 4,829,725 5,390,949 561,224 482,134 79,090 2016 RM 85 page
DIRECTORS’ REPORT AND AUDITED FINANCIAL STATEMENTS 2017 PERAK CORPORATION BERHAD (210915-U) 86 page
DIRECTORS’ REPORT AND AUDITED FINANCIAL STATEMENTS 2017 PERAK CORPORATION BERHAD (210915-U) (Incorporated in Malaysia) Perak Corporation Berhad 210915-U 17. (Note17(a)) Bhd. Sdn. Port Rungkup Bhd. Sdn. Taipan PCB Bhd. Sdn. Leisure PCB PCB EquitySdn.Bhd. Sdn.Bhd. PCB Development Name ofsubsidiaries loanstosubsidiaries Equity Unquoted shares,atcost Investments insubsidiaries Sdn.Bhd. Animation ThemePark Held by PCB DevelopmentSdn. Bhd. losses Less: Accumulatedimpairment Details of subsidiaries are asfollows: subsidiaries Details of incorporation Malaysia Malaysia Malaysia Malaysia Malaysia Malaysia Country of 86 Equity interest 2017 100 100 100 100 70 51 held (%) 2016 100 100 100 100 51 - Principal activities propertydevelopment Operation ofportfacility Investment holding investment holding Property investment and projectmanagement Property development and Investment holding andreal animation theme park Develop andoperate an 155,598,590 153,996,589 155,098,590 1,602,001 (500,000) 2017 RM Company 155,598,589 153,996,589 155,098,589 1,602,000 (500,000) 2016 RM (Incorporated in Malaysia) Perak Corporation Berhad 210915-U 17. Sdn.Bhd.) (Note17(b)) VillageResort Pangkor known (formerly as Rimba Land Sdn. Bhd. Sdn.Bhd. Labu Sayong Cafe Sdn.Bhd. Park Meru Raya Water Recreation Sdn. Bhd. BioD Leisureand Malaysia Meru Raya ParkSdn.Bhd. Malaysia Lanai CasuarinaSdn.Bhd. Sdn.Bhd. Casuarina Taiping Sdn.Bhd. Casuarina Boathouse Sdn.Bhd. Intan Casuarina Teluk Malaysia Sdn.Bhd. Malim Casuarina Tanjong Sdn.Bhd. Casuarina Pangkor Held by PCB LeisureSdn.Bhd. Name ofsubsidiaries Investments insubsidiaries (contd.) incorporation Malaysia Malaysia Malaysia Malaysia Malaysia Malaysia Malaysia Malaysia Country of 87 Equity interest 2017 100 100 100 100 100 100 100 100 100 100 100 held (%) 2016 100 100 100 100 100 100 100 100 100 100 - Principal activities Jungle adventurepark of restaurant andcafe ofrestaurant Operation andmanagement recreational related activities themeparks,water sportand Managementwater parks, of travel services Provision oftransportationand facilities management Property development and ofhotel Operation andmanagement ofresthouse Operation andmanagement facilities Provision ofaccommodation ofhotel Operation andmanagement ofhotel Operation andmanagement ofhotel Operation andmanagement (Incorporated in Malaysia) Perak Corporation Berhad 210915-U 17. Sdn.Bhd.) (Note17(b)) VillageResort Pangkor known (formerly as Rimba Land Sdn. Bhd. Sdn.Bhd. Labu Sayong Cafe Sdn.Bhd. Park Meru Raya Water Recreation Sdn. Bhd. BioD Leisureand Malaysia Meru Raya ParkSdn.Bhd. Malaysia Lanai CasuarinaSdn.Bhd. Sdn.Bhd. Casuarina Taiping Sdn.Bhd. Casuarina Boathouse Sdn.Bhd. Intan Casuarina Teluk Malaysia Sdn.Bhd. Malim Casuarina Tanjong Sdn.Bhd. Casuarina Pangkor Held by PCB LeisureSdn.Bhd. Name ofsubsidiaries Investments insubsidiaries (contd.) incorporation Malaysia Malaysia Malaysia Malaysia Malaysia Malaysia Malaysia Malaysia Country of 87 Equity interest 2017 100 100 100 100 100 100 100 100 100 100 100 held (%) 2016 100 100 100 100 100 100 100 100 100 100 - Principal activities facilities management Property development and ofhotel Operation andmanagement Operation andmanagement of restaurant andcafe ofrestaurant recreational related activities themeparks,water sportand travel services ofresthouse facilities ofhotel ofhotel ofhotel Jungle adventurepark Operation andmanagement Managementwater parks, of Provision oftransportationand Operation andmanagement Provision ofaccommodation Operation andmanagement Operation andmanagement 87 page
DIRECTORS’ REPORT AND AUDITED FINANCIAL STATEMENTS 2017 PERAK CORPORATION BERHAD (210915-U) 88 page
DIRECTORS’ REPORT AND AUDITED FINANCIAL STATEMENTS 2017 PERAK CORPORATION BERHAD (210915-U) (Incorporated in Malaysia) Perak Corporation Berhad 210915-U 17. * Although the Group has 50% effective ownership AlthoughtheGrouphas50%effective have interest,thedirectors determined * Held by Casuarina Meru Sdn.Bhd. Held by Casuarina Meru LMT Capital Sdn. Bhd. * Held by Lumut Maritime Terminal Sdn. Bhd. MaritimeLumut Terminal Held by PCB Taipan Sdn.Bhd. Name ofsubsidiaries Investments insubsidiaries (contd.) Cash Complex Sdn. Bhd. Sdn.Bhd. Corporation Held by Silveritage Sdn.Bhd. Silveritage Corporation Malaysia CasuarinaMeru Sdn.Bhd. Sdn.Bhd. 100% voting interestin LMTCapitalSdn. Bhd. that theGroupcontrols LMTCapital Sdn.Bhd. asLumut Maritime Sdn. Bhd.has Terminal incorporation Malaysia Malaysia Malaysia Malaysia Country of 88 hr 1share 1 share hr hr privatised project 1share 1 share 0pu 0pu Dormant 50plus 50 plus Development ofanintegrated 50plus 50 plus Equity interest 66.18 89.54 89.54 2017 held (%) 61 Investmentholding 66.18 Development oftourism 89.54 Hotelier, restaurateur and 89.54 2016 Principal activities projects andotherancillary activities rental of port related land ofabulkterminal,salesand operationandmaintenance multi-purposeport facilities, andoperations of encompassingownership propertydeveloper (Incorporated in Malaysia) Perak Corporation Berhad 210915-U 17. Net cash inflow onacquisition Net cashinflow Considerations settledin cash acquisition ofthe oncash flows isThe effect asfollows: Goodwill paid Consideration Less: Parent's share of net liabilities net liabilities of share interests Non-controlling netliabilitiesacquired identifiable Total Other payables balances bank and Cash (b) (a) Acquisitionsubsidiaries of Investments insubsidiaries (contd.) Less: Cashandbank balances acquisition were: acquisition of date the at as subsidiaries the of liabilities and assets identifiable the of values fair The Village Resort Sdn. Bhd.) asPangkor known LandSdn.Bhd.(formerly inRimba Acquisition ofshares Sdn. Bhd. inRungkupPort Acquisition ofshares Acquisition, RLSB became a wholly-owned subsidiary of theGroup. RLSBbecameawholly-ownedsubsidiary Acquisition, the of Upon completion ("Acquisition"). RM1 of acashconsideration shares, for ordinary Bhd. (formerly Resort Sdn.known asPangkor Village comprising Bhd.)("RLSB") 2 On 26January2017,theGroupacquiredentire equityinterestinRimbaLandSdn. Company.subsidiary oftheGroupand 70%-owned a became RPSB Acquisition, the of completion Upon ("Acquisition"). Port Sdn. Bhd. ("RPSB") comprising 70 ordinary shares, for a cash consideration of RM1 On 5June2017,theGroupandCompanyacquired70%equityinterestin Rungkup 89 (20,206) (25,166) (25,173) (20,208) (4,960) RM RM (2) (2) 7 7 5 (Incorporated in Malaysia) Perak Corporation Berhad 210915-U 17. Net cash inflow onacquisition Net cashinflow Less: Cashandbank balances Considerations settledin cash acquisition ofthe oncash flows isThe effect asfollows: Goodwill paid Consideration Less: Parent's share of net liabilities net liabilities of share interests Non-controlling netliabilitiesacquired identifiable Total Other payables balances bank and Cash (b) (a) Acquisitionsubsidiaries of Investments insubsidiaries (contd.) acquisition were: acquisition of date the at as subsidiaries the of liabilities and assets identifiable the of values fair The Village Resort Sdn. Bhd.) asPangkor known LandSdn.Bhd.(formerly inRimba Acquisition ofshares Sdn. Bhd. inRungkupPort Acquisition ofshares subsidiary of the Group and of the Company.subsidiary oftheGroupand 70%-owned a became RPSB Acquisition, the of completion Upon ("Acquisition"). Port Sdn. Bhd. ("RPSB") comprising 70 ordinary shares, for a cash consideration of RM1 On 5June2017,theGroupandCompanyacquired70%equityinterestin Rungkup Acquisition, RLSB became a wholly-owned subsidiary of theGroup. RLSBbecameawholly-ownedsubsidiary Acquisition, the of Upon completion ("Acquisition"). RM1 of acashconsideration shares, for ordinary Bhd. (formerly Resort Sdn.known asPangkor Village comprising Bhd.)("RLSB") 2 On 26January2017,theGroupacquiredentire equityinterestinRimbaLandSdn. 89 (20,206) (25,166) (25,173) (20,208) (4,960) RM RM (2) (2) 7 7 5 89 page
DIRECTORS’ REPORT AND AUDITED FINANCIAL STATEMENTS 2017 PERAK CORPORATION BERHAD (210915-U) 90 page
DIRECTORS’ REPORT AND AUDITED FINANCIAL STATEMENTS 2017 PERAK CORPORATION BERHAD (210915-U) 210915-U
Perak Corporation Berhad (Incorporated in Malaysia)
17. Investments in subsidiaries (contd.)
(i) Summarised statements of financial position
Lumut Maritime Animation Theme Terminal Sdn. Bhd. Casuarina Meru Sdn. Bhd. Park Sdn. Bhd. Total 2017 2016 2017 2016 2017 2016 2017 2016 RM RM RM RM RM RM RM RM
Non-current assets 175,414,428 96,819,685 75,777,294 81,870,647 251,623,607 350,488,311 502,815,329 529,178,643 Current assets 61,758,969 77,621,823 11,576,361 3,712,814 27,643,698 126,816,908 100,979,028 208,151,545 Total assets 237,173,397 174,441,508 87,353,655 85,583,461 279,267,305 477,305,219 603,794,357 737,330,188
Non-current liabilities 38,686,201 6,155,776 - 644,110 305,781,586 435,455,688 344,467,787 442,255,574 Current liabilities 17,304,529 13,867,112 11,048,015 6,656,907 353,632,188 52,014,837 381,984,732 72,538,856 Total liabilities 55,990,730 20,022,888 11,048,015 7,301,017 659,413,774 487,470,525 726,452,519 514,794,430 Net assets/(liabilities) 181,182,667 154,418,620 76,305,639 78,282,444 (380,146,469) (10,165,306) (122,658,163) 222,535,758
Equity attributable to: Owners of the Company 90,713,323 77,331,305 68,324,069 70,094,100 (195,431,431) (6,741,037) (36,394,039) 140,684,368 Non-controlling interests 90,469,344 77,087,315 7,981,570 8,188,344 (184,715,038) (3,424,269) (86,264,124) 81,851,390 181,182,667 154,418,620 76,305,639 78,282,444 (380,146,469) (10,165,306) (122,658,163) 222,535,758
90 210915-U
Perak Corporation Berhad (Incorporated in Malaysia)
17. Investments in subsidiaries (contd.)
(ii) Summarised statements of comprehensive income
Lumut Maritime Animation Theme Terminal Sdn. Bhd. Casuarina Meru Sdn. Bhd. Park Sdn. Bhd. Total 2017 2016 2017 2016 2017 2016 2017 2016 RM RM RM RM RM RM RM RM
Revenue 105,314,215 97,988,604 15,235,068 14,296,873 14,561,642 - 135,110,925 112,285,477 Profit/(loss) for the year 31,764,056 32,200,260 (1,976,807) (4,281,790) (369,981,162) (20,255,669) (340,193,913) 7,662,801 Total comprehensive income/(loss) 31,764,056 32,200,260 (1,976,807) (4,281,790) (369,981,162) (20,147,089) (340,193,913) 7,771,381
Profit/(loss) attributable to: Owners of the Company 15,882,028 16,100,130 (1,770,033) (3,407,020) (188,690,393) (4,595,137) (174,578,398) 8,097,973 Non-controlling interests 15,882,028 16,100,130 (206,774) (874,770) (181,290,769) (15,660,532) (165,615,515) (435,172) 31,764,056 32,200,260 (1,976,807) (4,281,790) (369,981,162) (20,255,669) (340,193,913) 7,662,801
Total comprehensive income/(loss) attributable to: Owners of the Company 15,882,028 16,100,130 (1,770,033) (3,407,020) (188,690,393) (4,486,557) (174,578,398) 8,206,553 Non-controlling interests 15,882,028 16,100,130 (206,774) (874,770) (181,290,769) (15,660,532) (165,615,515) (435,172) 31,764,056 32,200,260 (1,976,807) (4,281,790) (369,981,162) (20,147,089) (340,193,913) 7,771,381
Dividend paid to non-controlling interests 2,499,999 14,999,999 - - - - 2,499,999 14,999,999
91 91 page
DIRECTORS’ REPORT AND AUDITED FINANCIAL STATEMENTS 2017 PERAK CORPORATION BERHAD (210915-U) 92 page
DIRECTORS’ REPORT AND AUDITED FINANCIAL STATEMENTS 2017 PERAK CORPORATION BERHAD (210915-U) 210915-U
Perak Corporation Berhad (Incorporated in Malaysia)
17. Investments in subsidiaries (contd.)
(iii) Summarised statements of cash flows
Lumut Maritime Animation Theme Terminal Sdn. Bhd. Casuarina Meru Sdn. Bhd. Park Sdn. Bhd. Total 2017 2016 2017 2016 2017 2016 2017 2016 RM RM RM RM RM RM RM RM
Net cash flows generated from/(used in): Operating activities 26,427,207 33,971,562 (1,486,066) (41,601,890) (50,268,640) 37,329,642 (25,327,499) 29,699,314 Investing activities (82,151,149) (8,419,088) (857,023) (671,938) (99,179,949) (71,557,779) (182,188,121) (80,648,805) Financing activities 32,001,635 (35,233,768) 38,519 40,732,227 124,391,429 51,435,640 156,431,583 56,934,099 Net (decrease)/increase in cash and cash equivalents (23,722,307) (9,681,294) (2,304,570) (1,541,601) (25,057,160) 17,207,503 (51,084,037) 5,984,608 Cash and cash equivalents at: Beginning of the year 31,179,949 40,861,243 (1,772,899) (231,298) 26,670,908 9,463,405 56,077,958 50,093,350 End of the year 7,457,642 31,179,949 (4,077,469) (1,772,899) 1,613,748 26,670,908 4,993,921 56,077,958
The financial information of Rungkup Port Sdn. Bhd. is not disclosed as it is not material to the Group.
92 (Incorporated in Malaysia) Perak Corporation Berhad 210915-U 18. Sdn.Bhd. © Sdn.Bhd. © Visi Cenderawasih Held by PCB Equity Sdn. Bhd. Name ofassociates Details associates ofthe areasfollows: - Ordinaryshares Unquoted shares,atcost Investments inassociates Unified Million (M) Unified Shares (“CRNCPS”) RedeemableNon-ConvertiblePreference - Cumulative Share of post-acquisition loss Share ofpost-acquisition Less: Accumulatedimpairment loss to theGroup. haveanyassociate thatis individuallymaterial As at31December 2017, theGroup did not associates material of information Financial firmsofEY auditedbymember Not © incorporation Malaysia Malaysia Country of 93 Resort operatorfor provider Network facilities Pangkor VillageResort Pangkor Principal activity (3,830,942) 3,576,859 6,100,000 1,900,000 7,407,801 (592,199) 2017 RM Group subsidiary (%) Percentage of 2017 2016 30 49 equity held (1,169,058) (3,830,942) through 1,100,000 6,100,000 4,930,942 2016 RM - (Incorporated in Malaysia) Perak Corporation Berhad 210915-U 18. Sdn.Bhd. © Million (M) Unified Sdn.Bhd. © Visi Cenderawasih Held by PCB Equity Sdn. Bhd. Name ofassociates Details associates ofthe areasfollows: - Ordinaryshares Unquoted shares,atcost Investments inassociates Shares (“CRNCPS”) RedeemableNon-ConvertiblePreference - Cumulative Share of post-acquisition loss Share ofpost-acquisition Less: Accumulatedimpairment loss to theGroup. haveanyassociate thatis individuallymaterial As at31December 2017, theGroup did not associates material of information Financial firmsofEY auditedbymember Not © incorporation Malaysia Malaysia Country of 93 Resort operatorfor provider Network facilities Pangkor VillageResort Pangkor Principal activity (3,830,942) 3,576,859 6,100,000 1,900,000 7,407,801 (592,199) 2017 RM Group subsidiary (%) Percentage of 2017 2016 30 49 equity held (1,169,058) (3,830,942) through 1,100,000 6,100,000 4,930,942 2016 RM - 93 page
DIRECTORS’ REPORT AND AUDITED FINANCIAL STATEMENTS 2017 PERAK CORPORATION BERHAD (210915-U) 94 page
DIRECTORS’ REPORT AND AUDITED FINANCIAL STATEMENTS 2017 PERAK CORPORATION BERHAD (210915-U) (Incorporated in Malaysia) Perak Corporation Berhad 210915-U 19. investments Market quoted of value Malaysia) Unit TrustFund(quotedin or loss throughprofit Financial assets atfairvalue Current atcost Malaysiain shares Unquoted assets Available-for-sale financial PreferenceShares("RCPS") Convertible Redeemable 3.5% Held-to-maturity investments Non-current Other investments 455,000 430,000 418,536 418,536 94 25,000 2017 RM Group 1,182,571 1,182,571 25,000 25,000 2016 RM - 350,473 350,473 2017 RM Company - - - 338,671 338,671 2016 RM - - - (Incorporated in Malaysia) Perak Corporation Berhad 210915-U 20. At 31December andequipment(Note14) property,plant from Transfer combination business Acquisition through 1January 2017 At 31December2017 combination business Acquisition through Amortisation At 31December Impairment loss At 31December2016 and At 31December2016 Net carryingamount and1January 2017 31December2016 At 1January 2016, and impairment Accumulated amortisation At 1January 2016 Cost Group Intangible assets management purposes. management internal for monitored is which at goodwill the Group the within level lowest the represent which For the purpose of impairment testing, goodwillthe Group's operating divisions is allocated to Goodwill 23,950,451 23,831,211 23,930,243 23,911,564 23,829,682 Goodwill 100,561 119,240 100,561 95 20,208 18,679 RM - - Intellectual 3,568,998 1,479,165 3,568,998 2,089,833 1,506,603 property 583,230 rights RM ------rights work- rights in-progress Intellectual 35,247,253 17,461,671 35,247,253 17,785,582 17,785,582 property RM ------62,766,702 42,772,047 38,816,251 23,930,243 23,911,564 23,829,682 19,994,655 19,392,746 583,230 100,561 20,208 18,679 Total RM (Incorporated in Malaysia) Perak Corporation Berhad 210915-U 20. At 31December andequipment(Note14) property,plant from Transfer At 31December2017 Amortisation combination business Acquisition through 1January 2017 combination business Acquisition through At 31December2016 Net carryingamount At 31December Impairment loss and1January 2017 31December2016 At 1January 2016, and impairment Accumulated amortisation At 31December2016 and At 1January 2016 Cost Group Intangible assets management purposes. management internal for monitored is which at goodwill the Group the within level lowest the represent which For the purpose of impairment testing, goodwillthe Group's operating divisions is allocated to Goodwill 23,950,451 23,831,211 23,911,564 23,930,243 23,829,682 Goodwill 100,561 119,240 100,561 95 20,208 18,679 RM - - Intellectual 3,568,998 3,568,998 1,479,165 2,089,833 1,506,603 property 583,230 rights RM ------rights work- rights in-progress Intellectual 35,247,253 35,247,253 17,461,671 17,785,582 17,785,582 property RM ------62,766,702 38,816,251 42,772,047 23,911,564 23,930,243 23,829,682 19,994,655 19,392,746 583,230 100,561 20,208 18,679 Total RM 95 page
DIRECTORS’ REPORT AND AUDITED FINANCIAL STATEMENTS 2017 PERAK CORPORATION BERHAD (210915-U) 96 page
DIRECTORS’ REPORT AND AUDITED FINANCIAL STATEMENTS 2017 PERAK CORPORATION BERHAD (210915-U) (Incorporated in Malaysia) Perak Corporation Berhad 210915-U 20. determining theVIU havenotbeendisclosed. in used assumptions key the hence significant, not is ATP to allocated goodwill the As Animation Theme ParkSdn.Bhd. Lumut Maritime TerminalSdn. Bhd. Goodwill (contd.) assets (contd.) Intangible Animation Theme Park Sdn. Bhd. ("ATP") Village Resort Sdn.Bhd.) Rimba Land Sdn.Bhd.(formerly known asPangkor Bhd. Sdn. Port Rungkup Terminal growth rate Discount rate The sensitivity assumptions changesin are ofitsvalueinuseto thekey assetoutbelow: data). sources (historical and are based on both external sources and internal trends in the industry assessment offuture management's assumptionsrepresent the key assigned to The values • • • assumptions: key based onthefollowing was and divisionthe continuing the from of flows use cash generated be to expected future the recoverableThe was above its the on for based amount discounting by determined was and VIU Sdn. Bhd. Terminal Lumut Maritime follows: are as eachunit to allocated of goodwill carryingamounts The aggregate weighted average cost of capital. cost of average weighted discountamount ofthedivision. ratewasestimatedbased The on theindustryaverage recoverable the determining in applied was :10%) (2016 10% for rate pre-tax A discount annum. per 2%) : (2016 2% of growth annual anticipated at projected was Revenue projection. based Cash flowswereon actualoperatingresultsand projected a 5years(2016:years) 96 assumption Change in 1% 1% VIU by 23% VIU Increase in by 21% VIU Decrease in assumption Increase in 23,811,003 23,831,211 11,573 8,635 2017 RM - VIU by 17% VIU Decrease in by 29% VIU Increase in assumption Decrease in 23,811,003 23,911,564 100,561 2016 RM - - (Incorporated in Malaysia) Perak Corporation Berhad 210915-U 21. 20. In 3to5years In 1to3years 1year Within Maturity Current Non-current receivablelease Finance assets (contd.) Intangible the netinvestment inthelease.Theleasepayments madebythelesseearesplit intoaninterest theamountof for areceivable Group recognises The equipment. of air-conditioning leasing to the A subsidiary of the Group is a lessor in connection with the finance lease. Essentially, relates this minimum lease payments: investmentof payable andthepresentvaluetable presentsthegross amounts The following The finance lease of the Group bears interest at 3% (2016 : Nil) per annum. Nil) per (2016 : at 3% interest bears the Group lease of The finance Intellectual property rights in a finance leaseisdetermined: in afinance interest incomeinprofitorloss.Thefollowinghow theamount ofthenetinvestment tableshows reduced bytheprincipalreceived. The interestcomponent as of thepaymentsisrecognised interestcomponent andaprincipalusing effective method.Theleasereceivable the is income. years andisincludedinthe"Other expenses" of lineitemofthestatements comprehensive The amortisation is calculatedonastraight-line basis over estimateduseful of 3to3.5 lives the a subsidiary. theme parkoperatedby acquiredfortheuseina Intellectual propertyrightsrelatetolicense 97 539,123 372,394 109,967 539,123 109,967 429,156 56,762 2017 2017 RM RM Group Group 2016 2016 RM RM ------(Incorporated in Malaysia) Perak Corporation Berhad 210915-U 21. 20. In 3to5years In 1to3years 1year Within Maturity Current Non-current receivablelease Finance assets (contd.) Intangible income. years andisincludedinthe"Other expenses" of lineitemofthestatements comprehensive The amortisation is calculatedonastraight-line basis over estimateduseful of 3to3.5 lives the a subsidiary. theme parkoperatedby acquiredfortheuseina Intellectual propertyrightsrelatetolicense Intellectual property rights The finance lease of the Group bears interest at 3% (2016 : Nil) per annum. Nil) per (2016 : at 3% interest bears the Group lease of The finance minimum lease payments: investmentof payable andthepresentvaluetable presentsthegross amounts The following leaseisdetermined: in afinance interest incomeinprofitorloss.Thefollowinghow theamount ofthenetinvestment tableshows reduced bytheprincipalreceived. The interestcomponent as of thepaymentsisrecognised interestcomponent andaprincipalusing effective method.Theleasereceivable the is the netinvestment inthelease.Theleasepayments madebythelesseearesplit intoaninterest theamountof for areceivable Group recognises The equipment. of air-conditioning leasing to the A subsidiary of the Group is a lessor in connection with the finance lease. Essentially, relates this 97 539,123 372,394 109,967 539,123 109,967 429,156 56,762 2017 2017 RM RM Group Group 2016 2016 RM RM ------97 page
DIRECTORS’ REPORT AND AUDITED FINANCIAL STATEMENTS 2017 PERAK CORPORATION BERHAD (210915-U) 98 page
DIRECTORS’ REPORT AND AUDITED FINANCIAL STATEMENTS 2017 PERAK CORPORATION BERHAD (210915-U) (Incorporated in Malaysia) Perak Corporation Berhad 210915-U 22. Tools andspares Other supplies Merchandise goods Food andbeverages (c) (b) (a) realisablevalue tonet Write-down Completed properties -Development costs of more than 50 years unexpired lease period -Leasehold landwith -Freeholdland development under Properties Current -Freeholdland development for held Properties Non-current Inventories costofsales Inventories recognisedas orloss: inprofit Recognised (2016 :RM296,642). RM224,281 of capitalised costs development in Included borrowing are year the during costs 26(c)(i). in Note asdisclosed facilities banking RM12,500,000) ofthe Group have been pledgedtoafinancial institution assecurityfor Freehold land under development withcarrying amounts totallingRM12,500,000 (2016 : due course. (2016 :RM27,331,797) havebeensurrenderedtoPTGandwillbe re-issued to theGroupin As at31December2017,certainlandtitlesbelonging totheGrouptotallingRM13,103,774 parties. third to land vacant development of pieces certain off disposed and hadthroughoutthepastyears("PTG"). the masterblocktitles, Group Upon receiving throughPejabatTanahdanGalian the Group certainparcelsoflandto master blocktitlesfor issued holdingcorporation,PerbadananKemajuanNegeriIn prioryear,the Perakhad 198,316,545 171,225,053 221,027,932 13,463,519 59,777,851 50,085,101 61,362,101 22,711,387 66,241,710 6,267,430 6,141,927 399,412 819,204 854,107 98 2017 RM Group 173,609,509 156,958,955 197,920,896 50,632,872 46,682,320 59,643,763 24,311,387 59,337,087 5,797,490 2,097,800 8,580,613 109,402 514,350 65,249 2016 RM 16,507,420 47,739,712 23,404,056 87,651,188 87,651,188 87,651,188 924,305 2017 RM Company ------15,988,556 44,336,932 23,285,747 83,611,235 83,611,235 83,611,235 2016 RM ------(Incorporated in Malaysia) Perak Corporation Berhad 210915-U 23. Subsidiaries holding corporation Subsidiaries of ultimate Associate loss impairment Allowance for Less: Deposits Amounts duefromthirdparties Other receivables,Other net oa rd n te eevbe 217,110,015 Total tradeandotherreceivables receivable Services and Goods Less: Tax Total loansand receivables Total (Note 25) Add: Cashandbank balances Ultimateholding corporation Amounts duefromrelatedparties: Other receivables parties Third Trade receivables Trade andotherreceivables Trade receivables,net receivable Goods andServices Tax Amounts due from third parties Amount due from an associate Amountsduefromsubsidiaries loss impairment Allowance for Less: 161,077,679 105,527,202 179,314,490 215,212,522 247,781,605 270,781,840 (91,467,350) (90,413,310) 90,904,430 32,569,083 69,119,209 39,263,806 37,795,525 (1,468,281) (1,897,493) (1,054,040) 1,054,040 2,279,466 1,897,493 99 2017 RM Group - - 161,338,018 237,225,547 262,736,608 262,422,841 355,987,182 238,279,587 86,239,893 74,504,018 93,564,341 74,044,085 27,839,406 25,511,061 (2,328,345) (1,054,040) (1,054,040) 1,054,040 2,123,784 (313,767) 313,767 2016 RM - - - 163,867,117 244,761,111 238,109,350 238,109,350 238,040,014 238,143,780 245,503,433 80,893,994 (7,394,083) (7,394,083) 672,986 103,766 (69,336) 69,336 2017 RM Company ------103,802,372 200,599,473 202,110,169 202,110,169 201,893,528 207,980,072 202,158,197 16,792,546 80,004,555 1,342,083 6,086,544 (216,641) 216,641 (48,028) (48,028) 2016 RM ------(Incorporated in Malaysia) Perak Corporation Berhad 210915-U 23. Total loansand receivables Total (Note 25) Add: Cashandbank balances receivable 217,110,015 Services and Goods Less: Tax Total tradeandotherreceivables receivables,Other net holding corporation Subsidiaries ofultimate Associate Subsidiaries loss impairment Allowance for Less: receivable Goods andServices Tax Deposits Amounts duefromthirdparties Amounts due from third parties Amount due from an associate Amountsduefromsubsidiaries loss impairment Allowance for Less: Ultimateholding corporation Amounts duefromrelatedparties: Other receivables Trade receivables,net parties Third Trade receivables Trade andotherreceivables 247,781,605 215,212,522 179,314,490 161,077,679 105,527,202 270,781,840 (91,467,350) (90,413,310) 32,569,083 90,904,430 69,119,209 37,795,525 39,263,806 (1,897,493) (1,468,281) (1,054,040) 1,054,040 1,897,493 2,279,466 99 2017 RM Group - - 355,987,182 262,422,841 262,736,608 237,225,547 161,338,018 238,279,587 93,564,341 86,239,893 74,504,018 74,044,085 25,511,061 27,839,406 (1,054,040) (2,328,345) (1,054,040) 1,054,040 2,123,784 (313,767) 313,767 2016 RM - - - 238,143,780 238,040,014 238,109,350 238,109,350 163,867,117 244,761,111 245,503,433 80,893,994 (7,394,083) (7,394,083) 103,766 672,986 (69,336) 69,336 2017 RM Company ------207,980,072 201,893,528 202,110,169 202,110,169 103,802,372 200,599,473 202,158,197 16,792,546 80,004,555 6,086,544 1,342,083 (216,641) 216,641 (48,028) (48,028) 2016 RM ------99 page
DIRECTORS’ REPORT AND AUDITED FINANCIAL STATEMENTS 2017 PERAK CORPORATION BERHAD (210915-U) 100 page DIRECTORS’ REPORT AND AUDITED FINANCIAL STATEMENTS 2017 PERAK CORPORATION BERHAD (210915-U)
(Incorporated in Malaysia) Perak Corporation Berhad 210915-U 23. (a) Trade andotherreceivables(contd.) 61 to90days pastduenotimpaired 31 to60days pastduenotimpaired 1 to30days pastduenotimpaired Neither pastduenor impaired Trade receivables More 91days than impaired not due past Impaired These trade receivables that are past due but not impairedThese tradereceivables unsecuredin are thatarepastduebut nature. business. of course ordinary the in losses material without full in realised be should debts these reportingdatebutnotimpaired.Thedirectors areoftheopinionthat are pastdueatthe The Grouphastradereceivables amounting to RM15,411,443 (2016:RM11,929,107) that Receivables are past due but not that impaired year. financial the during renegotiated been have impaired nor due past neither are that receivables trade Group's the of None with good payment records withthe Group. debtors creditworthy are impaired nor due past neither are receivables other and Trade that due nor impaired are neither past Receivables that as follows: tradereceivables is the Group's The ageinganalysisof receivables trade of analysis Ageing established. is entity another from asset financial They areinitially attheircost recognised the contractualrighttoreceivewhen cashoranother case-by-case basis. areassessedandapprovedona Other credit terms 60 days)terms. to 30 : (2016 days 60 to 30 receivables on Trade generally are and bearing non-interest are 100 22,384,082 15,411,443 39,263,806 4,999,892 6,203,228 3,345,888 1,468,281 862,435 2017 RM Group 13,581,954 11,929,107 27,839,406 1,145,872 5,525,550 1,676,616 3,581,069 2,328,345 2016 RM (Incorporated in Malaysia) Perak Corporation Berhad 210915-U 23. (b) (a) Trade andotherreceivables(contd.) Related parties At 1January Trade receivables-nominal amounts Trade receivables (contd.) Movement in allowance accounts: Less: Allowance forimpairment Reversal of impairment losses impairment Reversal of theyear Charge for At 31December recoverable and no allowance for for recoverable and no allowanceimpairment loss is necessary. isholding corporation fully that theamountduefrom The directorsareof the opinion 7.5%) per annum. (2016 : 6.0% of to interest subject and is unsecured holding corporation due from The amount theimpairmentareasfollows: accounts usedtorecord the allowance dateandthemovementof The Group's tradereceivablesthat are impairedatthe reporting are impaired Receivables that Amount due from ultimateholding corporation Amount duefrom irrecoverable is written off against the receivable directly. againstthereceivable off iswritten irrecoverable Unless theGroupissatisfied that recoveryoftheamountispossible,considered losses. is usedtorecordimpairment receivablesamount inrespectoftrade The allowance 101 (1,468,281) 2,328,345 1,468,281 1,468,281 (860,064) 2017 2017 RM RM Group - - (2,328,345) 2,328,345 2,325,562 2,328,345 2,783 2016 2016 RM RM - - (Incorporated in Malaysia) Perak Corporation Berhad 210915-U 23. (a) Trade andotherreceivables(contd.) (b) Related parties At 1January Movement in allowance accounts: Less: Allowance forimpairment Trade receivables-nominal amounts Trade receivables (contd.) At 31December losses impairment Reversal of theyear Charge for recoverable and no allowance for for recoverable and no allowanceimpairment loss is necessary. isholding corporation fully that theamountduefrom The directorsareof the opinion 7.5%) per annum. (2016 : 6.0% of to interest subject and is unsecured holding corporation due from The amount ultimateholding corporation Amount duefrom theimpairmentareasfollows: accounts usedtorecord the allowance dateandthemovementof The Group's tradereceivablesthat are impairedatthereporting are impaired Receivables that irrecoverable is written off against the receivable directly. againstthereceivable off iswritten irrecoverable Unless theGroupissatisfied that recoveryoftheamountispossible,considered losses. is usedtorecordimpairment receivablesamount inrespectoftrade The allowance 101 (1,468,281) 2,328,345 1,468,281 1,468,281 (860,064) 2017 2017 RM RM Group - - (2,328,345) 2,328,345 2,325,562 2,328,345 2,783 2016 2016 RM RM - - 101 page DIRECTORS’ REPORT AND AUDITED FINANCIAL STATEMENTS 2017 PERAK CORPORATION BERHAD (210915-U)
102 page DIRECTORS’ REPORT AND AUDITED FINANCIAL STATEMENTS 2017 PERAK CORPORATION BERHAD (210915-U)
(Incorporated in Malaysia) Perak Corporation Berhad 210915-U 23. (b) Trade andotherreceivables(contd.) (c) Other receivables Related parties (contd.) amount during the year. the during amount provided has Group RM60,795,423). : (2016 full the on for impairment allowance an The (formerly known asSandersonDesignGroup(M)Sdn. Bhd.),amounting toRM90,413,310 Included inotherreceivablesamount duefrom a contractor, Sejahtera Sdn.Bhd. Daya is an impairmentlossisallowancefor necessary. PESBfrom recoverable andno The directorsareoftheopinionthatamountowing isfully effect the transfer. toPejabatTanahdanGalian form the said and submission of of the ownership transfer for Form 14A execution of subject to now of landis parcels of both the transfer and ParkLand Hi-Tech and Perak Dalam Land of Teluk authorities forthetransfer therelevant necessaryapprovals from has securedallthe on the basiswas the settlement process granted that is now at the final stage. The Company meet the conditions precedent that willbe due on 30 September 2018. The said extension On 4 April 2018, the Company has agreed to grant PESBmonths to a further extension of 6 The S&PAgreementsandProposedAcquisitions were subjectedtoconditionsprecedent. still PESB Acquisitions"). ("Proposed Agreements") to acquire the Settlement Land from Company hadenteredintotwo separateconditionalSaleandPurchaseAgreements ("S&P the executionIn tandemwiththe Settlement of Agreement on28February2012, the Settlement"). PESBproperties ("Settlement by ("Proposed theCompanyfrom Land") tobeacquired debt owing as at 31 December 2011 by PESB to the Company by way of set-off against two entered into a conditional settlement agreement PESB on 28 February with 2012 to settle the conditional settlement agreement between PESBand theCompany.TheCompany had from Perak EquitySdn. Bhd.("PESB")which expected tobesettled pursuant toa is Included inamountsduefrom related partiesisRM75,659,794 (2016:RM75,237,219) owing future. Company intheevent thattheserelatedparties areunabletomeettheir obligationsinthe corporation hasgivenThe holdingto settletheseamountsowing itsundertaking to the per annum. : 7.5%) 6.0% (2016 to interest of corporation are unsecured and subject holding ultimate subsidiaries of and associate subsidiaries,an duefrom The amounts corporation holding of ultimate and subsidiaries associate subsidiaries, an from Amounts due 102 (Incorporated in Malaysia) Perak Corporation Berhad 210915-U 25. 24. Deposits with licensed banks balances bank and Cash Cash andbankbalances Prepayments Other currentassets Included in prepayments are advances made for enhancement project amounting t for are advancesIncluded in prepayments made operation of a port at Bagan Datoh. Bagan at aport of operation and construction design, worksinthe preliminarydesign for subsidiary incurredbya fees Included inprepayments are amountstotallingRM7,589,923 :RM7,589,923) (2016 representing (2016 : RM2,252,607). of a theme park operated by a subsidiary. Both amounts are in respect merchandise goods amounting to RM1,971,676: RM21,072,756) and prepayments made for December 2017 are between 1 to 12 months (2016 : 1 to 3 months). 31 at as the deposits of maturities and the perannum 4.41%) 1.95% to (2016 : 4.05% 2.66% to during the year betweenThe average rates of the deposits with licensed banks range interest Note 26. asdisclosedin bank facilities for assecurities RM Nil)pledged Included in cash and bank balances of the Group and of the Company are RM19,417 (2016 : 26. Note in disclosed as granted facilities bank for securities as pledged RM5,507,820) Included in the depositswith licensed banks ofthe Group areRM19,529,103 (2016 : 24,485,153 16,268,153 32,569,083 8,083,930 103 2017 2017 RM RM Group Group 51,184,012 42,380,329 25,934,842 93,564,341 2016 2016 RM RM 103,766 50,108 53,658 7,462 2017 2017 RM RM Company Company o RM Nil (2016 5,514,060 6,086,544 572,484 4,062 2016 2016 RM RM (Incorporated in Malaysia) Perak Corporation Berhad 210915-U 25. 24. Deposits with licensed banks balances bank and Cash Cash andbankbalances Prepayments Other currentassets December 2017 are between 1 to 12 months (2016 : 1 to 3 months). 31 at as the deposits of maturities and the perannum 4.41%) 1.95% to (2016 : 4.05% 2.66% to during the year betweenThe average rates of the deposits with licensed banks range interest Note 26. asdisclosedin bank facilities for assecurities RM Nil)pledged Included in cash and bank balances of the Group and of the Company are RM19,417 (2016 : 26. Note in disclosed as granted facilities bank for securities as pledged RM5,507,820) Included in the depositswith licensed banks ofthe Group areRM19,529,103 (2016 : Datoh. Bagan at aport of operation and construction design, worksinthe preliminarydesign for subsidiary incurredbya fees Included inprepayments are amountstotallingRM7,589,923 :RM7,589,923) (2016 representing (2016 : RM2,252,607). of a theme park operated by a subsidiary. Both amounts are in respect merchandise goods amounting to RM1,971,676: RM21,072,756) and prepayments made for enhancement project amounting t for are advancesIncluded in prepayments made 24,485,153 16,268,153 32,569,083 8,083,930 103 2017 2017 RM RM Group Group 51,184,012 42,380,329 25,934,842 93,564,341 2016 2016 RM RM 103,766 50,108 53,658 7,462 2017 2017 RM RM Company Company o RM Nil (2016 5,514,060 6,086,544 572,484 4,062 2016 2016 RM RM 103 page DIRECTORS’ REPORT AND AUDITED FINANCIAL STATEMENTS 2017 PERAK CORPORATION BERHAD (210915-U)
104 page DIRECTORS’ REPORT AND AUDITED FINANCIAL STATEMENTS 2017 PERAK CORPORATION BERHAD (210915-U)
(Incorporated in Malaysia) Perak Corporation Berhad 210915-U 26. than5years More than2years andless Overdraft RCPS Revolving credits RCPS Revolving credits Overdraft Revolving credits than2years More than1year andless On demandorwithin one year RCPS): leaseliabilitiesand finance (excluding hirepurchaseand Maturity ofborrowings Term loans Term financing-i lease liabilities 27,(a) Hire purchase and finance Total borrowings Term loans Term financing-i lease liabilities 27,(a) Hire purchase and finance Secured: Non-current Term loans Term financing-i lease liabilities 27,(a) Hire purchase and finance Secured: Current Loans andborrowings Note d 191,279,529 (d) 50,592,000 (d) 140,687,529 (d) b 37,040,000 (b) 31,320,000 (b) (b) c 262,371,541 (c) (c) 262,371,541 (c) 495,814,070 536,556,604 121,794,537 413,902,070 414,762,067 25,600,000 33,569,938 33,569,938 56,312,000 5,123,000 5,123,000 7,172,596 6,312,599 5,720,000 859,997 104 2017 RM Group - 408,696,666 259,721,558 130,000,000 130,000,000 446,136,181 296,650,614 148,975,108 276,497,558 259,721,558 149,485,567 31,743,079 31,743,079 16,776,000 2,199,108 2,199,108 5,696,436 5,185,977 510,459 2016 RM - - - - - 160,000,000 110,000,000 110,000,000 160,013,694 110,000,000 110,011,677 50,000,000 50,002,017 50,000,000 50,000,000 13,694 11,677 2,017 2017 RM Company ------100,000,000 100,000,000 100,000,000 100,052,645 100,000,000 100,039,424 13,221 52,645 13,221 39,424 2016 RM ------(Incorporated in Malaysia) Perak Corporation Berhad 210915-U 26. (c) (b) (a) (contd.) Loans andborrowings • • • following: the by secured is financing-i term The plus1.25% Fund ("COF") atbank'sCostof Term financing-i betweento 4.19% (2016 :2.34%to4.19%) perannum. 2.35% range which at rates interest bear Company the of and Group the of leases finance The Hire purchase and finance lease liabilities (iii) (ii) (i) Term loans First PartyAssignment andChargeover FinancingPaymentReserve Account ("FPRA"). assets;and and future debenture by way First of registered Fixed and/or Floating Charge over all the present leasehold land; lots of ofBankover4 infavour Legal Charge Fixed FirstParty registered RM66,672,076) of a subsidiary. RM66,672,076) ofa under property, plant and equipment amounting to RM66,533,589 : (2016 Meruheld over knownasCasuarinaHotel charge property issecuredbya The facility 1.5% atiCOF+ Financing-i Term Mutanaqisah Musharakah 22(b). amounting to RM12,500,000 (2016 : RM12,500,000) of a subsidiary asdisclosedin Note over freehold The term loan issecuredbya charge land held under development certain and is repayable in60monthly instalments. (2016:7.40%to7.65%)perannum at7.40%to7.65% The termloanbearsinterestrate to 7.65% Term Loan at 7.40% repayable in180 monthly instalments. 6.85%(2016:Nil)perannumand is The termloanbearsinterest rate at 6.6% to Acres ofCommercialLandat ThirdPartyFirstandSecondLegalChargesover 2 (b) a hr at is n eodLglCagsoe .8 ce fCmecaLandat ThirdPartyFirstandSecondLegalChargesover AcresofCommercia 3.782 (a) aresecuredby: The facilities i iandBusinessCashLine- Business Financing- Bandar KualaKangsar. and Intan; Teluk Baru Bandar 105 (Incorporated in Malaysia) Perak Corporation Berhad 210915-U 26. (c) (b) (a) (contd.) Loans andborrowings • • • following: the by secured is financing-i term The plus1.25% Fund ("COF") atbank'sCostof Term financing-i betweento 4.19% (2016 :2.34%to4.19%) perannum. 2.35% range which at rates interest bear Company the of and Group the of leases finance The Hire purchase and finance lease liabilities (iii) (ii) (i) Term loans First PartyAssignment andChargeover FinancingPaymentReserve Account ("FPRA"). assets;and and future debenture by way First of registered Fixed and/or Floating Charge over all the present leasehold land; lots of ofBankover4 infavour Legal Charge Fixed FirstParty registered RM66,672,076) of a subsidiary. RM66,672,076) ofa under property, plant and equipment amounting to RM66,533,589 : (2016 Meruheld over knownasCasuarinaHotel charge property issecuredbya The facility 1.5% atiCOF+ Financing-i Term Mutanaqisah Musharakah 22(b). amounting to RM12,500,000 (2016 :RM12,500,000) of a subsidiary asdisclosedin Note over freehold The term loan issecuredbya charge land held under development certain and is repayable in60monthly instalments. (2016:7.40%to7.65%)perannum at7.40%to7.65% The termloanbearsinterestrate to 7.65% Term Loan at 7.40% repayable in180 monthly instalments. 6.85%(2016: Nil)perannumandis The termloanbearsinterest rate at 6.6% to Acres ofCommercialLandat ThirdPartyFirstandSecondLegalChargesover 2 (b) Land at ThirdPartyFirstandSecondLegalChargesover AcresofCommercia 3.782 (a) aresecuredby: The facilities i iandBusinessCashLine- Business Financing- Bandar KualaKangsar. and Intan; Teluk Baru Bandar 105 105 page DIRECTORS’ REPORT AND AUDITED FINANCIAL STATEMENTS 2017 PERAK CORPORATION BERHAD (210915-U)
106 page DIRECTORS’ REPORT AND AUDITED FINANCIAL STATEMENTS 2017 PERAK CORPORATION BERHAD (210915-U)
(Incorporated in Malaysia) Perak Corporation Berhad 210915-U 26. (c) (contd.) Loans andborrowings (iv) Term loans(contd.) required to meet certain financial covenants. The subsidiary did not fulfil thedebtequity fulfil did not The subsidiary covenants. financial certain tomeet required The Syndicated term loan is subjected to covenant clauses, whereby the subsidiary is • • • • • • • • • • • by: is secured The termloan drawndownon 26September2017(thethirdyearfrom the first date). annum. The loan principal is repayableinstalment with in 8 equal repayment due the first 8.20%)per subsidiaryTerm loanofabearsinterestat5.30%to8.15%(2016: Syndicated termloan 2017. as at31December asa current liability dueandpayableispresented immediately breachofthecovenant Due tothis clause,theoutstanding amount maybecome amountofRM265,000,000.currently hasanoutstanding in agreement the subsidiary of which the ratio anddebtservicecoverageasrequired Letter of undertaking by a corporate shareholder and the holding company. a corporate by Letter of undertaking and Floatingdebenture Fixedassets ofthesubsidiary;on allpresentandfuture and the subsidiaryduring theconstruction period bywayoffirstlegalassignment; of a project with or in connection Guarantee for issued of Performance Assignment return ofpremium; claims thereofincluding from and any proceeds all thebenefits ina projectofthesubsidiaryand with connection oninsuranceprocured Assignment proceeds; subsidiary's revenue legalassignmentonthe first way of Assignment ofproceedsby the subsidiary; Designated Accountsof overcharge Assignment and subsidiary; Pledged fixed depositsamountingto RM8,018,814 :RM10,377,730) (2016 of the andaformer director; ofguarantee and indemnityby two directors Deed company; holding the and shareholder acorporate from guarantee Corporate Jointly andseverally guaranteedbytwo directorsandaformer director; RM48,269,323 (2016 : RM48,269,323); amountof a carrying landwith freehold onthesubsidiary's Legal charges 106 (Incorporated in Malaysia) Perak Corporation Berhad 210915-U 26. (d) (contd.) Loans andborrowings Subsidiaries Holding corporation (i) Revolving credits (iii) (ii) subsidiaries asfollows: At thereportingdate, therevolving obtained credits by theCompanyareon-lent to andsubsidiaries corporation toholding Borrowings on-lent (c) Corporate Guarantee of the Company. the of Guarantee Corporate (c) Fixeddeposit to a minimum of RM750,000; and (b) 15622, PT held under HS(D) leasehold land overa piece of legal charge First fixed (a) follows: are as credit revolving the for securities The sharefinancing for credit Revolving Company. the of guarantee Corporate (c) Bank Islamic Affin with maintained Account Current the over charge legal party First (b) the Company land of freehold two pieces of over fixed legal charge party first Third (a) 5.29% to5.41%)perannumandaresecuredbyway of: rate 5.29%to5.35%(2016: bear interestata credits forsharefinancing The revolving Revolving (secured) credits RM66,672,076) of a subsidiary. RM66,672,076) ofa under property, plant and equipment amounting to RM66,533,589 : (2016 Meruheld over knownasCasuarinaHotel charge property issecuredbya The facility at iCOF + 1.5% Credit-i RevolvingTawarruq 17275, Mukim Hulu Bernam Timur, Perak;17275, Mukim Hulu BernamTimur, Berhad; and ("Secured Property 2"); HSD 228153, HSD under held ("Secured 228154 229479 HSD or 1") Property 107 108,367,089 92,000,000 16,367,089 2017 RM Group 90,000,000 73,600,000 16,400,000 2016 RM (Incorporated in Malaysia) Perak Corporation Berhad 210915-U 26. (d) (contd.) Loans andborrowings Subsidiaries Holding corporation (iii) (ii) (i) Revolving credits subsidiaries asfollows: At thereportingdate, therevolving obtained credits by theCompanyareon-lent to andsubsidiaries corporation toholding Borrowings on-lent (c) Corporate Guarantee of the Company. the of Guarantee Corporate (c) Fixeddeposit to a minimum of RM750,000; and (b) 15622, PT held under HS(D) leasehold land overa piece of legal charge First fixed (a) follows: are as credit revolving the for securities The sharefinancing for credit Revolving Company. the of guarantee Corporate (c) Bank Islamic Affin with maintained Account Current the over charge legal party First (b) the Company land of freehold two pieces of over fixed legal charge party first Third (a) 5.29% to5.41%)perannumandaresecuredbyway of: rate 5.29%to5.35%(2016: bear interestata credits forsharefinancing The revolving Revolving (secured) credits RM66,672,076) of a subsidiary. RM66,672,076) ofa under property, plant and equipment amounting to RM66,533,589 : (2016 Meruheld over knownasCasuarinaHotel charge property issecuredbya The facility at iCOF + 1.5% Credit-i RevolvingTawarruq 17275, Mukim Hulu Bernam Timur, Perak;17275, Mukim Hulu BernamTimur, Berhad; and ("Secured Property 2"); HSD 228153, HSD under held ("Secured 228154 229479 HSD or 1") Property 107 108,367,089 92,000,000 16,367,089 2017 RM Group 90,000,000 73,600,000 16,400,000 2016 RM 107 page DIRECTORS’ REPORT AND AUDITED FINANCIAL STATEMENTS 2017 PERAK CORPORATION BERHAD (210915-U)
108 page DIRECTORS’ REPORT AND AUDITED FINANCIAL STATEMENTS 2017 PERAK CORPORATION BERHAD (210915-U)
(Incorporated in Malaysia) Perak Corporation Berhad 210915-U 26. (e) (contd.) Loans andborrowings Accretion during theyear At 31December businesscombination Acquisition through At 1January debtinstruments: sharesclassified as Issued and fully paid Redeemable convertible preference shares ("RCPS") • • • • • • • follows: as are RCPS the of features salient The a subsidiary of the Group. comprise 31,743,079 The RCPS shares issuedbyAnimationThemeParkSdn.Bhd.("ATP"), one (1) vote. one (1) Association of Articles of each meetings, class all In ATP. RCPS holder the entitle shall to in relationtoanyproposal the by ATPtovary orabrogate rights ofRCPSas statedin the meeting class any at held RCPS each for vote (1) one to aholder entitle shall RCPS The each RCPS held; and shall beentitledtovotetogether the holdersofordinaryshares with and toone(1)votefor proposal thataffects the rightsattachedtoRCPS.Inanysuchcase,holders ofRCPS business andundertaking, to wind-up duringthewindingof ATPandonany ATP, up to anyproposalreducethecapitalofATP, dispose thewholeATP's property, of The RCPS no shallcarry right tovoteatanygeneralmeetingofATP exceptwithregards ordinary shares at RM1.00each, atequivalent toitsaccruedsum; paid new convertible into fully (20 years) shall be or cancelled at Maturity Date redeemed RCPSwhichhave notbeen any outstanding payable for Any accruedRCPSdividends sharesatRM1.00each; intofully paid newordinary years) shallbeconvertible Any outstanding RCPS which havenotbeenredeemed or cancelled atMaturity Date(20 per RCPS; ofRM1.00 the issueprice basedon annum calculated per percent (4.0%) offour dividend rate preferential annualcumulative to areentitled The RCPSholders is later; whicheverof issue of RCPS, date of the anniversary the fifteenth or after of funds; and availability the issuer repaid by been fully parkhave theproposed theme to part-finance facilities banking to the subject the issue up and includingthe Maturity Date (20 years) at the option of the RCPS holders the first anniversary cash at RM1.00date of Thereafter, the RCPS is redeemable for from RCPS isredeemablefor cash atRM1.00at theoptionofissuer; anniversaryFrom the date of issuance up to issue, and the including first date of the 31,743,079 31,743,079 108 Number ofshares 2017 - - 31,743,079 31,743,079 2016 - - 33,569,938 31,743,079 1,826,859 2017 RM Amount - 31,743,079 31,743,079 2016 RM - - (Incorporated in Malaysia) Perak Corporation Berhad 210915-U 26. (e) (contd.) Loans andborrowings non-controlling interestsholderATP of consideration Total receivedissuance to RCPS of from Redeemable convertible preferenceshares ("RCPS") (contd.) Deferred taxliabilities Deferred non-controlling interestsholderATP of Amount classified asequitycomponent attributedto Amount classified asdebtinstruments Accretion ofinterest follows: as instruments andequitycomponentattributabletonon-controllinginterestsholderofATP asdebt classified allocatedand and are financialinstruments are compound The RCPS 109 (13,128,050) 48,412,000 31,283,409 33,569,938 (4,000,541) 2,286,529 2017 RM Group (13,128,050) 48,412,000 31,283,409 31,743,079 (4,000,541) 459,670 2016 RM (Incorporated in Malaysia) Perak Corporation Berhad 210915-U 26. (e) (contd.) Loans andborrowings Deferred taxliabilities Deferred non-controlling interestsholderATP of Amount classified asequitycomponent attributedto non-controlling interestsholderATP of consideration Total receivedissuance to RCPS of from Redeemable convertible preferenceshares ("RCPS") (contd.) Amount classified asdebtinstruments Accretion ofinterest follows: as instruments andequitycomponentattributabletonon-controllinginterestsholderofATP asdebt classified allocatedand and are financialinstruments are compound The RCPS 109 (13,128,050) 48,412,000 33,569,938 31,283,409 (4,000,541) 2,286,529 2017 RM Group (13,128,050) 48,412,000 31,743,079 31,283,409 (4,000,541) 459,670 2016 RM 109 page DIRECTORS’ REPORT AND AUDITED FINANCIAL STATEMENTS 2017 PERAK CORPORATION BERHAD (210915-U)
110 page DIRECTORS’ REPORT AND AUDITED FINANCIAL STATEMENTS 2017 PERAK CORPORATION BERHAD (210915-U)
210915-U
Perak Corporation Berhad (Incorporated in Malaysia)
26. Loans and borrowings (contd.)
(f) Changes in liability arising from financing activities:
1 January New Non-cash 31 December 2017 Proceeds Repayments leases changes Overdraft 2017 RM RM RM RM RM RM RM Group
Loans and borrowings 446,136,181 98,319,529 (14,449,977) 1,800,120 1,826,859 2,923,892 536,556,604
Company
Loans and borrowings 100,052,645 59,961,049 - - - - 160,013,694
110 (Incorporated in Malaysia) Perak Corporation Berhad 210915-U 27. 12 months (Note 26) Amount duewithin Present valueofpayments: Not laterthan1 year Minimum leasepayments: Hire purchase and financelease liabilities 12 months (Note 26) Amount dueafter laterthan5years Later than1year andnot More than5years Less: Financecharges betweento 4.19% (2016 :2.34%to4.19%)perannum. 2.35% range which at rates interest bear Company the of and Group the of leases finance The (24,147,319) 31,319,915 28,802,000 6,312,599 1,612,238 7,172,596 7,172,596 859,997 905,677 111 2017 RM Group (18,853,971) 24,550,407 22,750,000 5,185,977 1,260,983 5,696,436 5,696,436 510,459 539,424 2016 RM 11,677 11,677 13,694 13,915 13,694 2,017 2,238 2017 (221) RM Company - 39,424 41,032 13,221 13,852 52,645 54,884 52,645 (2,239) 2016 RM - (Incorporated in Malaysia) Perak Corporation Berhad 210915-U 27. 12 months (Note 26) Amount duewithin Present valueofpayments: Not laterthan1 year Minimum leasepayments: Hire purchase and financelease liabilities 12 months (Note 26) Amount dueafter laterthan5years Later than1year andnot More than5years Less: Financecharges betweento 4.19% (2016 :2.34%to4.19%)perannum. 2.35% range which at rates interest bear Company the of and Group the of leases finance The (24,147,319) 31,319,915 28,802,000 6,312,599 1,612,238 7,172,596 7,172,596 859,997 905,677 111 2017 RM Group (18,853,971) 24,550,407 22,750,000 5,185,977 1,260,983 5,696,436 5,696,436 510,459 539,424 2016 RM 11,677 11,677 13,694 13,915 13,694 2,017 2,238 2017 (221) RM Company - 39,424 41,032 13,221 13,852 52,645 54,884 52,645 (2,239) 2016 RM - 111 page DIRECTORS’ REPORT AND AUDITED FINANCIAL STATEMENTS 2017 PERAK CORPORATION BERHAD (210915-U)
112 page DIRECTORS’ REPORT AND AUDITED FINANCIAL STATEMENTS 2017 PERAK CORPORATION BERHAD (210915-U)
(Incorporated in Malaysia) Perak Corporation Berhad 210915-U 28. Directors Shareholder Associate holding corporation Subsidiaries ofultimate Ultimateholding corporation Amounts duetorelated parties: Other payables holding corporation Subsidiaries ofultimate Amounts duetorelated parties: parties Third Trade payables Current holding corporation Subsidiaries ofultimate Subsidiaries Amounts duetorelated parties: parties Third Other payables Non-current Trade andotherpayables carriedatamortised cost liabilities financial Total (Note26) Add: Loansandborrowings payable Services and Goods Less: Tax (non-currentandcurrent) Total tradeandotherpayables payables (current) other and trade Total Other payables payable Goods andServices Tax Accruals Deposits received 185,071,822 170,302,852 208,093,618 202,970,618 202,970,618 32,547,736 61,665,005 74,289,987 67,478,801 14,768,970 17,898,796 17,751,410 5,576,038 9,192,932 5,123,000 1,800,124 6,250,000 147,386 247,765 252,747 60,674 112 2017 RM Group - - - 72,184,838 69,985,730 70,100,258 69,984,740 64,326,201 36,964,961 10,051,453 17,195,259 10,925,259 5,658,539 5,658,539 2,199,108 6,250,000 (114,528) 115,518 115,518 114,528 20,000 2016 RM ------32,039,644 32,010,571 46,911,677 46,911,677 46,911,677 14,872,033 14,563,933 10,462,216 10,214,451 2,747,187 1,354,230 308,100 308,100 247,765 29,073 2017 300 RM Company ------31,775,329 31,722,168 43,892,923 43,892,923 43,892,923 12,117,594 11,809,494 1,577,550 1,137,063 9,094,881 9,074,881 308,100 308,100 53,161 20,000 2016 RM ------(Incorporated in Malaysia) Perak Corporation Berhad 210915-U 29. 28. Unearned revenue billings Progress Deferred income (c) (b) (a) Trade andotherpayables (contd.) park of a subsidiary. park of Unearned revenuesold inadvancebefore the openingof theme consistsmainlyoftickets land. of completion ofsales before in advance received relates toproceed mainly billingsProgress Related partiesbalances Other payables Trade payables work-in-progress work-in-progress payableto acontractor. construction being million RM19.1 year was financial previous in payables other in Included days (2016 : 7 to 90 days). payablesThese amountsarenon-interestbearing. Trade settledwithin7 to90 arenormally repayable ondemand. shareholder areunsecured,non-interestbearingand directorsanda The amountsdueto December 2017. demand forrepaymentswithinthe next12monthson theoutstandingamountsasat31 During theyear,the holdingcorporationissued not beany alettertoconfirm that therewill 7.5%) perannum. 6% (2016: in unsecuredandsubjecttointerestof are non-trade nature, amounts duetodirectorsandashareholder) parties(excluding The amountsduetorelated 23,519,659 21,881,305 1,638,354 113 2017 RM Group 9,645,911 3,364,607 6,281,304 2016 RM 2017 RM Company - - - 2016 RM - - - (Incorporated in Malaysia) Perak Corporation Berhad 210915-U 29. 28. Unearned revenue billings Progress Deferred income (c) (b) (a) Trade andotherpayables (contd.) park of a subsidiary. park of Unearned revenuesold inadvancebefore the opening ofthetheme consistsmainlyoftickets land. of completion ofsales before in advance received relates toproceed mainly billingsProgress Related partiesbalances Other payables Trade payables work-in-progress work-in-progress payableto acontractor. construction being million RM19.1 year was financial previous in payables other in Included days (2016 : 7 to 90 days). payablesThese amountsarenon-interestbearing. Trade settledwithin7 to90 arenormally repayable ondemand. shareholder areunsecured,non-interestbearingand directorsanda The amountsdueto December 2017. demand forrepaymentswithinthe next12monthson theoutstandingamountsasat31 During theyear,the holdingcorporationissued not beany alettertoconfirm thattherewill 7.5%) perannum. 6% (2016: in unsecuredandsubjecttointerestof are non-trade nature, amounts duetodirectorsandashareholder) parties(excluding The amountsduetorelated 23,519,659 21,881,305 1,638,354 113 2017 RM Group 9,645,911 3,364,607 6,281,304 2016 RM 2017 RM Company - - - 2016 RM - - - 113 page DIRECTORS’ REPORT AND AUDITED FINANCIAL STATEMENTS 2017 PERAK CORPORATION BERHAD (210915-U)
114 page DIRECTORS’ REPORT AND AUDITED FINANCIAL STATEMENTS 2017 PERAK CORPORATION BERHAD (210915-U)
(Incorporated in Malaysia) Perak Corporation Berhad 210915-U 30. Set off of tax Set off Net tax assets/(liabilities) Net tax Unrecognised deferred taxassets Unrecognised deferred Property, plant and equipment Company andportfacilities Property, plant and equipment Group Recognised deferredtax assets/(liabilities) Deferred tax (2016:24%) Deferred taxbenefitat24% differences Other deductibletemporary allowances Unabsorbed capital losses Unutilised tax shares preference convertible Redeemable Other provisions profit profit against whichthe Group can therefrom. utilise the benefits are there because future taxable recognised been not haveitems available that probable not is it current taxlegislation. Deferred tax assetsinrespectof these differences do not expire under The unutilised tax losses, unabsorbed capital allowancesother deductible temporary and atthe following items (stated gross): Deferred tax assets havealso not been recognised by the Group and the Company in respect of 11,341,537 6,711,103 2,721,969 4,616,952 (705,463) 705,463 705,463 114 13,481 2017 2017 RM RM Assets Group - - - - (1,008,822) 1,008,822 1,951,811 7,335,248 1,008,822 8,132,545 774,252 23,045 2016 2016 RM RM - - - - (12,812,474) (13,517,937) (9,955,844) (3,562,093) (194,060) 705,463 2017 2017 RM RM Liabilities Company ------(12,032,072) (13,040,894) (9,040,353) (4,000,541) 1,008,822 (194,060) 2016 2016 RM RM ------210915-U
Perak Corporation Berhad (Incorporated in Malaysia)
30. Deferred tax (contd.)
Acquisition At Recognised through At Recognised As at 1 January in profit business 31 December in profit 31 December 2016 or loss combination 2016 or loss 2017 RM RM RM RM RM RM
Group Property, plant and equipment and port facilities (7,045,639) (615,896) (1,378,818) (9,040,353) (915,491) (9,955,844) Redeemable convertible preference shares - - (4,000,541) (4,000,541) 438,448 (3,562,093) Other provisions 11,022 997,800 - 1,008,822 (303,359) 705,463 (7,034,617) 381,904 (5,379,359) (12,032,072) (780,402) (12,812,474)
Company Property, plant and equipment (194,060) - - (194,060) - (194,060)
115 115 page DIRECTORS’ REPORT AND AUDITED FINANCIAL STATEMENTS 2017 PERAK CORPORATION BERHAD (210915-U)
116 page DIRECTORS’ REPORT AND AUDITED FINANCIAL STATEMENTS 2017 PERAK CORPORATION BERHAD (210915-U)
(Incorporated in Malaysia) Perak Corporation Berhad 210915-U 31. of Companies Act 2016 ofimplementation Effect Ordinary shares paid: Issued andfully Share capital members of the Company as a result of this transition. members of the Company as a result of this relativecapital. There is no impact on the number of shares in issue or the entitlement of any Company’s Company’scredit ofthe sharepremiumaccountbecamepartofthe share Pursuant to Section 618 of the Companies Act 2016 in Malaysia,the amount standing to the 31 valuefrom January2017. no longerhaveaparornominal witheffect In accordance withSection 74 of the Companies Act 2016 in Malaysia,the Company’s share equally withregard totheCompany's residual assets. and are entitled to one vote per share at meetings of the Company. All ordinary shares rank time to time dividends asdeclaredfrom The holdersofordinarysharesareentitledtoreceive share capital. value of capitalandpar concept ofauthorisedshare on31January2017 abolished the The newCompanies Act2016 whichcame into operation 100,000,000 100,000,000 ordinary shares 2017 Number of Number 116 - 100,000,000 100,000,000 2016 - 272,770,440 172,770,440 100,000,000 2017 RM Amount 100,000,000 100,000,000 2016 RM - (Incorporated in Malaysia) Perak Corporation Berhad 210915-U 33. Related party disclosures party Related 33. 32. Retained earnings tier system. single under the earning entire retained out of dividendsits distribute able to The Company is of the government. of the The Groupis related to the Government of Malaysia itin view that is controlled by an agency parties. and related subsidiaries corporation, its holding relationshipwith party hasrelated The Group 11. Note in disclosed are Group personnelincludes directorsofthe Group. Remunerationofkeymanagement allthe either directly or indirectly and entity that provides key management personnel services to the authority andresponsibility forplanning, directingandcontrollingtheactivities oftheGroup having asthosepersons personneldefined key management alsoinclude Related parties subject tocommoncontrol.Related partiesmaybeindividualsor otherentities. operating decisions, orviceversa,where theGroup or theCompanyandparty are and financial making in party the over influence significant exercise or party the control Group ifGroup or the the Company has the ability, directly or indirectly, to control or jointly tothe statements, partiesareconsideredtoberelated For thepurposesofthesefinancial 117 (Incorporated in Malaysia) Perak Corporation Berhad 210915-U 33. Related party disclosures party Related 33. 32. Retained earnings tier system. single under the earning entire retained out of dividendsits distribute able to The Company is of the government. of the The Groupis related to the Government of Malaysia itin view that is controlled by an agency parties. and related subsidiaries corporation, its holding relationshipwith party hasrelated The Group 11. Note in disclosed are Group personnelincludes directorsofthe Group. Remunerationofkeymanagement allthe either directly or indirectly and entity that provides key management personnel services to the authority andresponsibility forplanning, directingandcontrollingtheactivities oftheGroup having asthosepersons personneldefined key management alsoinclude Related parties subject tocommoncontrol.Related partiesmaybeindividualsor otherentities. operating decisions, orviceversa,where theGroup or theCompanyandparty are and financial making in party the over influence significant exercise or party the control Group ifGroup or the the Company has the ability, directly or indirectly, to control or jointly tothe statements, partiesareconsideredtoberelated For thepurposesofthesefinancial 117 117 page DIRECTORS’ REPORT AND AUDITED FINANCIAL STATEMENTS 2017 PERAK CORPORATION BERHAD (210915-U)
118 page DIRECTORS’ REPORT AND AUDITED FINANCIAL STATEMENTS 2017 PERAK CORPORATION BERHAD (210915-U)
(Incorporated in Malaysia) Perak Corporation Berhad 210915-U 33. Related party (contd.) Relatedparty disclosures 33. Interest income advancesRepayment of Advances received Advances paid Holding corporation Interest expenses Rental expense Rental income Advances received Rental income Advances paid Rental expenses Interest expenses Rental received Interest expenses Advances received TerminalSdn. Bhd. Bulk inrespect ofLekir Operation andmaintenance entities Government related Interest income Related companies Advances paid Subsidiaries significant related party transactions of the Group and of the Company are shown below. shown are Company the of and Group the of transactions party related significant Related partytransactionshave course beenenteredintointhenormal of business.The transactions relatedparty Significant (10,001,020) 51,978,283 58,560,419 (2,256,391) (1,434,286) 2,871,155 1,981,911 598,586 294,097 566,485 76,460 (2,165) 2017 RM 118 Group ------(52,942,267) 24,302,593 61,134,947 2,588,025 1,136,378 1,297,099 (279,675) (265,000) (285,389) 235,537 724,941 (81,575) 2016 RM ------(4,387,374) 924,741 927,601 170,177 954,000 2017 RM Company ------(30,061,036) (44,626,189) 21,187,976 (1,939,664) 4,009,947 (422,706) (237,839) 225,121 423,733 175,233 23,942 2016 RM ------(Incorporated in Malaysia) Perak Corporation Berhad 210915-U 34. (a) Commitments (iii) (ii) (i) Capital expenditure as at thereportingdateareasfollows: Capital commitments Port facilities providedfor: Contracted but not Port facilities equipment Property, plant and for: contracted Authorised butnot Port facilities equipment Property, plant and for: contracted Authorised and 199,029,200 206,790,889 46,230,700 47,090,799 7,761,689 860,099 2017 119 RM Group - 113,159,880 113,159,880 2,557,293 2016 RM - - - - 2017 RM Company ------2016 RM ------(Incorporated in Malaysia) Perak Corporation Berhad 210915-U 34. (a) Commitments (iii) (ii) (i) Capital expenditure as at thereportingdateareasfollows: Capital commitments Port facilities Port facilities Port facilities providedfor: Contracted but not equipment Property, plant and for: contracted Authorised butnot equipment Property, plant and for: contracted Authorised and 199,029,200 206,790,889 47,090,799 46,230,700 7,761,689 860,099 2017 119 RM Group - 113,159,880 113,159,880 2,557,293 2016 RM - - - - 2017 RM Company ------2016 RM ------119 page DIRECTORS’ REPORT AND AUDITED FINANCIAL STATEMENTS 2017 PERAK CORPORATION BERHAD (210915-U)
120 page DIRECTORS’ REPORT AND AUDITED FINANCIAL STATEMENTS 2017 PERAK CORPORATION BERHAD (210915-U)
(Incorporated in Malaysia) Perak Corporation Berhad 210915-U 34. (c) (b) Commitments (contd.) (ii) (i) Contingent liabilities 5years Between 1 and Less than1year follows: as payables are rentals lease operating Non-cancellable Leases aslessee Operating lease commitments years which the Group intends to exercise. The renewalperiod of8 option includeda further the aboveleaseagreement is for in date. Therearenorestrictions placed upontheGroupbyenteringintothislease. lease typically runs for a period of 2 years, with an option to renew the lease after that arelatedcompany. The premise underanoperatingleasefrom The Groupleasesa any additional amountsrequiredtobemadeinthe financial statements. statements. The these havebeenrecordedinthefinancial directors donotforesee payableand the amounts subsidiaryhasquantified The operated byasubsidiary. park subcontractorsduringthecompletion ofatheme to certain sums payable other completed("Outstanding thecertified Sum") andall Works Contract Pricefor the Companyhasundertaken During theyear,to paycertainoutstandingprogressive such, noprovision isrequired to bemadeinthefinancialstatements. andas not besuccessful ZJwill from the claim that the view areof The directors the hearing, ZJ haswithdrawnits appeal. As a result,the injunction orderstays. During 16 April2018. forhearingon is fixed of Appealwhich theCourt an appealto filed has Court.ZJ theIpohHigh from order obtainedaninjunction had successfully and notice, awinding filing from ZJ stop to injunction an filed subsidiary the 2017, On19April consultancy contractbetweenbothparties. successfeeundera final of balance the being RM2,756,000 claiming allegedly Company, the of subsidiary On 27March 2017,ZJAdvisorySdn.Bhd. ("ZJ")served awinding upnotice ona 152,000 56,000 96,000 2017 120 RM Group 2016 RM - - - 2017 RM Company - - - 2016 RM - - - (Incorporated in Malaysia) Perak Corporation Berhad 210915-U 35. grantedtoassociates bank facilities to banks for Corporate guaranteesgiven grantedtosubsidiaries bank facilities to banks for Corporate guaranteesgiven Financial guarantees grantedtojointoperations bank facilities to banks for Corporate guaranteesgiven and joint operations would default on and joint operations wouldrepayment other than as discosed default in Note 26. At theendofreportingperiod,therewasindication thatthesubsidiaries,associates no The GroupandtheCompanyhaveprovidedthe followingguarantees asatthereportingdate: Exposure tocreditrisk,qualityand collateral as going concerns. continueto operate enablethem to subsidiaries to toprovide The GroupandtheCompanyhavesupport tocertain financial undertaken joint operationsandrepaymentsmadebythesecompanies. subsidiaries,associatesand the resultsof an ongoingbasis and theCompanymonitoron Group The operations. and joint associates subsidiaries, certain to granted facilities banking guarantees of to banks inrespect The GroupandtheCompanyprovideunsecuredfinancial the risk managing and processes for objectives, policies Risk management 327,765,900 45,141,000 28,500,000 2017 121 RM Group 327,765,900 45,141,000 28,500,000 2016 RM 327,765,900 45,141,000 28,500,000 2017 RM Company 327,765,900 45,141,000 28,500,000 2016 RM (Incorporated in Malaysia) Perak Corporation Berhad 210915-U 35. grantedtoassociates bank facilities to banks for Corporate guaranteesgiven grantedtosubsidiaries bank facilities to banks for Corporate guaranteesgiven Financial guarantees grantedtojointoperations bank facilities to banks for Corporate guaranteesgiven and joint operations would default on and joint operations wouldrepayment other than as discosed default in Note 26. At theendofreportingperiod,therewasindication thatthesubsidiaries,associates no The GroupandtheCompanyhaveprovidedthe followingguarantees asatthereportingdate: Exposure tocreditrisk,qualityand collateral as going concerns. continueto operate enablethem to subsidiaries to toprovide The GroupandtheCompanyhavesupport tocertain financial undertaken joint operationsandrepaymentsmadebythesecompanies. subsidiaries,associatesand the resultsof an ongoingbasis and theCompanymonitoron Group The operations. and joint associates subsidiaries, certain to granted facilities banking guarantees of to banks inrespect The GroupandtheCompanyprovideunsecuredfinancial the risk managing and processes for objectives, policies Risk management 327,765,900 45,141,000 28,500,000 2017 121 RM Group 327,765,900 45,141,000 28,500,000 2016 RM 327,765,900 45,141,000 28,500,000 2017 RM Company 327,765,900 45,141,000 28,500,000 2016 RM 121 page DIRECTORS’ REPORT AND AUDITED FINANCIAL STATEMENTS 2017 PERAK CORPORATION BERHAD (210915-U)
122 page DIRECTORS’ REPORT AND AUDITED FINANCIAL STATEMENTS 2017 PERAK CORPORATION BERHAD (210915-U)
(Incorporated in Malaysia) Perak Corporation Berhad 210915-U 36. (d) (c) (b) (a) operations injoint Interest to achieve its social agenda and fulfil theaspirationofPerakStateGovernment.to achieveitssocialagendaandfulfil theGroup’sdesire for strategic apartments andis development ofaffordable comprising Meru Landdevelopsapiece of landinBandarMeruRaya, Perakintoahousing OP Global Sdn. Bhd.. OPG Meru Land’s principal place of business is in Malaysia. OPG The Company hasa20%ownership interestinajointoperation, OPG Meru Landwith Land") Meru Bhd. ("OPG LandSdn. OPG Meru fortheGroup'sgrowth. buildingsis strategic and developmentPerak intoacommercial area comprising ofresidentialandcommercial Malaysia.Gelombang Prestasi Sdn.Bhd. develops apieceofland inBandarMeruRaya, in business is place of principal Gelombang Prestasi's Sdn. Bhd.. Revenue Teguh interest inajointoperation,GelombangPrestasiwithThe Grouphasa20%ownership Prestasi") Bhd. ("Gelombang PrestasiSdn. Gelombang growth. Group's the for strategic is and buildings commercial and residential of comprising development commercial and housing MeruPerak into a a piece of land Raya, in Bandar D Aman Residences develops Malaysia.in is business of place principal Residences' Aman D Bhd.. Sdn. Euro-Master The Grouphasa20%ownershipinterest ina joint operation,DAman Residences with D AmanResidences Sdn.Bhd. ("DAman Residences") Government. the aspiration of the Group's desire to achieve itssocialagenda and fulfil the PerakState for andisstrategic housing scheme ofaffordable housing developmentcomprising into a Cempaka Raya, Perak in Malaysia. developsapieceoflandinBandarMeruMajujaya Sunny Reap Development Sdn.Bhd..CempakaMajujaya's principalplaceofbusinessis The Group has a 30% ownershipinterest ina joint operation,CempakaMajujayawith Sdn. Bhd.("CempakaMajujaya")Cempaka Majujaya 122 (Incorporated in Malaysia) Perak Corporation Berhad 210915-U 37. (a) events Significant (1) (2) following: The Settlement Lands witha totalattributed value of RM70.27million consistofthe Acquisitions”). (“S&P Agreements”)toacquiretheSettlementLandsfromPESB(“Proposed Company had entered intotwo separateconditional Sale andPurchaseAgreements the executionIn tandemwiththe Settlement of Agreement on28February2012, the Company from PESB (“Proposed Settlement”). total purchaseconsideration ofRM70.27million for two properties to be acquired by the owing as at 31 December 2011 by PESB to the Company by way of set-off against the million debtofRM104.62 total the settle topartially holdingcorporation ultimate of its Agreement (“Settlement subsidiaryAgreement”) withEquity Sdn.Bhd.("PESB"), a Perak On 28February2012, theCompany hadenteredinto aconditionalSettlement cletvl nw ste"eu DalamLands") (collectively knownasthe"Teluk Malay ReservedLand (“Reserved Land”). as designated Perak DarulRidzuan, of of Manjung,State District of Lumut, Mukim Perak Darul Ridzuan, with onetitle, namely, H.S.(D)29371,P.T. No. 13222 in all in 35 titles of land all in of the Lumut, Mukim District of Manjung in the state of bungalow 34 unitsof with together 4.17 acres approximately landmeasuring (ii) of main one block with together 10.33 acres approximately landmeasuring (i) million comprising: valued atRM32.14 Perak, Pangkor, Pulau Dalam, Pantai Teluk located at Resort Teluk Dalam buildings at Lands and Lands") (collectively knownasthe"PHTP an with main infrastructure with together land agricultural of 906.821 acres (ii) (i) 96.118 acres of industrial land together 96.118acresofindustrialwith land together main infrastructure with an (i) Kanthan/Sg Siput, Kanthan,Perak valuedat RM38.13 millioncomprising: Off Jalan a proposedPerakHi-TechPark(“PHTP”), Herbal Parklocatedat TechnologyParkand Park, ForestArboretum Bio-Tech Industrial development of of for purpose the infrastructure main with provided be to land of acres 1,002.939 chalets erected on the land with an attributed value of RM8.51 million. value an attributed onthelandwith chalets erected million; and units of chalets (Melati) erected on the land withattributed an valueof RM23.63 and 69 (Tanjung-Seaview) chalets units of hall, 32 cafeteria, office, building, million. value of RM20.33 attributed attributed value ofRM17.80 million; and 123 (Incorporated in Malaysia) Perak Corporation Berhad 210915-U 37. (a) events Significant (2) (1) following: The Settlement Lands witha totalattributed value of RM70.27 million consistofthe Acquisitions”). (“S&P Agreements”)toacquiretheSettlementLandsfromPESB(“Proposed Company had entered intotwo separateconditional Sale andPurchaseAgreements the executionIn tandemwiththe Settlement of Agreement on28February2012, the Company from PESB (“Proposed Settlement”). total purchaseconsideration ofRM70.27million for two properties to be acquired by the owing as at 31 December 2011 by PESB to the Company by way of set-off against the million debtofRM104.62 total the settle topartially holdingcorporation ultimate of its Agreement (“Settlement subsidiaryAgreement”) withEquity Sdn.Bhd.("PESB"), a Perak On 28February2012, theCompany hadenteredinto aconditionalSettlement cletvl nw ste"eu DalamLands") (collectively knownasthe"Teluk Malay ReservedLand (“Reserved Land”). as designated Perak DarulRidzuan, of of Manjung,State District of Lumut, Mukim Perak Darul Ridzuan, with onetitle, namely, H.S.(D)29371,P.T. No. 13222 in all in 35 titles of land all in of the Lumut, Mukim District of Manjung in the state of bungalow 34 unitsof with together 4.17 acres approximately landmeasuring (ii) of main one block with together 10.33 acres approximately land measuring (i) million comprising: valued atRM32.14 Perak, Pangkor, Pulau Dalam, Pantai Teluk located at Resort Teluk Dalam buildings at Lands and Lands") (collectively knownasthe"PHTP an with main infrastructure with together land agricultural of 906.821 acres (ii) 96.118acresofindustrialwith landtogether main infrastructure with an (i) Kanthan/Sg Siput, Kanthan,Perak valuedat RM38.13 millioncomprising: Off Jalan a proposedPerakHi-TechPark(“PHTP”), Herbal Parklocatedat TechnologyParkand Park,ForestArboretum Bio-Tech Industrial development of of for purpose the infrastructure main with provided be to land of acres 1,002.939 chalets erected on the land with an attributed value of RM8.51million. value an attributed onthelandwith chalets erected million; and units of chalets (Melati) erected on the land withattributed an valueof RM23.63 and 69 (Tanjung-Seaview) chalets units of hall, 32 cafeteria, office, building, million. value of RM20.33 attributed attributed value ofRM17.80 million; and 123 123 page DIRECTORS’ REPORT AND AUDITED FINANCIAL STATEMENTS 2017 PERAK CORPORATION BERHAD (210915-U)
124 page DIRECTORS’ REPORT AND AUDITED FINANCIAL STATEMENTS 2017 PERAK CORPORATION BERHAD (210915-U)
(Incorporated in Malaysia) Perak Corporation Berhad 210915-U 37. a (contd.) (a) events(contd.) Significant adopting theresidualmethod. PHTP Lands for the Revised valueof RM44.05 million a market 2014 has indicated valuation SettlementLands.Thevaluation thereondated ofthe report 12November assessing themarketvalues oftheRevisedPHTPLandssimilartothatusedin in method comparison and method residual the adopting Bhd Sdn Consultants Property out on the Revised PHTP Lands byMessrs Suleiman & Co A valuation has been carried million. RM70.36revised to is now thePHTP Lands andTeluk Dalam Lands million for ofRM70.27 consideration totalpurchase theoriginal Consequently, million. RM38.13 of a consideration acrespricedat 1,002.939 area of indicative the earlier instead of ofRM38.22 million ataconsideration priced PHTPLands”) acres(“Revised of 959.87 Agreement aretobesubstituted, as setoutbelow, toanarea which revisedtheacreage and Purchase PHTPLandsstatedintheSale piecesAccordingly, certain ofthe plan for Perak Hi-Tech Parkwhich has been recently approved by the StateAuthority. new layout issuance of the the following PHTP Lands arises to The ProposedVariation Lands”). VariationtoPHTP PHTP Lands(“Proposed tothe regard 2012,with 28 February twoSaleandPurchase Agreements Agreement andone ofthe respectively, bothdated to as the “Revised Agreements”) withPESB to vary the terms of the Settlement Agreement andaSupplementary SaleandPurchaseAgreement (collectivelybe referred On 12February2015, the Companyhadenteredinto aSupplementarySettlement one year totheFurtherExtended ConditionalPeriod tobedueon28February2015. On 26 February 2014, the Company had agreed to grant PESB an additional period of Extended Conditional Period")was granted. On 28 August 2013, an additional period of 6 months to 28 February 2014 ("Further August 2013. extended automatically to 28 February 2013, for an additional period of to 28 6 months the Extended ConditionalPeriod, which wasfirstdueon28 November2012 and On 27February2013, the CompanyhadagreedtograntPESB anextensionoftimeto approved bytheShareholders atan Extraordinary GeneralMeeting. and Settlement Proposed the 2012, had July 26 On Acquisitions Proposed duly been of the the document of titles the transfer and issue of the relevant authorities for (ii) theShareholdersofCompany atanExtraordinary GeneralMeeting be to (i) following:the approvals of the and Agreements the of precedent conditions ofThe Proposed Settlement and Proposed Acquisitions weresubject to fulfillment Settlement lands. convened; and 124 (Incorporated in Malaysia) Perak Corporation Berhad 210915-U 38. 37. (a) Subsequent events (contd.) (a) events(contd.) Significant (c) (b) theme park,MovieAnimation Park Studios(“MAPS”). andoperatethe forapotential collaborationtomanage to negotiate Berhad (“OWG”) GroupHoldings Only World with (“HOA”) Agreement Heads of a into 2018 entered which Bhd. Sdn. turn in awholly-ownedis the of subsidiary on has Company, January 24 Animation ThemeParkSdn.Bhd.(“ATP”),a51%-owned subsidiaryofPCBDevelopment Company. Upon completionof the Acquisition,RPSB becamea70%-owned subsidiaryofthe ("RPSB") comprising 70ordinaryshares,foracashconsideration ofRM1("Acquisition"). PortOn 5June2017,theCompanyacquired70%equityinterestinRungkup Sdn.Bhd. Company. the of subsidiary an and PCBL wholly-owned of a subsidiary wholly-ownedindirectly RLSB became Acquisition, of the Upon completion ("Acquisition"). ofRM1 consideration Pangkor Village Resort Sdn.Bhd.) ("RLSB")comprisinga cash 2ordinaryshares,for Company acquired the entire equityinterestin RimbaLandSdn.Bhd.(formerly known as On 26January2017, PCBLeisure Sdn.Bhd.("PCBL"), awholly-ownedsubsidiary ofthe respectively. 2017 and31March2018 2016,30June June 2016,31December to bedueon30 extension FurtherExtendedhad agreedtograntPESBafurther tothe ConditionalPeriod 2017 January 3 2016, June 30 2016, Company the February 2017, 29 On August 23 and the transfer of the PHTP Lands and Teluk the approval by the State Authority for (ii) Rezab after therevocationofstatus"Pengisytiharan issuanceofnewlandtitle (i) still pending: are following The Company has agreed to grant PESB the said extension on the basis that the one year totheFurtherExtended ConditionalPeriod tobedueon28February2016. On 25 February 2015, the Company had agreed to grant PESB an additional period of towards thecompletionofProposedSettlement. The ProposedVariation toPHTPLandsisinthebestinterestofPCBGroup moving Dalam Lands to the Company or its appointed nominee. the Company or its Dalam Lands to and title couldbetransferred; theland Dalam Lands before oftheTeluk Land inrespect on theReserved Melayu" 125 (Incorporated in Malaysia) Perak Corporation Berhad 210915-U 38. 37. (a) Subsequent events (c) (b) (contd.) (a) events(contd.) Significant theme park,MovieAnimation Park Studios(“MAPS”). andoperatethe forapotential collaborationtomanage to negotiate Berhad (“OWG”) GroupHoldings Only World with (“HOA”) Agreement Heads of a into 2018 entered which Bhd. Sdn. turn in awholly-ownedis the of subsidiary on has Company, January 24 Animation ThemeParkSdn.Bhd.(“ATP”),a51%-owned subsidiaryofPCBDevelopment Company. Upon completionof the Acquisition,RPSB becamea70%-owned subsidiaryofthe ("RPSB") comprising 70ordinaryshares,foracashconsideration ofRM1("Acquisition"). PortOn 5June2017,theCompanyacquired70%equityinterestinRungkup Sdn.Bhd. Company. the of subsidiary an and PCBL wholly-owned of a subsidiary wholly-ownedindirectly RLSB became Acquisition, of the Upon completion ("Acquisition"). ofRM1 consideration Pangkor Village Resort Sdn.Bhd.) ("RLSB")comprisinga cash 2ordinaryshares,for Company acquired the entire equityinterestin RimbaLandSdn. Bhd. (formerly known as On 26January2017, PCBLeisure Sdn.Bhd.("PCBL"), awholly-ownedsubsidiary ofthe respectively. 2017 and31March2018 2016,30June June 2016,31December to bedueon30 extension FurtherExtendedhad agreedtograntPESBafurther tothe ConditionalPeriod 2017 January 3 2016, June 30 2016, Company the February 2017, 29 On August 23 and the transfer of the PHTP Lands and Teluk the approval by the State Authority for (ii) Rezab after therevocationofstatus"Pengisytiharan issuanceofnewlandtitle (i) still pending: are following The Company has agreed to grant PESB the said extension on the basis that the one year totheFurtherExtended ConditionalPeriod tobedueon28February2016. On 25 February 2015, the Company had agreed to grant PESB an additional period of towards thecompletionofProposedSettlement. The ProposedVariation toPHTPLandsisinthebestinterestofPCBGroup moving Dalam Lands to the Company or its appointed nominee. the Company or its Dalam Lands to and title couldbetransferred; theland DalamLandsbefore oftheTeluk Land inrespect on theReserved Melayu" 125 125 page DIRECTORS’ REPORT AND AUDITED FINANCIAL STATEMENTS 2017 PERAK CORPORATION BERHAD (210915-U)
126 page DIRECTORS’ REPORT AND AUDITED FINANCIAL STATEMENTS 2017 PERAK CORPORATION BERHAD (210915-U)
(Incorporated in Malaysia) Perak Corporation Berhad 210915-U 38. (c) (b) (contd.) (a) Subsequent events(contd.) the terms oftheagreement. the terms bothpartiesarestill thedateofHOA.Asatthisreport, negotiating from months (3) three within MSA Definitive the to finalise endeavour shall OWG and ATP into. exhaustive andexpressivelysubject tocontractuntil thedefinitive MSA hasbeenentered HOAarenot andfinalised andexecutedthereafter. conditionsofthe The terms operated andthecourse of thedealingswillbe documentedintheDefinitive MSA be to be will MAPS which upon principles general certain to respect with understanding parties’ (“Definitive MSA”)to manageandoperatetheMAPS.OWG The HOAsetsoutboth for good faithwitha view execute adefinitive to managementservices agreement parties,and negotiate in The HOA enables the contracting ATP and to OWG, explore approximately RM800 mill in the span of 26 years. 26 of span the in mill RM800 approximately execution of the OM Agreements willalso give a secured potential revenue of LMThad beenoperatingunderOMA1 for LBT for the last15yearssinceMay2002. The LBT. by owned is which Terminal Pursuant totheOMAgreements, LMTcontinue tooperateandmaintain will LBT Berhad. of Integrax via it’s holding Nasional (“TNB”) Berhad by Tenaga owned and controlled being is LBT Indirectly Terminal. LBT terminal, bulk a of ownership encompassing project an integrated privatisedare that The of principal the activitiesdevelopment of of LBT BulkTerminal SdnBhd(“LBT”), a subsidiaryofIntegrax withBerhad. Lekir Agreements”)(collectively referredtoasthe“OM NewOperation & Maintenance Agreement No. 3("OMA3"). (iii) NewOperation & Maintenance AgreementNo. 2("OMA2"); and (ii) Addendumtoexisting &Maintenance Operation Agreement("OMA1"); (i) April 2018 entered into: Taipan Sdn.Bhd. which in turn is a wholly-ownedsubsidiary of the Company, has on 5 Lumut Maritime Sdn. Bhd.(“LMT”),a50%plus1sharesubsidiary Terminal ofPCB and issuance of land titles. Lands PHTP and Lands Dalam Teluk the transfer the for ownership of complete to yet The Company has to grant agreed the said extension on the basis that the Company has September 2018. PESB afurtherextension totheFurtherExtended ConditionalPeriod tobedueon30 Further toasdisclosed inNote37(a),on4April2018,theCompany had agreed to grant 126 (Incorporated in Malaysia) Perak Corporation Berhad 210915-U 39. (b) (a) Fair value of financial instruments Convertible Preference - 3.5%Redeemable investments Held-to-maturity whose carrying amounts are not reasonable approximation of fair value offair approximation carryingamountsarenotreasonable whose Fair value offinancial instrumentsby classes that arenotcarried atfairvalue and Trade andotherpayables (non-current) Loans andborrowingsand current) (non-current Trade andotherreceivables (current) Finance lease receivable (non-currentandcurrent) Determinationvaluefair of Shares(Note 19) (Note19) Malaysia at cost - Unquotedsharesin financial assets Available-for-sale Financial assets: Group hold theinvestment tomaturity. comparable industry peerthat is listed.TheGrouphas the positive intentionandability to These held-to-maturityinvestmentsand doesnothaveany arenotquotedonanymarket reliably. cannot bemeasured valuescost becausefair carried at investments thatare held-to-maturity theGroup’s for disclosed has notbeen information Fair value investments Held-to-maturity ** future. foreseeable peer thatislisted.TheGroupdoesnotintend todisposeofthisinvestment inthe equity instrument is not quoted on any market and do not have any comparable industry instrument thatiscarriedatcostbecausefairvalue cannotbemeasuredreliably.This equity investment in theGroup’s disclosed for has notbeen information Fair value assets financial * Available-for-sale whose carrying amounts are reasonable approximation of fair value: approximation reasonable are whose of fair amounts carrying value and fair at not carried that are instruments financial of are classes The following Carrying 430,000 amount 25,000 127 RM 2017 value Fair RM ** * Carrying Note amount 28 26 23 21 25,000 RM 2016 - value Fair RM * - (Incorporated in Malaysia) Perak Corporation Berhad 210915-U 39. (a) Fair value of financial instruments (b) Convertible Preference - 3.5%Redeemable investments Held-to-maturity whose carrying amounts are not reasonable approximation of fair value offair approximation carryingamountsarenotreasonable whose Fair value offinancial instrumentsby classes that arenotcarried atfairvalue and Trade andotherpayables (non-current) Loans andborrowingsand current) (non-current Trade andotherreceivables (current) Finance lease receivable (non-currentandcurrent) Determinationvaluefair of Shares(Note 19) (Note19) Malaysia at cost - Unquotedsharesin financial assets Available-for-sale Financial assets: Group ** Held-to-maturity investments Held-to-maturity ** future. foreseeable peer thatislisted.TheGroupdoesnotintend todisposeofthisinvestment inthe equity instrument is not quoted on any market and do not have any comparable industry instrument thatiscarriedatcostbecausefairvalue cannotbemeasuredreliably.This equity investment in theGroup’s disclosed for has notbeen information Fair value assets financial * Available-for-sale whose carrying amounts are reasonable approximation of fair value: approximation reasonable are whose of fair amounts carrying valueand fair at not carried that are instruments financial of are classes The following hold theinvestment tomaturity. comparable industry peerthat is listed.TheGrouphas the positive intentionandability to These held-to-maturityinvestmentsand doesnothaveany arenotquotedonanymarket reliably. cannot bemeasured valuescost becausefair carried at investments thatare held-to-maturity theGroup’s for disclosed has notbeen information Fair value Carrying 430,000 amount 25,000 RM 127 2017 value Fair RM ** * Carrying Note amount 28 26 23 21 25,000 RM 2016 - value Fair RM * - 127 page DIRECTORS’ REPORT AND AUDITED FINANCIAL STATEMENTS 2017 PERAK CORPORATION BERHAD (210915-U)
128 page DIRECTORS’ REPORT AND AUDITED FINANCIAL STATEMENTS 2017 PERAK CORPORATION BERHAD (210915-U)
(Incorporated in Malaysia) Perak Corporation Berhad 210915-U 39. (b) Fair value of financial instruments (contd.) Determinationvaluefair (contd.) of Finance lease receivable and loans and borrowings Finance leasereceivable value: thefair estimate used to were methods andassumptions The following date.the reporting or near interest rateson tomarket rate instrumentsthatarere-priced theyarefloating values,approximationstheir short-term nature or that eitherdueto of fair reasonable are liabilities and assets financial these of amounts carrying The market bid price at the reporting biddate. market price at published to their reference by directly sharesisdetermined quoted valueof The fair The exposure on the portion that is not expected to be recovered due to the - period; the guaranteed within party defaulting guaranteed of the The likelihood - assumptions: thefollowingkey for andassigned been estimated probability has Fair value isdetermined based onprobability weighted discountedcashflow method. The Financial guarantees Group. ratesofthe borrowing interest cashparties) areestimatedbydiscountingexpectedweighted flows future average at payables duetorelated the non-current trade andother (amounts The fairvalueof Trade and other payables date. reporting the at arrangements borrowing or lending of types similar for rate lending incremental market at at flows cash the expectedfuture values upondiscounting approximate fair borrowings arealso leaseloans and and receivable non-current portion of finance The carrying amounts of the date. the reporting at similar incrementalof lending or borrowing arrangements market lendingtypes for rate cashflowsat bydiscountingexpectedfuture estimated fairvaluesare discounting. The impactof insignificant to the valuesdue fair of approximations are reasonable borrowings leaseand loans and receivable of finance portion of the current The carrying amounts Quoted equity instruments Quoted equity in Note 26. as disclosed than are due other willbe abletomeettheir shortterm loans andborrowings obligationsasandwhen they operators asthesesubsidiaries, associates andjoint remote guarantees being calledis financial the of probability the as negligible is guarantees financial the of value fair The guaranteedwere Theestimatedloss default. exposureiftheparty to - guaranteed party's default; and guaranteed party'sdefault; 128 (Incorporated in Malaysia) Perak Corporation Berhad 210915-U 39. (c) Fair value of financial instruments (contd.) (quotedinMalaysia) -Unit Trust Fund profitorloss fairvalue through Financial assets at Financial assets: At 31December2017 Company (quotedinMalaysia) -Unit TrustFund profitorloss fairvalue through Financial assets at Financial assets: As 31December2016 (quotedinMalaysia) -Unit TrustFund profitorloss fairvalue through Financial assets at Financial assets: At 31December2017 Group Fair value of financial instruments that are carried at fair value of fair value hierarchy: of fair by level at fair value carried instruments of financial analysis table shows an The following Quoted prices instruments markets for 1,182,571 identical in active 350,473 418,536 Level 1 RM 129 observable Significant Level 2 inputs other RM - - - unobservable Significant Level 3 inputs RM - - - 1,182,571 350,473 418,536 Total RM (Incorporated in Malaysia) Perak Corporation Berhad 210915-U 39. (c) Fair value of financial instruments (contd.) (quotedinMalaysia) -Unit Trust Fund profitorloss fairvalue through Financial assets at Financial assets: At 31December2017 Company (quotedinMalaysia) -Unit TrustFund profitorloss fairvalue through Financial assets at Financial assets: As 31December2016 (quotedinMalaysia) -Unit TrustFund profitorloss fairvalue through Financial assets at Financial assets: At 31December2017 Group Fair value of financial instruments that are carried at fair value of fair value hierarchy: of fair by level at fair value carried instruments of financial analysis table shows an The following Quoted prices instruments markets for 1,182,571 identical in active 350,473 418,536 Level 1 RM 129 observable Significant Level 2 inputs other RM - - - unobservable Significant Level 3 inputs RM - - - 1,182,571 350,473 418,536 Total RM 129 page DIRECTORS’ REPORT AND AUDITED FINANCIAL STATEMENTS 2017 PERAK CORPORATION BERHAD (210915-U)
130 page DIRECTORS’ REPORT AND AUDITED FINANCIAL STATEMENTS 2017 PERAK CORPORATION BERHAD (210915-U)
(Incorporated in Malaysia) Perak Corporation Berhad 210915-U 39. (c) Fair value of financial instruments (contd.) (quotedinMalaysia) -Unit TrustFund profitorloss fairvalue through Financial assets at Financial assets: As 31December2016 Company (contd.) Fair value of financial instruments that are carried at fair value (contd.) ee Inputs other than quoted prices included withinLevel 1 thatare observable for Level 2- identicalfor assets; inactivemarkets Quotedprices(unadjusted) Level 1- levels: the following has value hierarchy fair The in Note2.30. asdisclosed themeasurements in making inputs used ofthe thesignificance that reflects valuemeasurement usingafairvalueThe GroupandtheCompanyclassifyfair hierarchy Fair valuehierarchy during the financial yearsDecember 2017and312016. during thefinancial ended 31 There have beennotransfers between Leveland Levelmeasurements value 1 2fair (unobservable data market observable on based not are that asset the for Inputs 3- Level inputs). and the asset,eitherdirectly(i.e., as prices)orindirectly(i.e.,derivedfrom prices); Quoted prices instruments markets for identical in active 338,671 Level 1 RM 130 observable Significant Level 2 inputs other RM - unobservable Significant Level 3 inputs RM - 338,671 Total RM (Incorporated in Malaysia) Perak Corporation Berhad 210915-U 40. (i) Financial riskmanagement objectives and policies speculative transactions. in to engage policyisnot Group’s Boardandthe approvedbythe are guidelines that clearly defined within operates The Group price risks. market and risk liquidity risk, credit its managing whilst businesses the Group’s thedevelopmentof areavailablefor resources financial adequate that toensure policyseeks management risk financial The Group’s Credit risk of trade receivables as at the end of the reporting 23. Note in disclosed as is period reporting the of end the at as receivables trade of ageing receivablesonly.The of trade in respect analysis maintainsanageing The Group domestic. was region geographic of the reporting period by the end trade receivables as at risk for The exposure of credit individually.monitored are risk, credit higher havingsignificant balances past due more than 60 days, deemed to have which are receivables Any receivables. the of quality credit the monitor to analysis ageing uses customersthat receivableshave beentransactingwith areregular Group.TheGroup the portiondue norimpairedarestatedattheirrealisablevalues. ofthese Asignificant past neither are receivables that ensure to steps reasonable that Management taken has receivables bythecarrying isrepresented amountsinthestatementoffinancialposition. period, from of thereporting themaximum exposureto creditriskarising As attheend Exposure tocreditrisk,qualityand collateral a certainamount. over requiringcredit onallcustomers are performed Credit evaluations basis. an ongoing Management hasacreditpolicyinplaceandtheexposure tocreditriskismonitoredon risk managingthe processes for objectives,policiesand Risk management Receivables receivables. and other its trade from principally risk arises credit Group'sexposure obligations.financial instrumentfailstomeetitscontractual to The toa counterparty or customer ifa Group the lossto a financial of the risk risk is Credit 131 (Incorporated in Malaysia) Perak Corporation Berhad 210915-U 40. (i) Financial riskmanagement objectives and policies speculative transactions. in to engage policyisnot Group’s Boardandthe approvedbythe are guidelines that clearly defined within operates The Group price risks. market and risk liquidity risk, credit its managing whilst businesses the Group’s thedevelopmentof areavailablefor resources financial adequate that toensure policyseeks management risk financial The Group’s Credit risk Risk management objectives, policies and processes for managing the risk managingthe processes for objectives,policiesand Risk management Receivables receivables. and other its trade from principally risk arises credit Group'sexposure obligations.financial instrumentfailstomeetitscontractual to The toa counterparty or customer ifa Group the lossto a financial of the risk risk is Credit of trade receivables as at the end of the reporting 23. Note in disclosed as is period reporting the of end the at as receivables trade of ageing receivablesonly.The of trade in respect analysis maintainsanageing The Group domestic. was region geographic of the reporting period by the end trade receivables as at risk for The exposure of credit individually.monitored are risk, credit higher havingsignificant balances past due more than 60 days, deemed to have which are receivables Any receivables. the of quality credit the monitor to analysis ageing uses customersthat receivableshave beentransacting with areregular Group.TheGroup the portiondue norimpairedarestatedattheirrealisablevalues. ofthese Asignificant past neither are receivables that ensure to steps reasonable that Management taken has receivables bythecarrying isrepresented amountsin thestatementoffinancialposition. period, from of thereporting themaximum exposureto creditriskarising As attheend Exposure tocreditrisk,qualityand collateral a certainamount. over requiringcredit onallcustomers are performed Credit evaluations basis. an ongoing Management hasacreditpolicyinplaceandtheexposure tocreditriskismonitoredon 131 131 page DIRECTORS’ REPORT AND AUDITED FINANCIAL STATEMENTS 2017 PERAK CORPORATION BERHAD (210915-U)
132 page DIRECTORS’ REPORT AND AUDITED FINANCIAL STATEMENTS 2017 PERAK CORPORATION BERHAD (210915-U)
(Incorporated in Malaysia) Perak Corporation Berhad 210915-U 40. (i) Financial riskmanagement objectives and policies (contd.) Credit risk (contd.) and joint operations would default on repayment other than as disclosed in Note 26. in disclosed as Note than other repayment would on default operations and joint associates period, At theendofreporting there wasnoindicationthatsubsidiaries, as going concerns. continueto operate enablethem to subsidiaries to toprovide Companyhavesupport tocertain financial undertaken The Groupandthe these companies. operations andrepaymentsmadeby associates andjoint subsidiaries, the of results the basis ongoing an on monitor Company the and Group The operations. andjoint associates subsidiaries, certain to granted facilities of banking respect in banks to guarantees financial unsecured provide Company the and Group The risk managingthe processes for objectives,policiesand Risk management Financial guarantees recoverable. reportingperiod,As attheendof therewasno indication thattheinvestmentsarenot Impairment losses assetsareunsecured. other financial The investmentsand assets. other financial investmentsand for rating counterparties high credit with riskbydealingexclusively Companyminimisecredit The Groupandthe Exposure tocreditrisk,qualityand collateral institutions. financial approved with are instruments financial derivative involving Transactions Group. thanthe better toor rating equal credit thathavea counterparties securitiesandonlywith areallowedonly inliquid Investments period was: the reporting receivablesas attheendof of trade ageing receivables only.The risk of trade managingthe in respect processes for analysis objectives,policiesand maintainsanageing Risk management The Group assets other financial Impairment lossesInvestments and 132 (Incorporated in Malaysia) Perak Corporation Berhad 210915-U 40. (ii) (i) Financial riskmanagement objectives and policies (contd.) Liquidity risk Credit risk (contd.) significantly earlier, or at significantly different amounts. different significantly at or earlier, significantly It isnotexpected thatthecash flows included inthematurityanalysis couldoccur 2017. December 31 at as amounts outstanding the repayments within next the twelvemonths on letter to confirm that it not willdemand for a hasalsoissued corporation due.Theholding when theyfall meetitsliabilities liquidity to adequate bythemanagementtoensure, have sufficient as farpossible,thatitwill deemed facilities andbank cash equivalents of cash and maintainsalevel The Group borrowings. andloans and otherpayables trade its various from principally arises risk to liquidity exposure due.TheGroup's they fall as obligations its financial to meet not be able will that the Group the risk risk is Liquidity due. they fall when asand theirobligations tomeet entities to enablethese support continuing financial provide to willingness its indicate to undertaking of a letter issued also has corporation corporation tosettle advances to these companiesasdisclosed in holding Note 23. The of theholding with abilityandwillingness the satisfied hasconsideredandis Group The companies. these to advances of ageing the monitor specifically not does Group The recoverable. not reportingperiod, therewasno indicationAs attheendof thatthesebalancesare Impairment losses statements position. by theircarryingamountsinthe of financial period, of thereporting the maximum exposure credit risk isrepresented As at the end to Exposure tocreditrisk,qualityand collateral parties regularly. related monitors the results of its parties. The Group related transactionswith tradeand non-trade The Grouphasbalancesarisingfrom its risk managingthe processes for objectives,policiesand Risk management parties Loans andadvancestorelated 133 (Incorporated in Malaysia) Perak Corporation Berhad 210915-U 40. (ii) (i) Financial riskmanagement objectives and policies (contd.) Liquidity risk Credit risk (contd.) significantly earlier, or at significantly different amounts. different significantly at or earlier, significantly It isnotexpected thatthecash flows included inthematurityanalysis couldoccur 2017. December 31 at as amounts outstanding the repayments within next the twelvemonths on letter to confirm that it not willdemand for a hasalsoissued corporation due.Theholding when theyfall meetitsliabilities liquidity to adequate bythemanagementtoensure, have sufficient as farpossible,thatitwill deemed facilities andbank cash equivalents of cash and maintainsalevel The Group borrowings. andloans and otherpayables trade its various from principally arises risk to liquidity exposure due.TheGroup's they fall as obligations its financial to meet not be able will that the Group the risk risk is Liquidity due. they fall when asand theirobligations tomeet entities to enablethese support continuing financial provide to willingness its indicate to undertaking of a letter issued also has corporation corporation tosettle advances to these companiesasdisclosed in holding Note 23. The of theholding with abilityandwillingness the satisfied hasconsideredandis Group The companies. these to advances of ageing the monitor specifically not does Group The recoverable. not reportingperiod, therewasno indicationAs attheendof thatthesebalancesare Impairment losses statements position. by theircarryingamountsinthe of financial period, of thereporting the maximum exposure credit risk isrepresented As at the end to Exposure tocreditrisk,qualityand collateral parties regularly. related monitors the results of its parties. The Group related transactionswith tradeand non-trade The Grouphasbalancesarisingfrom its risk managingthe processes for objectives,policiesand Risk management parties Loans andadvancestorelated 133 133 page DIRECTORS’ REPORT AND AUDITED FINANCIAL STATEMENTS 2017 PERAK CORPORATION BERHAD (210915-U)
134 page DIRECTORS’ REPORT AND AUDITED FINANCIAL STATEMENTS 2017 PERAK CORPORATION BERHAD (210915-U)
210915-U
Perak Corporation Berhad (Incorporated in Malaysia)
40. Financial risk management objectives and policies (contd.)
(ii) Liquidity risk (contd.)
Maturity analysis
The table below summarises the maturity profile of the Group's and the Company's financial liabilities as at the end of the reporting period based on undiscounted contractual payments:
Contractual Carrying interest rate Contractual Under More than amount per annum cash flows 1 year 1 - 2 years 2 - 5 years 5 years Group RM % RM RM RM RM RM
2017 Non-derivative financial liabilities Trade and other payables (current) 185,071,822 - 185,071,822 185,071,822 - - - Trade and other payables (non-current) 17,898,796 6.00 18,972,724 - 18,972,724 - - Loans and borrowings 536,556,604 2.35 - 6.35 585,333,291 496,968,545 62,764,746 17,160,000 8,440,000 Financial guarantees - - 401,406,900 401,406,900 - - - 739,527,222 1,190,784,737 1,083,447,267 81,737,470 17,160,000 8,440,000
134 210915-U
Perak Corporation Berhad (Incorporated in Malaysia)
40. Financial risk management objectives and policies (contd.)
(ii) Liquidity risk (contd.)
Maturity analysis (contd.)
Contractual Carrying interest rate Contractual Under More than amount per annum cash flows 1 year 1 - 2 years 2 - 5 years 5 years Group (contd.) RM % RM RM RM RM RM
2016 Non-derivative financial liabilities Trade and other payables (current) 69,984,740 - 69,984,740 69,984,740 - - - Trade and other payables (non-current) 115,518 7.50 124,182 - 124,182 - - Loans and borrowings 446,136,181 2.34 - 10.65 517,914,641 149,485,567 25,705,019 319,974,055 22,750,000 Financial guarantees - - 401,406,900 401,406,900 - - - 516,236,439 989,430,463 620,877,207 25,829,201 319,974,055 22,750,000
135 135 page DIRECTORS’ REPORT AND AUDITED FINANCIAL STATEMENTS 2017 PERAK CORPORATION BERHAD (210915-U)
136 page DIRECTORS’ REPORT AND AUDITED FINANCIAL STATEMENTS 2017 PERAK CORPORATION BERHAD (210915-U)
210915-U
Perak Corporation Berhad (Incorporated in Malaysia)
40. Financial risk management objectives and policies (contd.)
(ii) Liquidity risk (contd.)
Maturity analysis (contd.)
Contractual Carrying interest rate Contractual Under More than amount per annum cash flows 1 year 1 - 2 years 2 - 5 years 5 years Company RM % RM RM RM RM RM
2017 Non-derivative financial liabilities Trade and other payables (current) 14,872,033 - 14,872,033 14,872,033 - - - Trade and other payables (non-current) 32,039,644 6.00 33,962,023 - 33,962,023 - - Loans and borrowings 160,013,694 5.35 - 6.00 168,151,493 115,324,476 52,827,017 - - Financial guarantees - - 401,406,900 401,406,900 - - - 206,925,371 618,392,449 531,603,409 86,789,040 - -
136 210915-U
Perak Corporation Berhad (Incorporated in Malaysia)
40. Financial risk management objectives and policies (contd.)
(ii) Liquidity risk (contd.)
Maturity analysis (contd.)
Contractual Carrying interest rate Contractual Under More than amount per annum cash flows 1 year 1 - 2 years 2 - 5 years 5 years Company (contd.) RM % RM RM RM RM RM
2016 Non-derivative financial liabilities Trade and other payables (current) 12,117,594 - 12,117,594 12,117,594 - - - Trade and other payables (non-current) 31,775,329 7.50 34,158,479 - 34,158,479 - - Loans and borrowings 100,052,645 2.34 - 5.65 100,055,061 100,040,347 14,714 - - Financial guarantees - - 401,406,900 401,406,900 - - - 143,945,568 547,738,034 513,564,841 34,173,193 - -
137 137 page DIRECTORS’ REPORT AND AUDITED FINANCIAL STATEMENTS 2017 PERAK CORPORATION BERHAD (210915-U)
138 page DIRECTORS’ REPORT AND AUDITED FINANCIAL STATEMENTS 2017 PERAK CORPORATION BERHAD (210915-U)
(Incorporated in Malaysia) Perak Corporation Berhad 210915-U 40. (iii) Financial riskmanagement objectives and policies (contd.) Financial assets instruments rate Floating Financial assets instruments Fixed rate Financial liabilities Financial liabilities was: period reporting the of end the at as based instruments, amounts carrying on financial bearing Company'ssignificantinterest- Group'sandthe profileofthe The interestrate Exposure tointerestraterisk on varying maturitiesandinterestrateterms. balances income for the Group. The Group manages its interest rate risk by placing such interest togenerate withreputable licensedbanks The Groupplacescashbalances the bankers. and after consultations with trends expectedintereststructure, and tenorofborrowings rate madebasedonthe are debt respect offloating rate closely monitorstheinterestratetrendsanddecisions in theGroup'sloans Group andborrowings.Interest rateexposurearisesmainlyfrom The risk managingthe processes for objectives,policiesand Risk management rate risk. to interest exposed significantly in flows duetochanges interestrates.Short-term receivables andpayablesarenot incash ofchange arisk andborrowingsareexposedto rate loans variableThe Group's risk Interest rate minimal. is risk exchange foreign to exposure interest rateswill Group's the Group'sfinancialpositionaffect The orcashflows. and exchange rates asforeign market prices, such changes in risk that isthe Market risk Market risk (121,688,506) (460,489,987) (493,059,070) 160,981,298 32,569,083 39,292,792 2017 RM Group 138 (308,789,217) (402,353,558) 161,466,549 106,132,690 (55,333,859) 93,564,341 2016 RM (159,896,234) (160,000,000) (10,257,218) 81,783,590 71,526,372 103,766 2017 RM Company (100,000,000) (93,913,446) 97,135,772 87,955,085 (9,180,687) 6,086,554 2016 RM (Incorporated in Malaysia) Perak Corporation Berhad 210915-U 40. (iii) Financial riskmanagement objectives and policies (contd.) instruments Floating rate Company instruments Floating rate Group shown below.This analysis assumesthatall other variables remainconstant. would haveincreased/(decreased)equity orlossand post-tax bytheamounts profit the reporting period in interest rates at the end of of 25 basis points ("bp") A change variable instruments rate analysisfor Cash flowssensitivity loss. or profit in impact significant any have not would period reporting the of the end at rates in interest achange Therefore, or loss. profit through value at fair liabilities and assets financial rate fixed material any have not does Group The rateinstruments for fixed analysis Fair valuesensitivity Interest rate risk (contd.) Market risk (contd.) increase (303,803) (874,931) 25 bp RM 2017 139 decrease 303,803 874,931 25 bp RM increase (178,436) (586,700) 25 bp RM 2016 decrease 178,436 586,700 25 bp RM (Incorporated in Malaysia) Perak Corporation Berhad 210915-U 40. (iii) Financial riskmanagement objectives and policies (contd.) instruments Floating rate Company instruments Floating rate Group shown below.This analysis assumesthatall othervariables remainconstant. would haveincreased/(decreased)equity orlossand post-tax bytheamounts profit the reporting period in interest rates at the end of of 25 basis points ("bp") A change variable instruments rate analysisfor Cash flowssensitivity loss. or profit in impact significant any have not would period reporting the of the end at rates in interest achange Therefore, or loss. profit through value at fair liabilities and assets financial rate fixed material any have not does Group The rateinstruments for fixed analysis Fair valuesensitivity Interest rate risk (contd.) Market risk (contd.) increase (303,803) (874,931) 25 bp RM 2017 139 decrease 303,803 874,931 25 bp RM increase (178,436) (586,700) 25 bp RM 2016 decrease 178,436 586,700 25 bp RM 139 page DIRECTORS’ REPORT AND AUDITED FINANCIAL STATEMENTS 2017 PERAK CORPORATION BERHAD (210915-U)
140 page DIRECTORS’ REPORT AND AUDITED FINANCIAL STATEMENTS 2017 PERAK CORPORATION BERHAD (210915-U)
(Incorporated in Malaysia) Perak Corporation Berhad 210915-U 41. Capital management Gearing ratio and netdebt Capital Loans andborrowings Trade andotherpayables Net debt Less: Cashandbank balances Company Equity attributable tothe owners ofthe year. during approach the financial management to capital the Group's in changes no were There needarise. shouldthe payment obligations cash to meet any The Group has also identified certain lands that can be disposed for 12 months. to funds ensure thattheGrouphassufficient the next meet theirpaymentobligationsfor will The paymentholiday to RM50million. amounting on principalrepayments holiday upto2019 in the process of renegotiating the terms withthe lenders to provide a two year payment Management loan. theimmediaterepaymentofsyndicatedterm is for has notrequested called for financiala defaulteventand statements,thefacilityagent hasnot As ofthedate 26. Note in disclosed as breach covenant a to due liability current to reclassified been has million RM238.7 of subsidiary a of loan term syndicated the thanfourtimes.AsAs at31December2017,thedebt-to-equity ratio ismore such, Facility the to accordance in 2014. July Agreement 10 dated syndicatedterm loan timesthroughoutthetenureof four not morethan to-equity ratioof tomaintainthe imposed capitalrequirements apart from is required a subsidiarywhichdebt- Group andoftheCompany.TheCompanyarenotsubjecttoanyexternally and the Company consists of net debt and equity of the The capital structure of the Group value. shareholders' maximise and business their to support order in structure capital optimal an maintain to is capital managing when objectives Group's The 140 1,093,212,768 536,556,604 202,970,618 706,958,139 386,254,629 (32,569,083) 65% 2017 RM Group 983,883,883 446,136,181 422,672,098 561,211,785 (93,564,341) 70,100,258 43% 2016 RM (Incorporated in Malaysia) Perak Corporation Berhad 210915-U 42. (iv) (iii) (ii) (i) Segmental information The Group is organised into four (2016 : four) majorbusinesssegments: (2016:four) intofour The Groupisorganised located in Malaysia.predominantly businessactivitiesare segmentanalysisprepared astheGroup’s geographical is No Group’sbusinesssegments. respect ofthe Segment informationispresentedin negotiated terms. that allinter-segment established on transactions haveThe directorsareoftheopinion been thetotaloperatingprofitorthe businesssegments. allocated asawhole lossof against managed are These and units. strategic operating individual the to apportioned not are taxes income costs)and finance resources(including thefinancing segments, business Group's Group'sChiefOfficer. management reports the Executiveby the Within that arereviewed the internal segmentperformance is includedin statements.The in theconsolidatedfinancial orloss operatingprofit from differently is measured below, the table as explained in respects Segment performanceisevaluated or losswhich,incertain basedonoperatingprofit assessment. performance allocation and decisionsresource making about of the purpose separately businessfor segments the Group's Managementmonitors theoperatingresultsof separately. reported be to sufficient size a of investment are which of none distribution, and include property business segments which services andother Provision ofmanagement others Management servicesand andHotelier, restaurateur themepark. Hotel andtourism and ancillary services. property Township development of real development Township activities. ancillary other and land related port of rental and sales terminal, bulk of a andmaintenance operation port facilities, ofmultipurpose operations encompassing Maritimethe development privatised services inrespectof ofanintegrated project and Infrastructure 141 (Incorporated in Malaysia) Perak Corporation Berhad 210915-U 42. (iv) (iii) (ii) (i) Segmental information The Group is organised into four (2016 : four) majorbusinesssegments: (2016:four) intofour The Groupisorganised located inMalaysia. predominantly businessactivitiesare segmentanalysisprepared astheGroup’s geographical is No Group’sbusinesssegments. respect ofthe Segment informationispresentedin negotiated terms. that allinter-segment established on transactions haveThe directorsareoftheopinion been thetotaloperatingprofitorthe businesssegments. allocated asawhole lossof against managed are These and units. strategic operating individual the to apportioned not are taxes income costs)and finance resources(including thefinancing segments, business Group's Group'sChiefOfficer. management reports the Executiveby the Within that arereviewed the internal segmentperformance is includedin statements.The in theconsolidatedfinancial orloss operatingprofit from differently is measured below, the table as explained in respects Segment performanceisevaluated or losswhich,incertain basedonoperatingprofit assessment. performance allocation and decisionsresource making about of the purpose separately businessfor segments the Group's Managementmonitors theoperatingresultsof separately. reported be to sufficient a size of investment are which of none distribution, and include property business segments which services andother Provision ofmanagement others Management servicesand andHotelier, restaurateur themepark. Hotel andtourism and ancillary services. property Township development of real development Township activities. ancillary other and land related port of rental and sales terminal, bulk of a andmaintenance operation port facilities, ofmultipurpose operations encompassing Maritimethe development privatised services inrespectof ofanintegrated project and Infrastructure 141 141 page DIRECTORS’ REPORT AND AUDITED FINANCIAL STATEMENTS 2017 PERAK CORPORATION BERHAD (210915-U)
142 page DIRECTORS’ REPORT AND AUDITED FINANCIAL STATEMENTS 2017 PERAK CORPORATION BERHAD (210915-U)
210915-U
Perak Corporation Berhad (Incorporated in Malaysia)
42. Segmental information (contd.)
Per Management Adjustments consolidated Township Hotel services and financial Infrastructure development and tourism and others Total eliminations statements RM RM RM RM RM RM Notes RM 2017
Revenue: External revenue 105,314,216 43,540,338 32,645,256 4,288,000 185,787,810 - 185,787,810 Inter-segment revenue - - 365,361 2,500,001 2,865,362 (2,865,362) A - Total revenue 105,314,216 43,540,338 33,010,617 6,788,001 188,653,172 (2,865,362) 185,787,810
Results: Operating results (64,225,105) (284,875,800) (369,766,497) (33,364,937) (752,232,339) 278,848,290 (473,384,049) Interest income 317,116 13,226,547 836,959 14,996,497 29,377,119 (25,328,671) 4,048,448 Finance costs (41,483) (11,373,376) (38,942,013) (12,109,526) (62,466,398) 25,328,671 (37,137,727) Share of results of associates - - - - - 576,859 576,859 Profit/(loss) before tax 41,364,744 (239,482,291) (374,860,934) (23,689,965) (596,668,446) 279,425,149 B (320,108,659)
Income tax expense (20,464,012)
Loss for the year C (340,572,671)
142 210915-U
Perak Corporation Berhad (Incorporated in Malaysia)
42. Segmental information (contd.)
Per Management Adjustments consolidated Township Hotel services and financial Infrastructure development and tourism and others Total eliminations statements RM RM RM RM RM RM Notes RM 2017 (contd.)
Other information Depreciation of property, plant and equipment 516,847 30,457 13,047,028 2,189,805 15,784,137 - 15,784,137 Depreciation of port facilities 3,355,176 - - - 3,355,176 - 3,355,176 Depreciation of investment properties - 79,090 - - 79,090 - 79,090 Amortisation of intangible assets - - 583,230 - 583,230 - 583,230
Other non-cash items: Impairment loss on receivables 7,346,055 220,163,864 90,413,310 - 317,923,229 (227,509,919) 90,413,310 Impairment loss on investment in a subsidiary - 51,073,571 - - 51,073,571 (51,073,571) - Bad debts written off 4,256 - 18,758 - 23,014 - 23,014 Property, plant and equipment written off 3 - - 359,697 359,700 - 359,700 Inventories written down to net realisable value 372,754 481,353 - - 854,107 - 854,107
143 143 page DIRECTORS’ REPORT AND AUDITED FINANCIAL STATEMENTS 2017 PERAK CORPORATION BERHAD (210915-U)
144 page DIRECTORS’ REPORT AND AUDITED FINANCIAL STATEMENTS 2017 PERAK CORPORATION BERHAD (210915-U)
210915-U
Perak Corporation Berhad (Incorporated in Malaysia)
42. Segmental information (contd.)
Per Management Adjustments consolidated Township Hotel services and financial Infrastructure development and tourism and others Total eliminations statements RM RM RM RM RM RM Notes RM 2017 (contd.)
Assets and liabilities Additions to non-current assets - Property, plant and equipment 2,396,603 3,375 109,156,444 4,858,991 116,415,413 (847,253) 115,568,160 - Port facilities 80,071,661 - - - 80,071,661 - 80,071,661 Reporting segment assets 237,173,400 172,581,048 406,229,482 788,104,815 1,604,088,745 (523,464,529) D 1,080,624,216 Reporting segment liabilities (56,013,564) (264,544,610) (712,593,076) (253,122,943) (1,286,274,193) 505,635,522 E (780,638,671)
144 210915-U
Perak Corporation Berhad (Incorporated in Malaysia)
42. Segmental information (contd.)
Per Management Adjustments consolidated Township Hotel services and financial Infrastructure development and tourism and others Total eliminations statements RM RM RM RM RM RM Notes RM 2016
Revenue: External revenue 97,988,604 31,576,199 14,217,251 2,922,174 146,704,228 - 146,704,228 Inter-segment revenue - - 1,056,615 15,000,001 16,056,616 (1,656,616) - Total revenue 97,988,604 31,576,199 15,273,866 17,922,175 162,760,844 (1,656,616) A 146,704,228
Results: Operating results 42,646,107 (8,665,329) (4,183,358) (12,805,110) 16,992,310 (13,330,943) 3,661,367 Interest income 1,122,253 815,735 235,394 11,862,070 14,035,452 (9,076,452) 4,959,000 Finance costs (932,510) (8,600,228) (2,672,790) (5,821,182) (18,026,710) 11,067,452 (6,959,258) Share of results of associates - - - - - 69,611 69,611 Profit/(loss) before tax 42,835,850 (16,449,822) (6,620,754) (6,764,222) 13,001,052 (11,270,332) B 1,730,720
Income tax expense (17,745,878)
Loss for the year C (16,015,158)
145 145 page DIRECTORS’ REPORT AND AUDITED FINANCIAL STATEMENTS 2017 PERAK CORPORATION BERHAD (210915-U)
146 page DIRECTORS’ REPORT AND AUDITED FINANCIAL STATEMENTS 2017 PERAK CORPORATION BERHAD (210915-U)
210915-U
Perak Corporation Berhad (Incorporated in Malaysia)
42. Segmental information (contd.)
Per Management Adjustments consolidated Township Hotel services and financial Infrastructure development and tourism and others Total eliminations statements RM RM RM RM RM RM Notes RM 2016 (contd.)
Other information Depreciation of property, plant and equipment 479,051 460,999 4,151,211 2,196,675 7,287,936 - 7,287,936 Depreciation of port facilities 3,129,425 - - - 3,129,425 - 3,129,425 Depreciation of investment properties - 79,090 - - 79,090 - 79,090
Other non-cash items: Impairment loss in trade receivables - 2,141,575 183,987 - 2,325,562 - 2,325,562 Gain on revaluation of an associate upon obtaining control - (1,543,883) - - (1,543,883) - (1,543,883) Impairment loss: - investment in an associate - - - 5,000,000 5,000,000 (1,169,058) 3,830,942 - amount due from an associate - - - 1,054,040 1,054,040 - 1,054,040 Bad debts written off - - 19 - 19 - 19 Property, plant and equipment written off - 879,735 - - 879,735 - 879,735 Inventories written down to net realisable value - 514,350 - - 514,350 - 514,350
146 210915-U
Perak Corporation Berhad (Incorporated in Malaysia)
42. Segmental information (contd.)
Per Management Adjustments consolidated Township Hotel services and financial Infrastructure development and tourism and others Total eliminations statements RM RM RM RM RM RM Notes RM 2016 (contd.)
Assets and liabilities Additions to non-current assets - Property, plant and equipment 1,361,128 76,907,012 13,767,901 640,299 92,676,340 1,991,000 94,667,340 - Port facilities 8,180,218 - - - 8,180,218 - 8,180,218 Reporting segment assets 174,441,510 619,934,241 111,964,525 746,682,697 1,653,022,973 (467,891,029) D 1,185,131,944 Reporting segment liabilities (20,022,890) (482,422,049) (33,055,837) (186,945,786) (722,446,562) 180,377,793 E (542,068,769)
147 147 page DIRECTORS’ REPORT AND AUDITED FINANCIAL STATEMENTS 2017 PERAK CORPORATION BERHAD (210915-U)
148 page DIRECTORS’ REPORT AND AUDITED FINANCIAL STATEMENTS 2017 PERAK CORPORATION BERHAD (210915-U)
(Incorporated in Malaysia) Perak Corporation Berhad 210915-U 42. D C B A Note (contd.) information Segmental -subsidiaries assetseliminationInter-segment dividendselimination Inter-segment elimination sales Inter-segment dividendselimination Inter-segment Goodwill onconsolidation statements financial consolidated inthe reported atamounts toarrive and eliminations adjustments Nature of presented intheconsolidatedstatementofcomprehensiveincome. for the year" segment profit to arrive at "Loss item is deducted from The following assets reported in the consolidated statement of financial position:assets reported in the consolidated statement attotal segmentassetstoarrive items are(deductedfrom)/added The followingto ofcomprehensivetax" presentedintheconsolidatedstatement income. "Profit/(loss) before segmentprofittoarriveat items aredeductedfrom The following Inter-segment revenue are eliminated on consolidation. 148 (547,295,740) (523,464,529) 23,831,211 2,500,001 2,865,362 2,500,001 365,361 2017 2017 2017 RM RM RM (491,802,593) (467,891,029) 15,000,001 16,056,616 15,000,001 23,911,564 1,056,615 2016 2016 2016 RM RM RM (Incorporated in Malaysia) Perak Corporation Berhad 210915-U 44. 43. 42. Authorisation of financial statements for issue for statements Authorisationfinancial of figures Comparative E Note (contd.) information Segmental accordance witha resolutionofthedirectorson30 April2018. in issue for authorised were 2017 December 31 ended year the for statements financial The current year presentation. Certain comparativesfor31December2016havebeenreclassifiedtoconformwith the -subsidiaries liabilities elimination Inter-segment (contd.) statements financial consolidated inthe reported atamounts toarrive and eliminations adjustments Nature of the consolidated statement of financial position: offinancial statement the consolidated in reported liabilities total to arrive at segment liabilities to item is added The following The rest of this page has been intentionally left blank. 149 505,635,522 2017 RM 180,377,793 2016 RM (Incorporated in Malaysia) Perak Corporation Berhad 210915-U 44. 43. 42. Authorisation of financial statements for issue for statements Authorisationfinancial of figures Comparative E Note (contd.) information Segmental accordance witha resolutionofthedirectorson30 April2018. in issue for authorised were 2017 December 31 ended year the for statements financial The current year presentation. Certain comparativesfor31December2016havebeenreclassifiedtoconformwith the consolidated financial statements (contd.) statements financial consolidated inthe reported atamounts toarrive and eliminations adjustments Nature of -subsidiaries liabilities elimination Inter-segment the consolidated statement of financial position: offinancial statement the consolidated in reported liabilities total to arrive at segment liabilities to item is added The following The rest of this page has been intentionally left blank. 149 505,635,522 2017 RM 180,377,793 2016 RM 149 page DIRECTORS’ REPORT AND AUDITED FINANCIAL STATEMENTS 2017 PERAK CORPORATION BERHAD (210915-U)
This page has been intentionally left blank. PERAK CORPORATION BERHAD INCORPORATED IN MALAYSIA (Company No.: 210915-U)
Before completing the Number of ordinary shares held FORM OF PROXY form please refer to the notes below.
I/We NRIC/Passport/Company No. (FULL NAME IN BLOCK CAPITALS) of Tel. No. (FULL ADDRESS) being a member of PERAK CORPORATION BERHAD, hereby appoint:
PROXY 1 (FULL NAME IN BLOCK CAPITALS) NRIC/Passport No. No. of shares % of shareholdings
Address:
PROXY 2 (FULL NAME IN BLOCK CAPITALS) NRIC/Passport No. No. of shares % of shareholdings
Address: or failing him/her, the Chairman of the Meeting, as my/our proxy to vote for me/us and on my/our behalf, at the TWENTY-SEVENTH ANNUAL GENERAL MEETING of the Company to be held at Amanjaya Convention Centre, Casuarina @ Meru Hotel, No. 1-C, Jalan Meru Casuarina, Bandar Meru Raya, 30020 Ipoh, Perak Darul Ridzuan on Wednesday, 27 June 2018 at 10:00 a.m. or at any adjournment thereof in the manner indicated below: No. Resolutions For Against 1. To approve the increase in Directors’ fees for 2017 and the payment thereon.
2. To approve the payment of Directors’ benefits for 2017 and for the period until the next AGM of the Company.
3. To re-elect Dato’ Dr Vasan a/l Sinnadurai as Director of the Company.
4. To re-elect Datuk Dr Wan Norashikin binti Wan Noordin as Director of the Company.
5. To re-appoint Messrs Ernst & Young as Auditors of the Company.
Ordinary Resolution: To authorise Tuan Haji Ab Rahman bin Mohammed to continue in office as 6. Independent Non-executive Director. Ordinary Resolution: Proposed Renewal of Shareholders’ Mandate for Recurrent Related Party Transactions 7. of a Revenue or Trading Nature.
8. Special Resolution: Proposed Adoption of a New Constitution of the Company.
(Please indicate with an “X” in the appropriate box above how you wish to cast your vote. If this form is returned without any indication as to how the proxy shall vote, the proxy shall vote or abstain as he/she thinks fit.)
Dated this _____ day of ______in the year ______. ______Signature/Seal Notes: 1. A member of the Company entitled to attend and vote at the meeting may appoint 4. The instrument appointing a proxy shall be in writing under the hand of the appointor any person to be his/her proxy to attend and vote in his/her stead. A proxy may but or his/her attorney duly authorised in writing or if the appointor is a corporation, need not be a member of the Company and there shall be no restriction as to the either under its common seal or under the hand of an officer or attorney duly qualification of the proxy. A proxy shall have the same rights as the member to speak authorised. at the meeting. 5. The instrument appointing a proxy must be deposited at the Registered Office of the 2. Where a member is an Exempt Authorised Nominee which holds ordinary shares Company at D-3-7, Greentown Square, Jalan Dato’ Seri Ahmad Said, 30450 Ipoh, Perak in the Company for multiple beneficial owners in one securities account (“omnibus Darul Ridzuan at least forty-eight (48) hours before the time appointed for holding account”), there is no limit to the number of proxies which the Exempt Authorised the Annual General Meeting or at any adjournment thereof. Nominee may appoint in respect of each omnibus account it holds. 6. Only members whose names appear in the Record of Depositors as at 21 June 2018 3. When a member appoints more than one proxy the appointments shall be invalid will be entitled to attend and vote at the above Meeting. unless he/she specifies the proportion of his/her shareholding to be represented by 7. The registration for the above Meeting will commence on Wednesday, 27 June 2018 at each proxy. 9:00 a.m. First Fold
stamp THE SECRETARY
PERAK CORPORATION BERHAD Co. No. 210915-U D-3-7, Greentown Square, Jalan Dato’ Seri Ahmad Said, 30450 Ipoh, Perak Darul Ridzuan, Malaysia.
Second Fold