Corporate Profile
Seloga Holdings Berhad ("SHB") is a holding company with subsidiaries principally involved in construction and property development. SHB is listed on the Bursa Malaysia Securities Berhad [Stock Code: SELOGA 7641].
The wholly-owned subsidiaries of SHB, namely Seloga Jaya Sdn Bhd and Seloga Engineering Sdn Bhd are registered with the Construction Industry Development Board ("CIDB") with Class G7 license (no limit to contract sum) and Pusat Khidmat Kontractor ("PKK") with Class A license (no limit to contract sum).
The projects undertaken by the SHB Group include among others, residential township such as Sime UEP and Wangsa Maju; office and shopping complexes such as Subang Parade and Cheras Leisure Mall, hotels and resorts such as Swiss Garden and Avillion Resort Hotel; the Meru Industrial Park; Labuan Sports Complex, Toll Plazas at Bukit Raja and Damansara; Kelana Jaya LRT stations; Taman Tun Dr. Ismail Mosque; Multimedia University Campus; Bintulu Port Authority Main Operations and Administrative Office and many more.
SHB has an authorized share capital of RM500 million and a paid-up capital of RM111 million as at 13 April 2005.
Corporate Mission Quality Policy Statement Seloga aims to be a top quality construction and engineering company through continual improvement. We are committed in providing services to our customers' satisfaction in accordance with the contractual requirement. Contents
Notice Of the Ninth Annual General Meeting 2 Statement Accompanying Notice of the 4 Ninth Annual General Meeting Corporate Information 5 Profile Of Directors 6 Corporate Structure 8 Audit Committee Report 10 Corporate Governance Statement 13 Statement On Internal Control 18 Statement Of Directors’ Responsibility In 20 Relation To The Audited Financial Statements Additional Compliance Information 21 News Article 24 Chairman’s Statement 26 Penyata Pengerusi 31 Financial Statements 35 List Of Properties As At 31 December 2004 71 Analysis Of Shareholdings 73 Form Of Proxy Notice Of The Ninth Annual General Meeting NOTICE IS HEREBY GIVEN THAT the Ninth Annual General Meeting of Seloga Holdings Berhad ("the Company" or "SHB") will be held at Sheraton Subang Hotel & Tower, Melati 1 & 2, 7 Jalan SS16/1, 47600 Subang Jaya, Selangor Darul Ehsan on Friday, 27 May 2005 at 10.30 a.m. to transact the following businesses: -
AGENDA
Ordinary 1. To receive the Audited Financial Statements for the financial year ended 31 December 2004 and the Resolution 1 Reports of Directors and Auditors thereon.
Ordinary 2. To re-elect Dato' Lim Git Hooi @ Robert Lim who retires in accordance with Article 87 of the Company's Resolution 2 Articles of Association.
Ordinary 3. To re-appoint Messrs Shamsir Jasani Grant Thornton, as Auditors of the Company and authorise the Resolution 3 Directors to determine their remuneration.
4. As Special Business to consider and if thought fit, to pass the following Ordinary Resolution, with or without modifications: -
Ordinary AUTHORITY TO ISSUE SHARES PURSUANT TO SECTION 132D OF THE COMPANIES ACT, 1965 Resolution 4 "THAT pursuant to Section 132D of the Companies Act, 1965, the Directors be and are hereby authorised to issue and allot shares in the Company at any time until the conclusion of the next Annual General Meeting and under such terms and conditions and for such purposes as the Directors may, in their absolute discretion, deem fit provided that the aggregate number of shares to be issued does not exceed 10 per centum of the total issue share capital of the Company for the time being, subject always to the approval of all relevant regulatory bodies being obtained for such issue and allotment."
5. To transact any other business of which due notice shall have been received.
BY ORDER OF THE BOARD
SELENA LEONG SIEW TEE KANG SHEW MENG Secretaries
Petaling Jaya 5 May 2005
2 SELOGA HOLDINGS BHD (361052-H) NOTES:
1. A Member entitled to attend and vote at the meeting is entitled to appoint one or more proxies to attend and vote in his stead. A proxy may but need not be a Member of the Company and a Member may appoint any persons to be his proxy. The provisions of Section 149(1)(a) and (b) of the Companies Act, 1965 shall not apply to the Company.
2. Where a Member appoints two or more proxies, the appointment shall be invalid unless the Member specifies the proportions of his holdings to be represented by each proxy.
3. Where a Member is an authorised nominee as defined under the Securities Commission (Central Depositories) Act, 1991, it may appoint at least one (1) proxy in respect of each Securities Account it holds with ordinary shares of the Company standing to the credit of the said Securities Account.
4. The instrument appointing a proxy shall be in writing under the hand of the appointer or if the appointer is a corporation, either under its Common Seal or under the hand of its officer or attorney duly authorised.
5. The instrument appointing a proxy and the power of attorney or other authority (if any), under which it is signed or a notarially certified copy thereof, must be deposited at the Registered Office of the Company at 312, 3rd Floor, Block C, Kelana Square, 17 Jalan SS7/26, 47301 Petaling Jaya, Selangor Darul Ehsan not less than forty eight (48) hours before the time for holding the Ninth Annual General Meeting or any adjournment thereof.
Explanatory notes on Special Business:
Ordinary Resolution 4 The proposed Ordinary Resolution 4 if passed, is to give the Directors of the Company flexibility to issue and allot shares for such purposes as the Directors in their absolute discretion consider to be in the interest of the Company, without having to convene a general meeting. This authority will expire at the next Annual General Meeting of the Company.
ANNUAL REPORT 2004 3 Statement Accompanying Notice of The Ninth Annual General Meeting
STATEMENT ACCOMPANYING NOTICE OF THE NINTH ANNUAL GENERAL MEETING PURSUANT TO PARAGRAPH 8.28(2) OF THE LISTING REQUIREMENTS OF BURSA MALAYSIA SECURITIES BERHAD.
1. Name of the Director standing for re-election:-
(i) Dato' Lim Git Hooi @ Robert Lim
2. Details of attendance of Directors at Board Meetings are as follows:-
Total Total Number of Meetings % of No. Name of Directors Meetings Attended Attendance
1. Dato' Lim Git Hooi @ Robert Lim 8 8 100.00
2. Derek John Fernandez 8 8 100.00
3. Dato' Syed Md. Amin Bin Syed Jan Aljeffri 8 6 75.00
3. Place, Date and Time of the Ninth Annual General Meeting
Place: Sheraton Subang Hotel & Tower Melati 1 & 2, 7, Jalan SS16/1, 47600 Subang Jaya, Selangor darul Ehsan.
Date and Time: Friday, 27 May 2005 at 10.30 a.m.
4. Information on Director standing for re-election:-
(i) Dato' Lim Git Hooi @ Robert Lim
The Profile of the above director is set out on pages 6 to 7 of the Annual Report.
4 SELOGA HOLDINGS BHD (361052-H) Corporate Information
BOARD OF DIRECTORS SENIOR MANAGEMENT SECRETARIES
Dato' Lim Git Hooi @ Robert Lim Tan Sri Dato’ Seri Halim Saad Kang Shew Meng Chairman Chief Executive Officer MAICSA 0778565 Independent Non-Executive Director Koh Lai Huat Selena Leong Siew Tee Derek John Fernandez Chief Financial Officer MAICSA 7017630 Independent Non-Executive Director Nor Zainal Bin Abdul Rahman Dato' Syed Md. Amin Bin Syed Jan Aljeffri General Manager - Corporate Affairs SHARE REGISTRAR Independent Non-Executive Director Lim Weng Ho Epsilon Registration Services Sdn Bhd Deputy Managing Director 312, 3rd Floor, Block C, Kelana Square AUDIT COMMITTEE Seloga Jaya Sdn Bhd 17 Jalan SS 7/26 47301 Petaling Jaya Dato' Lim Git Hooi @ Robert Lim Tan Boon Chai @ Lee Boon Chuan Selangor Darul Ehsan Chairman Chief Operation Officer Malaysia Seloga International Corporation Sdn Bhd Telephone : 603-78062116 Derek John Fernandez Facsimile : 603-78061261 Zamani Bin Kassim Managing Director Dato' Syed Md. Amin Bin Syed Jan Aljeffri Seloga Engineering Sdn Bhd AUDITORS REGISTERED OFFICE REMUNERATION COMMITTEE Shamsir Jasani Grant Thronton Level 11-1, Faber Imperial Court 312, 3rd Floor, Block C, Kelana Square Derek John Fernandez Jalan Sultan Ismail 17 Jalan SS 7/26 Chairman 50250 Kuala Lumpur 47301 Petaling Jaya Selangor Darul Ehsan Dato' Lim Git Hooi @ Robert Lim Malaysia PRINCIPAL BANKERS Telephone: 603-78031126 Dato' Syed Md. Amin Bin Syed Jan Aljeffri Facsimile : 603-78061387 Appointed on 5 July 2004 Alliance Bank Malaysia Berhad Bumiputra Commerce Bank Berhad PRINCIPAL PLACE OF BUSINESS NOMINATION COMMITTEE EON Bank Berhad Wisma Seloga RHB Bank Berhad Derek John Fernandez No. 1, Jalan USJ 10/1A, Chairman 47620 UEP Subang Jaya Selangor Darul Ehsan STOCK EXCHANGE LISTING Dato' Lim Git Hooi @ Robert Lim Malaysia Telephone : 603-56372888 The Second Board, Facsimile : 603-56375227 Bursa Malaysia Securities Berhad Email : [email protected]
ANNUAL REPORT 2004 5 Profile
DATO' LIM GIT HOOI @ ROBERT LIM Chairman/Independent Non-Executive Director
Dato' Lim Git Hooi @ Robert Lim, aged 65, a Malaysian, Chairman and Independent Non-Executive Director of the Company was appointed to the Board on 27 September 2002 and subsequently appointed Chairman of the Company on 22 January 2003.
Dato' Robert Lim, is a Chartered Accountant. He was a practicing accountant until he retired from the profession on 31 December 1996. He is a member of the Malaysian Institute of Certified Public Accountants and the Malaysian Institute of Accountants.
Dato' Robert Lim started his career in the accounting profession as an articled clerk with DCA Robertson & Co., Perth in July 1960. He later joined Bell, Frost & Aitken, Perth and qualified as a Chartered Accountant before returning to Malaysia in 1966 to join Turquand Young & Company, Kuala Lumpur/Ipoh as an audit assistant. He worked his way up to the senior auditor level and left the Company at the end of 1970. In 1971 he set up his own accounting practice, Robert Lim & Company, which later expanded to Lim Ali & Company and became affiliated to Arthur Young and Company. When Arthur Young and Ernst & Whinney merged to form Ernst & Young in 1990, Dato' Robert from left to right: Lim became the Partner-In-Charge of the combined practice 1. Dato’ Lim Git Hooi @ Robert Lim in Ipoh. He retired as a Partner of the firm in December 1996. Chairman / Independent Non-Executive Director Dato' Robert Lim has over 30 years of professional experience 2. Derek John Fernandez in all aspects of the accounting profession including auditing, Independent Non-Executive Director accounting, company secretarial and tax matters, receivership 3. Dato’ Syed Md. Amin bin Syed Jan Aljeffri and liquidations and corporate planning and services. His Independent Non-Executive Director special areas of competence include management studies and loan project reporting, corporate turnaround, receivership and None of the Directors have: liquidations and design and installation of accounting systems ● Any family relationship with any Director and/or major and internal controls. shareholders’ of the Company. Dato' Robert Lim is a Director of Bumiputra-Commerce Bank ● Any conflict of interest with the Company. Berhad, Gopeng Berhad, Choo Bee Metal Industries Berhad ● Any conviction for offences with the past 10 years. and Yu Neh Huat Berhad. ● Any securities holding in the Company or its subsidiaries except for Derek John Fernandez who holds 1,000 ordinary shares of RM1 each in the Company.
6 SELOGA HOLDINGS BHD (361052-H) of Directors
Dato' Robert Lim is the Chairman of the Company's Audit DATO' SYED MD. AMIN BIN SYED JAN ALJEFFRI Committee and a member of Remuneration Committee and Independent Non-Executive Director Nomination Committee. Dato' Syed Md. Amin Bin Syed Jan Aljeffri, aged 57, an Independent Non-Executive Director of the Company was Dato' Robert Lim attended all the Board Meetings held appointed to the Board on 16 October 2003. He has more during the financial year. than 30 years of experience in corporate management and the business world. An Economics graduate from the University of Malaya, he is also a Chartered Accountant from the Canadian Institute of Chartered Accountants, a CPA with the Malaysian Institute of Certified Public Accountants and the Institute of Certified Public Accountants of Singapore, a Certified Financial Planner with the Financial Planning Association of Malaysia, a DEREK JOHN FERNANDEZ member of the Malaysian Institute of Accountants and a Independent Non-Executive Director Fellow of the Malaysian Institute of Taxation. His extensive work experience have included Esso in Malaysia and the Mr. Derek John Fernandez, aged 40, a Malaysian, an United States of America, Touche Ross Canada and Independent Non-Executive Director of the Company was his own public accounting and consulting practices, appointed to the Board on 29 June 2001. A lawyer by AljeffriDean. profession, his academic qualifications include B.Sc and Dato' Syed sits on the board of DRB-Hicom Berhad, Bina LLB (Hons) from Monash University, Australia. He was Darulaman Berhad, Tien Wah Press Berhad, LBI Capital admitted as a Barrister and Solicitor of the Supreme Court Berhad, Kulim Technologies Park Corporation Berhad, of Victoria, Australia in 1989. He was admitted as an Mines City Hotel Berhad, Pembangunan Sumber Manusia Advocate and Solicitor of the High Court of Malaya in 1991. Berhad and several other private limited companies. He was a legal assistant in Fernandez and Co from 1989 - 1991 as well as a Lecturer in Law, Sunway College from Dato' Syed is also a member of the Board of the Islamic 1991 - 1994 and a Partner of K. Nadarajah and Partners University College of Malaysia, owned by the Malaysian from 1994 - 1996. Government. He is currently the President of the Malay Chamber of Currently, he is the Managing Partner in Fernandez & Commerce Kuala Lumpur and the Chairman of the ASEAN Selverajah (Advocates & Solicitors). He is also a member Business Advisory Council. He is also a Council Member of the Bar Councils sub committee on corporate and of the Malaysia-China Business Council and the East Asia banking matters. Business Council. He is a member of the Board of the Islamic University College of Malaysia and the Small and Mr. Derek John Fernandez is the Chairman of the Medium Industries Development Corporation (SMIDEC). Company's Remuneration Committee and Nomination He is also the Malaysian Honorary Council for the Federal Committee and a member of the Audit Committee. Democratic Republic of Ethiopia. He was formerly the Secretary General of the ASEAN Chamber of Commerce & Industry. He attended all the Board Meetings held during the financial year. Dato’ Syed is the member of the Audit Committee and Remuneration Committee.
He attended six out of eight Board Meetings held during the financial year.
ANNUAL REPORT 2004 7 Corporate Structure Construction Domestic
100% Jamin Setia Sdn Bhd (249710-H)
100% Seloga 100% S.J. Mix Properties Sdn Bhd Sdn Bhd (448939-K) (140047-M)
100% Seloga 100% Sawab Engineering Development Sdn Bhd Sdn Bhd (415364-A) (258012-U)
100% Seloga Jaya 100% Timber 100% Tulus Unggul Sdn Bhd Components (M) Sdn Bhd (21253-M) (M) Sdn Bhd (254749-K) (61671-P) International 100% Seloga Machinery 100% Seloga (Labuan) Ltd and Equipment (LL04254) Sdn Bhd (219474-P)
100% Seloga International Corporation Sdn Bhd (659606-W)
Oil & Gas
50% Kemaman Oil 94% Kemaman Bitumen Corporation Company Sdn Bhd Sdn Bhd (612725-U) (660063-U)
100% Seloga Petroleum Sdn Bhd (661486-U)
8 SELOGA HOLDINGS BHD (361052-H) ANNUAL REPORT 2004 9 Audit Committee Report
The members of the Audit Committee ("AC") are as follows:-
Chairman
Dato' Lim Git Hooi @ Robert Lim Independent Non-Executive Director
Committee Members
● Derek John Fernandez Independent Non-Executive Director ● Dato' Syed Md. Amin Bin Syed Jan Aljeffri Independent Non-Executive Director
All members of the AC have sound knowledge of finance and accounting and two of its members, Dato' Lim Git Hooi @ Robert Lim and Dato' Syed Md. Amin Bin Syed Jan Aljeffri are members of the Malaysia Institute of Accountants ("MIA").
The terms of reference of the AC are as follows:-
Objective of the AC
The primary function of the Committee is to assist the Board of Directors in ensuring the Group's process of assessing risks and internal controls, corporate governance and other compliance requirements of the Group are properly managed and monitored.
Membership
The Committee shall be appointed from amongst its Directors and must fulfill the following requirements:-
(i) The AC must be composed of no fewer than 3 members; (ii) Majority of the members must be Independent Directors; (iii) At least one member of the AC:- (a) Must be a member of the MIA or (b) If he is not a member of MIA, he/she must have at least 3 years working experience; and
● He must have passed the examination specified in Part 1 of the 1st Schedule of the Accountants Act 1967; or
● He must be a member of one of the associations of accountants specified in Part II of the 1st Schedule of the Accountants Act 1967. (iv) The Chairman must be an Independent Non-Executive Director. (v) No alternate director is appointed as a member of the AC. (vi) In the event of any vacancy in the AC resulting in the non-compliance of the above requirements, the Company must fill the vacancy within 3 months. (vii) The Company Secretary shall act as Secretary to the Committee.
10 SELOGA HOLDINGS BHD (361052-H) Meeting and Minutes
The Committee shall meet as and when the need arises. Any two members of the Committee shall form a quorum. The Company Secretary shall act as the Secretary of the Committee and shall be responsible to keep the minutes of meeting of the Committee, circulating them to committee members and to the other members of the Board of Directors.
Duties and Responsibility
The function of the Committee shall be:-
● to review the audit plans with the auditors and to ensure co-ordination between the auditors;
● to review the audit reports with auditors;
● to review the Company's policies and procedures with management and auditors to ensure the adequacy of internal accounting and financial reporting controls;
● to review with the auditors, their evaluation of the system of internal accounting controls;
● to review the assistance given by the Company's and the Group's officers to the auditors;
● to review the financial statements of the Company and the Group and thereafter to submit them to the Board;
● to review any related party transactions within the Company or the Group;
● to consider the nomination of a person or persons as auditors; and
● any such other functions as may be agreed by the Committee and the Board.
Authority
The Committee shall have the authority to investigate any activities within its terms of reference and shall have unrestricted access to the auditors and to all employees of the Group and also to obtain external legal or other independent professional advice as and when necessary.
Where the Committee is of the view that a matter reported by it to the Board has not been satisfactorily resolved resulting in a breach of the Listing Requirements of Bursa Malaysia Securities Berhad, the Committee shall promptly report such matter to Bursa Malaysia Securities Berhad.
AC REPORT
Meetings and activities
The AC held meetings on 4 occasions during the year ended 31 December 2004.
ANNUAL REPORT 2004 11 Audit Committee Report
The details of attendance are as follows:-
Name of Directors Total No. of Meetings Attendance
Dato' Lim Git Hooi @ Robert Lim 4 4 Derek John Fernandez 4 3 Dato' Syed Md. Amin Bin Syed Jan Aljeffri 4 4
Summary of Activities of the AC
The AC performed the following activities during the financial year ended 31 December 2004:-
1. Reviewed with the external auditor the results of the audit and reports arising out of the audit; 2. Reviewed the Annual Report and audited financial statements of the Company prior to submission to the Board for consideration and approval. The review, inter alia, was to ensure compliance with relevant legislation, listing requirements and the applicable accounting standards approved by Malaysian Accounting Standards Board ("MASB"); 3. Reviewed the quarterly unaudited financial results announcements prior to recommending them for the Board's approval, and to ensure its compliance to Bursa Malaysia Securities Berhad's Listing Requirements; 4. Reviewed the Enterprise Risk Management Report; and 5. Reviewed related party transactions and recommended to the Board the course of action to be taken by the Company to recover related party debts. 6. Approved internal audit plans and reviewed internal audit reports.
Internal Controls
Internal controls are an internal self-regulatory mechanism in enhancing corporate governance. The Board acknowledges that the Group's system of internal control covering financial, operational and compliance controls as well as risk management are their responsibility. To this end, the Board already has an AC in place to review and monitor the overall operations of the Group. The Group has outsourced the internal audit function to an independent professional services firm who perform internal audits on a periodic basis.
In addition, the Group has in place, a risk management framework which enables an ongoing process of identifying, evaluating, monitoring and managing the significant risks of the Group. This system will provide reasonable assurance that assets are safeguarded against material loss or unauthorised use and transactions are properly authorised and recorded.
12 SELOGA HOLDINGS BHD (361052-H) Corporate Governance Statement
The Board of Directors is committed to instill a corporate culture that emphasizes excellent corporate governance and uphold high standards of corporate governance throughout the Group. This includes a commitment towards enhancement of shareholder value and financial accountability and transparency of the Group. The Board is fully dedicated to ensuring that the structures and procedures which are in place in the Group to support good corporate conduct, will continue to exist not only in their present form but will continually be enhanced and fortified.
Compliance Statement
The Board has taken measures to ensure that the Group complies with the Principles and Best Practices in Corporate Governance as identified in the Malaysia Code on Corporate Governance.
BOARD OF DIRECTORS
Composition
The Board currently consists of three (3) Independent Non-Executive Directors, thereby bringing objective, independent judgement to the decisions of the Company. All the Directors through their varied experience and qualification in accounting and law provide effective contribution and support to the functions of the Board.
Role and Responsibility of the Board
The Board of Directors comprise of Independent Non-Executive Directors who play an oversight role to ensure that the Management headed by Chief Executive Officer ("CEO") always act in the best interests of all its shareholders.
Board Meetings and Supply of Information to the Board
The full Board meets regularly on a quarterly basis. Additional meetings may also be convened as and when there are matters that require the Board's attention.
Agenda and board papers are provided to the directors prior to the meeting to ensure that the Board is fully aware of the matters that are to be deliberated, which include that of strategy, operations, financials, performance as well as resources.
During the financial year ended 31 December 2004, the Board had conducted 8 meetings. The attendance of the individual directors is as disclosed in the Statement Accompanying Notice of Annual General Meeting.
The Directors are provided with written reports and supporting documents as and when it is necessary and as and when requested in a timely manner. The Board is given unrestricted access to all staff for any information relating to the Company's affairs as well as advisers and professionals appointed to advise on corporate proposals. The Directors are updated by the Company Secretary on new statutory as well as regulatory requirements relating to duties and responsibilities of Directors. All members of the Board have ready and direct access to the services and advice of the Company's Secretary and should it be necessary, the Directors may seek independent advice.
ANNUAL REPORT 2004 13 Corporate Governance Statement
Nomination Committee
The composition of the Nomination Committee and their attendance at the meetings were as follows:-
Name of member No of meetings attended
Chairman : Mr Derek John Fernandez 1 / 1 Member : Dato' Lim Git Hooi @ Robert Lim 1 / 1
The terms of reference of the Nomination Committee are as follows:
● to recommend to the Board, candidates for all directorships to be filled by the shareholders or the Board;
● to annually review the Board's required mix of skills, experience and other qualities, including core-competencies that the Non-Executive Directors should bring to the Board;
● to consider, in making its recommendations, candidates for directorship proposed by the CEO and, within the bounds of practicability, by any other senior executive or any director or shareholder; and
● to recommend to the Board, directors to fill the vacancies on Board Committees.
Remuneration Committee
The composition of the Remuneration Committee and their attendance at the meeting were as follows:-
Name of member No of meetings attended
Chairman : Derek John Fernandez 1 / 1 Member : Dato' Lim Git Hooi @ Robert Lim 1 / 1 Dato' Syed Md. Amin Bin Syed Jan Aljeffri - Appointed on 5 July 2004
The terms of reference of the Remuneration Committee are as follows:
● to recommend to the Board the remuneration to be paid to each Executive Director for his services as a member of the Board, drawing from outside advice as necessary.
● to establish a formal and transparent procedures for developing policy on Executive Directors' remuneration and for fixing the remuneration packages of individual Directors.
14 SELOGA HOLDINGS BHD (361052-H) The table below provides details on the Directors' Remuneration of the Group for the financial year ended 31 December 2004:
GROUP RM'000
Directors of the Company:
Executive Directors:
Fees - Salary and other remuneration, including meeting allowances - Bonuses - Benefits-in-kind -
-
Non-Executive Directors:
Fees 168 Other remuneration, including meeting allowances 17 Benefits-in-kind -
185
Grand Total 185
The number of directors of the Company whose total remuneration received/receivable from the Group for the financial year 2004 which fall within the required disclosure bands is as follows:
Executive Directors Non-Executive Directors
RM50,000 and below - 2 RM50,001 to RM100,000 - 1 RM100,001 to RM150,000 - - RM150,001 to RM200,000 - - RM200,001 to RM250,000 - - RM250,001 to RM300,000 - - RM350,001 to RM400,000 - - RM400,001 to RM450,000 - - RM450,001 to RM500,000 - -
Total -3
Note: For information of remuneration paid to former Directors in 2004, kindly refer to Note 26 of the audited financial statements on page 66
ANNUAL REPORT 2004 15 Corporate Governance Statement
Directors' Training
All the Directors have accumulated their required points in relation to the Continuing Education Programme ('CEP'). Directors are encouraged to attend continuous education programmes and seminars to keep abreast with developments in the market place as well as to aid the directors in the discharge of their duties as Directors.
Seminars and conferences organised by the Securities Commission, I-Mesdaq Sdn Bhd, relevant Regulatory Authorities and professional bodies on areas concerning Directors' responsibilities and corporate governance issues are notified to the Board, for their participation at such seminars and conferences.
Re-Election of Directors
The Articles of Association provides that all directors shall retire at the first Annual General Meeting of the company. Additionally, at least one-third of the directors for the time being shall retire from office provided always that all directors shall retire from office once at least every three (3) years but shall be eligible for re-election.
ACCOUNTABILITY AND AUDIT
Financial Reporting
The Board aims to present a balanced, clear and meaningful report on the Group's financial positions and business prospects to its shareholders, investors and the Regulatory Authorities via timely release of quarterly reports, annual reports and regular announcements on material business matters.
The Board is assisted by the Audit Committee ("AC") to oversee the Group's financial reporting process and the quality of the financial reporting.
The Responsibility Statement by the Directors on the annual audited financial statements of Company and Group is set out on page 20.
Internal Control
The Board has overall responsibility for maintaining a system of internal controls that provides reasonable assurance of effective and efficient operations, and compliance with laws and regulations, as well as with internal procedures and guidelines. The dynamic business environment and the nature of risks mean that events may occur and give rise to unanticipated or unavoidable losses. The Group's system internal controls are designed to provide reasonable but not absolute assurance against the risk of material errors, frauds or losses occurring.
The effectiveness of the Group's system of internal controls is reviewed periodically by the AC. The review covers the financial, operational and compliance controls as well as risk management.
The internal audit function, which was outsourced to a firm of Chartered Accountants, provides assurance to the AC with regards to the state of internal controls within the Group.
The Statement on Internal Control, which provides an overview of the state of internal control of the Group is set out on page 18 and 19.
16 SELOGA HOLDINGS BHD (361052-H) AC
In addition to the duties and responsibilities set out under its terms of reference, the AC acts as a forum for discussion of internal control issues. The minutes of the AC meetings are tabled to the Board for noting and for action by the Board where necessary.
The activities of the AC during the year are set out under the AC Report on page 10 to 12.
Relationship with External Auditors
The AC meets with the external auditors at least once a year to discuss the audit plan, annual financial statements and their audit findings. It also meets with the external auditors whenever it deems necessary. These meetings are held without the presence of the Executive Directors.
COMMUNICATION WITH SHAREHOLDERS AND INVESTORS
The Board recognises the importance of maintaining an effective communication policy with its shareholders and investors. A key channel to reach out to the shareholders and investors is the Annual Report of the Company. There is continuing effort by the Board to improve the contents of the Annual Report in line with developments in corporate governance practices.
The main forum for dialogues with the shareholders and investors is the Company's general meeting. Shareholders and investors who attend the general meetings are encouraged to raise questions pertaining to the subject matters of such general meetings.
This statement is made in accordance with the resolution of the Board of Directors dated 12 April 2005.
ANNUAL REPORT 2004 17 Statement on Internal Control
Introduction
Paragraph 15.27(b) of Bursa Malaysia Securities Berhad's Listing Requirements requires the Board of Directors of public listed companies to include in its annual report a "statement about the state of internal control of the listed issuer as a group". The Board is committed to maintaining a sound system of internal control in the Group and is pleased to provide the following statement, which outlines the key elements of internal control systems within the Group for the financial year.
Board responsibility
The Board acknowledges its responsibility for the Group's system of internal control which includes the establishment of an appropriate control environment and framework as well as reviewing its adequacy and integrity to safeguard shareholders' investment and Group's assets. The system of internal control is designed to manage, rather than eliminate, the risk of failure to achieve corporate objectives and can only provide reasonable but not absolute assurance against material misstatement or loss. In pursuing this objective, the Management's role is to ensure the implementation and compliance of those internal controls in its day-to-day operation.
THE GROUP'S SYSTEM OF INTERNAL CONTROL
Control Environment and Monitoring Mechanism
● The Board entrusts the daily running of the business to the Chief Executive Officer ('CEO') who is assisted by his management team.
● The Board members receive timely information pertaining to performance and operations matters of the Group through regular reports from management and quarterly Board papers.
● Scheduled meetings are held at operational and management levels to identify, discuss and resolve business and operational issues. These include scheduled management meetings at the Company and individual subsidiary levels, operation meetings, staff meetings and site meetings. Minutes of these meetings and management reports are disseminated to the relevant Directors on a timely basis.
● The Audit Committee ("AC"), on behalf of the Board, regularly reviews and holds discussions with management on the actions taken within the internal control system, issues identified in reports prepared by the external auditors and management.
● There is a defined framework on policies, procedures and guidelines on areas concerning responsibilities and authority for crucial business and operational matters. The framework also encompasses the application of capital expenditure and approval on borrowings. Post-implementation reviews are also conducted and reported to the Board.
● A major subsidiary company has obtained its ISO 9001:2000 certification that increased focus on top management commitment to inter alia, (i) the development and improvement of its quality management system with a customer focus, (ii) consider the legal and regulatory requirements, and (iii) establish measurable objectives at relevant functions and levels within the organization.
18 SELOGA HOLDINGS BHD (361052-H) Enterprise Risk Management Framework
The Board has established an ongoing process of identifying, evaluating and managing significant risks faced by the Group. This project has achieved its objective to identify principal risks affecting the achievement of the Group's business objectives.
Assurance Mechanism
● The Board continuously reviews the adequacy and integrity of the Group's system of internal control.
● The AC is tasked by the Board with the duty of reviewing and monitoring the effectiveness of the Group's system of internal control.
● The Group has an outsourcing arrangement with a firm of Chartered Accountants in relation to its internal audit function.
● The internal audit function adopts a risk-based approach where a rolling plan has been developed and updated based on the outcome of Risk Assessment Exercise.
● Periodic scheduled internal audit visits are carried out in accordance with the internal audit plan approved annually by the AC.
● Based on the internal audit visits, the internal audit function provides the AC with periodic reports highlighting observations, recommendations and management action plans to improve the system of internal control.
● In addition, the AC also reviews and deliberates on any matters relating to internal control highlighted by the external auditors in the course of their statutory audit of the financial statements of the Group.
The Report of the AC is set out on pages 10 to 12 of the Annual Report.
The Board understands that the Group operates in a dynamic business environment and that the structure of controls and operations must continually evolve to ensure they remain adequate and appropriate to the Group. The Board remains committed towards continuous improvement and enhancement of its system of internal control and will, when necessary, put in place action plans to ensure that there is increased certainty of the achievement of business objectives, thus enhancing shareholder's value.
The statement is made in accordance with the resolution of the Board of Directors dated 12 April 2005.
ANNUAL REPORT 2004 19 Statement of Director’s Responsibility in Relation to the Audited Financial Statements
The Directors are responsible for ensuring that the annual financial statements of the Group and the Company are drawn up in accordance with the requirements of the applicable approved accounting standards in Malaysia and the provisions of the Companies Act, 1965.
The Directors are to ensure that the annual financial statements of the Group and the Company give a true and fair view of the state of affairs of the Group and the Company as at 31 December 2004 and of the results of their operations and cash flows for the year ended on that date.
In preparing the financial statements, the Directors have:
● applied the appropriate and relevant accounting policies on a consistent basis; ● made judgements and estimates that are reasonable and prudent; ● prepared the financial statements on going concern basis; and ● ensured that proper accounting and other records are kept so as to enable the preparation of the financial statements with reasonable accuracy.
The Directors are also responsible for taking reasonable steps to safeguard the assets of the Group to prevent and detect fraud and irregularities.
This statement is made in accordance with the resolution of the Board of Directors dated 12 April 2005.
20 SELOGA HOLDINGS BHD (361052-H) Additional Compliance Information
Additional Disclosure
Non-audit fees
There is no non-audit fees paid to the external auditors by the Group and the Company for the financial year ended 31 December 2004. (2003: Nil)
Material Contracts
There was no material contract (not being contracts entered into in the ordinary course of business) entered into by the Company and/or its subsidiary companies which involve directors and major shareholders, either still subsisting at the end of the financial year ended 31 December 2004 or entered into since the end of the previous financial period that have been entered by the Company or its subsidiary companies involving directors and major shareholders.
Sanctions and/or Penalties
There were no sanctions and/or penalties imposed on the Company and its subsidiary companies, directors or management by the relevant regulatory bodies during the financial year ended 31 December 2004.
Revaluation Policy
The revaluation policy on landed properties are disclosed in Note 11 to the financial statements.
Utilisation on Proceeds Raised from the Restructuring Exercise Completed in year 2003
The utilization of proceeds raised from the Restructuring Exercise completed during the financial year ended 31 December 2003 is as follow:- RM'000
Rights Issue Proceeds 11,200 Repayment to an Investor (5,720)
5,480 Restricted Issue Proceeds 28,000 Repayment of Advances from a Director (4,280)
29,200 Interest earned from Repo Placement 80 Expenses relating to the Restructuring Exercise (2,161) Working Capital (25,519)
Unutilised balance as at 31 December 2003 1,600 Working Capital (1,600)
Balance as at 29 February 2004 0
ANNUAL REPORT 2004 21 Additional Compliance Information
Utilisation of Proceeds Raised from the Private Placement Exercise
The utilisation of proceeds raised from the Private Placement Exercise completed during the financial year ended 31 December 2004 is as follow:- RM'000
Private Placement Proceeds - 1st batch 12,737 Expenses relating to the Private Placement Exercise (149) Working capital (12,588)
Unutilised balance as at 30 September 2004 0
Private Placement Proceeds - 2nd batch 15,067 Repayment of Bank Borrowings (5,153)
9,914 Expenses relating to the Private Placement Exercise (113) Working Capital (8,990)
Unutilised balance as at 18 April 2005 811
Irredeemable Convertible Unsecured Loan Stocks (ICULS)
On 9 May 2003, the Company issued RM24 million nominal value seven year zero coupon irredeemable convertible unsecured loan stock ("ICULS") to Segi Resources Sdn Bhd, a joint venture ("JV") partner to the Segi-Seloga Jaya JV turnkey project.
The ICULS are convertible into new ordinary shares on a semi-annual basis commencing six months from the issuance date to the day immediately preceding the maturity date, 7 May 2010, based on the cumulative certified billing amount/turnover of the Segi-Seloga Jaya JV turnkey project. The amount of ICULS converted during the financial year ended 31 December 2004 is disclosed in Note 5 to the financial statements under share capital.
22 SELOGA HOLDINGS BHD (361052-H) ANNUAL REPORT 2004 23 24 SELOGA HOLDINGS BHD (361052-H) ANNUAL REPORT 2004 25 Chairman’s Statement Dear Shareholders,
Unquestionably, the past year will go down in Seloga Holdings Berhad's ("SHB") corporate history as a watershed period. Against a backdrop of competitive business environment and tough financial constraints, your company continues to overcome challenges as well as seek opportunities to revitalise itself into a viable and dynamic company.
If you recall in my last Annual Report, I have stressed the importance for this Group to continue to address the myriad issues and challenges normally associated with financially distressed companies - among them reduced revenues, negative returns and high gearing. I am pleased to report that we have met these challenges by restructuring our debts, reducing costs and rationalising our staff size. Rounding up the Group's transformation, we have restructured the Group into two distinct business segments, namely Construction and Oil & Gas.
Understandably, dealing with these complex issues require bold and innovative efforts, and your continued support will invariably enable us to secure the Group's long term future and ultimately create value to shareholders.
While putting our house in order remained a key priority, we did not lose sight of our other responsibilities. SHB achieved several project milestones during the year with the completion of the Duchess of Kent Hospital Nursing College and Hostels Project (Sabah) and Jitra Polytechnic Upgrading Project (Kedah Darul Aman). The Pantai Dalam Apartments (Kuala Lumpur) and Bintulu Port Authority Building (Sarawak) are also in their final stages of construction. The Group's ability to deliver large-scale affordable and quality housing was once again amply demonstrated with the success of the Taman Nusantara housing project at Gelang Patah, Johor Darul Takzim. More than 800 units of affordable homes were launched in year 2004 and have since been fully sold, with construction progress ahead of schedule. A further 7,500 units are expected to be constructed over the next seven years to meet the ever increasing demand for affordable homes. In search of duplicating our success in the mass housing front, we have also taken up opportunities to explore and participate in large-scale housing projects in emerging markets overseas. The decision to widen our search overseas was largely an anticipation to the softening Malaysian construction industry in general.
26 SELOGA HOLDINGS BHD (361052-H) The past year also witnessed SHB's first foray into the Oil & On the back of increased revenue, the Group's loss before tax Gas industry via a Joint-Venture to manufacture top-quality has also reduced by 24%, a testimony that our strategic focus bitumen. When fully operational, we are poised to become a on profit-making projects and belt tightening measures are major supplier of bitumen to the domestic market, where over beginning to bear fruit. The Group's loss before tax stood at 95% is currently imported from Singapore. This venture has been RM7.4 million as compared to RM9.7 million last year. rated as A+ project by Malaysian Rating Corporation Berhad ("MARC") and promises to provide SHB with solid returns and The Group has also ended the year with improved financial sustainable growth. strength. Net Tangible Asset per share has more than tripled from RM0.08 per share in year 2003 to RM0.25 per share in While the challenges and difficulties that we face are clearly year 2004. Whilst this was largely due to the completed Private evident, all of us at SHB are proud and determined to maintain Placement exercise, it is notable that Net Current Asset has our focus in moving forward and elevating the Group to a new grown from RM35.4 million to RM47.3 million and Long Term level of excellence. On this note, it is my pleasure on behalf of Liabilities has been reduced by almost RM10 million to RM19.3 the Board of Directors of SHB, to present to you this Annual million. Report and Audited Financial Statements of the Group and Company for the financial year ended 31 December 2004. The Group will leverage on this improvement to further strengthen itself so as to remain competitive and adaptable in an increasingly challenging environment. FINANCIAL PERFORMANCE
In a year which saw a lukewarm domestic construction industry, DIVIDENDS the Group's revenue has increased by 20% to RM87.6 million against RM73.2 million recorded last year. This change was Due to the loss at company level, the Board of Directors is mainly due to the increased focus and efforts on our Taman recommending that no dividend be declared for the fiscal year Nusantara Project - one of the biggest contributor to our revenue. ending 31 December 2004.
ANNUAL REPORT 2004 27 Chairman’s Statement
CORPORATE DEVELOPMENTS % SHB 50 ● Private Placement TASCO 40 TBC 10 Two Private Placement Exercises were conducted during the financial year ended 31 December 2004. The first Private 100 Placement of 9,098,000 new ordinary shares of RM1.00 each at an issue price of RM1.40 each was completed on The Joint Venture Company shall subscribe for ordinary 25 March 2004. share of RM1.00 each in KBSB up to an amount equivalent to United States Dollar ("USD")17,000,000 (or approximately On 31 December 2004, the Company fully completed the RM64,600,000) from time to time as may be required by second Private Placement of 10,044,600 new ordinary the Joint Venture Company as determined by its Board of shares of RM1.00 each at an issue price of RM1.50 each. Directors. The Joint Venture Company shall be the holding company of KBSB. ● Joint Venture for the Manufacture of Bitumen ● New Subsidiary - Seloga International Corporation On 13 July 2004, SHB entered into a Shareholders' Sdn Bhd ("SICSB") Agreement with Tipco Asphalt Public Company Limited ("TASCO"), a public company incorporated in Thailand and On 15 July 2004, a new wholly-owned subsidiary, SICSB Thai Bitumen Company Limited ("TBC"), a company was incorporated with an issued and paid-up capital of incorporated in Thailand whereby SHB, TASCO and TBC RM2.00 divided into 2 ordinary shares of RM1.00 each (the "Joint Venture Parties") will jointly participate in the ("Subscribers' Shares") and authorised capital of RM100,000 share capital of a new company (the "Joint Venture divided into 100,000 ordinary shares of RM1.00 each. SICSB, Company") as the vehicle for the purposes of holding not which is currently dormant, will in the future carry out property less than 94% of the issued and paid up shares in the share investment and development activities abroad. capital of Kemaman Bitumen Company Sdn. Bhd. ("KBSB"). ● Restructuring of 100% owned subsidiary company - Pursuant to the Joint Venture, the Joint Venture Company Seloga Engineering Sdn Bhd ("SESB") shall be incorporated in Malaysia under the Companies Act, 1965 of Malaysia, the equity interest holdings of the Joint On 26 July 2004, SHB subscribed for 450,000 ordinary Venture Parties as follows:- shares of RM1.00 in the capital of SESB, which is 100%
28 SELOGA HOLDINGS BHD (361052-H) owned by Seloga Jaya Sdn Bhd ("SJSB"), a wholly-owned accordingly accepted FCSB's request and the parties have subsidiary of SHB. mutually agreed to abort the proposed disposal.
The entire equity interest comprising of 300,000 ordinary ● Proposed Acquisition of Infra Expert Development shares of RM1.00 each in the share capital of SESB held Sdn Bhd ("IED") by SJSB, was transferred to SHB on 29 July 2004, making SESB a direct wholly-owned subsidiary SHB. On 30 September 2004, the Group entered into a Conditional Share Sale and Purchase Agreement with ● New Subsidiary - Seloga Petroleum Sdn Bhd ("SPSB") Md. Anwar Bin Mamood, Syed Amir Abidin Jamalullail and Dato' Badarudin Bin Abdul Khalid (collectively known as On 2 August 2004, a new wholly-owned subsidiary, SPSB the "Vendors") for the proposed acquisition by SHB from was incorporated with an issued and paid-up capital of the Vendors who collectively holds 51% equity interest in RM2.00 divided into 2 ordinary shares of RM1.00 each IED comprising 2,550,000 ordinary shares of RM1.00 each ("Subscribers' Shares") and authorised capital of ("IED Shares") for a total cash consideration of RM10 million. RM100,000.00 divided into 100,000 ordinary shares of RM1.00 each. SPSB will be carrying on the business of an The cash consideration was arrived at on a willing buyer- investment holding company. willing seller basis, after taking into consideration IED's development rights for the Nusantara Project which is ● Proposed Disposal of SJSB valued at RM25 million, based on the valuation carried out on 15 September 2004 by Messrs. Knight Frank, an On 30 September 2004, the Group entered into a independent professional valuer. Conditional Share Sale and Purchase Agreement with Flare Class Sdn Bhd ("FCSB") for the proposed disposal by SHB Further to the announcement on 30 September 2004, the to FCSB of the entire issued and paid-up share capital of Group had on 2 December 2004 entered into a SJSB comprising 65,000,000 ordinary shares of RM1.00 Supplemental Agreement with the Vendors to vary certain each ("SJSB Shares") for a total cash consideration of terms and conditions of the Conditional Share Sale and RM1 million. Purchase Agreement as follows:-
FCSB had on 26 April 2005 requested SHB to rescind the (i) The cash purchase consideration for the Proposed Conditional Share Sale and Purchase Agreement due to Acquisition has been revised from RM10 million to unfulfilled conditions precedent within the stipulated RM8 million to be paid in the following manner: timeframe agreed between the parties. SHB had
ANNUAL REPORT 2004 29 Chairman’s Statement
● RM5 million on a date falling one month (or such to rebuild shareholders' value, SHB will build upon its current later time as SHB and the Vendors may agree in order book of approximately RM500 million by bringing on board writing) from the date when all the conditions viable ventures. precedent have been fulfilled ("Completion Date"); and ACKNOWLEDGEMENT ● RM3 million on the date falling on the third anniversary of the Completion Date or upon full On behalf of the Board of Directors, we would like to welcome satisfaction of all debts due and payable by IED to YBhg. Tan Sri Dato' Seri Halim Saad as the Chief Executive SHB and/or any of SHB's subsidiaries as recorded Officer of SHB. We strongly believe Tan Sri's expertise and in SHB's and/or such subsidiaries' audited vast experience would no doubt benefit the Group and we accounts as at 31 December 2004, whichever is look forward to his continued stewardship and contribution. later. At the same time we also welcome Mr. Tan Boon Chai, Mr. Koh Lai Huat, En. Nor Zainal Bin Abdul Rahman and (ii) An additional condition precedent to the Conditional En. Zamani Bin Kassim to the Senior Management Team of the IED SPA which requires IED to furnish sufficient proof Group. to the satisfaction of SHB, that IED has no less than five years unexpired duration of development rights in During the year, Mr. Chan Nung Wai, Mr. Noel John a/l respect of the Nusantara Project pursuant to the M. Subramaniam and Mr. Wong Ah Fook tendered their Development and Sale and Purchase Agreement dated resignations from their respective positions in the Group. We 22 February 1999 between Prolink Development Sdn thank them for their services and wish them the best in their Bhd and IED. future undertakings.
Certain condition precedents are still pending for the above We would also like to extend our gratitude for the services of acquisition. Currently SHB Group is the main contractor for Mr. Lim Weng Ho, who has since stepped down from the Board IED. of SHB.
OUTLOOK AND WAY FORWARD APPRECIATION
The global economy is expected to grow at a moderate rate of The Board of Directors of SHB would like to thank our customers 4.4% in 2005, largely influenced by the laggard United States' and business associates, the regulatory authorities, investors economy due to higher interest rates and also the volatility of and shareholders for their continuing strong support. global oil prices. Things are brighter on the domestic front as our Gross GDP is expected to expand by 6%. However, we We would also like to thank the Management and Staff for their expect the construction sector to remain on the backseat while ongoing dedication, resourcefulness and commitment to the the agricultural and manufacturing sectors will be given added pursuits of the Group. Our achievements are a result of the impetus in the coming year. concerted effort and contribution of the entire team.
Notwithstanding the above, we anticipate year 2005 to be a year of continuing improvement for the Group. SHB will continue to persevere and embark on corporate developments that will place SHB on firmer financial footing while consolidating its focus Dato' Lim Git Hooi @ Robert Lim on the Group's core competencies. Reinforcing our commitment CHAIRMAN
30 SELOGA HOLDINGS BHD (361052-H) Penyata Pengerusi Kepada Pemegang Saham Yang Dihormati, Tahun lepas merupakan titik perubahan dalam sejarah korporat Seloga Holdings Berhad ("SHB"). Dalam suasana perniagaan yang bersaingan dan kekangan kewangan yang ketat, Syarikat terus mengharungi segala cabaran serta mencari peluang untuk memulihkan diri agar menjadi sebuah syarikat yang berdaya maju dan dinamik.
Sekiranya anda mengimbas kembali Laporan Tahunan saya Lembaga Pelabuhan Bintulu (Sarawak) juga dalam peringkat yang lalu, saya telah menekankan betapa pentingnya akhir pembinaan. Kemampuan Kumpulan menyediakan projek Kumpulan untuk terus menangani pelbagai isu dan cabaran perumahan mega mampu milik dan berkualiti sekali lagi yang biasanya berkaitan dengan syarikat-syarikat yang dibuktikan melalui kejayaan projek perumahan Taman mengalami masalah kewangan - antaranya penurunan Nusantara di Gelang Patah, Johor Darul Takzim. Lebih daripada perolehan, pulangan negatif dan peningkatan daya usaha. Saya 800 unit rumah mampu milik telah dilancarkan pada tahun 2004 dengan sukacitanya melaporkan bahawa kami telah berjaya dan sudah habis dijual, dengan kemajuan pembinaan mengharungi kesemua cabaran ini dengan menstruktur semula mendahului jadual. Sebanyak 7,500 unit lagi dijangka dibina hutang, mengurangkan kos dan merasionalkan saiz dalam tempoh tujuh tahun akan datang bagi memenuhi kakitangan. Melalui pelaksanaan transformasi Kumpulan, kami permintaan yang kian meningkat terhadap rumah jenis mampu telah menstruktur semula Kumpulan kepada dua segmen milik. Dalam usaha menggandakan kejayaan kami dalam projek perniagaan iaitu Pembinaan dan Minyak & Gas. perumahan mega, kami juga sudah merebut peluang meneroka dan melibatkan diri dalam projek perumahan mega dalam Menangani isu-isu rumit ini sememangnya memerlukan usaha pasaran baru di luar negara. Kami mengambil keputusan untuk yang gigih serta inovatif. Sokongan anda yang berterusan meluaskan usaha di luar negara kerana kelembapan industri sudah pasti dapat membantu kami menjamin masa depan pembinaan di tempatan yang dijangka pada tahun ini. Kumpulan untuk jangka masa panjang dan seterusnya menjana nilai untuk para pemegang saham. Tahun lepas turut menyaksikan penyertaan pertama SHB dalam industri Minyak & Gas melalui sebuah Usaha Sama Walaupun projek perumahan kekal sebagai keutamaan untuk mengeluarkan bitumen berkualiti tinggi. Apabila terpenting, namun kami tidak memandang ringan beroperasi sepenuhnya, kami pasti menjadi pembekal utama tanggungjawab lain. SHB mencatatkan beberapa kejayaan bitumen kepada pasaran domestik, di mana melebihi 95% sepanjang tahun lepas dengan menyiapkan Projek Duchess bitumen kini diimport dari Singapura. Usaha Sama ini telah of Kent Hospital Nursing College dan Hostels (Sabah) dan mendapat penarafan sebagai projek A+ oleh Malaysian Rating Projek Menaiktaraf Politeknik Jitra (Kedah Darul Aman). Corporational Berhad ("MARC") dan menjanjikan pulangan Apartmen Pantai Dalam (Kuala Lumpur) dan Bangunan lumayan dan pertumbuhan berterusan kepada SHB.
ANNUAL REPORT 2004 31 Penyata Pengerusi
Meskipun cabaran dan kesukaran yang kami hadapi cukup KEMAJUAN KORPORAT ketara, namun kami semua di SHB berasa bangga dan bertekad mengekalkan tumpuan untuk terus maju ke hadapan ● Peruntukan Persendirian dan memacu Kumpulan ke tahap kecemerlangan yang lebih tinggi. Saya bagi pihak Lembaga Pengarah SHB, dengan Dua Langkah Peruntukan Persendirian telah dilaksanakan sukacitanya membentangkan Laporan Tahunan dan Penyata pada tahun kewangan berakhir 31 Disember 2004. Kewangan Beraudit bagi Kumpulan dan Syarikat untuk tahun Peruntukan Persendirian yang pertama untuk 9,098,000 kewangan berakhir 31 Disember 2004. saham biasa baru bernilai RM1.00 sesaham pada harga terbitan RM1.40 sesaham disempurnakan pada 25 March 2004. PRESTASI KEWANGAN Pada 31 Disember 2004, Syarikat telah menyempurnakan Pada tahun yang menyaksikan industri pembinaan domestik sepenuhnya Peruntukan Persendirian yang kedua untuk mengalami kelembapan, perolehan Kumpulan telah meningkat 10,044,600 saham biasa baru bernilai RM1.00 sesaham sebanyak 20% kepada RM87.6 juta berbanding RM73.2 juta pada harga terbitan RM1.50 sesaham. yang dicatatkan pada tahun lepas. Perubahan ini dicapai hasil daripada peningkatan tumpuan dan daya usaha terhadap ● Usaha Sama Pengeluaran Bitumen Projek Taman Nusantara - salah satu penyumbang terbesar kepada perolehan Kumpulan. Berikutan peningkatan Pada 13 Julai 2004, SHB memeterai Perjanjian Pemegang perolehan, kerugian sebelum cukai Kumpulan turut turun Saham dengan Tipco Asphalt Public Company Limited sebanyak 24%, sekaligus membuktikan bahawa tumpuan ("TASCO"), syarikat yang diperbadankan di Thailand dan strategik terhadap projek-projek menjana untung dan langkah Thai Bitumen Company Limited ("TBC"), syarikat yang penjimatan kos mula berhasil. Kerugian sebelum cukai diperbadankan di Thailand. SHB, TASCO dan TBC Kumpulan adalah RM7.4 juta berbanding RM9.7 juta pada ("Pihak-Pihak Usaha Sama") akan terlibat secara tahun lepas. bersama dalam modal saham bagi sebuah syarikat baru ("Syarikat Usaha Sama") sebagai perantara untuk tujuan Kumpulan turut mengakhiri tahun berkenaan dengan pemegangan tidak kurang daripada 94% saham bagi kedudukan kewangan yang lebih kukuh. Aset Ketara Bersih modal saham terbitan dan berbayar dalam Kemaman sesaham adalah melebihi tiga kali daripada RM0.08 sesaham Bitumen Company Sdn. Bhd. ("KBSB"). pada tahun 2003 kepada RM0.25 sesaham pada tahun 2004. Meskipun ini dicapai berikutan penyempurnaan langkah Dalam merealisasikan usaha sama tersebut, Syarikat Peruntukan Persendirian, namun ternyata bahawa Aset Usaha Sama berkenaan dikehendaki diperbadankan di Semasa Bersih telah meningkat daripada RM35.4 juta kepada Malaysia di bawah Akta Syarikat 1965 Malaysia, dengan RM47.3 juta dan Liabiliti Jangka Panjang telah berkurangan pegangan ekuiti bagi Pihak-Pihak Usaha Sama seperti sebanyak hampir RM10 juta kepada RM19.3 juta. berikut:-
Kumpulan akan menggunakan kemajuan ini bagi % mengukuhkan lagi dirinya agar kekal berdaya saing dan boleh SHB 50 menyesuaikan diri dengan keadaan persekitaran yang semakin TASCO 40 mencabar. TBC 10
100 DIVIDEN Syarikat Usaha Sama akan membeli saham biasa KBSB Berikutan kerugian pada tahap syarikat, Lembaga Pengarah bernilai RM1.00 sesaham sehingga sejumlah setara mencadangkan bahawa tiada dividen diisytiharkan untuk tahun dengan United States Dollar ("USD") 17,000,000 (atau kewangan berakhir 31 Disember 2004. anggaran RM64,600,000) dari semasa ke semasa
32 SELOGA HOLDINGS BHD (361052-H) sebagaimana yang diperlukan oleh Syarikat Usaha Sama ("FCSB") bagi cadangan penjualan oleh SHB kepada dan ditetapkan oleh Lembaga Pengarahnya. Syarikat FCSB bagi kesemua modal saham terbitan dan berbayar Usaha Sama akan menjadi syarikat pemegang KBSB. SJSB terdiri daripada 65,000,000 saham biasa bernilai RM1.00 sesaham ("Saham SJSB") pada harga bayaran ● Anak Syarikat Baru - Seloga International Corporation tunai berjumlah RM1 juta. Sdn Bhd ("SICSB") Pada 26 April 2005, FCSB telah memohon SHB untuk Pada 15 Julai 2004, sebuah anak syarikat baru milik penuh, membatalkan jualan saham bersyarat dan perjanjian SICSB telah diperbadankan dengan modal terbitan dan belian diatas syarat prajadi yang tidak dilaksanakan dalam berbayar RM2.00 yang dipecahkan kepada 2 saham biasa rangka masa tertentu seperti yang telah dipersetujui kedua bernilai RM1.00 sesaham ("Saham Pelanggan") dan modal pihak. Oleh itu, SHB telah menerima permohonan FCSB dibenarkan sebanyak RM100,000 dipecahkan kepada dan kedua pihak masing-masing telah bersetuju untuk 100,000 saham biasa bernilai RM1.00 sesaham. SICSB, menggugurkan pelupusan yang dicadangkan. yang kini tidak aktif, pada masa akan datang akan melakukan aktiviti pelaburan dan pembangunan hantanah ● Cadangan Pemerolehan Infra Expert Development di luar negara. Sdn Bhd ("IED")
● Menstruktur semula anak syarikat milik penuh - Seloga Pada 30 September 2004, Kumpulan memeterai perjanjian Engineering Sdn Bhd ("SESB") jual beli saham bersyarat dengan Md. Anwar Bin Mamood, Syed Amir Abidin Jamalullail dan Dato' Badaruddin Bin Pada 26 Julai 2004, SHB membeli 450,000 saham biasa Abdul Khalid (secara bersama dikenali sebagai "Vendor- bernilai RM1.00 sesaham dalam modal saham SESB, yang Vendor") bagi cadangan pemerolehan oleh SHB daripada 100% dimiliki oleh Seloga Jaya Sdn Bhd ("SJSB"), anak Vendor-Vendor yang secara bersama memegang 51% syarikat milik penuh SHB. kepentingan ekuiti dalam IED terdiri daripada 2,550,000 saham biasa bernilai RM1.00 sesaham ("Saham IED") Keseluruhan kepentingan ekuiti terdiri daripada 300,000 pada harga bayaran tunai berjumlah RM10 juta. saham biasa bernilai RM1.00 sesaham dalam modal saham SESB yang dipegang oleh SJSB, telah dipindahkan Jumlah harga bayaran tunai berkenaan dicapai atas dasar kepada SHB pada 29 Julai 2004, sekaligus menjadikan pembeli sanggup - penjual sanggup, selepas mengambil SESB anak syarikat langsung milik penuh SHB. kira hak pembangunan IED bagi Projek Nusantara bernilai RM25 juta, berdasarkan penilaian yang dilakukan ● Anak Syarikat Baru - SPSB oleh badan penilai bebas, Messrs. Knight Frank, pada 15 September 2004. Pada 2 Ogos 2004, sebuah anak syarikat baru milik penuh, Seloga Petroleum Sdn Bhd ("SPSB") telah diperbadankan Selepas pengumuman pada 30 September 2004, dengan modal terbitan dan berbayar RM2.00 dipecahkan Kumpulan pada 2 Disember 2004 memeterai Perjanjian kepada 2 saham biasa bernilai RM1.00 sesaham ("Saham Tambahan dengan Vendor-Vendor bagi mengubah terma Pelanggan") dan modal dibenarkan berjumlah dan syarat tertentu dalam Perjanjian Jual Beli Saham RM100,000.00 dipecahkan kepada 100,000 saham biasa Bersyarat berkenaan seperti berikut:- bernilai RM1.00 sesaham. SPSB akan meneruskan perniagaan syarikat pemegangan pelaburan. (i) Harga bayaran tunai bagi Cadangan Pemerolehan telah dikurangkan daripada RM10 juta kepada RM8 ● Cadangan Menjual SJSB juta dan akan dibayar melalui kaedah berikut:
Pada 30 September 2004, Kumpulan memeterai Perjanjian Jual Beli Saham Bersyarat dengan Flare Class Sdn Bhd
ANNUAL REPORT 2004 33 Penyata Pengerusi
● RM5 juta pada tarikh tepat sebulan (atau lebih mengukuhkan komitmen kami untuk membina semula nilai lama sebagaimana yang dipersetujui secara pemegang saham, SHB akan melaksanakan pembinaan bertulis oleh SHB dan Vendor-Vendor) dari tarikh mengikut buku pesanan semasanya bernilai kira-kira apabila syarat-syarat utama telah dipenuhi RM500 juta melalui usaha sama berdaya maju. ("Tarikh Penyempurnaan"); dan
● RM3 juta pada tarikh tepat tiga tahun dari Tarikh PENGHARGAAN Penyempurnaan atau apabila pembayaran penuh semua hutang yang sampai tempoh bayar Bagi pihak Lembaga Pengarah, kami ingin mengucapkan atau boleh dibayar oleh IED kepada SHB dan/ selamat datang kepada YBhg. Tan Sri Dato’ Seri Halim Saad atau anak-anak syarikat SHB sebagaimana sebagai Ketua Pegawai Eksekutif SHB. Kami yakin kepakaran dicatatkan dalam akaun beraudit SHB dan/atau dan pengalaman luas Tan Sri sudah pasti menyumbang anak-anak syarikat berkaitan pada 31 Disember manfaat besar kepada Kumpulan dan kami menaruh harapan 2004, yang mana kemudian. terhadap kepimpinan dan sumbangan beliau yang berterusan. Pada masa yang sama, kami turut mengucapkan selamat (ii) Syarat utama tambahan bagi Perjanjian Jual Beli datang kepada Encik Tan Boon Chai, Encik Koh Lai Huat, Encik Bersyarat IED yang menghendaki IED menyertakan Nor Zainal Bin Abdul Rahman dan Encik Zamani Bin Kassim bukti mencukupi yang dapat menyakinkan SHB, ke dalam Pasukan Pengurusan Kanan Kumpulan. bahawa IED mempunyai tempoh hak pembangunan tidak kurang daripada lima tahun dan tidak luput Pada tahun berkenaan, Encik Chan Nung Wai, Encik Noel John berhubung Projek Nusantara mengikut Perjanjian a/l M. Subramaniam dan Encik Wong Ah Fok meletakkan Pembangunan dan Jual Beli bertarikh 22 Februari jawatan masing-masing dalam Kumpulan. Kami mengucapkan 1999 antara Prolink Development Sdn Bhd dan IED. terima kasih atas khidmat masing-masing dan mendoakan masing-masing menempa kejayaan pada masa akan datang. Syarat utama tertentu masih belum dipenuhi bagi pemerolehan di atas. Kini Kumpulan SHB adalah kontraktor Kami juga ingin mengucapkan terima kasih atas khidmat utama bagi IED. Encik Lim Weng Ho, yang telah meletakkan jawatan dari Lembaga Pengarah SHB.
JANGKAAN DAN PROSPEK PENGIKTIRAFAN Ekonomi dunia dijangka tumbuh pada kadar sederhana iaitu 4.4% pada 2005, sebahagian besarnya dipengaruhi oleh Lembaga Pengarah SHB ingin mengucapkan terima kasih kelembapan ekonomi Amerika Syarikat akibat kenaikan kadar kepada para pelanggan dan rakan-rakan niaga, pihak berkuasa faedah dan juga kemeruapan harga minyak sedunia. Keadaan kawal selia, para pelabur dan para pemegang saham atas ekonomi domestik diramal lebih cerah kerana Keluaran Dalam sokongan berterusan yang diberikan. Negara Kasar dijangka tumbuh pada kadar 6%. Bagaimanapun kami meramalkan sektor pembinaan kekal ketinggalan di Kami juga ingin mengucapkan terima kasih kepada belakang meskipun sektor pertanian dan perkilangan akan Pengurusan dan Kakitangan atas dedikasi, kepintaran dan diberi rangsangan tambahan pada tahun mendatang. komitmen berterusan yang disumbangkan demi mencapai matlamat Kumpulan. Pencapaian kita adalah hasil usaha dan Meskipun keadaan di atas berlaku, kami meramalkan tahun sumbangan berterusan seluruh pasukan kita. 2005 sebagai tahun kesinambungan kemajuan untuk Kumpulan. SHB akan terus giat berusaha dan memulakan pembangunan korporat yang akan meletakkan SHB pada asas kewangan yang lebih kukuh di samping mengukuhkan Dato' Lim Git Hooi @ Robert Lim tumpuannya pada kecekapan teras Kumpulan. Dalam usaha PENGERUSI
34 SELOGA HOLDINGS BHD (361052-H) Financial Statement
Directors’ Report 36
Statement by Directors and 40 Statutory Declaration
Report of the Auditors 41
Balance Sheets 42
Income Statements 43
Statements of Changes in Equity 44
Cash Flow Statements 45
Notes to the Financial Statements 47 Directors’ Report
The Directors hereby submit their reports together with the audited financial statements of the Group and of the Company for the financial year ended 31 December 2004.
PRINCIPAL ACTIVITIES The Company is principally an investment holding company. The principal activities of the subsidiary companies are set out in Note 12 to the Financial Statements.
There have been no significant changes in the nature of the activities of the Company and of its subsidiary companies during the financial year.
FINANCIAL RESULTS Group Company RM’000 RM’000
Net loss for the year 7,385 1,203
DIVIDENDS There were no dividends paid or declared by the Company since the end of the previous financial year.
RESERVES AND PROVISIONS There were no material transfers to or from reserves or provisions during the financial year, save as disclosed in the Statements of Changes In Equity and Note 6 to the Financial Statements.
ISSUE OF SHARES AND DEBENTURES During the financial year, the following shares of RM1 each were issued:-
Date of issue Purpose of issue Class of share Number of shares Term of issue
11.3.2004 Working capital Ordinary 7,000,000 Private placement 25.3.2004 Working capital Ordinary 2,098,000 Private placement 19.5.2004 Settlement of profit Ordinary 128,401 Conversion of irredeemable unsecured loan stocks 25.11.2004 Settlement of profit Ordinary 589,760 Conversion of irredeemable unsecured loan stocks 13.12.2004 Working capital Ordinary 5,000,000 Private placement 31.12.2004 Working capital Ordinary 5,044,600 Private placement
There were no debentures issued during the financial year.
36 SELOGA HOLDINGS BHD (361052-H) INFORMATION ON THE FINANCIAL STATEMENTS Before the financial statements of the Group and of the Company were made out, the Directors took reasonable steps:-
(a) to ascertain that proper action had been taken in relation to the writing off of bad debts and the making of allowance for doubtful debts and satisfied themselves that there are no bad debts to be written off and that adequate allowance had been made for doubtful debts; and
(b) to ensure that any current assets which were unlikely to realise their book value in the ordinary course of business were written down to an amount which they might be expected so to realise.
At the date of this report, the Directors are not aware of any circumstances:-
(a) which would render it necessary to write off any bad debts or the amount of the allowance for doubtful debts in the financial statements of the Group and of the Company inadequate to any substantial extent; or
(b) which would render the values attributed to current assets in the financial statements of the Group and of the Company misleading; or
(c) which have arisen which render adherence to the existing method of valuation of assets or liabilities of the Group and of the Company misleading or inappropriate.
Save as disclosed in Note 32 to the Financial Statements, no contingent or other liability has become enforceable or is likely to become enforceable within the period of twelve months after the end of the financial year which, in the opinion of the Directors, will or may affect the ability of the Group and of the Company to meet its obligations as and when they fall due.
At the date of this report, there does not exist:-
(a) any charge on the assets of the Group and of the Company which has arisen since the end of the financial year which secures the liability of any other person; or
(b) any contingent liability of the Group and of the Company which has arisen since the end of the financial year.
OTHER STATUTORY INFORMATION The Directors state that:-
At the date of this report, they are not aware of any circumstances not otherwise dealt with in this report or the financial statements which would render any amount stated in the financial statements misleading.
In the opinion of the Directors:-
(a) the results of the Group’s and of the Company’s operations during the financial year were not substantially affected by any item, transaction or event of a material and unusual nature; except as disclosed in Note 33 to the Financial Statements.
ANNUAL REPORT 2004 37 Directors’ Report
(b) there has not arisen in the interval between the end of the financial year and the date of this report any item, transaction or event of a material and unusual nature likely to affect substantially the results of the operations of the Group and of the Company for the current financial year in which this report is made.
DIRECTORS The Directors in office since the date of the last report are:-
Dato’ Lim Git Hooi @ Robert Lim Dato’ Syed Md. Amin Bin Syed Jan Aljeffri Derek John Fernandez Wong Ah Fook @ Wong Fook Chuin (resigned on 1.7.2004) Lim Weng Ho (retired on 28.6.2004) Chan Lung Mei @ Chan Nung Wai (resigned on 27.6.2004) Noel John a/l M. Subramaniam (resigned on 17.6.2004)
The following Director who held office at the end of the financial year had, according to the register required to be kept under Section 134 of the Companies Act, 1965, an interest in the ordinary shares of the Company stated as below:-
Ordinary shares of RM1 each As at As at Interest in the Company 1.1.2004 Bought Sold 31.12.2004
Derek John Fernandez - direct 1,000 --1,000
By virtue of his interest in the shares of the Company, the above Director is also deemed to be interested in the shares of the subsidiary companies to the extent that the Company has an interest.
Other than as disclosed above, none of the other Directors in office at the end of the financial year held any shares or had any direct interest in the shares of the Company or its related corporations during the financial year.
In accordance with Article 87 of the Company’s Articles of Association, Dato’ Lim Git Hooi @ Robert Lim retires by rotation at the Annual General Meeting and, being eligible, offers himself for re-election.
DIRECTORS’ BENEFITS During and at the end of the financial year, no arrangements subsisted to which the Company is a party, with the object or objects of enabling Directors of the Company to acquire benefits by means of the acquisition of shares in, or debentures, of the Company or any other body corporate.
Since the end of the previous financial year, no Directors have received or become entitled to receive any benefit (except as disclosed in Note 26 to the Financial Statements) by reason of a contract made by the Company with the Director or with a firm of which he is a member, or with a company in which he has a substantial financial interest.
38 SELOGA HOLDINGS BHD (361052-H) AUDITORS Messrs Shamsir Jasani Grant Thornton have expressed their willingness to continue in office.
Signed on behalf of the Board of Directors in accordance with a resolution of the Directors,
...... ……..…. ) DATO’ LIM GIT HOOI @ ROBERT LIM ) ) ) ) ) ) ) DIRECTORS ) ) ) ) ) ) ...... ……..…. ) DATO’ SYED MD. AMIN BIN SYED ) JAN ALJEFFRI )
Subang Jaya 12 April 2005
ANNUAL REPORT 2004 39 Statement by Directors
In the opinion of the Directors, the financial statements set out on pages 42 to 70 are drawn up in accordance with the provisions of the Companies Act, 1965 and applicable approved accounting standards in Malaysia so as to give a true and fair view of the state of affairs of the Group and of the Company as at 31 December 2004 and of the results and cash flows of the Group and of the Company for the financial year then ended.
On behalf of the Board
...... …...... …... DATO’ LIM GIT HOOI @ ROBERT LIM DATO’ SYED MD. AMIN BIN SYED JAN ALJEFFRI
Subang Jaya 12 April 2005
Statutory Declaration
I, Koh Lai Huat, being the Officer responsible for the financial management of Seloga Holdings Berhad, do solemnly and sincerely declare that to the best of my knowledge and belief, the financial statements set out on pages 42 to 70 are correct and I make this solemn declaration conscientiously believing the same to be true and by virtue of the provisions of the Statutory Declarations Act, 1960.
Subscribed and solemnly declared by ) the abovenamed at Subang Jaya in the ) State of Selangor this day of 12 April 2005 ) ...... KOH LAI HUAT
Before me:
Commissioner for Oaths CHOY YEE CHEONG
40 SELOGA HOLDINGS BHD (361052-H) Report of the Auditors to the members of Seloga Holdings Berhad (Incorporated in Malaysia)
We have audited the financial statements set out on pages 42 to 70 of Seloga Holdings Berhad.
These financial statements are the responsibility of the Company’s Directors.
It is our responsibility to form an independent opinion, based on our audit, on these financial statements and to report our opinion to you, as a body, in accordance with Section 174 of the Companies Act, 1965 and for no other purpose. We do not assume responsibility towards any other person for the content of this report.
We conducted our audit in accordance with Approved Standards on Auditing in Malaysia. These standards require that we plan and perform the audit to obtain all the information and explanations, which we consider necessary to provide us with sufficient evidence to give reasonable assurance that the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence relevant to the amounts and disclosures in the financial statements. An audit includes an assessment of the accounting principles used and significant estimates made by the Directors as well as evaluating the overall adequacy of the presentation of information in the financial statements. We believe that our audit provides a reasonable basis for our opinion.
In our opinion: a) the financial statements which have been prepared under the historical cost convention, as modified by the revaluation of certain property, plant and equipment, are properly drawn up in accordance with the provisions of the Companies Act, 1965 and applicable approved accounting standards in Malaysia so as to give a true and fair view of:
(i) the matters required by Section 169 of the Companies Act, 1965 to be dealt with in the financial statements of the Group and of the Company; and
(ii) the state of affairs of the Group and of the Company as at 31 December 2004, results of the operations and cash flows of the Group and of the Company for the year ended on that date; and b) the accounting and other records and the registers required by the Companies Act, 1965 to be kept by the Company and by the subsidiary companies of which we have acted as auditors have been properly kept in accordance with the provisions of the said Act.
We are satisfied that the financial statements of the subsidiary companies that have been consolidated with the Company’s financial statements are in form and content appropriate and proper for the purposes of the preparation of the consolidated financial statements and we have received satisfactory information and explanations required by us for those purposes.
The auditors’ reports on the financial statements of the subsidiary companies were not subject to any qualification and did not include any comment made under Subsection (3) of Section 174 of the Act.
SHAMSIR JASANI GRANT THORNTON (NO. AF : 0737) CHARTERED ACCOUNTANTS
DATO’ N. K. JASANI CHARTERED ACCOUNTANT (NO: 708/03/06(J/PH)) PARTNER
Kuala Lumpur 12 April 2005
ANNUAL REPORT 2004 41 Balance Sheets as at 31 December 2004
Group Company Note 2004 2003 2004 2003 RM’000 RM’000 RM’000 RM’000 SHARE CAPITAL 5 111,081 91,220 111,081 91,220 SHARE PREMIUM 6 12,480 4,149 12,480 4,149 RESERVES ON CONSOLIDATION 7 9,444 9,444 - - ACCUMULATED LOSS (104,998) (97,613) (31,408) (30,205) 28,007 7,200 92,153 65,164 Deferred And Long Term Liabilities Term loans 8 18,816 27,419 - - Finance creditors 9 458 773 - - Deferred taxation 10 32 32 - - 47,313 35,424 92,153 65,164 Represented by :- PROPERTY, PLANT AND EQUIPMENT 11 11,294 14,965 - - INVESTMENT IN SUBSIDIARY COMPANIES 12 - - 52,824 52,245 INVESTMENT IN JOINTLY CONTROLLED ENTITY 13 95 - 95 - OTHER INVESTMENTS 14 119 147 - - LAND HELD FOR DEVELOPMENT 15 20,575 20,416 - - PROJECT DEVELOPMENT EXPENDITURE 16 2,331 - - - GOODWILL ON CONSOLIDATION 17 173 281 - - FIXED DEPOSITS WITH LICENSED BANKS 18 764 931 - - Current Assets Amount due from customers on contracts 19 6,148 6,949 - - Inventories 20 - 208 - - Trade receivables 21 58,826 39,947 - - Other receivables 22 6,298 7,786 76 3 Amount due from subsidiary companies 12 - - 40,716 12,164 Tax recoverable 18 18 - - Fixed deposits with licensed banks 18 857 156 857 - Cash and bank balances 9,539 4,907 3,031 1,126 Total current assets 81,686 59,971 44,680 13,293 LESS : CURRENT LIABILITIES Amount due to customers on contracts 19 6,576 6,160 - - Trade payables 23 29,684 26,617 - - Other payables 7,851 1,982 5,445 349 Finance creditors 9 276 323 - - Tax payable 9 120 1 25 Bank borrowings 24 25,328 26,085 - - Total current liabiltiies 69,724 61,287 5,446 374 NET CURRENT ASSETS/(LIABILITES) 11,962 (1,316) 39,234 12,919 47,313 35,424 92,153 65,164
The accompanying notes form an integral part of the financial statements.
42 SELOGA HOLDINGS BHD (361052-H) Income Statements for the financial year ended 31 December 2004
Group Company Note 2004 2003 2004 2003 RM’000 RM’000 RM’000 RM’000
Revenue 25 87,631 73,151 - -
Cost of sales (86,485) (73,886) - -
Gross profit/(loss) 1,146 (735) - -
Other operating income 1,528 1,344 53 88
Other operating expenses (6,097) (6,754) (1,242) (853)
Operating loss (3,423) (6,145) (1,189) (765)
Finance cost (3,928) (3,598) - -
Loss before taxation 26 (7,351) (9,743) (1,189) (765)
Taxation 27 (34) (147) (14) (25)
Net loss for the year (7,385) (9,890) (1,203) (790)
Loss per ordinary share (sen) 28 (8) (14)
The accompanying notes form an integral part of the financial statements.
ANNUAL REPORT 2004 43 Statements of Changes in Equity for the financial year ended 31 December 2004
Reserves Share Share on Accumulated capital premium consolidation loss Total RM’000 RM’000 RM’000 RM’000 RM’000
Group
Balance at 1 January 2003 28,000 11,964 9,444 (87,723) (38,315) Restricted issue 28,000 - - - 28,000 Rights issue 22,400 (11,200) - - 11,200 Restructuring scheme 12,587 5,412 - - 17,999 Restructuring expenses - (2,027) - - (2,027) Conversion of ICULS 233 - - - 233 Net loss for the year - - - (9,890) (9,890)
Balance at 31 December 2003 91,220 4,149 9,444 (97,613) 7,200 Private placement 19,143 8,662 - - 27,805 Conversion of ICULS 718 - - - 718 Private placement expenses - (331) - - (331) Net loss for the year - - - (7,385) (7,385)
Balance at 31 December 2004 111,081 12,480 9,444 (104,998) 28,007
Company
Balance at 1 January 2003 28,000 11,964 - (29,415) 10,549 Restricted issue 28,000 - - - 28,000 Rights issue 22,400 (11,200) - - 11,200 Restructuring scheme 12,587 5,412 - - 17,999 Restructuring expenses - (2,027) - - (2,027) Conversion of ICULS 233 - - - 233 Net loss for the year - - - (790) (790)
Balance at 31 December 2003 91,220 4,149 - (30,205) 65,164 Private placement 19,143 8,662 - - 27,805 Conversion of ICULS 718 - - - 718 Private placement expenses - (331) - - (331) Net loss for the year - - - (1,203) (1,203)
Balance at 31 December 2004 111,081 12,480 - (31,408) 92,153
The accompanying notes form an integral part of the financial statements.
44 SELOGA HOLDINGS BHD (361052-H) Cash Flow Statements for the financial year ended 31 December 2004
Group Company Note 2004 2003 2004 2003 RM’000 RM’000 RM’000 RM’000
Cash Flows From Operating Activities Loss before taxation (7,351) (9,743) (1,189) (765) Adjustments for: Loss on disposal of other investments 28 - - - Amortisation of goodwill on consolidation 108 109 - - Deposits wirtten off 1 - - - Depreciation 814 944 - - Interest expenses 3,928 3,598 - - Loss on disposal of quoted investments - 25 - - Property, plant and equipment written off 7 450 - - Allowance for foreseeable loss on contracts 1,867 4,001 - - Allowance for doubtful debts no longer required (668) - - - Allowance for obsolete inventories no longer required (221) - - - Bad debts recovered - (60) - - Gain on disposal of property, plant and equipment (1,331) (864) - - Interest income (72) (88) (53) (88) Write back of bad debts written off in previous year - (1,085) - - Operating loss before working capital changes (2,890) (2,713) (1,242) (853) Inventories 429 13 - - Receivables (15,166) (377) (73) 1,032 Payables 9,600 (20,906) 5,096 (1,148) Customers on contracts (651) 1,429 - - Cash (used in)/generated from operations (8,678) (22,554) 3,781 (969) Interest received 72 88 53 88 Interest paid (1,802) (2,149) - - Tax paid (145) - (38) - Net cash (used in)/from operating activities (10,553) (24,615) 3,796 (881) Cash Flows From Investing Activities Payment of land held for development (159) (1,198) - - Project development expenditure paid (2,331) - - - Withdrawal/(Placement) of fixed deposits pledged to financial institutions 167 (226) - - Proceeds from disposal of property, plant and equipment A 3,712 1,471 - - Proceeds from disposal of quoted investments - 780 - - Purchase of property, plant and equipment B (773) (814) - - Net change in amount due from subsidiary companies - - (27,963) (35,353) Additional investment in subsidiary company - - (450) - Investment in jointly controlled entity (95) - (95) - Net cash from/(used in) investing activities 521 13 (28,508) (35,353)
ANNUAL REPORT 2004 45 Cash Flow Statements
Group Company Note 2004 2003 2004 2003 RM’000 RM’000 RM’000 RM’000
Cash Flows From Financing Activities
Repayment from a Director - (6,000) - - Net repayment of short term bank advances (2,479) (1,934) - - Net repayment of term loan (7,468) (465) - - Net proceeds from issuance of shares 27,474 37,173 27,474 37,173 Repayment to finance creditors (624) (180) - -
Net cash from financing activities 16,903 28,594 27,474 37,173
Net increase in cash and cash equivalents 6,871 3,992 2,762 939
Cash and cash equivalents brought forward (4,867) (8,859) 1,126 187
Cash and cash equivalents carried forward C 2,004 (4,867) 3,888 1,126
NOTES TO THE CASH FLOW STATEMENTS
A. DISPOSAL OF PROPERTY, PLANT AND EQUIPMENT During the financial year, the Group disposed property, plant and equipment for a total consideration of RM5,270,000 (2003: RM4,452,000). Cash amounting to RM3,712,000 (2003: RM1,471,000) was received from the disposal of property, plant and equipment of which RM1,558,000 (2003: RM2,981,000) was included in other receivables.
B. PURCHASE OF PROPERTY, PLANT AND EQUIPMENT During the financial year, the Group acquired property, plant and equipment with aggregate costs of RM1,034,000 (2003: RM1,761,000) of which RM261,000 (2003: RM947,000) was financed by hire purchase facility. Cash payments of RM773,000 (2003: RM814,000) was made to purchase these property, plant and equipment.
C. CASH AND CASH EQUIVALENTS Cash and cash equivalents included in the Cash Flow Statements comprise the following balance sheet amounts:-
Group Company 2004 2003 2004 2003 RM’000 RM’000 RM’000 RM’000
Cash and bank balances 9,539 4,907 3,031 1,126 Fixed deposits with licensed banks 857 156 857 - Bank overdrafts (8,392) (9,930) - -
2,004 (4,867) 3,888 1,126
The accompanying notes form an integral part of the financial statements.
46 SELOGA HOLDINGS BHD (361052-H) Notes to the Financial Statements 31 December 2004
1. BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS The financial statements of the Group and of the Company have been prepared in accordance with the provisions of the Companies Act, 1965 and applicable approved accounting standards in Malaysia.
2. FINANCIAL RISK MANAGEMENT POLICIES The Group’s financial risk management policies seeks to ensure that adequate financial resources are available for the development of the Group’s businesses whilst managing its risks. The Group has written risk management framework which sets out their overall business strategies, their tolerance to risk and has established processes to monitor and control the risks. Such framework is approved by the Board of Directors and quarterly reviews are undertaken to ensure that the Group’s policy guidelines are adhered to.
The main areas of financial risks faced by the Group and the policies in respect of the major areas of treasury activity are set out as follows:-
(a) Interest rate risk The Group’s policy is to borrow principally on the floating rate basis but to retain a proportion of fixed rate debt. The objectives for the mix between fixed and floating rate borrowings are set to reduce the impact of an upward change in interest rates while enabling benefits to be enjoyed if interest rates fall.
(b) Credit risk The credit risk is controlled by the application of credit approvals, limits and monitoring procedures. An internal credit review is conducted if the credit risk is material.
(c) Market risk For key product purchases, the Group establishes floating and fixed price levels that the Group considers acceptable and enters into physical supply agreements, where necessary, to achieve these levels. The Group does not face significant exposure from the risk from changes in price levels.
(d) Liquidity and cash flow risks The Group monitors its cash flow position and seeks adequate funding to finance the Group’s operations. In addition, the Group ensures that at the minimum, all projected net borrowing needs are covered by committed facilities.
3. SIGNIFICANT ACCOUNTING POLICIES
(a) Accounting convention The financial statements of the Group and of the Company are prepared under the historical cost convention, as modified by the revaluation of certain property, plant and equipment.
(b) Basis of consolidation The consolidated financial statements incorporate the audited financial statements of the Company and its subsidiary companies as mentioned in Note 12 to the Financial Statements made up to the end of the financial year. The subsidiary companies are consolidated on acquisition method.
ANNUAL REPORT 2004 47 Notes to the Financial Statements
3. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
(b) Basis of consolidation (cont’d) Under the acquisition method of accounting, the results of the subsidiary company acquired are included from the date of acquisition until the date of disposal. At the date of acquisition, the fair value of the subsidiary companies’ net assets are determined and reflected in the Group’s financial statements. The excess of the consideration paid for shares in the subsidiary companies over the fair value of the underlying net assets of the subsidiary companies acquired represents goodwill or reserves arising on consolidation. Goodwill maintained by subsidiary companies are amortised through the consolidated income statements over their useful economic life which is estimated to be 10 years. No amortisation is made on reserves arising on consolidation.
Where an indication of impairment exists, the carrying amount of the goodwill is assessed and written down immediately to their recoverable amount.
All inter-company transactions and balances are eliminated on consolidation and the consolidated financial statements reflect external transactions only.
(c) Subsidiary companies A subsidiary company is a company in which the Group or the Company has a long term equity interest of more than 50 percent and where there is management participation through Board’s representation.
Investment in subsidiary companies is stated at cost less accumulated impairment losses. Where an indication of impairment exists, the carrying amount of the subsidiary companies is assessed and written down immediately to their recoverable amount.
(d) Interest in jointly controlled entity Joint venture is defined as a contractual arrangement entered into by two or more parties to undertake a jointly controlled economic activity in which no single venturer has unilateral control in the financial and operating decisions of the joint venture.
Interest in joint venture which does not involve any establishment of a separate entity is accounted for in the financial statements based on the agreed share of the results, assets and liabilities of the joint venture.
Investment in joint venture which involves an establishment of a separate entity is stated at cost less accumulated impairment losses, if any, in the financial statements. Where consolidated financial statements are prepared, the interest in the joint venture entity is accounted for using the equity method based on the audited financial statements of the entity. In the consolidated balance sheet, the Group’s interest is stated at cost and adjusted for the Group’s share of changes in the net assets of the entity.
(e) Investments Non-current investments other than investment in subsidiary companies, are shown at cost. Allowance is only made where, in the opinion of the Directors, there is a permanent diminution in value. Diminution in the value of an investment is recognised as an expense in the period in which the diminution is identified.
Marketable securities are carried at the lower of cost and market value.
On disposal of an investment, the difference between net disposal proceeds and its carrying amount is charged or credited to the income statements.
48 SELOGA HOLDINGS BHD (361052-H) 3. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
(f) Property, plant and equipment Property, plant and equipment are stated at cost or valuation less accumulated depreciation and any accumulated impairment losses.
Freehold land is not depreciated. Depreciation of 2% on the straight line basis is provided on buildings, shoplots, apartments and properties in which the land cost cannot be separated from the total cost. Long term leasehold land is amortised on the straight line method over the remaining unexpired lease periods ranging from 59 to 81 years.
Depreciation of plant and equipment is calculated to write off the cost on the reducing balance method over the estimated useful lives of the plant and equipment, except for motor vehicles and computers which is provided for on a straight line basis to write off the cost of each asset to its residual value over the estimated useful life.
The principal annual depreciation rates used are as follows:-
Plant and machinery 20% Motor vehicles 20% Furniture, fittings and office equipment 10% – 20% Computers 33%
Property, plant and equipment are written down to recoverable amount if, in the opinion of the Directors, it is less than their carrying value. Recoverable amount is the net selling price of the property, plant and equipment i.e. the amount obtainable from the sale of an asset at arm’s length transaction between knowledgeable, willing parties, less the costs of disposal.
(g) Land held for development Land held for development consists of the cost of land held for development, all direct building costs and other related development costs common to the whole project.
Land held for development is classified as non-current asset in the balance sheet as the development is not expected to be completed within the normal operating cycle.
(h) Project development expenditure Project development expenditure consists of the development costs and other related development costs common to the whole project.
Project development expenditure is classified as non-current asset in the balance sheet as the development is not expected to be completed within the normal operating cycle.
Project development expenditure that has been capitalised is amortised from the commencement of the commercial production of the product to which they relate on a straight line basis over the period of their expected benefit.
(i) Inventories Inventories are stated at the lower of cost and net realisable value. Cost is determined using the first-in first-out method. Cost of finished goods includes direct materials, labour and an appropriate portion of production overheads.
ANNUAL REPORT 2004 49 Notes to the Financial Statements
3. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
(i) Inventories (cont’d) Net realisable value represents the estimated selling price less all estimated costs to completion and costs to be incurred in marketing, selling and distribution.
(j) Construction contracts When the outcome of a construction contract cannot be estimated reliably, contract revenue is recognised only to the extent of contract costs incurred that is probably recoverable and contract costs are recognised as expenses.
When the outcome of a construction contract can be estimated reliably, contract revenue and contract costs are recognised over the period of contract as revenue and expenses respectively.
The Company uses the percentage of completion method to determine the appropriate amount of revenue and costs to be recognised in a period of the contract. When it is probable that contract costs will exceed total contract revenue, the expected loss is recognised as an expense immediately.
The aggregate of the costs incurred and the profit/loss recognised on each contract is compared against the progress billings up to the year end. Where costs incurred and recognised profits (less recognised losses) exceed progress billings, the balance is shown as amounts due from customers on construction contracts under current assets. Where progress billing exceed costs incurred plus recognised profits (less recognised losses), the balance is shown as amounts due to customers on construction contracts under current liabilities.
(k) Receivables Receivables are carried at anticipated realisable value. Bad debts are written off in the period in which they are identified. An estimate is made for doubtful debts based on a review of all outstanding amounts at the financial year end.
(l) Assets acquired under hire purchase and lease agreements The cost of assets acquired under hire purchase and finance lease arrangements which transferred substantially all the risks and rewards of ownership to the Group are capitalised. The depreciation policy on these assets is similar to that of the Group’s property, plant and equipment depreciation policy. Outstanding obligation due under hire purchase and finance lease arrangements after deducting finance expenses are included as liabilities in the financial statements. Finance charges on hire purchase and finance lease arrangements are allocated to income statements over the period of the respective agreements.
Leased payments for operating leases, where the substantial risks and benefits remained with the lessor, are charged as expenses in the period in which they are incurred.
(m) Provisions Provisions are recognised when there is a present obligation, legal or constructive, as a result of a past event, when it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and when a reliable estimate can be made of the amount of the obligation.
(n) Payables Payables are stated at cost which is the fair value of the consideration to be paid in future for goods and services received.
50 SELOGA HOLDINGS BHD (361052-H) 3. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
(o) Short term employees benefits Wages, salaries, bonuses and social security contributions are recognised as an expense in the year in which the associated services are rendered by the employees of the Group.
(p) Interest-bearing borrowings Interest-bearing borrowings are recorded at the amount of proceeds received, net of transaction costs.
(q) Revenue recognition
(i) Construction contracts Contract revenue represents proportion of sales value of construction projects attributable to the percentage of work completed during the financial year.
Profit from construction contracts is recognised on the ‘percentage of completion’ method in cases where the outcome of the contracts can be reliably estimated. Stage of completion is measured by reference to the actual costs incurred to date to the estimated total costs for each contract.
When the outcome of a construction contract cannot be estimated reliably, revenue is recognised only to the extent of contract costs incurred that it is probable will be recoverable and contract costs will be recognised as an expense in the period in which they are incurred.
(ii) Goods sold and services rendered Revenue from sales of goods is recognised upon delivery of goods. Revenue from services rendered is recognised as and when services are performed.
(iii) Rental income Rental income is recognised on accrual basis.
(r) Cash and cash equivalents Cash and cash equivalents comprise cash in hand, cash at bank, short-term demand deposits and highly liquid investments which are readily convertible to known amount of cash and which are subject to an insignificant risk of changes in value.
(s) Deferred tax liabilities and assets Deferred tax liabilities and assets are provided for under the liability method at the current tax rate in respect of all temporary differences between the carrying amount of an asset or liability in the balance sheet and its tax base including unabsorbed tax losses and unutilised capital allowances.
Deferred tax asset is recognised only to the extent that it is probable that taxable profit will be available against which the deductible temporary differences can be utilised. The carrying amount of deferred tax asset is reviewed at each balance sheet date. If it is no longer probable that sufficient taxable profit will be available to allow the benefit of part or all of that deferred tax asset to be utilised, the carrying amount of the deferred tax asset will be reduced accordingly. When it becomes probable that sufficient taxable profit will be available, such reductions will be reversed to the extent of the taxable profit.
ANNUAL REPORT 2004 51 Notes to the Financial Statements
3. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
(t) Impairment of assets The carrying values of assets are reviewed for impairment when there is an indication that the assets might be impaired. Impairment is measured by comparing the carrying values of the assets with their recoverable amounts. The recoverable amount is the higher of net realisable value and value in use, which is measured by reference to discounted future cash flows. Recoverable amounts are estimated for individual assets, or if it is not possible, for the cash-generating unit.
An impairment loss is charged to the income statements immediately, unless the asset is carried at a revalued amount. Any impairment loss of a revalued asset is treated as a revaluation decrease to the extent of previously recognised revaluation surplus of the same asset.
Subsequent increase in the recoverable amount of an asset is treated as reversal of the previous impairment loss and is recognised to the extent of the carrying amount of the asset that would have been determined (net of amortisation and depreciation) had no impairment loss been recognised. The reversal is recognised in the income statements immediately, unless the asset is carried at revalued amount. A reversal of an impairment loss on a revalued asset is credited directly to revaluation surplus. However, to the extent that an impairment loss on the same revalued asset was previously recognised as an expense in the income statements, a reversal of that impairment loss is recognised as income in the income statements.
(u) Financial instruments Financial instruments carried on the balance sheet include cash and bank balances, fixed deposits with licensed banks, investments, receivables, payables and borrowings. The particular recognition methods adopted are disclosed in the individual accounting policy statement associated with each item.
4. PRINCIPAL ACTIVITIES AND GENERAL INFORMATION The Company is principally an investment holding company. The principal activities of the subsidiary companies are set out in Note 12 to the Financial Statements.
There have been no significant changes in the nature of the activities of the Company and of its subsidiary companies during the financial year.
The Company is a public limited liability company, incorporated and domiciled in Malaysia and is listed on the Second Board of Bursa Malaysia Securities Berhad. The registered office of the Company is located at 312, 3rd Floor, Block C, Kelana Square, 17, Jalan SS7/26, 47301 Petaling Jaya, Selangor Darul Ehsan. The principal place of business of the Company is located at Wisma Seloga, No. 1, Jalan USJ 10/1A, 47620 UEP Subang Jaya, Selangor Darul Ehsan.
The financial statements were authorised for issue by the Board of Directors in accordance with a resolution of the Directors passed on 12 April 2005.
52 SELOGA HOLDINGS BHD (361052-H) 5. SHARE CAPITAL Group and Company 2004 2003 RM’000 RM’000
Authorised:- Ordinary shares of RM1 each At end of year 500,000 500,000
Issued and fully paid:- Ordinary shares of RM1 each At beginning of year 91,220 28,000 Allotted during the year:- Restricted issue - 28,000 Rights issue - 22,400 Settlement of joint venture - 4,910 Settlement of debts - 7,677 Conversion of ICULS * 718 233 Private placement 19,143 -
At end of year 111,081 91,220
* On 9 May 2003, the Company issued RM24 million nominal value seven year zero coupon irredeemable convertible unsecured loan stock (“ICULS”) to Segi Resources Sdn. Bhd., a joint venture (“JV”) partner to the Segi-Seloga Jaya JV turnkey project.
The ICULS are convertible into new ordinary shares on a semi-annual basis commencing six months from the issuance date to the day immediately preceding the Maturity Date, 7 May 2010, based on the cumulative certified billing amount/ turnover of the Segi-Seloga Jaya JV turnkey project.
During the financial year, the second and third conversion of 128,401 and 589,760 (2003: 232,604) ICULS to 128,401 and 589,760 new ordinary shares of RM1.00 each were completed on 19 May 2004 and 25 November 2004 respectively.
6. SHARE PREMIUM
Group and Company Share premium arose from the allotment of shares less listing expenses. Share premium is not available for distribution by way of cash dividends.
7. RESERVES ON CONSOLIDATION
Group These represent the difference between the purchase price and the fair value of the net assets of the subsidiaries at the date of acquisitions. These reserves are not available for distribution.
ANNUAL REPORT 2004 53 Notes to the Financial Statements
8. TERM LOANS Group 2004 2003 RM’000 RM’000
Current:- Payable within 1 year (Note 24)
Loan (1) - 3 (2) - 1 (3) 10,386 7,917 (4) 861 646
11,247 8,567
Non-current:- Payable after 1 year but not later than 5 years
Loan (3) 15,377 23,364 (4) 3,439 3,444
18,816 26,808
Payable later than 5 years
Loan (4) - 611
- 611
Total non-current 18,816 27,419
30,063 35,986
Loan Terms
(1) Bears interest at a rate of 2% (2003: 2%) per annum above bank’s Base Lending Rate and is repayable by monthly instalment of RM1,423, inclusive of interest over 8 years commencing from September 1995.
Secured by:-
(i) property of a subsidiary company; and
(ii) joint and several guarantee of third parties.
The term loan has been fully paid during the financial year.
54 SELOGA HOLDINGS BHD (361052-H) 8. TERM LOANS (CONT’D)
Loan Terms
(2) Bears interest at rates of 1.75% to 2% (2003: 1.75% to 2%) per annum above bank’s Base Lending Rate and is repayable by monthly instalment of RM12,309, inclusive of interest over 7 years commencing from October 1996.
Secured by:-
(i) first legal charge over the properties of a subsidiary company; and
(ii) joint and several guarantee of third parties.
The term loan has been fully paid during the financial year.
(3) Bears interest at the following rates:-
(i) from 1 May 2002 to 30 April 2005 at 6.5% per annum;
(ii) from 1 May 2005 to 30 April 2006 at 1.5% per annum above bank’s Base Lending Rate; and
(iii) from 1 May 2006 to 30 April 2007 at 1.75% per annum above bank’s Base Lending Rate.
Repayable as follows:-
(i) from 1 May 2003 to 30 April 2004, monthly repayment of partial interest of 3% per annum. The remaining interest of 3.5% per annum shall be deferred and added to the principal sum; and
(ii) from 1 May 2004 onwards, twelve quarterly equal repayments commencing from 1 July 2004.
Secured by:-
(i) properties of a subsidiary company;
(ii) pledge of fixed deposits of a subsidiary company; and
(iii) Corporate guarantee of the Company.
(4) Bears interest at the following rates:-
(i) from 1 April 2004 to 31 March 2009 at 7.35% per annum; and
(ii) from 1 April 2009 to 31 March 2011 at 7.75% per annum.
ANNUAL REPORT 2004 55 Notes to the Financial Statements
8. TERM LOANS (CONT’D)
Loan Terms
(4) Bears interest at the following rates:- (cont’d)
Repayable as follows:-
(i) under grace period for the first 6 months is RM28,787.50 per month;
(ii) from 1 April 2004 to 31 March 2009, monthly repayment is RM71,743; and
(iii) from 1 April 2009 to 31 March 2011, monthly repayment is RM72,033.
Secured by:-
(i) properties of a subsidiary company; and
(ii) Corporate guarantee of the Company.
9. FINANCE CREDITORS Group 2004 2003 RM’000 RM’000
Minimum payments - within 1 year 321 376 - after 1 year but not later than 5 years 532 901
853 1,277 Interest-in-suspense (119) (181)
734 1,096
Present value - within 1 year 276 323 - after 1 year but not later than 5 years 458 773
734 1,096
10. DEFERRED TAXATION
Group This represents deferred tax provided on potential Real Property Gain Tax on revalued properties.
56 SELOGA HOLDINGS BHD (361052-H) 11. PROPERTY, PLANT AND EQUIPMENT
* Long term Furniture, * leasehold * fittings, Freehold land Apartment Plant office land and and and and equipment Motor buildings buildings shoplots machinery and computers vehicles Total Group RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Net book value at 1 January 2004 8,815 1,953 287 1,087 1,060 1,763 14,965 Addition 230 335 - - 81 388 1,034 Disposal (212) (2,233) - (816) (2) (621) (3,884) Written off - - - (2) (4) (1) (7) Depreciation (167) (20) (5) (96) (213) (313) (814)
Net book value at 31 December 2004 8,666 35 282 173 922 1,216 11,294
At 31 December 2004
Cost 2,781 35 282 780 1,613 2,380 7,871 Valuation 6,721 - - - - - 6,721 Accumulated depreciation (836) - - (607) (691) (1,164) (3,298)
Net book value 8,666 35 282 173 922 1,216 11,294
At 31 December 2003
Cost 1,227 1,521 - 6,649 2,238 3,938 15,573 Valuation 8,900 617 342 - - - 9,859 Accumulated depreciation (1,312) (185) (55) (5,562) (1,178) (2,175) (10,467)
Net book value 8,815 1,953 287 1,087 1,060 1,763 14,965
* The Group is unable to separately disclose the cost of land and buildings of certain properties unless an independent valuation is carried out.
ANNUAL REPORT 2004 57 Notes to the Financial Statements
11. PROPERTY, PLANT AND EQUIPMENT (CONT’D)
Certain properties of the subsidiary companies were revalued by a firm of independent professional valuers on the open market basis and the revalued amount had been incorporated in the financial statements of the subsidiary companies since 25 October 1996. Surplus arising from the revaluation amounted to RM4,356,000 was credited to Capital Reserve Account of the subsidiary companies. An amount of RM3,641,000 was capitalised for bonus issue by the subsidiary company in the financial year ended 31 July 1998. As allowed by the transitional provision adopted by the MASB in respect of property, plant and equipment, the revalued properties are stated on the basis of their revaluations.
Had the revalued properties been carried at historical cost less accumulated depreciation, the carrying amount of the properties that would have been included in the financial statements of the Group as at 31 December are as follows:-
2004 2003 RM’000 RM’000
Freehold land and buildings 2,520 6,991 Long term leasehold land and buildings - 683 Apartments and shoplots - 216
2,520 7,890
Properties of certain subsidiary companies with carrying amount of RM8,541,520 (2003: RM10,767,000) are charged to financial institutions to secure banking facilities granted to the subsidiary companies.
Separate titles for apartments and shoplots of subsidiary companies with total carrying amount of RM3,052,903 (2003: RM3,109,000) have not been issued by the authorities.
The net book value of the property, plant and equipment of subsidiary companies which are under hire purchase and finance lease is as follows:-
2004 2003 RM’000 RM’000
Plant and machinery 92 201 Motor vehicles 1,083 1,379
1,175 1,580
58 SELOGA HOLDINGS BHD (361052-H) 12. SUBSIDIARY COMPANIES
(a) Investment in subsidiary companies Company 2004 2003 RM’000 RM’000
Unquoted shares, at cost 76,509 75,930 Less: Accumulated impairment losses (23,685) (23,685)
52,824 52,245
(b) Amount due from subsidiary companies Company 2004 2003 RM’000 RM’000
Amount due from subsidiary companies 47,104 18,552 Less: Allowance for doubtful debts (6,388) (6,388)
40,716 12,164
Amount due from subsidiary companies represents advances which are unsecured, interest free and have no fixed term of repayment.
Details of the subsidiary companies, all of which are incorporated in Malaysia, are as follows:-
Effective equity Name of companies Principal activities interest 2004 2003 %%
Seloga Jaya Sdn. Bhd. Civil engineering construction and investment holding 100 100 Seloga Properties Sdn. Bhd. Investment holding and insurance agency 100 100 Jamin Setia Sdn. Bhd. Property development 100 100 Seloga Engineering Sdn. Bhd. Mechanical and electrical engineering and civil engineering construction 100 - Seloga (Labuan) Limited* Dormant 100 - Seloga Petroleum Sdn. Bhd. Dormant 100 - Seloga International Corporation Sdn. Bhd. Dormant 100 -
ANNUAL REPORT 2004 59 Notes to the Financial Statements
12. SUBSIDIARY COMPANIES (CONT’D)
(b) Amount due from subsidiary companies (cont’d)
Effective equity Name of companies Principal activities interest 2004 2003 %%
Subsidiary companies of Seloga Jaya Sdn. Bhd. :-
Timber Components Manufacturer and trading of timber mouldings, general (Malaysia) Sdn. Bhd. contractor and investment holding 100 100 Sawab Development Sdn. Bhd. Property development 100 100 Seloga Engineering Sdn. Bhd. Mechanical and electrical engineering contractor - 100 S.J. Mix Sdn. Bhd. Dormant 100 100 Seloga Machinery and Equipment Sdn. Bhd. Dormant 100 100
Subsidiary company of Timber Components (Malaysia) Sdn. Bhd. :-
Tulus Unggul Sdn. Bhd. Dormant 100 100
* Company does not need to be audited.
The Directors are of the opinion that the financial position and results of Seloga (Labuan) Limted are immaterial to be consolidated.
13. INVESTMENT IN JOINTLY CONTROLLED ENTITY Company 2004 2003 RM’000 RM’000
Unquoted shares, at cost 95 -
The particulars of the jointly controlled entity which is incorporated in Malaysia, are as follows:- Effective equity Name of companies Principal activities interest 2004 2003 %%
Kemaman Oil Corporation Sdn. Bhd. Investment holding 50 -
The details of the subsidiary company are as follows:-
Kemaman Bitumen Company Engaged as producer, refiners, stores, supplies and Sdn. Bhd. distributors of petroleum and oil products 94 -
The financial results of this joint venture is not consolidated for the moment as the Directors are of the opinion that it is immaterial and would be of no real value to the Members of the Company.
60 SELOGA HOLDINGS BHD (361052-H) 14. OTHER INVESTMENTS Group 2004 2003 RM’000 RM’000
At cost
Quoted in Malaysia:- Quoted shares 65 65 Quoted loan stocks 2 2
67 67 Less: Allowance for diminution in value (64) (64)
3 3
At cost
Unquoted shares 52 52 Less: Allowance for diminution in value (51) (51)
1 1
At cost
Other investments 115 143
119 147
Market Value
Quoted shares 1 1 Quoted loan stocks 1 1
2 2
ANNUAL REPORT 2004 61 Notes to the Financial Statements
15. LAND HELD FOR DEVELOPMENT Group 2004 2003 RM’000 RM’000
Long term leasehold land, at cost 11,444 11,444 Development expenditure, at cost 9,131 8,972
20,575 20,416
The long term leasehold land of certain subsidiary companies with carrying amount of RM10,934,020 (2003: RM10,934,020) are charged to financial institutions to secure banking facilities granted to the subsidiary companies.
16. PROJECT DEVELOPMENT EXPENDITURE Group 2004 2003 RM’000 RM’000
At cost 2,331 -
Included in project development expenditure are the following charges for the financial year:- Group 2004 2003 RM’000 RM’000
Depreciation 49 - Interest expenses 312 - Rental of motor vehicles 104 - Rental of office 77 - Directors’ remuneration 33 - Property, plant and equipment written off 1 -
17. GOODWILL ON CONSOLIDATION Group 2004 2003 RM’000 RM’000
Goodwill on consolidation, at cost 1,080 1,080 Less: Accumulated amortisation (907) (799)
173 281
18. FIXED DEPOSITS WITH LICENSED BANKS
Group Included in the above is an amount of RM764,000 (2003: RM931,000) pledged to licensed banks as security for banking facilities granted to a subsidiary company.
62 SELOGA HOLDINGS BHD (361052-H) 19. AMOUNT DUE FROM/(TO) CUSTOMERS ON CONTRACTS Group 2004 2003 RM’000 RM’000
Aggregate cost incurred to date 412,703 328,067 Attributabe profit/(loss) less foreseeable loss (279) (1,752)
412,424 326,315 Progress billings (412,852) (325,526)
(428) 789
Amount due from customers on contracts 6,148 6,949 Amount due to customers on contracts (6,576) (6,160)
(428) 789
Included in the aggregate cost incurred to date of the Group are the following charges for the financial year:-
2004 2003 RM’000 RM’000
Rental of land and buildings 33 15 Rental of equipment 2 88 Hire of machinery and equipment 10 174 Overdue interest - 3
20. INVENTORIES Group 2004 2003 RM’000 RM’000
At net realisable value
Raw materials - 153 Work-in-progress - 20 Finished goods - 35
- 208
ANNUAL REPORT 2004 63 Notes to the Financial Statements
21. TRADE RECEIVABLES Group 2004 2003 RM’000 RM’000
Trade receivables 43,388 29,521 Retention sums 15,906 11,562
59,294 41,083 Less: Allowance for doubtful debts (468) (1,136)
58,826 39,947
The Group’s normal trade credit terms range from 30 to 60 days. Other credit terms are assessed and approved on a case-by- case basis.
22. OTHER RECEIVABLES
Included under other receivables amongst other items are the following:- Group 2004 2003 RM’000 RM’000
Advance for projects 2,850 3,400 Amount receivables from disposal of property, plant and equipment 1,558 2,981
23. TRADE PAYABLES Group 2004 2003 RM’000 RM’000
Trade payables 14,687 11,524 Retention sums 14,997 12,419 Project advance payments - 2,674
29,684 26,617
The normal credit terms granted to the Group range from 30 to 60 days.
64 SELOGA HOLDINGS BHD (361052-H) 24. BANK BORROWINGS Group 2004 2003 RM’000 RM’000
Secured:- Term loans (Note 8) 11,247 8,567 Short term bank advances 5,689 7,588 Bank overdrafts 8,392 9,930
25,328 26,085
The short term bank advances and bank overdrafts facilities are secured by:-
i) properties of the subsidiary companies; ii) assignment of proceeds from certain construction contracts of a subsidiary company; iii) corporate guarantee of the Company; and iv) joint and several guarantee of Directors of the subsidiary companies and third parties.
Interest of short term bank advances and bank overdrafts are charged at rate of 2% (2003: 2%) per annum above the bank’s Base Lending Rate.
25. REVENUE Group 2004 2003 RM’000 RM’000
Revenue consists of the following:-
Contracts revenue 87,298 72,699 Sales of goods 54 33 Rental of properties 259 404 Others 20 15
87,631 73,151
ANNUAL REPORT 2004 65 Notes to the Financial Statements
26. LOSS BEFORE TAXATION
Loss before taxation is stated after charging:- Group Company 2004 2003 2004 2003 RM’000 RM’000 RM’000 RM’000
Auditors’ remuneration 55 49 10 10 Directors’ salaries, bonus, allowances and others 586 864 - - Remuneration paid to former Directors 214 456 214 456 Directors’ fees 204 129 185 66 Directors’ fees in respect of prior year 66 - 66 - Interest on term loans and short term advances 3,248 2,672 - - Bank overdrafts interest 614 834 - - Rental of premises 12 25 - - Hire purchase and other interest 66 92 - - Depreciation 814 944 - - Amortisation of goodwill on consolidation 108 109 - - Loss on disposal of other investments 28 - - - Deposits written off 1 - - - Preliminary and pre-operating expenses written off 20 - - - Loss on disposal of quoted investments - 25 - - Property, plant and equipment written off 7 450 - - Allowance for foreseeable loss on contracts 1,867 4,001 - - And crediting:- Rental income 145 404 - - Allowance for doubtful debts no longer required 668 - - - Interest income 72 88 53 88 Gain on disposal of property, plant and equipment 1,331 864 - - Write back of bad debts written off in previous year - Trade - 1,080 - - - Non-trade - 5 - - Bad debts recovered - 60 - - Allowance for obsolete inventories no longer required 221 - - - Realised gain on foreign exchange 3 - - -
66 SELOGA HOLDINGS BHD (361052-H) 27. TAXATION Group Company 2004 2003 2004 2003 RM’000 RM’000 RM’000 RM’000
Current year provision 34 115 14 25 Transferred to deferred taxation (Note 10) - 32 - -
34 147 14 25
The provision for taxation of the Group is determined by applying the current Malaysian tax rate on chargeable income mainly consist of interest income and balancing charge on assets disposed during the financial year.
The provision for taxation of the Company is mainly in respect of interest income.
28. LOSS PER ORDINARY SHARE
Group Loss per ordinary share is calculated by dividing the Group’s net loss for the year of RM7,385,000 (2003: RM9,890,000) by 98,856,000 (2003: 69,205,000) being the number of weighted average ordinary shares in issue throughout the financial year ended 31 December 2004.
The diluted loss per share is not presented in the financial statements since the assumed conversion of ICULS would be anti-dilutive.
29. EMPLOYEES INFORMATION Group Company 2004 2003 2004 2003 RM’000 RM’000 RM’000 RM’000
Staff costs 5,361 4,633 203 37
The number of employees of the Group and of the Company at the end of the financial year were 74 (2003: 97) and 3 (2003: 1) persons respectively.
30. CAPITAL COMMITMENT
Capital expenditure in respect of the following are not provided for in the financial statements:-
Group 2004 2003 RM’000 RM’000
Authorised and contracted for - motor vehicle - 169
ANNUAL REPORT 2004 67 Notes to the Financial Statements
31. SEGMENTAL REPORT
Group Segmental information is not presented as there are no material segments other than for the construction and the Group’s operations are conducted predominantly in Malaysia.
32. CONTINGENT LIABILITIES
As at 31 December 2004, the outstanding unsecured contingent liabilities of the Group and of the Company are as follows:-
Group Company 2004 2003 2004 2003 RM’000 RM’000 RM’000 RM’000
Claims by customers for liquidated and ascertained damages 2,432 2,432 - - Claims by creditors which are disputed by a subsidiary company 1,651 2,097 - - Corporate guarantee to secure banking facilities granted to subsidiary companies - - 47,632 65,691
4,083 4,529 47,632 65,691
Based on the advice of the Company’s solicitors, the Board of Directors do not anticipate any loss arising from the above transactions.
33. SIGNIFICANT EVENTS DURING THE FINANCIAL YEAR
(a) On 13 July 2004, Seloga Holdings Berhad (“SHB”) entered into a Shareholders’ Agreement (“SA”) with Tipco Asphalt Public Company Limited (“TASCO”), a public company incorporated in Thailand and Thai Bitumen Company Limited (“TBC”), a company incorporated in Thailand whereby SHB, TASCO and TBC (the “Joint Venture Parties”) has jointly participated in the share capital of Kemaman Oil Corporation Sdn. Bhd. (the “Joint Venture Company”) as the vehicle for the purposes of holding not less than 94% of the issued and paid up shares in the share capital of Kemaman Bitumen Company Sdn. Bhd.
Pursuant to the Joint Venture, the Joint Venture Company shall be incorporated in Malaysia under the Companies Act, 1965 of Malaysia, the equity interest holdings of the Joint Venture Parties are as follows:-
%
SHB 50 TASCO 40 TBC 10
100
68 SELOGA HOLDINGS BHD (361052-H) 33. SIGNIFICANT EVENTS DURING THE FINANCIAL YEAR (CONT’D)
(b) On 26 July 2004, the Company subscribed for 450,000 ordinary shares of RM1 each of Seloga Engineering Sdn. Bhd., a wholly owned subsidiary company of Seloga Jaya Sdn. Bhd for RM450,000.
Further on 29 July 2004, the wholly owned ordinary shares of 300,000 by Seloga Jaya Sdn. Bhd. was transferred to Seloga Holdings Berhad for RM128,158 which resulted in Seloga Engineering Sdn. Bhd. becoming a wholly owned subsidiary company of the Company.
(c) During the financial year, the Company acquired the following subsidiary companies for a total consideration of RM8.
Nominal value of Date of Class Number each Term Subsidiary companies acquisition of issue of shares share of issue
Seloga (Labuan) Limited 20 May 2004 Ordinary 1 USD1.00 Cash Seloga International Corporation Sdn. Bhd. 5 July 2004 Ordinary 2 RM1.00 Cash Seloga Petroleum Sdn. Bhd. 2 August 2004 Ordinary 2 RM1.00 Cash
(d) On 30 September 2004, the Company entered into a conditional share sale and purchase agreement with Flare Class Sdn Bhd for the proposed disposal of the entire issued and paid-up share capital of Seloga Jaya Sdn Bhd comprising 65,000,000 ordinary shares of RM1.00 each for a total cash consideration of RM1 million.
However, the proposed disposal of Seloga Jaya Sdn Bhd is subject to the approval of Securities Commission and shareholders of the Company at an extraordinary general meeting to be convened in due course.
(e) On 30 September 2004, the Company entered into a conditional share sale and purchase agreement with Md. Anwar Bin Mamood, Syed Amir Abidin Jamalullail and Dato’ Badarudin Bin Abdul Khalid (collectively known as the “Vendors”) for the proposed acquisition by the Company from the Vendors who collectively holds 51% equity interest in Infra Expert Development Sdn Bhd comprising 2,550,000 ordinary shares of RM1.00 each for a total cash consideration of RM10 million. On 2 December 2004, the Company entered into a Supplemental Agreement to revise the cash purchase consideration for the proposed acquisition from RM10 million to RM8 million.
However, the proposed acquisition of Infra Expert Development Sdn Bhd is subject to the approval of the shareholders of the Company at an extraordinary general meeting to be convened in due course.
ANNUAL REPORT 2004 69 Notes to the Financial Statements
34. FINANCIAL INSTRUMENTS
(a) Interest rate risk The interest rate risk that financial instruments’ values will fluctuate as a result of changes in market interest rates, and the effective weighted average interest rates on classes of financial assets and financial liabilities were as follows :-
Effective weighted Group Less than 1 to 5 More than interest rates 1 year years 5 years Total during the year 2004 RM’000 RM’000 RM’000 RM’000 %
Financial asset
Fixed deposits with licensed banks 857 764 - 1,621 2.00 to 4.25
Financial liabilities
Finance creditors 276 458 - 734 3.29 to 6.00 Term loans 11,247 18,816 - 30,063 6.50 to 7.75 Short term bank advances 5,689 - - 5,689 8.00 Bank overdrafts 8,392 - - 8,392 8.00 to 8.50
2003 Financial asset
Fixed deposits with licensed banks 156 931 - 1,087 2.00 to 4.25
Financial liabilities
Finance creditors 323 773 - 1,096 3.29 to 6.00 Term loans 8,567 26,808 611 35,986 6.50 to 7.35 Short term bank advances 7,588 - - 7,588 8.00 Bank overdrafts 9,930 - - 9,930 8.00 to 8.50
Company 2004
Financial asset
Fixed deposits with licensed banks 857 - - 857 2.30
(b) Credit risk The maximum credit risk associated with recognised financial assets is the carrying amount shown in the balance sheet.
The Group has no significant concentration of credit risk with any single counterparty. In respect of investment in cash, the policy is to transact with financial institutions that have at least a short term counterparty rate.
35. FAIR VALUES The carrying amounts of financial assets and liabilities of the Group and of the Company at the balance sheet date approximated their fair values.
70 SELOGA HOLDINGS BHD (361052-H) List of Properties as at 31 December 2004
PROPERTIES PORTFOLIO
Location/Owner Description/Age Land area/ Tenure Net Book Existing Date of Of Building Built-up Value Use Acquisition/ (if relevant) Area @ 31.12.04 Last RM Revaluation
SELOGA JAYA SDN. BHD.
HS(D) 52588, 52587 & 52586, 3 units 3 storey 1,627.62 sq. m Freehold 4,280,190 Office 28 August 1995 Lot PT 11360, 11359 & 11358, shophouses /668.87 sq. m Building No.1,3 & 5, Jln USJ10/1A, /12 years 5 months 47620 UEP Subang Jaya.
SELOGA ENGINEERING SDN. BHD.
Parent Title No. GM930, 13 units of office lots 1,024 sq. m total Freehold 2,611,640 Vacant 28 August 1995 Parent Lot No. 1796 WM:3AL-A, at Wisma Mah Sing No. 163-3-8 to 163-3-20, with 13 car Wisma Mah Sing, Jln Sg. Besi, parking bays 50710 Kuala Lumpur. /12 years 5 months
Title No PN5559 Vacant commercial 233 sq. m Leasehold 34,942 Vacant 28 August 1995 Lot No 105978, and residential lots 99 years Taman Tasek Jaya, expiring Ipoh, Perak 12.1.2081
Under Parent Title CL015407664, 1 unit Condo- 178.37 sq. m Leasehold 281,530 Vacant 26 August 1995 Unit 5B, 5th Floor, Block Cassia, apartment 999 years The Colonnades, /16 years and expiring Off Jln Kebajikan, 3 months 22.3.2908 Kota Kinabalu, Sabah.
HS(M) 850, PT No. 1002, Apartment 133.48 sq. m Freehold 159,733 Vacant 22 November 1993 Mukim of Bentong, Tempat Bukit /9 years 5 months Tinggi,Negeri Pahang. TIL2P, Blk T1, Level 2, Selesa Hill Homes, Bukit Tinggi, Pahang.
ANNUAL REPORT 2004 71 List of Properties
PROPERTIES PORTFOLIO (CONT’D)
Location/Owner Description/Age Land area/ Tenure Net Book Existing Date of Of Building Built-up Value Use Acquisition/ (if relevant) Area @ 31.12.04 Last RM Revaluation
JAMIN SETIA SDN. BHD.
PL 19015, Lot No. 4096 Agricultural land 9.47 acres Leasehold 1,315,142 Vacant 1 October 1992 Plan No. 107-G-15 (pending approval 99 years Ref No. S.P. 17-57 for conversion to expiring Mukim of Labuan, Labuan industrial use) 31.12.2055
HSD 8805 D557 Residential lot 89,030.92 sq. m Leasehold 15,150,079 Vacant 22 September 1993 PT 10924 99 years Mukim Bentong, Bentong, expiring Pahang Darul Makmur 21.09.2092
SELOGA PROPERTIES SDN. BHD.
Geran Nos.8375, 29298,9299,8376, 6 lots of Shophouses 1,337.76 sq.m Freehold 1,614,748 Tenanted 28 August 1995 CP 11741, CP 6928, /18 years and Lots Nos 123, 124, 125, 4 months 126, 127 & 128, Jln Gopeng, Kampar, Perak.
SAWAB DEVELOPMENT SDN. BHD.
Lots 656, 989 & 1057, Residential Land 41,680 sq.m Leasehold 4,110,189 Vacant 13 January 1997 Mukim Batu Berendam, 99 years Daerah Melaka Tengah, expiring Melaka 09.02.2098/ 29.05.2100
72 SELOGA HOLDINGS BHD (361052-H) Analysis of Shareholdings as at 13 April 2005
Authorised Share Capital - RM500,000,000 Issued and Paid-up Share Capital - RM111,080,775 Class of Shares - Ordinary Share of RM1.00 Each Voting Rights - One Vote per share
SIZE OF SHAREHOLDINGS
Size of Shareholdings No. of Shareholders % No. of Shares %
1 – 99 48 2.06 2,293 0.00 100 – 1,000 982 42.15 960,378 0.86 1,001 – 10,000 1,015 43.56 3,901,530 3.51 10,001 – 100,000 226 9.70 7,271,541 6.55 100,001 – 5,554,037 56 2.40 56,302,520 50.69 5,554,038 AND ABOVE (*) 3 0.13 42,642,513 38.39
TOTAL 2,330 100.00 111,080,775 100.00
Notes: * 5% of Issued and Paid-up Share Capital
LIST OF TOP 30 HOLDERS AS AT 13 APRIL 2005
Name No. of % of issued shares held capital
1. Usaha Citra Sdn. Bhd. 25,545,092 23.00 2. Bumiputra-Commerce Nominees (Tempatan) Sdn. Bhd. Timecall Sdn. Bhd. (12727 HDOF) 9,933,830 8.94 3. DB (Malaysia) Nominee (Asing) Sdn. Bhd. Deutsche Bank AG Singapore PBD for Lucky Lamp International Limited 7,163,591 6.45 4. Chan Nung Wai Holdings Sdn. Bhd. 5,029,022 4.53 5. Tengku Uzir Bin Tengku Ubaidillah 4,913,100 4.42 6. Bank Kerjasama Rakyat Malaysia Berhad Pledged Securities Account for Timecall Sdn. Bhd. 4,500,000 4.05 7. HSBC Nominees (Asing) Sdn. Bhd. Henwood Limited 4,013,700 3.61 8. Mayban Securities Nominees (Tempatan) Sdn. Bhd. Pledged Securities Account for Chua Ma Yu (Dealer 072) 2,654,000 2.39 9. Chan Nung Chee 2,594,888 2.34 10. Citicorp Nominees (Asing) Sdn Bhd Pershing LLC for Top Select Investments Limited 2,439,300 2.20 11. PTB Ventures Sdn. Bhd. 2,000,000 1.80 12. OSK Nominees (Tempatan) Sdn. Berhad. OSK Capital Sdn. Bhd. for Yayasan Islam Terengganu 2,000,000 1.80
ANNUAL REPORT 2004 73 Analysis of Shareholdings
LIST OF TOP 30 HOLDERS AS AT 13 APRIL 2005 (CONT’D)
Name No. of % of issued shares held capital
13. Eastern Pacific Industrial Corporation Berhad 2,000,000 1.80 14. Bank Kerjasama Rakyat Malaysia Berhad Pledged Securities Account for Normah Binti Long 2,000,000 1.80 15. Ke-Zan Nominees (Tempatan) Sdn. Bhd. Kim Eng Securities Pte. Ltd. for Anuar Bin Adam. 1,928,000 1.74 16. Citicorp Nominees (Asing) Sdn. Bhd. UBS AG Singapore for Avonmore Investments Limited 1,680,100 1.51 17. Ke-Zan Nominees (Tempatan) Sdn. Bhd. Kim Eng Securities Pte. Ltd. for Timecall Sdn. Bhd. 1,600,000 1.44 18. Chan Nung Wai Holdings Sdn. Bhd. 1,578,091 1.42 19. Citicorp Nominees (Asing) Sdn. Bhd. UBS AG Singapore for Richard Services Corporation 1,451,600 1.31 20. Wong Ah Fook @ Wong Fook Chuin 978,278 0.88 21. Affin Nominees (Tempatan) Sdn. Bhd. Segi Resources Sdn. Bhd. 950,765 0.86 22. Desivest Sdn. Bhd. 917,800 0.83 23. Mayban Nominees (Tempatan) Sdn. Bhd. Malaysian Trustees Berhad for Mayban Smallcap Trust Fund (240165) 801,600 0.72 24. Tai Soke Khim 633,800 0.57 25. Razif bin Abdullah 556,900 0.50 26. Jacqueline Gracie Park 552,000 0.50 27. Loh Wai Cheng 509,080 0.46 28. Abdul Razak Bin Ismail 504,000 0.45 29. Lim So Moey 442,545 0.40 30. TA Nominees (Tempatan) Sdn. Bhd. Pledged Securities Account for Oh Kim Sun 434,400 0.39
74 SELOGA HOLDINGS BHD (361052-H) REGISTER OF DIRECTORS’ SHAREHOLDINGS AS AT 13 APRIL 2005
Seloga Holdings Berhad (“SHB”) Ordinary shares of RM1 each Direct % Indirect %
Directors
Dato’ Lim Git Hooi @ Robert Lim - - - - Derek John Fernandez 1,000 * - - Dato’ Syed Md. Amin Bin Syed Jan Aljeffri - - - -
Note: * Negligible
LIST OF SUBSTANTIAL SHAREHOLDERS List of Substantial Shareholders (excluding bare trustees), based on the Register of Substantial Shareholders as at 13 April 2005 are as follows:-
No. of Shares Substantial Shareholders Direct % Indirect %
Usaha Citra Sdn. Bhd. 25,545,092 23.00 - - Lucky Lamp International Limited 7,163,591 6.45 25,545,092 (#) 23.00 Tan Sri Halim Saad - - 32,708,683 (#) 29.45 Timecall Sdn. Bhd. 16,033,830 14.43 - - Anuar Bin Adam 1,928,000 1.74 16,033,830 (#) 14.43 Ong Siew Yeok - - 16,033,830 (#) 14.43 Chan Nung Wai Holdings Sdn. Bhd. 6,607,113 5.95 - - Chan Lung Mei @ Chan Nung Wai 451,291 0.41 9,955,681 (#) 8.96
Note: # Deemed interested by virtue of Section 6A of the Companies Act, 1965.
ANNUAL REPORT 2004 75 This page has been left blank intentionally Form of Proxy SELOGA HOLDINGS BERHAD (361052-H) (Incorporated in Malaysia under the Companies Act, 1965)
I/We______
NRIC No./Company No.______of______
______being a Member/Members of Seloga Holdings Berhad ("the
Company"), hereby appoint______of ______or failing him/her,
______of______
______as my/our proxy to vote for me/us and on my/our behalf at the Ninth Annual General Meeting of the Company to be held at Sheraton Subang Hotel & Tower, Melati 1 & 2, 7 Jalan SS16/1, 47600 Subang Jaya, Selangor Darul Ehsan on Friday, 27 May 2005 at 10.30 a.m. and at any adjournment thereof in the manner as indicated below:-
NO. RESOLUTION FOR AGAINST 1. Ordinary Resolution No. 1 2. Ordinary Resolution No. 2 3. Ordinary Resolution No. 3 4. Ordinary Resolution No. 4
(Please indicate with an "X" in the spaces provided on how you wish your vote to be cast. In the absence of specific direction, your proxy will vote or abstain as he / she thinks fit)
Signed this______day of ______2005
No. of Shares Held
______Signature of Shareholder or Common Seal
Notes:-
1. A Member entitled to attend and vote at the meeting is entitled to appoint one or more proxies to attend and vote in his stead. A proxy may but need not be a Member of the Company and a Member may appoint any persons to be his proxy. The provisions of Section 149(1)(a) and (b) of the Companies Act, 1965 shall not apply to the Company.
2. Where a Member appoints two or more proxies, the appointment shall be invalid unless the Member specifies the proportions of his holdings to be represented by each proxy.
3. Where a Member is an authorised nominee as defined under the Securities Commission (Central Depositories) Act, 1991, it may appoint at least one (1) proxy in respect of each Securities Account it holds with ordinary shares of the Company standing to the credit of the said Securities Account.
4. If the appointor is a corporation, this form must be executed either under its Common Seal or under the hand of its officer or attorney duly authorised.
5. To be valid, this form must be deposited at the Registered Office of the Company at 312, 3rd Floor, Block C, Kelana Square, 17 Jalan SS7/26, 47301 Petaling Jaya, Selangor Darul Ehsan not less than forty eight (48) hours before the time for the Ninth Annual General Meeting or any adjournment thereof. (Please Fold Here)
STAMP/SETEM
The Secretary SELOGA HOLDINGS BERHAD (361052-H) 312, 3rd Floor, Block C, Kelana Square, 17 Jalan SS7/26, 47301 Petaling Jaya, Selangor Darul Ehsan
(Please Fold Here)