Prinsiptek AR06(B.Up)
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Getting the mind through of spawning new ideas, of springing the mind with GETTING innovations, of setting ourselves free, from the perceptions of mind, from the weakness of emotion, from the power that holding us back, ...Getting the mind THE MIND through every opportunity, every hope on any given chance, hence getting the mind THROUGH... through will allow us of surpassing any difficulties and obstacles and releasing ourselves from mediocrities. cover rationale contents 4 chairman’s statement 16 profile of board of directors 100 statement of directors’ responsibility 9 notice of 20 corporate governance annual general meeting statement 101 other compliance information 12 corporate structure and 26 statement on internal control 102 list of properties principal activities 28 audit committee report 103 analysis of shareholdings 13 corporate information 33 financial statements proxy form 14 5 years financial highlights chairman’s statement PRINSIPTEK CORPORATION BERHAD (595000-H) 4 annual report 2006 Since our Annual Report last year, we have looked upon the future with optimism and self-belief based on our efforts and achievements during this 12-month period. On behalf of the Board of Directors of Prinsiptek Corporation Berhad (“PCB” or “the Company”), it is my great pleasure to present the Annual Report and Financial Statements of the PCB Group (“the Group”) and the Company for the financial year ended 31 December 2006. FINANCIAL PERFORMANCE Despite the less-than-favourable business environment on the local front, during the financial year under review, the Group recorded an increase of revenue by 3.53% to RM316.4 million compared to RM305.6 million in previous year. The construction division continues to be the main contributor in the Group’s revenue performance. The Group posted a lower net profit after tax of RM18.0 million as compared to RM20.7 million in year 2005. The drop in the net profit after tax was due to lower margin of construction projects as a result of higher construction costs and also attributed to low revenue from property development division. DIVIDEND In order to reward our shareholders, the Board of Directors is pleased to recommend a final dividend of 6% less tax of 27% for the financial year ended 31 December 2006. This is subject to the shareholders’ approval at the forthcoming Annual General Meeting. CORPORATE DEVELOPMENT PCB had on 16 June 2006 acquired the entire issued and fully paid-up share capital of Prestigedge Development Sdn Bhd (“Prestigedge”). Subsequent to the acquistion, Prestigedge became a wholly owned subsidiary of PCB. Prestigedge owns a piece of land known as No. Lot 2223, Mukim 13, Daerah Timur Laut, Pulau Pinang comprised in Geran Mukim No. GM2 with a total land area of 6,075.33 square metres. The above acquisition is a strategic and synergistic fit to the PCB Group's existing core businesses of property development and construction. Prestigedge had effectively changed its name to Prinsiptek Properties Sdn Bhd on 5 February 2007. chairman’s statement (cont’d) PRINSIPTEK CORPORATION BERHAD (595000-H) annual report 2006 5 chairman’s statement (cont’d) PRINSIPTEK CORPORATION BERHAD (595000-H) 6 annual report 2006 On 22 June 2006, Pentaland Sdn Bhd (“Pentaland”), a third quarter of year 2007 and completed by third quarter subsidiary of PCB, completed the acquisition of the entire of year 2009. issued and fully paid-up share capital of Solidvest Properties Sdn Bhd (“Solidvest”). Subsequent to the On 15 February 2007, Prinsiptek International Limited, a acquisition, Solidvest became a wholly owned subsidiary subsidiary of PCB entered into a joint venture agreement of Pentaland and PCB. Solidvest owns a piece of land with Mr. Danai Butrchote for the purpose of a joint venture described as Geran 29632 for No. Lot 9348 in the Mukim to undertake a mixed development project consisting of Batu, Daerah Gombak, Negeri Selangor. Pentaland is the following:- currently undertaking a development project on this land through a joint venture with Solidvest. a) Phase 1 - 7 blocks of 8 storey medium cost apartment; On 17 November 2006, PCB had vide its wholly owned b) Phase 2 - 2 storey link houses; subsidiary, Tanah Perangsang Sdn Bhd entered into a Sale c) Phase 3 - 2 storey link houses; and Purchase Agreement with Abi's Land & Properties Sdn d) Phase 4 - 3 storey shop office; and Berhad to acquire all the 14 parcels of freehold vacant e) Phase 5 - hypermarket land measuring approximately 2,867.88 square metres ("Proposed Development Project"). held under Geran Nos. 24607-24613, 37511, 33223- 33227 and 18617, Lot Nos. 109-115, 435, 443-447 and The Proposed Development Project with an approximate 471, all situated in Mukim Bandar Kuala Lumpur, Daerah gross development value of RM175.0 million is expected Kuala Lumpur, Negeri Wilayah Persekutuan. The land is to be commenced by the third quarter of year 2007. presently vacant and the Group intends to take over and implement the vendor's proposed development project involving the construction of 174 units of 24-storey service OUTLOOK AND PROSPECT apartment with public amenities and shoplots on the land ("Proposed Project") subject to the relevant approvals from The announcement of the Ninth Malaysia Plan on 31 the authorities. The estimated total development cost of March 2006 had revitalized hope for the construction the Proposed Project is approximately RM53.0 million industry. There will be RM46.8 billion in development which will be funded by internally generated funds and expenditure allocated for infrastructure and utilities from bank borrowings. The expected profit to be derived from year 2006 to 2010. This represents an increase of 21% the Proposed Project is approximately RM20.0 million. as compared to RM38.6 billion under the Eighth Malaysia The Proposed Project is expected to be commenced by Plan. chairman’s statement (cont’d) PRINSIPTEK CORPORATION BERHAD (595000-H) annual report 2006 7 The abolishment of real property gains tax and the Despite the tougher and competitive market, the Group announcement of the liberalisation of foreign exchange will take this challenging environment to equip itself and rules are expected to boost the property industry. strengthen its position to move forward locally and globally. Furthermore, the major changes of the new public service delivery system will enhance the efficiency of processing procedures by the local government authorities and will ACKNOWLEDGEMENT AND APPRECIATON further spur the property industry. On behalf of the Board, I wish to acknowledge that our PCB had secured a turnkey project from the National performance could not have been achieved without the Housing Authority of Thailand worth approximately combined support and hard work of our management RM194.0 million and had entered into a joint venture and employees as a whole. Therefore, I would like to take to undertake a mixed development project in Bangkok, this opportunity to express my utmost gratitude and Thailand with a total gross development value of RM175.0 appreciation to the management and staff for their strong million. These overseas ventures by the Group to Thailand commitment and dedication towards achieving the are viewed as a strategy for the Group to reduce its Company’s objective. I would also like to thank our dependence on local projects and to tap into advantages of shareholders, valued clients, business associates, bankers prevailing opportunities in the neighboring countries. and Government agencies for their continuous support to the Group all these years. As at 31 December 2006, the Group reported a total of RM425.0 million unbilled construction order book and future development projects with the total gross development value of RM353.0 million which are expected to be converted to revenue for the coming 2 to 3 Dato’ Seri Mohamad Noor Abdul Rahim years. PCB is expected to commence several new projects Chairman in year 2007 and the Group is in the midst of finalising few potential projects in local and overseas markets. chairman’s statement (cont’d) PRINSIPTEK CORPORATION BERHAD (595000-H) 8 annual report 2006 NOTICE IS HEREBY GIVEN THAT the Fifth Annual General Meeting (“AGM”) of Prinsiptek Corporation Berhad (“Company”) will be held at the Juara Hall, Level 1, Carlton Holiday Hotel & Suites Shah Alam, No. 1, Persiaran Akuatik, Seksyen 13, 40100 Shah Alam, Selangor Darul Ehsan on Friday, 8 June 2007 at 10.00 a.m. for the following purposes:- As Ordinary Business 1. To receive the Audited Financial Statements for the financial year ended 31 December 2006 RESOLUTION 1 together with the Reports of the Directors and Auditors thereon. 2. To approve a final dividend of 6% less 27% income tax for the financial year ended RESOLUTION 2 31 December 2006. 3. To re-elect the following Directors who retire in accordance with Article 84 of the Company’s Articles of Association:- 3.1 Y. Bhg. Dato’ Seri Mohamad Noor Abdul Rahim RESOLUTION 3 3.2 Y. B. Datuk Nur Jazlan Bin Tan Sri Mohamed RESOLUTION 4 4. To approve the aggregate Directors’ fees payable to the Directors of the Company of an amount RESOLUTION 5 not exceeding RM60,000.00 per annum. 5. To re-appoint Messrs Anuarul Azizan Chew & Co. as Auditors of the Company and to authorise the RESOLUTION 6 Directors to fix their remuneration. As Special Business To consider, and if thought fit, pass the following ordinary and special resolutions:- 6. Ordinary Resolution - Authority To Allot And Issue Shares RESOLUTION 7 “THAT subject always to the Companies Act, 1965 (“Act”), the Articles of Association of the Company and approval of the relevant regulatory authorities, the Directors be and are hereby empowered pursuant to Section 132D of the Act to allot and issue shares in the Company at any time until the conclusion of the Company’s next AGM and upon such terms and conditions and for such purposes as the Directors may, in their absolute discretion, deem fit provided that the aggregate number of shares to be issued pursuant to this resolution does not exceed 10% of the total issued share capital of the Company for the time being.” notice of annual general meeting PRINSIPTEK CORPORATION BERHAD (595000-H) annual report 2006 9 7.