ANNUAL REPORT 2012
(545961-X) (Wholly owned by International Islamic University Malaysia) Contents
• Core Values & Vision, Mission 3
• Notice for Annual General Meeting 4
• Corporate Information 5
• Corporate Structure 6
• 5 Years Financial Highlights 7
• Chairman’s Statement 8 - 9
• Director’s Profile 10 - 14
• Corporate Report 15 - 29
• Financial Statements 31 - 73
• Corporate Directory 75 - 80
2 • Annual Report 2012 • Core Values
Courage
Discipline
Trustworthy
Loyalty
Diligence
Vision & Mission Vision
To be the leading University-Based Company Internationally.
Mission
• We pledge to offer excellent services and valuable to our customers by our strategic resources and expert areas. While venturing into hi-tech areas, we continue to uphold our Core Values and business ethics.
• As the business arm of the University, we are committed to promote and commercialize our expertise and products. While doing this, we will simultaneously inject and inculcate the culture of entrepreneurship in the community.
• In aiming for profitable returns for the Company, we also strive to meet our financial obligations to the University while at the same time, being attentive to our employee’s welfare and development.
• Annual Report 2012 • 3 Notice for Annual General Meeting IIUM HOLDINGS SENDIRIAN BERHAD (Company No. : 545961-X) Incorporated in Malaysia
NOTICE IS HEREBY GIVEN that the Twelfth Annual General Meeting of the Company which will be deemed to be held on Friday, 28th day of June, 2013 for the following purposes:-
AGENDA
1. To receive the Audited Accounts for the year ended 31st December 2012 together with the Directors’ and Auditors’ Reports thereon. (Resolution 1)
2. To appoint YBhg. Tan Sri Dato’ Seri Utama Dr. Rais Yatim pursuant to Section 129(6) of the Companies Act, 1965 to hold office until the conclusion of the next Annual General Meeting. (Resolution 2)
3. To re-elect the following Directors who retire in accordance to Article 63 of the Company’s Articles of Association and being eligible offered themselves for re-election :
i. YBhg. Prof. Dr. Ahmad Faris bin Ismail (Resolution 3) ii. YBhg. Prof. Dr. Nik Ahmad Kamal bin Nik Mahmod (Resolution 4)
4. To re-elect the following Directors who retire in accordance to Article 68 of the Company’s Articles of Association and being eligible offered themselves for re-election :
i. YBhg. Dato’ Jamaludin bin Hassan (Resolution 5) ii. YBhg. Datuk Khalilur Rahman bin Ebrahim (Resolution 6)
5. To re-appoint Messrs. Ernst & Young (AF: 0039) as the Auditors of the Company and to authorize the Board to fix their remuneration. (Resolution 7)
6. To transact any other business of which due notice shall be given in accordance with the Companies Act, 1965.
BY ORDER OF THE BOARD
INONG PUTRI BINTI ABDULLAH Company Secretary
Kuala Lumpur Dated this 12th day of June, 2013
NOTE:
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 of that power or authority shall be deposited at the registered office of the company or at such other place within Malaysia as is specified for the purpose in the notice convening the meeting. Not less than forthy-eight hours before the time for holding the meeting or adjourned meeting at which the person named in the instrument proposes to vote, or, in the case of a poll, not less than twenty-four hours before the time appointed for the taking of the poll, and in default the instrument of proxy shall not be treated as valid. 4 • Annual Report 2012 • Corporate Information
Chairman Board Committees Tan Sri Mohd Sidek Hassan Audit Committee
Deputy Chairman Prof. Dr. Nik Ahmad Kamal Nik Mahmod - Chairman Tan Sri Abdul Aziz Abdul Rahman Prof. Dr. Nik Nazli Nik Ahmad - Member Board of Directors Prof. Dato’ Sri Dr. Zaleha Kamaruddin Prof. Dr. Najibah Mohd Zain - Member Prof. Dato’ Dr. Md. Tahir Md. Azhar Prof. Dr. Ahmad Faris Ismail Remunerations & Nomination Committee Prof. Dr. Nik Ahmad Kamal Nik Mahmod Tan Sri Abdul Aziz Abdul Rahman - Chairman Dato’ Hj. Ahmad Zailan Shaari Dato’ Hj. Wan Mohd Hilmi Wan Kamal Prof. Dato’ Dr. Md. Tahir Md. Azhar - Member
Registered Office Dato’ Hj. Wan Mohd Hilmi Wan Kamal - Member Level 3, Rectory International Islamic University Malaysia Remedial, Grievances & Disciplinary Committee Jalan Gombak, 53100 Kuala Lumpur Prof. Dr. Nik Ahmad Kamal Nik Mahmod - Chairman Tel: (603) 6196 4331 Fax: (603) 6196 4332 Dato’ Hj. Ahmad Zailan Shaari - Member
Principal Banker Dato’ Hj. Wan Mohd Hilmi Wan Kamal - Member Bank Islam (M) Berhad Management Team Company Secretary Inong Putri Datuk Abdullah Tuan Hj Naharudin Ali - Group CEO (LS 006938) Assoc. Prof. Dr. Zuhairah Ariff Abd. Ghadas - Group Legal Advisor Auditors Messrs Ernst & Young Puan Siti Thuraiya Ab Rahman - Group GM, HR (AF 0039) Puan Naaimah Ahmad Radzi - Group Internal Auditor
Puan Inong Putri Datuk Abdullah - Group Company Secretary
• Annual Report 2012 • 5 Corporate Structure
EDUCATION SECTOR
IIUM Centre for Continuing Education Sdn. Bhd.
IIUM Higher Education Sdn. Bhd.
IIUM Lower Education Sdn. Bhd.
IIUM Montessori Sdn. Bhd.
IIUM Educare Sdn. Bhd.
CONSULTANCIES & SERVICES
IIUM Entrepreneurship & Consultancies Sdn. Bhd.
IIUM Advanced Technologies Sdn. Bhd.
IIUM Corporate Management Sdn. Bhd.
IIUM Shariah Advisory Services Sdn. Bhd.
IIUM International Sdn. Bhd.
HEALTHCARE & OTHERS
IIUM Medical Specialist Centre Sdn. Bhd.
IKOP Sdn. Bhd.
IIUM Properties Sdn. Bhd.
Daya Bersih Sdn. Bhd.
6 • Annual Report 2012 • 5 Years Financial Highlights
IIUM Holdings Group 5 Year Financial Highlights 2008 2009 2010 2011 2012 Actual Actual Actual Restated Audited Turnover (RM'000) 94,810 97,590 103,357 70,581 91,575 Operating Profit (RM'000) 5,703 (2,647) (817) 8,817 8,503 Profit Before Tax (RM'000) 5,198 (3,618) (2,012) 6,526 7,091 Profit After Tax (RM'000) 3,650 (5,061) (2,509) 5,272 5,580 Total Shareholder Fund (RM'000) 5,277 216 107 2,047 7,466 No. of Shares Issued ('000) 2,600 2,600 5,000 5,000 5,000 Earning Per Share (RM) 1.40 (1.95) (0.50) 1.05 1.12 NTA per share (RM) 2.0 0.1 0.02 0.41 1.49
RM’Million TURNOVER RM’Million PROFIT BEFORE TAX
150 10
6.5 7.1 94.8 97.6 103.4 91.6 5.2 100 5 70.6
50 0
(2.0) 0 (5) (3.6) 2008 2009 2010 2011 2012 2008 2009 2010 2011 2012
TOTAL SHARE HOLDERS FUNDS NET ASSET PER SHARE RM’Million RM 150 150 7.5 100 2.03 5.3 100 50 1.49 50 50 2.0 50 0.41 0.2 0.1 0.08 0.02 0 0 2008 2009 2010 2011 2012 2008 2009 2010 2011 2012
• Annual Report 2012 • 7 Chairman’s Statement
On behalf of the Board of Directors, I am pleased to present the Annual Report and Audited Financial Statements of Performance of IIUM Holdings Group for the year ended 31st December 2012.
For the year under review, YBhg Dato’ Hj. Wan Mohd Hilmi Bin Wan Kamal and YBhg Dato’ Hj Ahmad Zailan Bin Sha’ari were appointed Directors on 26th April 2012.
From Good to Great
Having turned around to profitability in 2011, the Group embarked on a process of consolidation and restructuring of its businesses to lay solid foundation of financial strength for a sustainable long-term growth. A five-year road map being developed to synchronize with its shareholder’s expectations will undoubtedly be the launching pad for the Group to transform itself from Good to Great.
The strategies and action plans implemented thus far have proven to be successful in ensuring that the Group maintain its raison dëtre to generate profits and pay dividends to fund the operating expenses of the parent company, the International Islamic University of Malaysia (IIUM).
Financial Performance
The Group improved on its performance for the year with a higher Profit Before Tax of RM7.1 Million as compared with only RM6.5 Million for 2011. The excellent performance was achieved on the back of a Group turnover of RM91.6 Million. The Group also recorded its highest ever Profit After Tax of RM5.6 Million and this will go a long way towards strengthening the shareholders’ funds for future growth and expansion.
8 • Annual Report 2012 • This much improved performance was a result of The Group will undergo further restructuring, and improvements in almost every business sector. The bulk subsidiaries with limited or no sustainability growth of the profits were contributed by facilities management prospects will be divested. Management buy-out will be and property services as well as the International Islamic the preferred route to ensure continuity of employment Schools and Setiabudi Schools. The overall profits would for the affected staff. Existing operations are expected have been higher if not for losses incurred by consultancies to improve further but potential write-offs for the divested business sector. companies in the books of the holding company may affect overall profitability. Human Resource Acknowledgement The issues relating to shortage of manpower affected the Group substantially with regards to delivery and quality of On behalf of the Board of Directors of IIUM Holdings services as some of its operations are labour intensive. Group, I would like to congratulate and commend the Measures to introduce mechanization in the processes Management and employees for their hard work and have, to a certain extent, lessened the impact of labour commitment displayed in all tasks and responsibilities shortage. during the year to achieve the sterling performance. Their professionalism and dedication are vital for the For a primarily service-based business like ours, the sustainability of the Group in the pursuit of greatness. long-term growth and sustainability is highly dependent on the quality of our most precious asset, the human I would also like to record the Board’s appreciation to the capital. Acknowledging this, the Group continues to place Management of IIUM and the IIUM Community at large increased emphasis on training and development. for their unrelenting support to the Group. Also to all our business associates, partners, clients and vendors for their As a responsible corporate citizen, the Group complied faith, confidence and trust in maintaining the relationship with the Minimum Wages Order 2102 which came into with the Group. effect as at 1st January 2013. Although the initial impact will be a direct increase in its operational costs, the Group is taking a long term view to remain competitive in the employment market and continue to attract capable and committed talents.
Prospect For The Current Year
Outlook for the year remains positive with Malaysia’s economy continuing to demonstrate resilience in the face of global economic uncertainties. Some volatility is Tan Sri Mohd Sidek Hassan anticipated in the first half of the year due to the General Chairman Elections. However the markets should stabilize in the second half and business is expected to pick up as confidence is regained at the political front. As Government spending resumes to fuel the transformation initiatives, it will have a direct impact in stimulating expenditures of the man on the street.
• Annual Report 2012 • 9 Director’s Profile
TAN SRI MOHD SIDEK HASSAN Chairman
Tan Sri Mohd Sidek Hassan has had an illustrious Minister (Economic Affairs) at the Embassy of Malaysia career in the Malaysian Civil Service which he eventually in Washington, D.C., United States, and the Director of led as the Chief Secretary to the Government for close Multilateral Relations Division. to six years. He began his career in the Administrative and Diplomatic Service on 15 April 1974 as an Assistant He was appointed as Deputy Secretary-General (Trade) Director at the International Trade Division, Ministry of on 19 January 2001 and thereon as the Secretary-General Trade and Industry. He was later appointed Assistant of the Ministry of International Trade and Industry on 24 Trade Commissioner at the Malaysian Embassy in Tokyo, October 2004. Japan, from May 1977 until July 1980. On 3 September 2006, Tan Sri Mohd Sidek was appointed From August 1980 until July 1984, he served in the as the 12th Chief Secretary to the Government of Malaysia Implementation Coordination Unit (ICU) of the Prime by the Yang Di-Pertuan Agong, and was in office until 23 Minister’s Department, initially as a Principal Assistant June 2012. Director, then later promoted to Deputy Director, Project Analysis Sector and subsequently as the Deputy Director Tan Sri Mohd Sidek holds a Bachelor of Economics of Research in the same department. (Honours) degree in Public Administration from the University of Malaya and MBA from New Hampshire He has expansive working experience within the Ministry College, United States of America. of International Trade and Industry. During his service in the ministry, he had held the positions of Malaysia’s He currently serves as the Chairman of PETRONAS and Trade Commissioner in Sydney, Australia, Deputy also sits on the Boards of Top Glove and Malayan Flour Director in the Policy and Research Division, Deputy Mills. Director (Operations) in the International Trade Division,
10 • Annual Report 2012 • TAN SRI ABDUL AZIZ ABDUL RAHMAN YBHG DATO’ HJ. AHMAD ZAILAN Deputy Chairman SHAARI Director
Tan Sri Abdul Aziz Abdul Rahman represents the YBhg Dato’ Hj. Ahmad Zailan Shaari is currently the Government of Malaysia as a Majlis (Council) Member of Executive Director of Finance, International Islamic the International Islamic University Malaysia (IIUM). He University Malaysia. obtained his degree in Commerce from the University of New South Wales, Sydney, Australia in 1970. He is He obtained his Bachelor in Accountancy from University a member of the Malaysian Institute of Accountants Teknologi MARA 1988. Before pursuing his tertiary studies, (MIA) and the Malaysian Association of Certiἀed Public he worked as a bank clerk at the Bank Bumiputra Malaysia Accountants (MICPA). Berhad and as an Assistant Accountant at Sapura Holding Berhad. He served three terms as the Pahang State Assemblyman representing Mentakab (1982-1986) and the State He started his career in IIUM in 1988 as an Assistant Constituency of Bera from 1986 to 1995. He was a Bursar. He was assigned as Acting Finance Director in member of the Pahang State Executive Council and later 1996 before being permanently appointed as the Finance the Deputy Menteri Besar. He was appointed as a Senator Director in 1999. He holds membership of the Malaysian for two terms (1995-2001). Institute of Accountant as Chartered Accountant and is a member of the Certified Financial Planner Malaysia. He He was on the Board of Federal Land Development served as the IIUM Company Secretary from 1998 until Authority (FELDA), the Malaysia Timber Industry Board 2006. (MTIB), Executive Committee of the Commonwealth Parliamentarian Association (CPA) and Pacific Asia Travel Dato’ Hj. Ahmad Zailan is active in sports especially Association (PATA). golf and soccer. Due to his passion for games, he was appointed as the Chef-de-mission for the IIUM Staff At the corporate level he was with Price Waterhouse & Contingent for the past 10 years. Currently he is also on Co. Sydney, Malaysia Airlines and Managing Director of the Board of IIUM Advanced Technologies Sdn. Bhd. Bank Rakyat. He was Chairman of Public Companies in Malaysia and Australia and The National Translation Institute of Malaysia. He was a Chairman of National Film Development Corporation Malaysia (FINAS) and as a TV presenter for Fastforward Programme on RTM1. Currently he is the President of Majlis Bekas Wakil Rakyat Malaysia (MUBARAK) and sits on the Board of Affin Bank Berhad and UMP Holdings Sdn. Bhd.
• Annual Report 2012 • 11 YBHG PROF. DATO’ SRI YBHG PROF. DATO’ DR. DR. ZALEHA KAMARUDDIN MD. TAHIR MD. AZHAR Director Director
Prof. Dato’ Sri Dr. Zaleha Kamaruddin obtained her Prof. Dato’ Dr. Md. Tahir Md. Azhar, Deputy Rector LL.B (Hons) from University Malaya, Master’s Degree in (Academic and Planning), IIUM was born in Kangar in Comparative Laws and Advanced Diploma in Sharia Law 1949. Prior to this he was the Dean, Kulliyyah (Faculty) of and Practice from the International Islamic University Medicine from 1995 till May 2008 and also the Director of Malaysia, and her PhD in Comparative Law from IIUM Kuantan Campus from January 2005 until May 2008. University College, London University. She was admitted as Advocate and Solicitor of the High Court of Malaya in He is the Chairman of Sub-Specialty Committee of 1986. She has served the International Islamic University National Specialist Register (Clinical Oncology), the Malaysia for more than 27 years in various capacities. Deputy Chairman of Accreditation Committee, Malaysian Before her appointment as the Rector of IIUM she was Qualifications Agency and member of the Technical the Dean of the Ahmad Ibrahim Faculty of Laws, Dean Committee for Recognition of Medical Program. of the Centre for Postgraduate Studies, and then Deputy Director-General of the Malaysian Institute of Islamic After completing secondary school at Malay College Understanding. Kuala Kangsar, he studied medicine at University of Malaya (UM). His working career started in the General Prof. Dato’ Sri Dr. Zaleha is a member of the Fatwa Hospital of Penang and Kangar, followed by a stint in Committee for the State of Pahang and Selangor Saudi Arabia for the Malaysian Pilgrims Fund Board, and a member of the Selangor Council of Religious and at University Hospital, the University of Malaya. In Affairs (MAIS). At the Federal level, she is a member 1978 he joined University Kebangsaan Malaysia (UKM) of the Technical Committee on Sharia and Civil Laws, as trainee lecturer in internal medicine. He obtained his Department of Islamic Religious Affairs, Prime Minister’s MRCP in 1980 (Edinburgh), followed by DMRT (London) Department and serves as an appointed member in the and FFRRCSI (Dublin) in 1985, FRCP in 1990 (Glasgow) National Religious Council. As an expert in Family Law, and FRCP in 1994 (Edinburgh). she was appointed by the Minister of Women, Family and Community Development to be a council member of the At UKM, Prof. Dato’ Dr. Md.Tahir was the Deputy Dean National Women Advisory Council and also the Technical (Development & Training), editor of its medical journal, Committee for the NAM Institute for the Empowerment of and a consultant in radiotherapy and oncology. Besides Women. In 2010, she was appointed to chair the Panel being active in several professional bodies including the on Current Issues on Women and Islam, Department of Malaysian Oncology Society (President) till 1997 and Islamic Development. Asia-Oceania Clinical Oncology Association (Secretary) till 1998, he has also been on the scientific committee Academically, she serves as external examiner for doctoral for several conferences on cancer including the Asean theses and promotion for almost all the established law Conference on Gynaecological Cancer (Penang, 1991) schools in Malaysia. She is also a panel member for and 2nd Asia Pacific Conference on Cancer in Bangkok the Malaysian Qualifications Agency (Law Programmes), (1992). Vice Chairman Asia Pacific Cancer Conference and a member of Governance and Law Cluster under the (Kuala Lumpur, 1996). He was also Vice President of National Council of Professors. She was the Chief Editor Malaysian National Cancer Council (MAKNA) till 1998. of Tafhim: IKIM’s Journal of Islam and the Contemporary World and is also a member of the Editorial Board of the International Journal of Muslim Unity (IIUM), Journal of Governance and Law (UUM), Chairperson of the Editorial Board of the IIUM Law Journal, member of the Editorial Board of the International Journal of Economic, Social and Global Studies, International University of Sarajevo in Bosnia, and Member of the International Advisers for the Journal of Sultan Sharif Ali Islamic University, Brunei and Journal of Sharia and Law, Islamabad (IIUI).
12 • Annual Report 2012 • YBHG PROF. DR. NIK AHMAD YBHG PROF. DR. AHMAD KAMAL NIK MAHMOD FARIS ISMAIL Director Director
Prof. Dr. Nik Ahmad Kamal Nik Mahmod is currently Prof. Dr. Ahmad Faris Ismail was appointed as the IIUM the Legal Adviser of the International Islamic University Deputy Rector (Research and Innovation) on 1 July 2009. Malaysia. He is the Head, The Governance, Law and Public He obtained his B.Sc. in Chemical Engineering in 1988 Policy (GPPa) cluster of the National Professors Council from University of Houston, Texas before getting his Ph.D. (MPN). He graduated with LL.B from the University of in Engineering from Rice University, USA in 1993. He Malaya. He obtained his LL.M from University of London, has 20 years of university teaching experience and he is Diploma in Shariah and Law Practice from International currently a Professor of Engineering at the International Islamic University of Malaysia and PhD from the University Islamic University Malaysia (IIUM). He served as the Dean of Aberdeen, Scotland. He specializes in Labour Law and of Engineering from 1997 until 2009, and he was the Co- Industrial Relations Law, Constitutional and Administration chairman of the Malaysia Council of Engineering Deans Law. from 2007 until 2009.
He was involved in two book projects as a co-author; Prof. Dr. Ahmad Faris Ismail received the FUIW (The Administrative Law in Malaysia (Student Edition) and Federation of the Universities of the Islamic World) Tribute Employment Law in Malaysia. He is the Head, Cluster for to the “Personality Having Contributed to the Development Governance, Law and Public Management and National of Islamic University Education” in March 2008. He has Professor Council. He is also the Panel Auditor for Agensi served as a member of the Evaluation Committee for Kelayakan Malaysia (Malaysian Qualifications Agency the FRGS (Fundamental Research Grant Scheme) and iMQA). He chaired two committees under the Ministry of Science Fund (Industrial Sector) since 2006. He served Higher Education to review and amend the Universities and as an IDB (Islamic Development Bank) Consultant for the University Colleges Act 1971 and the Higher Educational Development of Mussa Bin Bique University, Mozambique Institutional Act 1996. At the international level, he was the Master Plan in August 2003. He was a Visiting Scientist Chairman of the Board of Governors, Asian Law Institute at Graduate School of Engineering, Kyoto University in and the President for the Asian Society for Labour Law. December 2004.
He has been invited as keynote speakers for various conferences and congresses in Jordan, Morocco, Saudi Arabia, Sudan, Syria, and Turkey. He has conducted workshops on “Academic Self-Assessment” and “Strategic Plan and Balanced Scorecard”, and he has delivered lectures on “Invention and Innovation”, “Curriculum Planning and Management”, “Professional Ethics”, “Towards Outcome-based Education”, and “Research Design and Instrumentation”. He is also a co-inventor for at least eight filed patents of the research products at IIUM.
Apart from teaching he has been active in research in the areas of nanofluids, energy and environment, computational fluid dynamics, combustion, simulation and modeling, and engineering education. He has published more than 150 papers in refereed journals and conference proceedings.
• Annual Report 2012 • 13 YBHG DATO’ WAN MOHD HILMI WAN KAMAL Director
YBhg Dato’ Wan Mohd Hilmi Wan Kamal is currently the Executive Director of the Management Services Division of IIUM and has been the Company Secretary to the IIUM since 2004.
He joined IIUM immediately upon obtaining his Advanced Diploma in Accountancy from MARA Institute of Technology (currently known as MARA University of Technology) in 1987. For more than a decade since joining IIUM, he has been entrusted with wide ranging responsibilities involving financial matters, property and development, student affairs and human resource.
He has been a member of the Malaysian Institute of Accountants since 1991 and a Certified Financial Planner since 2002.
14 • Annual Report 2012 • Corporate Report
EDUCATION SECTOR IIUM Centre for Continuing Education Sdn. Bhd.
“Nurturing Community Via University”
IIUM Centre for Continuing Education Sdn. Bhd. quality services in the delivery of the programmes (ICCE) was formerly known as Centre for Excellence in offered. Creative, fun and dynamic approaches were Continuing Education and Enhanced Teaching-Learning implemented in delivering and sustaining excellent (C-ExCEL). ICCE was established in August 1999 after services, of the courses offered. the International Islamic University of Malaysia (IIUM) decided to re-orientate itself in serving the community ICCE has established Accredited Learning Centres that lies within and beyond the confines of IIUM campus (ALCs) in major cities and township including Penang, with knowledge and information. Johore Bahru, Kuching, Kota Kinabalu and surrounding Klang Valley to reach out to its students ad support its ICCE is an education and training centre that aims at programme outside its main IIUM Campus in Gombak. providing quality education and training accessible to a wider scope of audience. With the tagline – NURTURING COMMUNITY VIA UNIVERSITY, ICCE offers and supports education and training programmes in various fields, from the lowest to highest institutional levels of education. Currently, ICCE is offering some academic programmes, such as Executive Bachelor in Business Management (EBBM), Bachelor in Islamic Revealed Knowledge and Heritage (Usul al-Din and Comparative Religion), Bachelor in Education (Islamic Education, Guidance & Counselling and TESL) and Master in Education (Teaching of Islamic Education, Education Administration, Education Psychology, Curriculum and Instruction and Instructional Technology. Besides focusing on academic programmes, ICCE also offers training courses that can be customised to the needs of organisations.
The courses offered include motivational programmes, communication skills, English and Arabic Programmes and Summer Camps, Edu-Tourism Trainings, Teaching Methodology Course and Information Technology Programmes. ICCE is proud and committed in ensuring
• Annual Report 2012 • 17 EDUCATION SECTOR
IIUM Higher Education Sdn. Bhd.
“Home for Success” CIT 1% IIUM Higher Education Sdn. Bhd. owns and manage DMM International Islamic College (IIC). IIC has implemented CBA 1% Quality Management System and received ISO 2% 9001:2008 certification since 2010. All of its academic DMA DBF programmes are approved by Malaysia Qualification 7% 8% Agency (MQA). In addition, IIC has been receiving ‘A’ grade from the National Higher Education Fund DIC DBA 13% Corporation (PTPTN) since 2004. 10% DIT 4% Furthermore, its academic programmes are uniquely DMS DCS 10% 2% designed to produce well-rounded students and DIT prospective professionals imbued with Islamic values 4% and ethics. To empower their intellectual, emotional and spiritual quotients, they are also exposed to co-curricular DCE activities such as Usrah (Islamic study circles), ‘Ibadah 37% camp, motivation and leadership talks.
IIC is committed to providing conducive environment, resources and practical training with leading companies for the students to realize their career aspirations and make a difference.
With the spirit of spreading the message of The most popular programme is Diploma in Islamic Early ‘rahmatallil’alamin’ (mercy to all the worlds), it is hoped Childhood Education which enrolled 1,353 students. that IIC community, parents and guardians will work Three new Diploma programmes namely Marketing together to inspire the students who will be young khulafa’ Management, Multimedia with Animation and Islamic (vicegerents) and agents of change for the benefit of Banking and Finance were launched in December 2012 mankind in workplaces and in the society as a whole. and at present, 223 students have enrolled in these three programmes. Programmes Offered in 2012
The following are the programmes:
• DBA - Diploma in Business Admin • DIT - Diploma Information Technology • DBF - Diploma in Islamic Banking • DCS - Diploma in Computer Science • DIA - Diploma in Accounting • DCE - Diploma in Islamic Early Childhood • DMS - Diploma in Office Management • DIC - Diploma in Islamic Contemporary Sciences • DMA - Diploma in Marketing • CIT - Certificate in IT • CBA - Certificate in Business
18 • Annual Report 2012 • EDUCATION SECTOR
IIUM Higher Education Sdn. Bhd.
Number of Graduates Future programmes (in progress):
With regards to graduates, there were 783 students who • Executive Diploma in Islamic Montessori graduated in 2012. (Brainy Bunch Islamic Montessori) • Foundation in Science Achievements (Center for Foundation Studies IIUM) • Foundation in Business Other achievements in 2012 include: (Center for Foundation Studies IIUM) • Secures ISO 9001:2008 through the 1st • Foundation in Information Technology surveillance audit (Center for Foundation Studies IIUM) • Secures 3 Stars MYQuest audit conducted by the • Certificate in Dental Technology Laboratory Ministry of Higher Education Assistant (IIUM Kuantan) • A library collection of 65,200 books which increased by 1,200 books in 2011
Future expansion
To franchise our diploma programmes abroad to the following institutions:
• Al-Jamiyah Education Center, Singapore • Universitas Islam Negeri Syariff Hidayatullah, Jakarta Indonesia • Yayasan Fajar Hidayah, Cibubur Indonesia • Attarkiyah Islamiyah Institute, Narathiwat Thailand • Villa College, Maldives
Future programmes (awaiting MQA/MoE approval):
• Bachelor in Information Technology (Ballarat University) • Bachelor in Entrepreneurship (Ballarat University) • Bachelor in Commerce (Ballarat University) • Bachelor in Early Childhood Studies (Teesside University) • Bachelor in Business Management (Teesside University) • Diploma in Graphic Design • Diploma in Techno-preneurship • Diploma in Psychology with Counseling • Diploma in Enforcement Management • Diploma in Risk Management • Diploma in Human Resource with Counseling • Executive Diploma in Islamic Early Childhood Education • Foundation in Arts (IIC Internal Programme) • Certificate in Enforcement Management • Certificate in English Language • Certificate in Early Childhood Education
• Annual Report 2012 • 19 EDUCATION SECTOR
IIUM Lower Education Sdn. Bhd.
“Accommodating Differences, Creating Excellence”.
The International Islamic School was established The 15th celebration of ILESB in 2013, will mark the 15 years ago under GombaK Educational & Cultural greatest achievement for ILESB where alumni are Develepoment Sdn Bhd (GECD). With the incorporation scattered all over the world and our students are of IIUM Holdings Sdn Bhd as the parent company, GECD accepted by reputable universities in the world. ILESB was eventually renamed as IIUM Lower Education Sdn also proudly announced that IISM Kuantan branch will be Bhd (ILESB) in 2007. opened in September 2013.
Up to date, ILESB is progressing in the field of education providing private primary, secondary and postsecondary education for local and international students.
At present, the company is managing 4 schools which is Setiabudi Primary and Secondary, International Islamic School Malaysia Primary and Secondary. Student population currently stand at more than 1,700 children with of students from 44 difference countries.
The uniqueness about ILESB is the human capital composition where staff from 13 different countries works together to achieve the same objective that is “Accommodating Differences, Creating Excellence”.
20 • Annual Report 2012 • EDUCATION SECTOR
IIUM Montessori Sdn. Bhd.
“We Care, We Educate, We Empower”
IIUM Montessori Sdn. Bhd. manages and operates IIUM Our centres are run by coordinators and teachers who Montessori, which is a chain of children establishment are professionally trained with at least a Certificate in centres offering pre-school education services for the Montessori and appropriate supervisory and leadership children ages 4 to 6 years old. experiences.
IIUM Montessori offers curriculum based on Kurikulum Currently we have six branches in Klang Valley namely, Standard Prasekolah Kebangsaan (KSPK) and AU5 Lembah Keramat, Danau Kota, Gombak, Putra Montessori Methods with the integration of Islamic Values Heights, Bandar Tun Hussein Onn and Bandar Bukit for international and Malaysian students with emphasis on Raja, Klang. three languages i.e. English, Bahasa Melayu and Arabic. Our curriculum comprises Mathematics & Numeral Skill, Phonic & Language, Exercise of Practical Life, Sensorial, Culture, Bahasa Melayu, Arabic, Jawi, Ibadah, Iqra’ & Al- Quran, Art & Craft and Music & Movements.
At IIUM Montessori we offer a conducive environment with a low teacher to student ratio 1:15, custom facilities, and innovative learning programs. Although our normal business operating hours are from 8:00 a.m. to 3:00 p.m., Monday through Friday, we do cater for extended operating hours to accommodate busy working parents.
• Annual Report 2012 • 21 EDUCATION SECTOR
IIUM Educare Sdn. Bhd.
“Nurturing, Caring, Loving”
IIUM Educare Sdn. Bhd. provides a conducive AGE GROUP environment that is loving, supportive, safe and imbued with Islamic spiritual values for families who require • Child Care : 2 months – 3 year old services for Kindergarten, Child Care and Day Care for • Kindergarten and Day Care : 4 year old – 6 year old their children, that meets the intellectual, moral, social, emotional and spiritual needs of each child. OPERATING HOURS
IIUM Educare aims to become the leading and • Child Care : 7.40 a.m. – 6.00 p.m. internationally recognized centre for Kindergarten, Child • Kindergarten : 7.40 a.m. – 1.00 p.m. Care and Day Care for children between 2 months and • Day Care : 1.00 p.m. – 6.00 p.m. 6 years of age based on Islamic and holistic concept of education. IIUM Educare also aims to provide a warm and supportive environment and rich learning experiences in keeping with the guidelines set out in the Qur’an and Sunnah so as to fully develop a child’s potentials and abilities and to produce a well-balanced and God-awareness child.
IIUM Educare is equipped with comprehensive facilities and equipment to cater for children developmental needs. Fun and learning activities such as water play, sand play, outdoor activities, field trips and gardening are also included to promote balance development of the children. The curriculum, workbooks and related materials are designed and prepared by the IIUM Educare team members and edited by the group of experts in the Early Childhood education.
22 • Annual Report 2012 • CONSULTANCIES & SERVICES
IIUM Entrepreneurship and Consultancies Sdn. Bhd.
IIUM Entrepreneurship and Consultancies Sdn. • Project on Geographical Information System For Bhd. (IEC) was established to pilot the consultancy and Ministry of Work Client : Ministry of Works training activities of the International Islamic University Malaysia. It also acts as a platform for IIUM experts to • Kajian Pelaksanaan dan Penguatkuasaan Perintah conduct their professional practices and consultancy Nafkah di Mahkamah Syariah di Malaysia Client : works. Wholly owned by the university and a subsidiary Jabatan Kehakiman dan Syariah Malaysia (JKSM) of IIUM Holdings, it is strategically positioned to yield • Business Matching in UAE Client : Private maximum benefits for IIUM through rational excellence and aptitude. • GPS Data Collection and GIS Database for Putrajaya Precint 14 Tree Client : NKK Technologies Sdn Bhd IEC which was incorporated on 7 November 2001, offers quality services second to none. From advisory services • Technical Training : GIS Training. AutoCAD Training & to contract and collaborative research, testing and What If? Training Client : Government and Private laboratory projects, workshops and seminars, its wide • Darul Ehsan GIS (DEGIS) Client : UPEN Negeri range of practical and innovative services boasts off a Selangor high level of dynamism and professionalism.
IEC is all set to provide the best and the most comprehensive services and activities for the local and international market. Equipped with expertise, knowledge and workforce, it is forging ahead to be the leading force.
IEC has successfully carried out technical and non- technical training programs of all kinds as well as research and surveys for various government agencies including the following:
• Kajian Pelan Pembangunan Taman Rekreasi & Pemuliharaan Ekosistem Marin Pulau Bidong Client : UPEN Negeri Terengganu • National Survey of R&D in Malaysia 2006 Client : Malaysian Science and Technology Information Centre (MASTIC) • Project on Shah Alam Hospital Client : Department of Public Works, Ministry of Works • Post Campaign Media Evaluation And Healthy Lifestyle 2006 Client : Ministry of Health
• Annual Report 2012 • 23 CONSULTANCIES & SERVICES
IIUM Advanced Technologies Sdn. Bhd.
IIUM Advanced Technologies Sdn. Bhd. (IAT) Our Customers provides a various services that will enable the University to move into self-sustainability by providing services in IAT has an established list of customers from Malaysian Sustainable and renewable energy, ICT Maintenance Government Agencies and Government Linked Outsourcing, ICT Consumer Services, Professional Companies including Bank Negara, Telekom Malaysia, Certification Programs, Education Services and Contract Tenaga Nasional and other customers that we continually Research. seek to establish relationship from time to time.
Our business scope is as follows: Energy Efficiency Program
Business Partnerships IAT is also involved in the energy management program at the International Islamic University Malaysia, IAT has established strategic partnership with both local coordinating and working with the IIUM Energy and international partners in the areas stated above management committee to conduct audit and implement and the more notable partners includes the Asia Pacific energy saving measures and practices to save the Security Association, Packet One Networks Sdn. Bhd., current energy consumed at both Gombak and Kuantan the Ministry of Local Housing and Development, the campuses. Malaysian Communication and Multimedia Commission, Altel Communications, GAE Resources Sdn. Bhd., Wilayah Persekutuan Infrastructure and Ganad Media Sdn. Bhd. IAT has also established international partnerships with overseas partners from Korea in implementing renewable energy and energy efficiency programs in the university.
24 • Annual Report 2012 • CONSULTANCIES & SERVICES
IIUM Shariah Advisory Services Sdn. Bhd.
IIUM Syariah Advisory Services Sdn. Bhd. (ISAS) was incorporated on the 15th September 2011. The purpose of the establishment was mainly to provide advisory services on Shariah matters pertaining to Islamic Banking and Finance.
Currently ISAS is working closely with the IIUM Institute of Islamic Banking and Finance (IIiBF) on their joint venture projects, where ISAS will be the project manager. The first project awarded to ISAS is to manage the offering of IIiBF’s training programmes to SME Bank.
ISAS has also initiated discussions with IIiBF, to develop new programmes with a view to have them marketed to both local and international markets.
ISAS is also exploring the ICT sector with the Kulliyyah of Information and Communication Technology (KICT), in order to hold rights to distribute latest softwares that could be marketed to the Islamic Banking and Takaful Industry.
• Annual Report 2012 • 25 HEALTHCARE & OTHERS
IIUM Medical Specialist Centre Sdn. Bhd.
IIUM Medical Specialist Centre Sdn. Bhd. (IMSC) was established to transform the former IIUM Clinical Care Centre within Kulliyyah of Medicine, into a medical specialist centre. The objective was to leverage on the available expertise among the medical and para-medical personnel within the International Islamic University of Malaysia. Also available are the various sub-specialities experts to provide medical care services of the highest standards.
IMSC officially commenced business in 2012 and immediately absorbed the operations of the Rehabilitation, Audio and Woman’s health clinics. As a precursor to its official commencement of business, IMSC carried out a “Sunathon 2011” during the year end school holidays as part of its CSR and market awareness program. The In-vitro fertilization (IVF) and Eye clinic are expected to come aboard in 2013. In IMSC is also expected to move into a 24-hour operation once the in-patient facility is completed towards early 2014. Providing health-care services of the highest standards the 55-bed facility has three operating theatres and a dialysis centre.
The IMSC will also be a hub for collaborative multi-centre research into clinical research with other academic and non-academic institutions at national and international levels.
26 • Annual Report 2012 • HEALTHCARE & OTHERS
IKOP Sdn. Bhd.
IKOP Sdn. Bhd. (Formerly known as IIUM Pharmacy Sdn. Bhd.) was set-up to leverage on its accessibility of the pilot plant located within Kulliyah of Pharmacy, IIUM Kuantan. The Pilot Plant which was commissioned to provide practical industrial experience to the graduate and post-graduate students of IIUM in pharmaceuticals has already obtained Good Manufacturing Practice (GMP) certification and capable of formulating and manufacturing generics and other GMP compliant pharmaceutical products.
The plant is also capable of producing tablets in blister packs or bottles and are halal certified. Other than generics, IKOP Sdn Bhd has also formulated ointments and hand sanitizers under its very own brand, iGesic, ikool, and iHand.
IKOP is currently in the process of collaborating with international pharmaceutical companies to contract manufacture their products for the Malaysian market as well as for export to other countries.
• Annual Report 2012 • 27 HEALTHCARE & OTHERS
IIUM Properties Sdn. Bhd.
Established in 2001, IIUM Properties Sdn. Bhd. (IPSB) has built its reputation as a Facility Management Services (FMS) contractor. With a strong foundation built from the FMS business, we have moved forward venturing into the construction industry obtained registration with Pusat Khidmat Kontractor (PKK) as a A Class Contractor in 2008 followed by a Grade G7 Contractor registration with CIDB and ISO 9001 : 2008 certification.
The Board of Directors consist of professionals and academicians including practicing architect, engineer, town planners and highly experience professional who has been involved in property development and construction.
IIUM Properties Sdn. Bhd. offers a range of services including construction and contracting works under conventional contracts as well as Private Financing Initiatives (PFI). IIUM Properties Sdn Bhd currently coordinates all development and construction works at the various campuses and land banks of International Islamic University Malaysian, and is ever ready to provide solutions to all construction related needs.
28 • Annual Report 2012 • HEALTHCARE & OTHERS
Daya Bersih Sdn. Bhd.
Daya Bersih Sdn. Bhd. (DBSB) – Integrated Facilities As the first successful, major project that has earned Management Services (FMS) a wholly owned subsidiary DBSB the reputation in Integrated Facilities Management of IIUM Holdings Sdn Bhd was established in 2004 to Services, we are set to go further in our quest for undertake the function of Operation and Maintenance of excellence. We are committed to quality, work ethics and the International Islamic University Malaysia (IIUM). effective turnaround time; and are destine to carve our name in this ever-challenging, yet competitive industry. DBSB has been entrusted to lead the new concept of out-sourcing on higher learning institution facility Amongst our clients are as follow : management. We offer to our client a single point of contact of all the traditional technical and non-technical management tasks for facilities and event management solutions.
Backed by a fully computerized control centre, our FMS service includes all spectrum of the following:
Mechanical & Electrical : Fire Control Lifts Electrical Distribution Generator Sets HVAC
Civil & Structural : Plumbing Sewerage Building Structure Maintenance
Custodial Service : General and Specialized Cleaning Landscaping Pest Control and Waste Disposal
Related Services : Energy Management Warranty Management
The presence of DBSB in the local Integrated Facilities management industry will enable other large scale academic facilities to tap the experience and engage DBSB as the partner to privatize the non-academic activity within the organization. This out-sourcing concept will enable the university to focus on their core business activity without much concern on the quality of service delivery to the end-users.
• Annual Report 2012 • 29
Financial Statement
Financial Statements Contents
Directors’ Report 34 - 36
Statement by Directors 37
Statutory Declaration 37
Independent Auditors’ Report 38 - 39
Income Statements 40
Balance Sheets 41 - 42
Statements of Changes in Equity 43
Cash Flow Statements 44 - 45
Notes to the Financial Statements 46 - 73
• Annual Report 2012 • 33 Directors’ Report
The directors have pleasure in presenting their report together with the audited financial statements of the Group and of the Company for the financial year ended 31 December 2012.
Principal activities
The principal activity of the Company is investment holding.
The principal activites of the subsidiaries are indicated in Note 9 to the financial statements.
There has been no significant change in the nature of the principal activities during the financial year.
Results
Group Company RM RM
Profit for the year 5,579,666 3,838,987
There were no material transfers to or from reserves or provisions during the financial year.
In the opinion of the directors, the results of the operations of the Group and of the Company during the financial year were not substantially affected by any item, transaction or event of a material and unusual nature.
Dividends
No dividend has been paid or declared by the Company since the end of the previous financial year.
Directors
The names of the directors of the Company in office since the date of the last report and at the date of this report are:
Tan Sri Mohd Sidek bin Hassan Tan Sri Abdul Aziz bin Abdul Rahman Prof. Dato’ Dr. Md. Tahir bin Md. Azhar Prof. Dr. Ahmad Faris bin Ismail Prof. Dr. Nik Ahmad Kamal bin Nik Mahmod Prof. Dato’ Dr. Zaleha binti Kamarudin Dato’ Ahmad Zailan bin Ashaari @ Shaari (appointed 26 April 2012) Dato’ Wan Mohd Hilmi bin Wan Kamal (appointed 26 April 2012)
34 • Annual Report 2012 • Directors’ benefits
Neither at the end of the financial year, nor at any time during that financial year, did there subsist any arrangement to which the Company was a party, whereby the directors might 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 director has received or become entitled to receive a benefit (other than benefits included in the aggregate amount of emoluments received or due and receivable by the directors as shown in Note 5 to the financial statements) by reason of a contract made by the Company or a related corporation with any director or with a firm of which the director is a member, or with a company in which the director has a substantial financial interest.
Directors’ interests
According to the register of directors’ shareholdings, none of the directors in office at the end of the financial year had any interest in shares in the Company or its related corporations during the financial year.
Other statutory information
(a) Before the income statements and balance sheets of the Group and of the Company were made out, the directors took reasonable steps:
(i) to ascertain that proper action had been taken in relation to the writing off of bad debts and the making of provision for doubtful debts and satisfied themselves that all known bad debts had been written off and that adequate provision had been made for doubtful debts; and
(ii) to ensure that any current assets which were unlikely to realise their values as shown in the accounting records in the ordinary course of business had been written down to an amount which they might be expected so to realise.
(b) At the date of this report, the directors are not aware of any circumstances which would render:
(i) the amount written off for bad debts or amount of the provision for doubtful debts in the financial statements of the Group and of the Company inadequate to any substantial extent; and
(ii) the values attributed to current assets in the financial statements of the Group and of the Company misleading or inappropriate.
• Annual Report 2012 • 35 Other statutory information (contd.)
(c) At the date of this report, the directors are not aware of any circumstances 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.
(d) At the date of this report, the directors are not aware of any circumstances not otherwise dealt with in this report or the financial statements of the Group and of the Company which would render any amount stated inthe financial statements misleading.
(e) As at the date of this report, there does not exist:
(i) 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 liabilities of any other person; or
(ii) any contingent liability of the Group and of the Company which has arisen since the end of the financial year.
(f) In the opinion of the directors:
(i) 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 will or may affect the ability of the Group and of the Company to meet their obligations as and when they fall due; and
(ii) no item, transaction or event of a material and unusual nature has arisen in the interval between the end of the financial year and the date of this report which is likely to affect substantially the results of the operations of the Group and of the Company for the financial year in which this report is made.
Auditors
The auditors, Ernst & Young, have expressed their willingness to continue in office.
Signed on behalf of the Board in accordance with a resolution of the Board of Directors dated 28 May 2013.
Tan Sri Mohd Sidek bin Hassan Tan Sri Abdul Aziz bin Abdul Rahman
36 • Annual Report 2012 • Statement By Directors Pursuant to Section 169(15) of the Companies Act, 1965
We, Tan Sri Mohd Sidek bin Hassan and Tan Sri Abdul Aziz bin Abdul Rahman, being two of the directors of IIUM Holdings Sdn. Bhd., do hereby state that, in the opinion of the directors, the accompanying financial statements set out on pages 7 to 40 are drawn up in accordance with Private Entity Reporting Standards and the Companies Act, 1965 in Malaysia so as to give a true and fair view of the financial position of the Group and of the Company as at 31 December 2012 and of their financial performance and cash flows for the year then ended
Signed on behalf of the Board in accordance with a resolution of the Board of Directors dated 28 May 2013.
Tan Sri Mohd Sidek bin Hassan Tan Sri Abdul Aziz bin Abdul Rahman
Statutory Declaration Pursuant to Section 169(16) of the Companies Act, 1965
I, Naharudin bin Ali, being the officer primarily responsible for the financial management of IIUM Holdings Sdn. Bhd., do solemnly and sincerely declare that the accompanying financial statements set out on pages 7 to 40, are in my opinion 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 Naharudin bin Ali at Kuala Lumpur in the Federal Territory on 28 May 2013.
Naharudin bin Ali
Before me,
• Annual Report 2012 • 37 545961-X
Independent Auditor’s Report To The Member Of IIUM Holdings Sdn. Bhd. (Incorporated in Malaysia)
Report on the financial statements
We have audited the financial statements of IIUM Holdings Sdn. Bhd., which comprise the balance sheets as at 31 December 2012 of the Group and of the Company, and the income statements, statements of changes in equity and cash flow statements of the Group and of the Company for the year then ended, and a summary of significant accounting policies and other explanatory notes, as set out on pages 7 to 40.
Directors’ responsibility for the financial statements
The directors of the Company are responsible for the preparation of financial statements that give a true and fair view in accordance with Private Entity Reporting Standards and the Companies Act 1965 in Malaysia, and for such internal control as the directors determine are necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
Auditors’ responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with approved standards on auditing in Malaysia. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on our judgment, including the assessment of risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the entity’s preparation of financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
38 • Annual Report 2012 • 545961-X
Independent Auditor’s Report To The Member Of IIUM Holdings Sdn. Bhd. (Incorporated in Malaysia)
Opinion
In our opinion, the financial statements have been properly drawn up in accordance with Private Entity Reporting Standards and the Companies Act, 1965 in Malaysia so as to give a true and fair view of the financial position of the Group and of the Company as at 31 December 2012 and of their financial performance and cash flows for the year then ended.
Report on other legal and regulatory requirements
In accordance with the requirements of the Companies Act, 1965 (“Act”) in Malaysia, we also report the following:
(a) In our opinion, the accounting and other records and the registers required by the Act to be kept by the Company and its subsidiaries of which we have acted as auditors have been properly kept in accordance with the provisions of the Act.
(b) We are satisfied that the financial statements of the subsidiaries that have been consolidated with the financial statements of the Company are in form and content appropriate and proper for the purpose of the preparation of the consolidated financial statements and we have received satisfactory information and explanations required by us for those purpose.
(c) The auditors’ report on the financial statements of the subsidiaries were not subject to any qualification and did not include any comment required to be made under Section 174(3) of the Act.
Other matters
This report is made solely to the member of the Company, as a body, in accordance with Section 174 of the Companies Act, 1965 in Malaysia and for no other purpose. We do not assume responsibility to any other person for the content of this report.
Ernst & Young Mohd Sukarno bin Tun Sardon AF: 0039 No. 1697/03/15(J) Chartered Accountants Chartered Accountant
Kuala Lumpur, Malaysia 28 May 2013
• Annual Report 2012 • 39 Income Statements For the year ended 31 December 2012
Group Company 2012 2011 2012 2011 Note RM RM RM RM (Restated)
Revenue 3 91,574,629 70,580,926 1,548,000 1,692,000 Cost of sales (36,012,961) (32,104,507) - - Gross profit 55,561,668 38,476,419 1,548,000 1,692,000 Other income 9,506,598 3,933,523 5,275,298 64,728 Operating expenses (56,564,891) (33,593,262) (2,731,369) (2,573,188) Profit/(loss) from operations 8,503,375 8,816,680 4,091,929 (816,460) Finance cost 4 (1,412,166) (2,291,149) (4,557) (344,562) Profit/(loss) before tax 5 7,091,209 6,525,531 4,087,372 (1,161,022) Income tax expense 7 (1,511,543) (1,253,690) (248,385) (577,555) Profit/(loss) for the year 5,579,666 5,271,841 3,838,987 (1,738,577)
The accompanying notes form an integral part of the financial statements.
40 • Annual Report 2012 • Balance Sheets as at 31 December 2012
Group Company 2012 2011 2012 2011 Note RM RM RM RM (Restated)
Assets
Non-current assets Property, plant and equipment 8 47,104,398 53,312,590 25,141 6,879,243 Investment in subsidiaries 9 - - 9,849,995 10,550,008 Investment in associate 10 - 1 - 1 Deferred tax assets 11 11,490 - - - 47,115,888 53,312,591 9,875,136 17,429,252
Current assets Inventories 63,618 12,909 - - Trade receivables 12 12,521,339 5,907,664 45,000 45,000 Other receivables 13 2,182,368 2,070,500 23,391 103,288 Amount due from subsidiaries 14 - - 36,098,782 17,029,720 Amount due from related companies 14 - 68,068 - - Tax recoverable 622,306 498,023 - - Cash and bank balances 15 29,753,376 18,026,439 5,118,456 1,942,868 45,143,007 26,583,603 41,285,629 19,120,876
• Annual Report 2012 • 41 Balance Sheets (contd.) as at 31 December 2012
Group Company 2012 2011 2012 2011 Note RM RM RM RM (Restated)
Current liabilities Trade payables 16 9,326,728 3,790,612 - 17,001 Other payables and accruals 17 21,203,758 14,709,140 214,782 1,642,165 Amount due to related companies 14 - 135,934 7,820,923 910,005 Amount due to holding company 14 23,858,168 17,777,374 40,135,772 30,581,846 Borrowings 18 2,214,996 6,300,681 1,592 569,521 Tax payable - 3,346,513 775,899 90,182 56,603,650 46,060,254 48,948,968 33,810,720
Net current liabilities (11,460,643) (19,476,651) (7,663,339) (14,689,844)
35,655,245 33,835,940 2,211,797 2,739,408
Financed by: Share capital 20 5,000,000 5,000,000 5,000,000 - Retained earnings/ (accumulated losses) 4,627,329 (952,337) (2,789,744) (6,628,731) Shareholders equity 9,627,329 4,047,663 2,210,256 (1,628,731
Non-current liabilities Borrowings 18 24,092,448 28,504,403 - 3,776,766 Deferred tax liabilities 11 1,935,468 1,283,874 1,541 591,373 26,027,916 29,788,277 1,541 4,368,139 35,655,245 33,835,940 2,211,797 2,739,408
The accompanying notes form an integral part of the financial statements.
42 • Annual Report 2012 • Statements Of Changes In Equity For the year ended 31 December 2012
(Accumulated losses)/ Share retained capital earnings Total Group RM RM RM
At 1 January 2011 As previously stated 5,000,000 (4,893,178) 106,822 Prior year adjusment (Note 22) - (1,331,000) (1,331,000) At 1 January 2011 (as restated) 5,000,000 (6,224,178) (1,224,178) Profit for the year - 5,271,841 5,271,841 At 31 December 2011 5,000,000 (952,337) 4,047,663
At 1 January 2012 As previously stated 5,000,000 1,044,163 6,044,163 Prior year adjusment (Note 22) - (1,996,500) (1,996,500) At 1 January 2012 (as restated) 5,000,000 (952,337) 4,047,663 Profit for the year - 5,579,666 5,579,666 At 31 December 2012 5,000,000 4,672,329 9,627,329
Share Accumulated capital losses Total
Company RM RM RM
At 1 January 2011 5,000,000 (4,890,154) 109,846 Loss for the year - (1,738,577) (1,738,577) At 31 December 2011 5,000,000 (6,628,731) (1,628,731) Profit for the year - 3,838,987 3,838,987 At 31 December 2012 5,000,000 (2,789,744) 2,210,256
The accompanying notes form an integral part of the financial statements.
• Annual Report 2012 • 43 Cash Flow Statements For the year ended 31 December 2012
Group Company 2012 2011 2012 2011 RM RM RM RM (Restated)
Cashflows from operating activities Profit/(loss) before tax 7,091,209 6,525,531 4,087,372 (1,161,022) Adjustments for: Depreciation of property, plant and equipment 3,814,468 2,836,118 76,499 86,223 Finance cost 1,412,166 2,291,149 4,557 344,562 Allowance for doubtful debts 1,475,871 1,631,963 - 870,000 Writeback on allowance for doubtful debts (80,088) - - (138,000) Bad debt written off 1,688,709 1,073,304 - - Provision for legal claim 2,705,033 - - - Gain on disposal of property, plant and equipment (6,253,276) - (5,103,263) - Loss on subsidiaries and associate being struck off 172,115 - 1,000,005 - Hibah income (262,534) (84,787) - (64,728) Operating profit/(loss) before working capital changes 11,763,673 14,273,278 65,170 (62,965) (Increase)/decrease in inventories (50,709) 7,191 - - (Increase)/decrease in receivables (9,863,056) 14,207,765 (18,989,165) 5,580,349 Increase/(decrease) in payables 15,275,616 (21,435,743) 16,213,409 1,141,237 Cash generated from/(used in) operations 17,125,524 7,052,491 (2,710,586) 6,658,621 Income tax paid (4,342,236) (281,357) (152,500) (186,000) Net cash generated from/ (used in) operating activities 12,783,288 6,771,134 (2,863,086) 6,472,621
Cashflows from investing activities Purchase of property, plant and equipment (3,356,262) (1,143,939) (28,083) (12,243)
44 • Annual Report 2012 • Cash Flow Statements (contd.) For the year ended 31 December 2012
Group Company 2012 2011 2012 2011 RM RM RM RM (Restated)
Cashflows from investing activities (contd.) Proceeds from disposal of property, plant and equipment 12,016,630 - 10,716,001 - Investment in subsidiaries - - (299,992) (6,549,998) Net cash outflow on subsidiary struck off (69,443) - - - Hibah income 262,533 84,787 - 64,728 Net cash generated from/ (used in) investing activities 8,853,458 (1,059,152) 10,387,926 (6,497,513)
Cashflows from financing activities Financing charges paid (1,412,166) (2,291,149) (4,557) (344,562) Drawdown/(repayment) of hire purchase payable 986,269 950,359 (13,027) (15,947) Repayment of borrowings (6,554,311) (3,148,750) (4,331,668) (508,595) Net cash used in investing activities (6,980,208) (4,489,540) (4,349,252) (869,104)
Net increase/(decrease) in cash and cash equivalents 14,656,538 1,222,442 3,175,588 (893,996) Cash and cash equivalents at beginning of year 14,082,976 12,860,534 1,942,868 2,836,864 Cash and cash equivalents at end of year 28,739,514 14,082,976 5,118,456 1,942,868
Cash and cash equivalents consists of: Cash and bank balances (Note 15) 29,753,376 18,026,439 5,118,456 1,942,868 Bank overdraft (Note 18) (1,013,862) (3,943,463) - - 28,739,514 14,082,976 5,118,456 1,942,868
The accompanying notes form an integral part of the financial statements.
• Annual Report 2012 • 45 Notes To The Financial Statements - 31 December 2012
1. Corporate information
The principal activity of the Company is investment holding. The principal activities of the subsidiaries are disclosed in Note 9 to the financial statements.
There has been no significant change in the nature of the principal activities during the financial year.
The Company is a private limited liability company, incorporated and domiciled in Malaysia. The registered office and the principal place of business of the Company is located at Level 3, Administration Building, Central Complex, International Islamic University Malaysia, Jalan Gombak, 53100 Kuala Lumpur.
The holding company is International Islamic University Malaysia, a company incorporated and domiciled in Malaysia.
The financial statements were authorised for issue by the Board of Directors in accordance with a resolution of the directors on 28 May 2013.
2. Significant accounting policies
2.1 Basis of Preparation
The financial statements of the Group and of the Company are prepared under historical cost convention and comply with Private Entity Reporting Standards and the Companies Act, 1965 in Malaysia.
The financial statements are presented in Ringgit Malaysia (RM).
2.2 Summary of significant accounting policies
(a) Subsidiaries and basis of consolidation
(i) Subsidiaries
Subsidiaries are entities over which the Group has the ability to control the financial and operating policies so as to obtain benefits from their activities. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the Group has such power over another entity.
46 • Annual Report 2012 • 2. Significant accounting policies (contd.)
2.2 Summary of significant accounting policies (contd.)
(a) Subsidiary and basis of consolidation (contd.)
(i) Subsidiary (contd.)
In the Company’s separate financial statements, investment in subsidiary is stated at cost less impairment losses. On disposal of such investment, the difference between net disposal proceeds and their carrying amounts is included in profit or loss.
(ii) Basis of consolidation
The consolidated financial statements comprise the financial statements of the Company and its subsidiary as at the balance sheet date. The financial statements of the subsidiary is prepared for the same reporting date as the Company.
Subsidiary is consolidated from the date of acquisition, being the date on which the Group obtains control, and continue to be consolidated until the date that such control ceases. In preparing the consolidated financial statements, intragroup balances, transactions and unrealised gains or losses are eliminated in full. Uniform accounting policies are adopted in the consolidated financial statements for like transactions and events in similar circumstances.
Acquisitions of subsidiary is accounted for using the purchase method. The purchase method of accounting involves allocating the cost of the acquisition to the fair value of the assets acquired and liabilities and contingent liabilities assumed at the date of acquisition. The cost of an acquisition is measured as the aggregate of the fair values, at the date of exchange, of the assets given, liabilities incurred or assumed, and equity instruments issued, plus any costs directly attributable to the acquisition.
Any excess of the cost of the acquisition over the Group’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities represents goodwill. Any excess of the Group’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities over the costof acquisition is recognised immediately in profit or loss.
• Annual Report 2012 • 47 2. Significant accounting policies (contd.)
2.2 Summary of significant accounting policies (contd.)
(b) Associate
Associates are entities in which the Group has significant influence and that is neither a subsidiary nor an interest in a joint venture. Significant influence is the power to participate in the financial and operating policy decisions of the investee but not in control or joint control over those policies.
Investments in associates are accounted for in the consolidated financial statements using the equity method of accounting based on management financial statements of the investee’s company made up to the end of the financial year.
(c) Property, plant and equipment and depreciation
All items of property, plant and equipment are initially recorded at cost. Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognised. All other repairs and maintenance are charged to the income statement during the financial year in which they are incurred. Subsequent to recognition, property, plant and equipment are stated at cost less accumulated depreciation and any accumulated impairment losses.
Freehold land is not depreciated. Depreciation of property, plant and equipment 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, at the following annual rates:
Leasehold land and buildings Over the lease period
Office, furniture and equipment 10% - 33% Plant and machinery 10% Renovation 10% Library books 10% Motor vehicles 20% Landscape 10%
48 • Annual Report 2012 • 2. Significant accounting policies (contd.)
2.2 Summary of significant accounting policies (contd.)
(c) Property, plant and equipment and depreciation (contd.)
The residual values, useful life and depreciation method are reviewed at each financial year-end to ensure that the amount, method and period of depreciation are consistent with previous estimates and the expected pattern of consumption of the future economic benefits embodied in the items of plant and equipment.
An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. The difference between the net disposal proceeds, if any and the net carrying amount is recognised in profit or loss.
d) Impairment of assets
The carrying amounts of assets are reviewed at each balance sheet date to determine whether there is any indication of impairment. If any such indication exists, the asset’s recoverable amount is estimated to determine the amount of impairment loss.
For the purpose of impairment testing of these assets, recoverable amount is determined on an individual asset basis unless the asset does not generate cash flows that are largely independent of those from other assets. If this is the case, recoverable amount is determined for the cash-generating unit (CGU) to which the asset belongs to.
An asset’s recoverable amount is the higher of an asset’s or CGU’s fair value less costs to sell and its value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. Where the carrying amount of an asset exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.
An impairment loss is recognised in profit or loss in the financial year in which it arises.
• Annual Report 2012 • 49 2. Significant accounting policies (contd.)
2.2 Summary of significant accounting policies (contd.)
(d) Impairment of assets (contd.)
Impairment loss for an asset is reversed if, and only if, there has been a change in the estimates used to determine the asset’s recoverable amount since the last impairment loss was recognised. The carrying amount of an asset is increased to its revised recoverable amount, provided that this amount does not exceed the carrying amount that would have been determined (net of amortisation or depreciation) had no impairment loss been recognised for the asset in prior years. A reversal of impairment loss for an asset is recognised in profit or loss.
(e) Income tax
Income tax on the profit or loss for the financial year comprises current and deferred tax. Current tax is the expected amount of income taxes payable in respect of the taxable profit for the financial year and is measured using the tax rates that have been enacted at the balance sheet date.
Deferred tax is provided for, using the liability method. In principle, deferred tax liabilities are recognised for all taxable temporary differences and deferred tax assets are recognised for all deductible temporary differences, unused tax losses and unused tax credits to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, unused tax losses and unused tax credits can be utilised. Deferred tax is not recognised if the temporary difference arises from the initial recognition of an asset or liability in a transaction which at the time of the transaction, affects neither accounting profit nor taxable profit.
Deferred tax is measured at the tax rates that are expected to apply in the financial year when the asset is realised or the liability is settled, based on tax rates that have been enacted or substantively enacted at the balance sheet date. Deferred tax is recognised as income or an expense and included in the profit or loss for the financial year, except when it arises from a transaction which is recognised directly in equity, in which case the deferred tax is also recognised directly in equity.
50 • Annual Report 2012 • 2. Significant accounting policies (contd.)
2.2 Summary of significant accounting policies (contd.)
(f) Employee benefits (contd.)
(i) Short term benefits
Wages, salaries, bonuses and social security contributions are recognised as an expense in the financial year in which the associated services are rendered by employees of the Group. Short term accumulating compensated absences such as paid annual leave are recognised when services are rendered by employees that increase their entitlement to future compensated absences, and short term non-accumulating compensated absences such as sick leave are recognised when the absences occur.
(ii) Defined contribution plans
Defined contribution plans are post-employment benefit plans under which the Group pays fixed contributions into separate entities or funds and will have no legal or constructive obligation to pay further contributions if any of the funds do not hold sufficient assets to pay all employee benefits relating to employee services in the current and preceding financial years. Such contributions are recognised as an expense in the profit or loss as incurred. As required by law, companies in Malaysia make such contributions to the Employees Provident Fund (“EPF”).
(iii) Defined benefit plans
The costs of providing benefits under defined benefit plans are determined separately for each plan using the projected unit credit actuarial valuation method. Actuarial gains and losses are recognised as income or expense when the net cumulative unrecognised actuarial gains and losses for each individual plan at the end of the previous reporting year exceeded 10% of the higher of the defined benefit obligation and the fair value of plan assets at that date. These gains or losses are recognised over the expected average remaining working lives of the employees participating in the plans.
The past service cost is recognised as an expense on a straight-line basis over the average period until the benefits become vested. If the benefits are already vested immediately following the introduction of, or changes to, a pension plan, past service cost is recognised immediately.
• Annual Report 2012 • 51 2. Significant accounting policies (contd.)
2.2 Summary of significant accounting policies (contd.)
(f) Employee benefits (contd.)
(iii) Defined benefit plans (contd.)
The defined benefit liability is the aggregate of the present value of the defined benefit obligation and actuarial gains and losses not recognised, reduced by past service cost not yet recognised and the fair value of plan assets out of which the obligations are to be settled directly. If such aggregate is negative, the asset is measured at the lower of such aggregate or the aggregate of cumulative unrecognised net actuarial losses and past service cost and the present value of any economic benefits available in the form of refunds from the plan or reductions in the future contributions to the plan.
If the asset is measured at the aggregate of cumulative unrecognised net actuarial losses and past service cost and the present value of any economic benefits available in the form of refunds from the plan or reductions in the future contributions to the plan:
- Net actuarial losses of the current period and past service cost of the current period are recognised immediately to the extent that they exceed any reduction in the present value of those economic benefits. If there is no change or an increase in the present value of the economic benefits, the entire net actuarial losses of the current period and past service cost of the current period are recognised immediately.
- Net actuarial gains of the current period after the deduction of past service cost of the current period exceeding any increase in the present value of the economic benefits stated above are recognised immediately. If there is no change or a decrease in the present value of the economic benefits, the entire net actuarial gains of the current period after the deduction of past service cost of the current period are recognised immediately.
The Group’s right to be reimbursed of some or all of the expenditure required to settle a defined benefit obligation is recognised as a separate asset at fair value when and only when reimbursement is virtually certain.
(g) Revenue recognition
Revenue is recognised when it is probable that the economic benefits associated with the transaction will flow to the enterprise and the amount of the revenue can be measured reliably.
52 • Annual Report 2012 • 2. Significant accounting policies (contd.)
2.2 Summary of significant accounting policies (contd.)
(g) Revenue recognition (contd.)
(i) Student fees
Student fees are recognised on an accrual basis where as non-refundable registration and enrolment fees are recognised when chargeable, less discount.
(ii) Management fee
Revenue from management fee is recognised on an accrual basis.
(iii) Services rendered
Revenue from services rendered is recognised net of service taxes and discounts as and when the services are performed.
(iv) Return on fixed deposits
Return on fixed deposits is recognised on a time proportion basis that reflects the effective yield on the deposits.
(v) Dividend income
Dividend income is recognised when the right to receive payment is established.
(vi) Sales of goods
Revenue relating to sales of goods is recognised net of sales taxes and discounts.
(vii) Rental income
Rental income is recognised on a straight-line basis over the term of the rental.
(h) Leases
A lease is recognised as a finance lease if it transfers substantially to the Group all the risks and rewards incidental to ownership. All other leases are classified as operating leases.
• Annual Report 2012 • 53 2. Significant accounting policies (contd.)
2.2 Summary of significant accounting policies (contd.)
(h) Leases (contd.)
(i) Finance leases
Assets acquired by way of hire purchase or finance leases are stated at an amount equal to the lower of their fair values and the present value of the minimum lease payments at the inception of the leases, less accumulated depreciation and impairment losses. The corresponding liability is included in the balance sheets as borrowings. In calculating the present value of the minimum lease payments, the discount factor used is the finance charge rate implicit in the lease, when itis practicable to determine; otherwise, the University’s incremental borrowing rate is used.
Lease payments are apportioned between the finance costs and the reduction of the outstanding liability. Finance costs, which represent the difference between the total leasing commitments and the fair value of the assets acquired, are recognised as an expense in the income statement over the term of the relevant lease so as to produce a constant periodic rate of charge on the remaining balance of the obligations for each accounting period. The depreciation policy for leased assets is in accordance with that for depreciable property, plant and equipment as described in Note 2.2(c).
3. Revenue
Group Company 2012 2011 2012 2011 RM RM RM RM (Restated) Student fees 42,695,418 36,402,786 - - Services rendered 41,757,415 31,374,706 - - Sales of goods 6,107,936 2,263,434 - - Management fee - - 1,008,000 1,152,000 Rental income 1,013,860 540,000 540,000 540,000 91,574,629 70,580,926 1,548,000 1,692,000
54 • Annual Report 2012 • 4. Finance cost Group Company 2012 2011 2012 2011 RM RM RM RM
Term financing charges 1,390,213 2,272,652 - 341,405 Hire purchase financing charges 21,953 18,497 4,557 3,157 1,412,166 2,291,149 4,557 344,562
5. Profit/(loss) before tax
The following amounts have been charged/(credited) in arriving at profit/(loss) before tax:
Group Company 2012 2011 2012 2011 RM RM RM RM (Restated)
Staff costs (Note 6) 27,019,923 24,548,822 1,059,541 731,498 Auditors’ remuneration - statutory audit 299,500 162,045 52,000 30,000 - other services 86,510 - 39,200 - Bad debt written off 1,688,709 1,073,304 - - Allowance for doubtful debts 1,475,871 1,631,963 - 870,000 Provision for legal claim 2,705,033 - - - Directors’ remuneration 156,674 164,630 38,000 49,494 Depreciation of property, plant and equipment 3,814,468 2,836,118 76,499 86,237 Factory rental 83,330 81,600 - - Rental of building 1,484,065 1,095,541 34,641 34,741 Rental of vehicles and equipment 176,129 341,672 8,700 8,700 Loss on subsidiaries and associate being struck off 172,115 - 1,000,005 - Writeback on allowance for doubtful debt (80,088) - - (138,000)
• Annual Report 2012 • 55 5. Profit/(loss) before tax (cont’d.)
The following amounts have been charged/(credited) in arriving at profit/(loss) before tax:
Group Company 2012 2011 2012 2011 RM RM RM RM (Restated)
Gain on diposal of property, plant and equipment (6,253,276) - (5,103,263) Rental income (412,680) - - - Hibah income (262,534) (84,787) (129,474) (64,728)
6. Staff costs
Group Company 2012 2011 2012 2011 RM RM RM RM
Salaries and wages 20,885,981 19,396,729 916,954 649,781 Pension cost - defined contribution plans 2,750,466 2,330,593 133,608 76,172 Social security costs 328,320 287,902 8,979 5,545 Other staff related expenses 3,055,156 2,533,598 - - 27,019,923 24,548,822 1,059,541 731,498
7. Income tax expense Group Company 2012 2011 2012 2011 RM RM RM RM
Income tax: Malaysian income tax 2,206,786 286,861 838,217 16,182 Over provision in prior years (1,335,347) (206,262) - (30,000) 871,439 80,599 838,217 (13,818)
56 • Annual Report 2012 • 7. Income tax expense (cont’d.)
Group Company 2012 2011 2012 2011 RM RM RM RM
Deferred tax (Note 11) : Relating to origination and reversal of temporary differences 551,247 1,248,669 (289,582) (19,415) Under/(over) provision in prior years 88,857 (75,578) (300,250) 610,788 640,104 1,173,091 (589,832) 591,373 1,511,543 1,253,690 248,385 577,555
Domestic income tax is calculated at the Malaysian statutory tax rate of 25% (2011: 25%) of the estimated assessable profit for the year.
A reconciliation of income tax expense applicable to profit/(loss) before tax at the statutory income tax rate to income tax expense at the effective income tax rate of the Group and of the Company is as follows:
Group Company 2012 2011 2012 2011 RM RM RM RM
Profit/(loss) before tax : 7,091,209 6,525,531 4,087,372 (1,161,022)
Taxation at Malaysian statutory tax rate of 25% (2011:25%) 1,772,802 1,631,383 1,021,843 (290,256) Income not subject to tax (513,008) - (443,813) - Expenses not deductible for tax purposes 1,245,734 885,901 22,851 287,023 Utilisation of unrecognised tax losses and capital allowances brought forward from previous years (114,643) (981,754) (52,246) - Deferred tax assets not recognised 367,148 - - - Over provision of income tax in prior years (1,335,347) (206,262) - (30,000) Under/(over) provision of deferred tax in prior years 88,857 (75,578) (300,250) 610,788 Tax expense for the year 1,511,543 1,253,690 248,385 577,555
• Annual Report 2012 • 57
RM Total (561,264) 3,356,262 1,996,500 3,814,468 47,104,398 71,054,883 65,157,567 75,157,567 19,848,477 21,844,977 23,950,485 (1,147,696) 10,000,000 (1,134,328)
(6,324,618) ------RM 47,164 99,301 99,301 28,717 175,182 175,182 175,182 128,018 Landscape
------Motor 311,204 311,204 432,801 704,236 704,236 458,254 458,254 124,385 582,639 vehicles 1,015,440
- - - RM books 73,945 Library 491,611 491,611 154,394 2,458,860 2,334,549 2,334,549 1,923,387 1,923,387 1,967,249 (30,083) (30,083)
------RM 366,068 1,286,784 6,825,328 3,516,492 5,538,544 5,538,544 2,942,768 2,942,768 3,308,836 Renovation
------RM 722,242 370,130 3,677,666 3,677,666 2,585,294 2,585,294 2,955,424 Plant and 3,677,666
- - - - RM Office, 3,235,936 1,603,880 8,425,517 8,425,517 1,405,137 8,713,041 11,449,342 11,449,342 11,449,342 11,948,977 equipment machinery furniture and (1,104,245) (1,117,613)
- - - RM building land and
3,413,956 1,996,500 5,410,456 1,446,086 6,295,278 Leasehold 38,658,152 10,000,000 51,278,048 44,953,430 41,278,048
(6,324,618) (561,264)
previously stated previously stated Group Accumulated depreciation Net carrying amount Property, plant and equipment Property, As at 31 December 2012 At 1 January 2012, as Prior year adjustment At 1 January 2012, restated Additions Write-off Disposals At 31 December 2012 At 1 January 2012, as Prior year adjustment At 1 January 2012, restated Charge for the year Write-off Disposals At 31 December 2012 8. Cost
58 • Annual Report 2012 •
RM Total 2,836,118 2,836,118 1,143,939 1,331,000 53,312,590 64,013,628 10,000,000 74,013,628 75,157,567 17,677,859 19,008,859 21,844,977
- - RM 27,827 75,881 46,270 71,474 71,474 99,301 128,912 128,912 175,182 Landscape
- - - Motor 121,229 245,982 704,236 704,236 704,236 337,025 337,025 458,254 vehicles
- - RM books 45,403 Library 113,516 113,516 411,162 411,162 2,289,146 2,289,146 2,334,549 1,809,871 1,809,871 1,923,387
- - RM 280,249 160,706 5,377,838 5,377,838 2,595,776 5,538,544 2,662,519 2,662,519 2,942,768 Renovation
- - - - RM 3,677,666 3,677,666 1,092,372 3,677,666 2,585,294 2,585,294 2,585,294 Plant and
- - RM Office, 887,211 887,211 891,560 3,023,825 7,538,306 7,538,306 8,425,517 11,449,342 11,449,342 10,557,782 10,557,782 equipment machinery furniture and
- RM building land and
2,673,370 1,331,000 4,004,370 1,406,086 5,410,456 Leasehold 45,867,592 41,278,048 10,000,000 51,278,048 51,278,048
previously stated previously stated Group Accumulated depreciation Net carrying amount Property, plant and equipment Property, As at 31 December 2012 as At 1 January 2011, Prior year adjustment restated At 1 January 2011, Additions At 31 December 2011 as At 1 January 2011, Prior year adjustment restated At 1 January 2011, Charge for the year At 31 December 2011 8. Cost
• Annual Report 2012 • 59 8. Property, plant and equipment (contd.)
Leasehold Furniture land and and Motor Total building fittings Computer vehicles RM RM RM RM RM
Company
As at 31 December 2012
Cost At 1 January 2012 7,366,950 60,433 129,580 87,179 7,644,142 Additions - - 28,083 - 28,083 Disposals (6,174,000) - - - (6,174,000) Adjustment (1,192,950) - - - (1,192,950) At 31 December 2012 - 60,433 157,663 87,179 305,275
Accumulated depreciation
At 1 January 2012 498,900 51,893 126,927 87,179 764,899 Charge for the year 62,364 3,455 10,680 - 76,499 Disposals (561,264) - - - (561,264) At 31 December 2012 - 55,348 137,607 87,179 280,134
Net carrying amount - 5,085 20,056 - 25,141
60 • Annual Report 2012 • 8. Property, plant and equipment (contd.)
Leasehold Furniture land and and Motor Total building fittings Computer vehicles RM RM RM RM RM
Company
As at 31 December 2011
Cost At 1 January 2011 7,366,950 52,175 125,595 87,179 7,631,899 Additions - 8,258 3,985 - 12,243 At 31 December 2011 7,366,950 60,433 129,580 87,179 7,644,142
Accumulated depreciation
At 1 January 2011 436,536 48,422 123,975 69,743 678,676 Charge for the year 62,364 3,471 2,952 17,436 86,223 At 31 December 2011 498,900 51,893 126,927 87,179 764,899
Net carrying amount 6,868,050 8,540 2,653 - 6,879,243
• Annual Report 2012 • 61 8. Property, plant and equipment (contd.)
(a) The net book values of property, plant and equipment held under hire purchase and finance lease arrangements are as follows:
Group Company 2012 2011 2012 2011 RM RM RM RM
Motor vehicles 233,225 114,954 - - 233,225 114,954 - -
(b) The net book values of property, plant and equipment pledged for borrowings as referred to in Note 18 are as follows:
Group 2012 2011 RM RM
Buildings 8,198,210 8,376,432
9. Investment in subsidiaries
Company 2012 2011 RM RM
Unquoted shares at cost 9,849,995 10,550,008
62 • Annual Report 2012 • 9. Investment in subsidiaries (contd.)
Details of the subsidiaries which are incorporated in Malaysia are as follows:
Name of Proportion (%) of subsidiary ownership interest Principal activities 2012 2011
Subsidiaries of the Company
IIUM Trading Sdn. Bhd. 100 100 Trading, cleaning services, computer supply and laboratory supplies
IIUM Properties Sdn. Bhd. 100 100 Acquisition and development of land and buildings and other related services
IIUM Lower Education Sdn. Bhd. 100 100 Providing education and related services
IIUM Entrepreneurship and 100 100 Providing consultancies and Consultancies Sdn. Bhd. educational services
IIUM Centre For Continuing 100 100 Providing education and Education Sdn. Bhd. related services
IIUM Higher Education 100 100 Providing education and Sdn. Bhd. related services
IIUM Printing Sdn. Bhd. 100 100 Printing, copying, binding and other related services
# IIUM Oil and Gas Sdn. Bhd. - 100 Dormant
IIUM International Sdn. Bhd. 100 100 Dormant
IIUM Educare Sdn. Bhd. 100 100 Pre-school, kindergarten and child nursery
IIUM Medical Specialist 100 100 Healthcare and related Centre Sdn. Bhd. services
Daya Bersih Sdn. Bhd. 100 100 Cleaning services, lanscaping and facilities management services
• Annual Report 2012 • 63 9. Investment in subsidiaries (contd.)
Name of Proportion (%) of subsidiary ownership interest Principal activities 2012 2011
# IIUM Strategic Tech & - 100 Technology and Eng Sdn. Bhd. engineering services
@ IIUM Cyber Campus - 100 Dormant Sdn. Bhd.
IIUM Pharmacy Sdn. Bhd. 100 100 Trading and retailing of medicine and health products
IIUM Corporate Management 100 100 Secretarial services Services Sdn. Bhd.
IIUM Shariah Advisory 100 100 Dormant Services Sdn. Bhd.
IIUM Advanced 100 - Information technology Technologies Sdn. Bhd. training and services
@ IIUM Cyber Campus Sdn. Bhd., an inactive subsidiary of the Company, were struck-off from the Schedule of the Registrar pursuant to Section 308(4) of the Companies Act, 1965 with effect from 30 September 2011.
# IIUM Oil and Gas Sdn. Bhd. and IIUM Strategic Tech & Eng Sdn. Bhd. are not carrying on business and its operations are in the process of strike off under the Schedule of the Registrar pursuant to Section 308(1) of the Companies Act, 1965.
10. Investment in associate Group/Company 2012 2011 RM RM Unquoted shares, at cost - 1,750,000 Less: Accumulated impairment loss - (1,749,999) - 1
64 • Annual Report 2012 • 10. Investment in associate (contd.)
Details of the associate which is incorporated in Malaysia is as follows:
Name of Proportion (%) of Associate ownership interest Principal activities 2012 2011
IIUM-Welloff Sdn. Bhd.* - 35 Dormant
* Not audited by Ernst & Young.
IIUM-Welloff Sdn. Bhd., an inactive associate of the Company, were struck-off from the Schedule of the Registrar pursuant to Section 308(4) of the Companies Act, 1965 with effect from 7 May 2012.
11. Deferred tax
Group Company 2012 2011 2012 2011 RM RM RM RM (restated)
At 1 January 1,283,874 110,783 591,373 - Recognised in income statement (Note 7) 640,104 1,173,091 (589,832) 591,373 At 31 December 1,923,978 1,283,874 1,541 591,373
Presented after appropriate offsetting as follows:
Deferred tax assets (11,490) - - - Deferred tax liabilities 1,935,468 1,283,874 1,541 591,373 1,923,978 1,283,874 1,541 591,373
• Annual Report 2012 • 65 11. Deferred tax (contd.)
The movements of deferred tax liabilities and assets during the financial year prior to offsetting are as follows:
Deferred tax liabilities/(asset) of the Group:
Others Accelerated Total capital allowance RM RM RM
At 1 January - 1,283,874 1,283,874 Recognised in income statement (11,490) 651,594 640,104 At 31 December 2012 (11,490) 1,935,468 1,923,978
RM RM RM
At 1 January - 110,783 110,783 Recognised in income statement - 1,173,091 1,173,091 At 31 December 2011 - 1,283,874 1,283,874
Deferred tax liabilities of the Company: RM At 1 January 2012 591,373 Recognised in income statement (589,832) At 31 December 2012 1,541
RM
At 31 December 2011 - Recognised in income statement 591,373 At 31 December 2011 591,373
66 • Annual Report 2012 • 11. Deferred tax (contd.)
Deferred tax asset has not been recognised in respect of the following items:
Group Company 2012 2011 2012 2011 RM RM RM RM
Unused tax losses 5,379,605 4,934,193 - 153,700 Unabsorbed capital allowances 3,669,004 3,290,150 - 55,284 Other deductible temporary differences 238,560 52,806 - - 9,287,169 8,277,149 - 208,984
The availability of the unutilised tax losses and unabsorbed capital allowances for offsetting against future taxable profits of the Group are subject to no substantial changes in shareholdings of the Group under Income Tax Act, 1967 and guidelines issued by the tax authority.
12. Trade receivables Group Company 2012 2011 2012 2011 RM RM RM RM
Trade receivables 13,997,210 6,939,588 45,000 45,000 Less: Provision for doubtful debt (1,475,871) (1,031,924) - - 12,521,339 5,907,664 45,000 45,000
The Group has no significant concentration of credit risk that may arise from exposures to a single debtor or to groups of debtors.
13. Other receivables Group Company 2012 2011 2012 2011 RM RM RM RM
Sundry receivables 691,741 1,211,941 23,391 103,288 Deposits and prepayments 1,490,627 858,559 - - 2,182,368 2,070,500 23,391 103,288
• Annual Report 2012 • 67 14. Amount due from/(to)
The amount due from/(to) related companies, due from/(to) subsidiaries and due to holding company are unsecured, interest free and repayable on demand.
15. Cash and bank balances Group Company 2012 2011 2012 2011 RM RM RM RM
Cash on hand and at banks 20,179,997 13,608,945 2,518,456 42,868 Deposits with licensed banks 9,573,379 4,417,494 2,600,000 1,900,000 29,753,376 18,026,439 5,118,456 1,942,868
Deposits with licensed banks of the Group amounting to RM1,575,000 (2011: RM1,575,000) are pledged to banks for credit facilities granted to certain subsidiaries as referred to in Note 18.
The weighted average effective rates of returns on deposits at the balance sheet date were as follows:
Group 2012 2011 % %
Licensed banks 3.12 3.12
The average maturities of deposits as at the end of the financial year were as follows:
Group 2012 2011 Days Days
Licensed banks 30 30
16. Trade payables
Trade payables are non-interest bearing and the normal trade credit terms granted to Group range from 30 to 90 days (2011: 30 to 90 days).
68 • Annual Report 2012 • 17. Other payables and accruals
Group Company 2012 2011 2012 2011 RM RM RM RM
Other payables 7,572,149 10,586,776 167,570 1,604,765 Accruals 10,926,576 4,122,364 47,212 37,400 Provision for legal claim 2,705,033 - - - 21,203,758 14,709,140 214,782 1,642,165
Included in other payables of the Company is an amount of RM113,000 (2011: RM113,000) due to the directors of the Company.
18. Borrowings
Group Company 2012 2011 2012 2011 RM RM RM RM (Restated)
Short term borrowings Hire purchase and lease payables (Note 19) 427,974 408,654 1,592 14,619 Term/trade financing 773,160 1,948,564 - 554,902 Overdraft 1,013,862 3,943,463 - - 2,214,996 6,300,681 1,592 569,521
Long term borrowings Hire purchase and lease payables (Note 19) 559,889 837,703 - - Term/trade financing 23,532,559 27,666,700 - 3,776,766 24,092,448 28,504,403 - 3,776,766 Total borrowings 26,307,444 34,805,084 1,592 4,346,287
• Annual Report 2012 • 69 18. Borrowings (contd.)
Group Company 2012 2011 2012 2011 RM RM RM RM Restated
Maturity of borrowings: Within one year 1,412,573 6,300,681 1,592 621,053 More than 1 year and less than 2 years 1,736,260 2,554,439 - 519,800 More than 2 years and less than 5 years 6,135,407 6,495,882 - 1,472,767 5 years or more 17,023,204 19,454,082 - 1,732,667 26,307,444 34,805,084 1,592 4,346,287
The weighted average effective finance charges rate at the balance sheet date for borrowings, excluding hire purchase and lease payables, were as follows:
Group Company 2012 2011 2012 2011 % % % %
Term/trade financing 6.38 6.38 - 3.75
The Islamic term financing of the Group is secured by the following:
(a) The first term loan of the Company bears a finance charge rate of 3.75% per annum. The term loan is secured by way of piece of leasehold property known as PN 5150, Lot No. 3312, Mukim Sungei Baru Tengah, Daerah Alor Gajah, Negeri Melaka measuring approximately 3.593 hectares.
(b) The second term loan is to restructure the existing borrowing. The term loan bears a finance charge rate of 9% per annum. The term loan is secured by:
(i) First fixed legal charge on the land and a 9 storey apartment block including basement floor held under Lot PT No. 6749 HS (D) 99402 Mukim Setapak, District Kuala Lumpur.
(ii) First legal charge on the land and 5 storey shop lot held under Lot PT No. 6748 HS(D) 99401 Mukim Setapak, District of Kuala Lumpur.
70 • Annual Report 2012 • 19. Hire purchase and lease payables
Group Company 2012 2011 2012 2011 RM RM RM RM
Minimum lease payment: Not later than 1 year 474,264 418,801 1,592 14,619 Later than 1 year but not later than 2 years 418,711 419,366 - - Later than 2 years but not later than 5 years 110,770 401,502 - - Later than 5 years 14,836 40,176 - - 1,018,581 1,279,845 1,592 14,619 Less: Future finance charges (30,718) (33,488) - - 987,863 1,246,357 1,592 14,619
Present value of hire purchase and finance lease liabilities Not later than 1 year 427,974 408,654 1,592 14,619 Later than 1 year but not later than 2 years 402,064 411,401 - - Later than 2 years but not later than 5 years 143,442 387,975 - - Later than 5 years 14,383 38,327 - - 987,863 1,246,357 1,592 14,619
Analysed as: Due within 12 months (Note 18) 427,974 408,654 1,592 14,619 Due after 12 months (Note 18) 559,889 837,703 - - 987,863 1,246,357 1,592 14,619
The hire purchase and finance lease liabilities bore finance charge at the balance sheets date at rates ranging from 2.5% to 5.3% (2011: 2.5% to 5.3%) per annum.
• Annual Report 2012 • 71 20. Share capital
Number of Ordinary Shares of RM1 each Amount 2012 2011 2012 2011 RM RM
Authorised At 1 January/31 December 5,000,000 5,000,000 5,000,000 5,000,000
Issued and fully paid At 1 January/31 December 5,000,000 5,000,000 5,000,000 5,000,000
The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at meetings of the Company. All ordinary shares rank equally with regard to the Company’s residual assets.
21. Significant related party transactions
In addition to the transactions detailed elsewhere in the financial statements, the Company had the following transactions with related parties during the financial year:
2012 2011 RM RM
Management fees charge to subsidiaries 1,008,000 1,152,000
The directors are of the opinion that all the transactions have been entered into in the normal course of business and have been established on terms and conditions that are not materially different from that obtainable in transactions with unrelated parties.
72 • Annual Report 2012 • 22. Prior year adjustment and restatement of comparatives
In previous financial years, there has been an understatement of cost of building purchased by a subsidiary of the Company and its corresponding depreciation effect. The effect arising from this prior year adjustment are as follows:
2012 2011 RM RM
Effect on retained earnings: At 1 January, as previously stated 1,044,163 (4,893,178) Prior year adjustment (1,996,500) (1,331,000) At 1 January, as restated (952,337) (6,224,178) Profit for the year 5,579,666 5,271,841 At 31 December 4,627,329 (952,337)
The presentation and classification of items in the current year‘s financial statements have been consistent with the previous financial year except that the following comparative amounts which have been adjusted as a result of prior year adjustment and restated to conform with the current year‘s presentation:
|------2011------| As previously As stated Adjustments restated RM RM RM
Group
Income statement
Revenue 92,480,475 21,899,549 70,580,926 Cost of sales (54,004,056) 21,899,549 (32,104,507) Depreciation 2,170,618 665,500 2,836,118
Balance sheet
Amount due to holding company 8,777,374 9,000,000 17,777,374 Borrowings 33,805,084 1,000,000 34,805,084 Property,plant and equipment - Cost 64,013,628 10,000,000 74,013,628 - Accumulated depreciation 17,677,859 1,331,000 19,008,859
• Annual Report 2012 • 73
Corporate Directory
Corporate Directory
IIUM HOLDINGS SDN. BHD (545961-X) Corporate Office Level 3, Rectory International Islamic University Malaysia Jalan Gombak 53100 Kuala Lumpur Tel : (603) - 6196 4331 / 6196 4333 Fax : (603) - 6196 4332 Website : www.iiumholdings.com.my
EDUCATION SECTOR
IIUM CENTRE FOR CONTINUING EDUCATION SDN BHD (685146-P) Ground Floor, Ahmad Ibrahim Kulliyyah of Law International Islamic University Malaysia Jalan Gombak 53100 Kuala Lumpur Tel : (603) - 6196 5445 / 6196 5446 / 6196 5447 Fax : (603) - 6196 5778 Website : www.icce.com.my
IIUM HIGHER EDUCATION SDN. BHD. (509334-W) INTERNATIONAL ISLAMIC COLLEGE No. 1, Jalan 31/10a Taman Batu Muda 68100 Kuala Lumpur Tel : (603) - 6187 1170 / 6184 1522 / 6187 6900 Fax : (603) - 6184 1900 / 6188 8200 / 6186 2900 Website : www.iic.edu.my
IIUM LOWER EDUCATION SDN. BHD. (453541-X) INTERNATIONAL ISLAMIC SCHOOL Batu 8, Jalan Sg. Pusu 53100 Kuala Lumpur Tel : (603) - 6188 4400 / 6188 8400 Fax : (603) - 6188 3300 Website: www.iis.edu.my
SEKOLAH TAMAN ILMU DAN BUDI Batu 8, Jalan Sg. Pusu 53100 Kuala Lumpur Tel : (603) - 6188 4400 / 6188 8400 Fax : (603) - 6188 3300
• Annual Report 2012 • 77 Corporate Directory (contd.)
IIUM MONTESSORI SDN BHD (585955-H) Batu 8, Jalan Sg. Pusu 53100 Kuala Lumpur Tel : (603) - 6188 4400 / 6188 8400 Fax : (603) - 6188 3300 Website : www.iiummontessori.edu.my
IIUM EDUCARE SDN BHD (886757-H) International Islamic University Malaysia Jalan Gombak 53100 Kuala Lumpur Tel : (603) - 6196 5934 Fax : (603) - 6196 4179 Website : www.iiumeducare.edu.my
CONSULTANCIES & SERVICES
IIUM ENTREPRENEURSHIP & CONSULTANCIES SDN BHD (563743-P) No 8-3, Jalan Jernai 6/21D Medan Idaman, Jalan Gombak 53100 Kuala Lumpur Tel : (603) - 4021 7062 Fax: (603) - 6196 4332 Website : www.iiumconsultants.com.my
IIUM ADVANCED TECHNOLOGIES SDN BHD (981067-V) Level 2, Block B, KICT Building International Islamic University Malaysia Jalan Gombak 53100 Kuala Lumpur Tel : (603) - 6196 5691 / 5693 Fax: (603) - 6196 5158 Website : www.iat.com.my
78 • Annual Report 2012 • Corporate Directory (contd.)
IIUM CORPORATE MANAGEMENT SDN. BHD. (958714-D) Level 3, Rectory International Islamic University Malaysia Jalan Gombak 53100 Kuala Lumpur Tel : (603) - 6196 5440 / 6196 4333 Fax : (603) - 6196 4332
IIUM SHARIAH ADVISORY SERVICES SDN BHD (960395-V) Institute of Islamic Banking and Finance (IIiBF), 205A, Jalan Damansara. Damansara Heights, 50480 Kuala Lumpur, Tel: (603) - 2082 2818 Fax : (603) - 2094 7728
IIUM INTERNATIONAL SDN. BHD. (875761-T) Level 3, Rectory International Islamic University Malaysia Jalan Gombak 53100 Kuala Lumpur Tel : (603) - 6196 5440 / 6196 4333 Fax : (603) - 6196 4332
• Annual Report 2012 • 79 Corporate Directory (contd.) HEALTHCARE & OTHERS
IIUM MEDICAL SPECIALIST CENTRE SDN BHD (874443-A) Kulliyyah of Medicine International Islamic University Malaysia Indera Mahkota Campus Jalan Sultan Ahmad Shah 25200 Kuantan, Pahang Darul Makmur Tel : (609) - 571 6424 Ext 7701 Fax: (609) - 571 6544
IKOP SDN BHD (614589-A) Pilot Plant, Kulliyyah of Pharmacy International Islamic University Malaysia Indera Mahkota Campus Jalan Sultan Ahmad Shah 25200 Kuantan, Pahang Darul Makmur Tel : (609) - 571 6400 Ext 3240 Fax: (609) - 571 6775 Website : www.ikop.com.my
IIUM PROPERTIES SDN BHD (551061-M) AHC 3-2, Level 3, Azman Hashim Complex International Islamic University Malaysia Jalan Gombak 53100 Kuala Lumpur Tel : (603) - 6184 1504 Fax: (603) - 6184 1341
DAYA BERSIH SDN BHD (639669-P) Corporate Office B1-3-3A, Level 3, Gaya Commercial Centre Lorong Selangor, Pusat Bandar Melawati 53100 Kuala Lumpur Tel : (603) - 4162 5560 Fax: (603) - 4162 5570 Website : www.dayabersih.com
DAYA BERSIH SDN BHD (639669-P) Gombak Operations Office AHC 2-3, Level 2, Azman Hashim Complex International Islamic University Malaysia Jalan Gombak 53100 Kuala Lumpur Tel : (603) - 6196 5415 / 5418 Fax: (603) - 6196 5416
80 • Annual Report 2012 •